Court Opinion

ID: 9832124
Source: CourtListenerOpinion
Date Created: 2023-09-01 21:38:28.670874+00
Date Added: 2024-06-11T07:43:42.410641
License: Public Domain

On Motion for Rehearing.
When an assignment of an oil and gas lease is registered — as was done in the instant case — such registration operates to give constructive notice of its contents to all the world. 31 Tex.Jur. par. 272, p. 970.
In the suit at bar, actual notice of the payment of the sum of $7,000 out of the oil, if, as, and when same is produced and marketed, was had by appellees, in addition to the constructive notice.
Texas Jurisprudence, vol. 31, par. 279, p. 980, goes further and announces the rule in Texas that: “Covenants in respect of title are not, it seems, implied in an assignment of a lease. Accordingly, an assignor can be held liable only on his express warranties and on those implied by the statute from the use of the word ‘grant’ or ‘convey.’ But inasmuch as the statutory implications provide protection only against prior conveyances and existing encumbrances, they are of no avail to protect the assignee against a failure of title accruing from the use of fraud in procuring the lease.”
This text, in the same paragraph, in discussing an express warranty against incumbrances, says: “While it seems that an express warranty against incumbrances is breached at the time the assignment is made, if an incumbrance on the leasehold exists, no right of action thereon accrues until the assignee is dispossessed or has been compelled to discharge the incumbrance.”
We carefully pointed out, in our original opinion, that Trico Oil Company did not create the “oil payment” incumbrance, of which complaint is made. It simply recog*1214nized such “oil payment” in the assignment made to it by its assignor. This recognition on its part not only did not bring into being the incumbrance, but added nothing to it, for Trico Oil Company was bound by the provisions of the assignment, made long before its acquisition of any interest in the lease.
We pointed out, also, the fact that, in its assignment to J. S. Kimbrough, Trico Oil Company did not use either of the words “grant” or “convey,” and whatever it warranted was limited by the following words: “Covenants and agrees with J. S. Kimbrough, Trustee, his heirs, successors and assigns, forever to warrant and defend the title thereto against the lawful claims and demands of all persons whomsoever, claiming or to claim the same by, through, or under Trico Oil Company, but no further.”
Even if such language does not bring the instrument squarely into the class designated as “quit claims,” or if the language be held not'to limit the warranty of title to the claims of those who hold “by, through, or under Trico Oil Company, but no further," nevertheless we are unable to see wherein the title is involved, or wherein same has failed. There is no contention here that the title to the leasehold interest was not vested in the assignee of Trico Oil Company, and on through subsequent assignments to appellees. The sole contention is that there is, an “oil payment,” or a payment of the sum of $7,000 to be made out of the oil if, as, and when same is produced and marketed, and that such incumbrance gives appellees the right to sue Trico Oil Company on its warranty.
This is the language used in appellees’ prayer, “that upon final hearing hereof they have judgment against the defendants’ for their damages aforesaid, together with interest, costs of suit and general and special relief, and they will ever pray, and plaintiff tenders to defendants said oil and gas lease and asks that the court divest title thereto out of plaintiff and reinvest same in defendants.”
An examination of appellees’ pleading discloses that they rely upon allegations to the effect that the existence of the $7,000 oil payment (of which they complain) and that of other oil payments, thereafter provided for (of which they make no complaint), renders the lease valueless, and therefore the title has failed.
As we said in the original opinion, there is not even a scintilla of evidence tending to show that Trico Oil Company practiced any fraud upon appellees. Such company had no dealings with appellees when Mrs. Gwen Pelton took an assignment of the lease from her brother, Compton. A further examination of appellees’ pleading discloses that the “fraud” relied upon is simply the language used by Trico Oil Company in its assignment of the lease to Kimbrough. The contention that such language constitutes “fraud” is wholly without merit. We hold definitely that appellees’ pleading does not raise any issue of fraud practiced by Trico Oil Company upon appellees, or upon any other party to this suit who has acquired any interest in the leasehold estate, from the time Trico Oil Company received its assignment down to appellees’ assignor Compton.
Finally, appellees contend that the judgment of this court is inequitable and unjust, in that we have reversed the judgment of the trial court wherein money damages were awarded appellees and rendered judgment in favor of Trico Oil Company on such issue, and at the same time affirmed that portion of the trial court’s judgment wherein title to the leasehold interest was divested out of appellee Mrs. Gwen Pelton and reinvested in Trico Oil Company.
In our original opinion we said: “The judgment of the trial court rendered against appellant, Trico Oil Company, is reversed and here rendered for the appellant.” We thought this language plain enough, but in order that appellees may understand perfectly what we mean, we overrule appellees’ motion fo'r a rehearing and enlarge our original opinion by declaring: The judgment of the trial court rendered against appellant, Trico Oil Company, and in favor of appellees for money damages, or the recovery of a money judgment against said appellant, is hereby reversed, and judgment here rendered that appellees take nothing as against Trico Oil Company; and the judgment of the trial court divesting title to said leasehold estate out of appellees and reinvesting same in Trico Oil Company is likewise reversed and here rendered, denying appellees the right to have such title to the said oil and gas lease, and said leasehold estate divested out of appellees, or either of them, and reinvested in Trico Oil Company.
Motion overruled.