Averyt v. Grande, Inc.

SPEARS, Justice.

The issue in this declaratory judgment action is whether a mineral reservation in a general warranty deed reserves a fraction of the entire mineral estate or only a fraction of the undivided one-half mineral interest owned and conveyed by the grantor. The trial court held that the reservation reserved a fraction of the entire mineral estate. The court of appeals affirmed. 686 S.W.2d 632. We affirm.

On September 30, 1977, Respondent Grande, Inc. conveyed the real property in question to the Fogelmans. The Fogel-mans then conveyed the property to Petitioner James R. Averyt, trustee for R.M. Hopkins, Jr. Averyt, individually and as Hopkin’s trustee, sued to determine what portion of the mineral interest Grande conveyed to the Fogelmans.

The Grande to Fogelman deed contains the following pertinent provisions:

[T]hat Grande, Inc. ... have GRANTED, SOLD and CONVEYED, ... unto the said Gordon V. Fogelman and wife, Clarice E. Fogelman, ... the following described real estate:
FIRST TRACT:
All that certain tract or parcel of land, situated in Fayette County, Texas, ....
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[Containing 86.82 acres of land.
SECOND TRACT:
An undivided ½ interest in and to all that certain tract or parcel of land, situated in Fayette County, Texas, ....
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[Containing 0.03 acres of land.
LESS, HOWEVER, AND SUBJECT TO an undivided ⅛ interest in the oil, gas, sulphur, and all other minerals, described in that deed from Rubie Keilers and Annie Keilers, to Texas Osage Cooperative Royalty Pool, et al, dated May 2, 1930, and recorded in Volume 152, Pages *89375-76, Deed Records of Fayette County, Texas.
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There is hereby excepted from this conveyance and reserved to Grantor, its successors and assigns, an undivided ¼ th of the royalty covering all of the oil, gas and other minerals, including but not limited to uranium, coal, lignite, iron, gold, silver, and all other minerals, whether or not now known to be valuable and whether by drilling, strip mining, or any other method, in, to and under or that may be produced from the lands above described_
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TO HAVE AND TO HOLD the above described premises, together with all and singular, the rights and appurtenances thereto in any wise belonging unto the said Gordon V. Fogelman and wife, Clarice E. Fogelman, their heirs and assigns, forever. And Grande, Inc., does hereby bind itself and its successors, to warrant and forever defend, all and singular, the said premises unto the said Gordon V. Fogelman and wife, Clarice E. Fogelman, their heirs and assigns, against every person whomsever lawfully claiming, or to claim the same or any part thereof, (emphasis added)

The question presented is whether Grande reserved one-fourth of the royalty from the entire 86.82 and 0.008 acres or one-fourth of the royalty from the undivided one-half mineral interest Grande owned at the time of the conveyance. Grande argues that the deed reserves one-fourth of the royalty of the entire mineral estate. Averyt argues that the deed reserves one-fourth of the royalty only from the undivided one-half mineral interest Grande owned at the time of the conveyance to the Fogel-mans.

Because neither party contends that the deed is ambiguous, we construe the language of the deed to ascertain the intent of the parties without considering parol evidence. Middleton v. Broussard, 504 S.W.2d 839 (Tex.1974). Courts give legal meaning to the language of the deed by construing all of its provisions in harmony and only if deed provisions irreconcilably conflict, apply one provision to the exclusion of another. Benge v. Scharbauer, 152 Tex. 447, 259 S.W.2d 166 (1958).

Specific rules of construction apply to cases in which a grantor owns an undivided mineral interest and reserves a fraction of the minerals under the land in the deed. If the deed reserves a fraction of the minerals under the land conveyed, then the deed reserves a fraction of the part of the mineral estate actually owned by the grantor and conveyed in the deed. Hooks v. Neill, 21 S.W.2d 532 (Tex.Civ.App.—Galveston 1929, writ ref'd). In Hooks, the grantor conveyed all of his undivided one-half interest in a tract of land. He then reserved “a one-thirty second part of all oil on and under the said land and premises herein described and conveyed.” The Hooks court focused on the word “conveyed” to hold that the reservation clause applied “only to the interest which [grantors] have in the land and ore which they conveyed.” Hooks, 21 S.W.2d at 538.

