Court Opinion

ID: 4897955
Source: CourtListenerOpinion
Date Created: 2021-09-03 00:10:35.150709+00
Date Added: 2024-06-11T08:12:48.171641
License: Public Domain

Mr. Justice Slatton,
dissenting.
The majority opinion concludes that the use of the land as an airport by the City of Beaumont is an encumbrance upon the title of a holder of a fractional interest of the royalty, who takes such interest without the right t.o make a lease, to participate in bonuses, or rentals, and with the express agreement that “nothing herein shall be construed as obligating grantor, its successors or assigns, to drill or otherwise operate for such oil, gas or other minerals against its will.”
The pleadings or Moore show that before or about the time of the conveyance by the City of Beaumont to Moore there was an oil exploration project in progress on adjacent lands to the airport property.
The City had the fee simple title to the airport tract. The grantee knew the use which the City was making of the tract, as it was described “known as the City of Beaumont airport tract”; the conveyance of the City was made subject to an oil and gas lease executed by the City to Landry, which was held at the time of Moore's deed by Humble Oil & Refining Company. Moore had knowledge of the provision contained in that lease, or at least he was charged with knowledge of such condition that it in effect did not authorize the lessee to enter upon the land until a well of a certain production of oil was brought in within 300 feet of said airport tract. The City retained a fractional interest in and to the royalty and the right to make a lease on the property, to receive bonus and rentals under the lease, or under a new lease.
*59The fact and circumstances surrounding the lease show the the City and Moore were dealing with the property because of its then value on account of adjoining exploration for minerals on land contiguous to the airport.
The title of Moore to the fractional interest of oil, gas and other minerals under the conveyance is generally designated as a nonparticipating, perpetual royalty. The words “royalty,” “bonus” and “rentals” have a well defined and understood meaning when used in conveyancing oil and gas interests. Under the conveyance the City of Beaumont and Moore agreed that Moore should not receive any of the money rentals to be paid under the existing lease. Moore did not acquire any right to make a lease, nor to participate in any bonus or rentals to be paid under any future lease.. These rights were retained by the City of Beaumont. Specifically, Moore’s right was described as “a perpetual royalty in and to all the oil, gas, sulphur, coal, or other minerals upon and under or that may be produced,” describing the land, and in part stating “known as the City of Beaumont airport tract.” The conveyance further provided that the payments of the royalty should be construed as a covenant running with the land. It therefore appears from the above stated provisions of the conveyance that the parties recognized in the conveyance the use by the City of Beaumont of the property as an airport.
The fact that Moore received an interest in real estate under the authoritative decisions of this Court cannot, in my opinion, force the conclusion that the use of the land as an airport by the City is an encumbrance upon the title acquired by Moore. The transaction is one in which the City and Moore agreed to the sale of a fractional interest in the royalty, which was then agreed to be worth the consideration stated in the deed. The parties must have recognized the speculative nature of the transaction, the value of which would be determined upon the success or failure of the adjoining exploration project then in progress. The parties evidently recognized that if the adjoining property became productive of oil, then the airport property or a part of it would become unsuited for the surface use then being made of it by the City of Beaumont. It must have been within the contemplation of the parties that it would be to the best interests of the City, in case of success of the exploration project, to discontinue the use of a part of the property as an airport, or if all of the airport became prospective oil bearing property, then to obtain another site and move the airport *60thereto. These considerations no doubt prompted the legislature to authorize cities by statute to lease city property for oil and gas. Article 1267, R. C. S. The City evidently inserted the following paragraph to avoid the very ruling which has been made by the majority, towit:
“It is expressly understood that nothing herein shall be construed as obligating grantor, its successors or assigns, to drill or otherwise operate for such oil, gas and other minerals against its will.”
This provision is an express agreement of the parties that the property will not be drilled or otherwise operated for oil, gas or other minerals against the City’s will.
