Atlantic Refining Company v. Noel

WALKER, Justice

(dissenting).

I adopt the following Dissenting Opinion filed by Associate Justice James R. Norvell on October 9, 1968, prior to his retirement from the Court:

In my opinion, the judgment of the Court of Civil Appeals which reverses the judgment of the trial court should he affirmed and, accordingly, I respectfully dissent from the order of this court which affirms the judgment of the trial court.

While I have found no precedent which controls the situation presented by the record in this case, I would adopt a policy supporting the certainty of land titles. After all, the holder of the mineral interest could have protected itself from loss. To me, the authorities cited by the Court of Civil Appeals are by analogy persuasive and suggest the correct answer to our problem here. In this case, the petitioner prays for equitable relief and one of the oldest maxims in our jurisprudence is that equity aids the vigilant and not those who sleep on their rights.

The judgment of the trial court creates a most unusual title situation. It cancels two patents and the Noel mineral leases. The patents issued covered 60.53 acres lying either north of or within Lot 10, Block 1, which for convenience, I shall refer to as tract 10-V, and a 94.5 acre tract lying either north of or within Lot 26, Block 1, which I shall refer to as tract 26-V. The trial court’s judgment did not purport to cancel or reform the 1946 patents to Section 10, Block 1, and Section 16, Block 1. These patents were issued on the Dod field notes. Now, who owns the surface estate in and to 10-V and 26-V, which tracts are not included within the Dod notes ? I suppose the State does as the Lanes and Howard do not. Then for the first time, so far as I have been able to determine, we have this situation: Under the trial court’s judgment, the extent of the surface area of Section 10, Block 1, and *42Section 26, Block 1, which excludes tracts 10-V and 26-V, differs from that of the mineral estate which includes tracts 10-V and 26-V as they are embraced within the Barton field notes. Atlantic’s mineral interest does not constitute a legal estate because under the trial court’s judgment, it necessarily follows that there is no .patent covering tracts 10-V and 26-V, although Atlantic holds either the equitable title or some equitable right to the minerals under such tracts. My fear is that in giving precedence to the certificate field notes of Barton over the patent notes without reforming the patent, we encounter evils we know not of and enter a title thicket we had best avoid as the exalting of the certificate over the patent may not only unsettle the title to a particular tract or section but adjoining sections as well. A purchaser buys a junior survey adjoining Section X which has been patented upon a resurvey. If before patent there has been a severance of the mineral and surface estates in Section X, how is the purchaser of the adjoining section going to know whether the owner of the mineral estate in Section X has acquiesced in the patent (resurvey) notes or not? I need not give further examples of possible title complications, but I do say that the simpler and more practical solution of our problem here is to say that the holder of a mineral interest in unpatented land is under a duty to see that a correct patent is issued and that he cannot shut his eyes to the land office situation and then maintain that a patent issued at the instance of one who under the law is entitled to apply therefor, has no binding force on him.

The factual situation here is comparatively simple. Applications to purchase Sections 10 and 26, Block 1, were made by H. R. Smith and John R. Johnston in 1904 and 1905 under the provisions of Chapter 12A, Title 87, Articles 4218b to 4218y, inclusive, of the Revised Statutes of 1895. These applications and the certificates issued thereon had reference to a survey made by H. C. Barton. This was long before the separation of the surface and mineral estates became a common thing in Texas. In 1913, Union Land Company, the then owner of Sections 10 and 26, Block 1, and Atlantic’s predecessor in title, requested a survey of the two sections. A resurvey was made by R. S. Dod and accepted by the Land Commissioner. After this event, which to me seems to be the controlling one in our present situation, the mineral estate was separated from the surface estate. This took place in 1943, some thirty years after the Land Commissioner had approved the Dod field notes, an event which a careful purchaser should not have ignored. In 1946, a patent was issued upon the application of Bankers Life Company, evidently acting on behalf of the surface owners. Since the Dod field notes were the latest approved field notes in the office of the Land Commissioner, they were transcribed into the patents issued in the name of E. G. King, assignee of H. R. Smith, the original applicant to purchase Lot 10, Block 1, and John R. Johnston, the original applicant to purchase Section 26, Block 1.

These patents were issued under the provisions of Article 5413, Vernon’s Ann.Tex. Stats.,1 which contemplates that a patent *43shall issue as a matter of course when the land has been paid for and the necessary-fees have been tendered. Conceivably, many persons may have acquired interests in a section of land prior to the issuance of a patent. It is not required that the Land Office notify all persons claiming an interest in the section that a request for the issuance of a patent has been made. Patents are generally issued in the name of the original applicant to purchase,2 and if he be dead, the patent operates to convey and secure valid title to his heirs or assignees. Article 5414, Vernon’s Ann.Tex.Stats.

In my opinion, when corrected field notes are prepared and accepted by the Land Commissioner, the corrected notes become the official notes of a section or survey. If such corrected notes are not in turn set aside and another set of field notes prepared and approved before the issuance of patent, then, upon final payment of the purchase price, a patent may be issued as a matter of course and the corrected field notes will constitute the description of the land granted by the State.

Article 5413 does not require that all of the owners of interests in a particular section must apply for a patent before it can be issued. The statute which had its origin in 1891 3 seems to contemplate that the person (or persons) who made application to purchase, or an assignee of the applicant’s entire estate, would apply for the patent upon payment of the purchase price. It seems apparent, however, that the prime prerequisite for the issuance of a patent is final payment of the purchase price. The owners of the surface estates in and to Sections 10 and 26, Block 1, were entitled to apply for the patent. In 1943, when the petitioner acquired the mineral estate, Dod’s corrected field notes with the Commissioner’s approval had been on file in the Land Office for some thirty years. Petitioner knew, or was charged with knowledge, that patent would issue upon the Dod notes upon completion of the payment of the purchase price unless the inaccuracy of the Dod notes was pointed out and corrections made thereto. It may be that the discrepancy between the Dod notes and the original notes prepared by Barton was not readily apparent, but this circumstance should not operate to change the rule. From 1913 to 1945, when patents were issued, Dod’s resurvey constituted the official notes for Sections 10 and 26, Block 1. During this period, no attack was made upon them and no error was asserted with regard thereto. Under such circumstance, the issuance of the patents should be held binding upon petitioner.

In Miller v. Yates, 122 Tex. 435, 61 S.W.2d 767 (1933), this court said, “[W]e reaffirm the soundness of the principle that the assignee of a land certificate loses all title or claim to so much land as may be included in an original file and survey thereunder as is without the limits of a corrected survey on which such assignee accepts a patent.” It is true that petitioner did not apply for the patent and it may be argued that it did not accept the patent, but the actions of Union Land Company, its predecessor in title, in procuring the Land Commissioner’s acceptance of a resurvey *44of Sections 10 and 26, Block 1, coupled with Atlantic’s failure (and that of its predecessors in title) to secure a correction of the errors in the resurvey before the time the patents could legally issue, should be held substantially equivalent to an acceptance of the patents. By its inattention to its business, its laches and delay, Atlantic should be precluded from asserting the priority of the certificate notes (by Barton) over the field notes of the patent.

It may be that in 1943, when it acquired its equitable right or title to the minerals underlying Sections 10 and 26 of Block 1, Atlantic regarded such interests as having a speculative or unproven value and for that reason made no investigation of the records of the Land Office and hence did not know that a resurvey of such sections had been approved by the Land Commissioner. Apparently, Atlantic paid no part of the purchase price to the State but regarded this as a duty primarily resting upon the surface owner. Perhaps Atlantic has done nothing of a particularly culpable nature, but it has done nothing, at least up to the time of the institution of the present suit. This should be enough to bar a recovery in this case. As property ownerships, the extent of which we do not know, may be affected by our decisions in suits such as this, I would avoid complications which are bound to arise once we recognize that a survey may have one area on the surface but a more or less extensive area below the surface.

From what has been said, it should be clear that this is not a case in which the correction of a patent is sought. Of course, a patent can be reformed so as to correctly describe the land actually severed from the public domain if such may be done without injury or prejudice to others, such as innocent purchasers for value. But no attempt was made here to reform the patents issued by the State to Sections 10 and 26 of Block 1. A proper patent, from Atlantic’s standpoint, could have been issued had timely action been taken, but such action was not forthcoming.