The vendee’s rights, therefore, under the conveyance, are nothing more than a title to a fractional interest in the minerals, free and clear of production costs if and when produced, depending upon the will of the City. I perceive no reason why the City cannot make this contract. Neither do I see any reason why Moore cannot.
Moore, by accepting a conveyance of the fractional royalty interest in the minerals with the express provision which restricted the exporation of the property for oil, gas or other minerals at the will of the City, does not have the right to compel an entry thereon for such purposes. Moore’s interest in and to the property, while an interest in real estate, is the right to be paid his fractional portion of the royalty if and when por-duced. No possessory right or interest in the surface of the land was included in his conveyance. Since Moore received, no right whatever to the surface estate, the use of it as an airport by the City is not in any wise inconsistent with his severed and speculative interest in the land. Therefore, such use cannot be an encumbrance upon his title.
If we concede for the sake of argument that the use of the property by the City of Beaumont as an airport is an encumbrance, then, to allow Moore a recovery upon the warranty, it must be upon the theory that the City has validity contracted to remove the encumbrance in the future. This is the theory upon which a recovery is allowed for known and existing encumbrances. That the City has power to warrant title to property held in its private or proprietary capacity is not questioned. Abbott v. City of Galveston, 97 Texas 474, 79 S. W. 1064. It does not follow from such a holding that the City has power either *61to alienate property which is dedicated to a public use or contract to remove in the future the public use then being made of it. A good statement of the rule is found in the case of City of Fort Worth v. First Baptist Church, 268 S. W. 1016, local citation 1022, which has been reiterated in the case of City of Teague v. Sheffield, 26 S. W. (2d) 417:
“A municipal corporation has no power to cede away or embarrass the exercise of its legislative or governmental powers or functions by contracts with others so as to disable it from the performance of its public duties or from controlling in the future as it may deem best its municipal affairs, and, when a contract is made by such corporation which is not warranted by the statutory authority conferred upon it, the governing body of such city has at all times the right to declare it void and to refuse compliance therewith. See, also, Waterbury v. City of Laredo, 68 Tex. 565, 5 S. W. 81, 84; City of Brenham v. Brenham Water Co., 67 Tex. 542, 4 S. W. 143, 150; Bowers v. City of Taylor (Tex. Com. App.), 16 S. W. (2d) 520, 521, 522.”
Thus it is seen that if the use of the property as an airport is an encumbrance, then we have a deed which the City of Beaumont did not have the power to make because a municipal corporation cannot alienate property which is devoted to a public use. Neither can it contract away its legislative functions in the future.
It must be considered that the deed of the City to Moore is an agreement for one purpose only, that is, the conveyance of a fractional royalty interest to the land. It is not a contract calling for the performance of more than one thing-. Then, too, there is only one consideration. See Sayles v. City of Abilene, 290 S. W. 239, as to whether a contract is severable.
These reasons, in my opinion, preclude Moore from a recovery upon a warranty.
The fact that Moore cannot recover upon a void contract is no reason why he could not recover for money had and received. He had that right if the deed to him was void. It is upon that theory that the courts will allow a recovery by Moore in order to avoid an unjust enrichment by the City of Beaumont. But Moore did not diligently pursue that right, as he did not file his suit within two years after the money had been paid to the City. Hence the lower courts properly sustained the City’s plea of the two years statute of limitation.
*62Summarizing my views of the case: the. surface use by the City as an airport is not an encumbrance upon Moore’s title; second, if such use is an encumbrance, the deed from the City to Moore is void. Hence the warranty is void. In such a case Moore’s only right of recovery is for money had and received. His suit being filed more than two years after the money was paid to the City, the plea of the two years statute of limitation filed thereto was correctly sustained by the lower courts. These conclusions render unnecessary a consideration of the correct measure of damages as for partial failure of title which has been placed upon the trial court by the majority opinion without any aid in the manner of submitting it to the jury. I respectfully enter my dissent to the majority view.
Opinion delivered April 30, 1947.
Associate Justices Simpson and Hickman concur in this dissent.