The facts in Holmes v. Yates, 122 Tex. 428, 61 S.W.2d 771 (1933), are in many respects similar though not identical to those revealed by the present record. I quote therefrom because it clearly and accurately presents the dangers of unsettling land titles incident to the disregarding of corrected field notes contained in patents. In Holmes, Mr. Justice Greenwood, speaking for this court, said:

“The controlling contention of plaintiffs in error is found in the following portion of the argument of their counsel, on pages IS and 16 of their brief in the Supreme Court, to wit: ‘If corrected field notes leave out or exclude land not in actual conflict with a senior survey, they are unauthorized and incorrect, and cannot be considered a substitute for the originals. If they are not truly correct, then, there is no substitute, and the result, the original surveys remain the same and the field notes thereof constitute the section of land. In this case, no doubt the Land Commissioner was justified in making an investigation, but he had no authority to call upon the locating surveyor to correct the field notes so far as to cause the survey to conform to the maps and records of his office. The law required the Land Commissioner to correct his maps and records to conform to actual surveys on the ground, rather than have the surveys which had been made on the ground changed so as to correspond with such maps and records of his office. It is true the so-called corrected field notes did not go outside of and include land not included in the original survey, but it is equally true that they did not include all of the land within the original survey not covered by a senior survey, and for that reason are incorrect and unauthorized. Corrected field notes to be given effect as being authorized, should not be confined to the original *45survey, but it is essential that they should not exclude land which is free from conflict on the ground with a prior location and survey. In other words, for the corrected field notes to be correct and authorized under the law, they must be confined to the original survey and must embrace all the land therein not in conflict on the ground with land previously appropriated. These so-called corrected field notes do not meet such requirements for the reason they exclude the land in controversy which should have been embraced therein.’
“The court is unable to recognize the soundness of the above contention. It would be difficult to conceive a more far-reaching method for unsettling land titles throughout Texas than for the Supreme Court to sanction the contention of plaintiffs in error. Instead, we regard as entirely correct the first counterproposition of defendants in error Yates and another, which is as follows: Where corrected field notes of a survey made under a located land certificate and of its alternate school survey are required to be filed by the Commissioner of the General Land Office to take same out of a conflict with prior and senior locations as shown by maps, records and archives of the General Land Office the fact that many years later it is discovered that the conflict on the ground existed only as to part of the area embraced in the original field notes but excluded from said corrected field notes, instead of the whole of it, does not render said corrected field notes void, and make the said school land alternate thus embrace all the area within the original field notes not actually in conflict, and which might have been, but were not, included within such corrected field notes, so that one who several years before such discovery had purchased such school land alternate location under said corrected field notes could not be held to have acquired title to such excluded area as against intervening purchasers thereof from the state of a subsequently made survey embracing such area.’ ”

The emphasis appearing in the above quotation has been supplied.

CALVERT, C. J., notes his dissent. Associate Justice WALKER adopts the dissenting opinion of former Associate Justice NORVELL delivered October 9, 1968. Associate Justices REAVLEY and Mc-GEE not sitting.

. Article 5413 reads as follows:

“The Commissioner shall issue patents when it appears from the books of his office that full payment for the land has been made where payment is required, and all legal fees due thereon have been paid into said office and not withdrawn, including the legal fees for the recording of said patent in the counties in which the land may be located. When one applies for a patent such person, shall, in addition to all other payments required by law, remit to the land office one dollar for each county in which the land may be wholly or partially located and give the name and address of the owner or agent. When the patent is ready for delivery the Commissioner shall send it by registered mail to the clerk of any such county with the receivers cheek for one dollar for each such county and accompany the same with the name and address of the owner or his agent.
*43Upon receipt thereof the clerk shall record the patent and send the same by registered mail with such name and address and the remaining fees to the clerk of another proper county until the patent has been recorded in each such county, and thereupon the patent shall he delivered to the proper party by registered mail.”

. With reference to issuance of patent to assignee, see, 3 Texas Practice — Land Titles (Lange) § 155.

. “Be it enacted by the Legislature of the State of Texas: That the Commissioner of the General Land Office is hereby authorized and required to issue and deliver all patents now or hereafter to be ready for issuance and delivery, to the person entitled to receive the same when it appears from the books of said office that the legal fee for said patent has been at any time heretofore deposited in said office, and not withdrawn.” (Acts 1891, 22nd Leg., ch. 115, p. 182, 10 Gammel’s Laws of Texas, 184)