If, on the other hand, the deed reserves a fraction of the minerals under the land described, the deed reserves a fraction of the minerals under the entire physical tract, regardless of the part of the mineral estate actually conveyed. King v. First National Bank of Wichita Falls, 144 Tex. 583, 192 S.W.2d 260 (1946). In King, the grantor conveyed all of his undivided one-half interest in the described land. The deed later reserved “an undivided one eighth of the usual and customary one eighth royalty ... in oil and gas and other minerals that may be produced from the hereinabove described land.” This court focused on the word “described” to hold that the grantor reserved an undivided one eighth of the royalty from the minerals under the entire described tract, not just the grantor’s undivided one-half. King, 192 S.W.2d at 262. We distinguished Hooks on the basis that the deed in that case limited the reservation to part of the estate conveyed while the King deed con-*894tamed no such restricting language. Id. See Masterson, Double Fraction Problems In Instruments Involving Mineral Interests, 11 Southwestern L.J. 281, 281 (1957) (disapproves distinction but states that King better effects intent of parties).

This court applied this same rule to a grant of a fractional mineral interest in Middleton v. Broussard, 504 S.W.2d 839 (Tex.1974). In Middleton, the grantors’ deed conveyed undivided fractional interests in several tracts of land, reserving all of the minerals to the grantor. The deed then granted a one-sixty-fourth royalty interest “in and to all of the oil, gas and other minerals in and under and that may be produced from all of the described land and premises.” We relied on the phrase “described land and premises” and King to hold that the deed granted a one-sixty-fourth royalty in the entire mineral estate under the land, not just in the fractional interest conveyed. Middleton, 504 S.W.2d at 842.

The Grande to Fogelman deed reserves one-fourth of the royalty from minerals “that may be produced from the lands above described.” . This places the reservation within the King rule. Averyt argues, however, that the exception of one-half of the minerals in the “subject to” clause is part of the description of the land. Averyt asserts that the “lands above described,” therefore, are the two tracts minus the one-half mineral interest excepted from the grant in the “subject to” clause. Averyt relies on Bass v. Harper, 441 S.W.2d 825 (Tex.1969), for his position, arguing that Bass controls our decision by holding that the “subject to” clause limits the description of the land. In Bass, Bass owned the entire surface and eight-fourteenths of the one-eighth royalty in a tract of land. Bass conveyed an undivided one-half interest in the land to Miller. The deed’s “subject to” clause excepted from the conveyance various mineral interests totaling six-fourteenths of the royalty. This court held that the granting clause conveyed one-half of the one-eighth royalty because it contained no language limiting the grant to one-half of the interest Bass owned. This court then held that the grant of seven-fourteenths of the royalty was subject to the exception of six-fourteenths, leaving Miller with one-fourteenth of the royalty. 441 S.W.2d at 827-28. In reaching this decision, the court held that the exception of six-fourteenths of the royalty in the “subject to” clause operated to limit the estate granted and did not just protect Bass on his warranty. 441 S.W.2d at 827.

Bass is readily distinguishable and does not control our decision. Bass only holds that the “subject to” clause limits the estate granted in the land, it does not reach the question here: whether the “subject to” clause forms part of the description of the land.

We hold that a “subject to” clause which excepts fractional mineral interests from lands and minerals conveyed does not form part of the description of the land. The “subject to” clause does limit the estate granted and warranted. Bass, 441 S.W.2d at 827. There is a difference, however, between the estate granted and the land described. “Land” is the physical earth in its natural state, while an estate in land is a legal unit of ownership in the physical land. 1 Thompson, Thompson on Real Property § 51 (1939). To define the estate granted is to set out the portion of the physical land conveyed. In contrast, “[T]o describe land is to outline its boundaries so that it may be located on the ground, and not to define the estate conveyed therein." Sharp v. Fowler, 151 Tex. 490, 252 S.W.2d 153, 154 (1952).

Because “land” includes the surface of the earth and everything over and under it, including minerals in place, Thompson at § 51, a description of land includes the land and all the minerals naturally existing underneath. Holloways Unknown Heirs v. Whatley, 133 Tex. 608, 131 S.W.2d 89, 92 (Tex.Comm’n App. 1939, opinion adopted). In other words, minerals under “the lands described” refers to all the minerals under the entire land because minerals “would necessarily be produced from the whole land, irrespective of the *895ownership of undivided shares thereof.” King, 192 S.W.2d at 263. The “subject to” clause affects “the ownership of the undivided shares” of the minerals, not the description of the land containing them. Id. Thus, when the Grande to Fogelman deed reserved a fraction of the minerals in the “lands above described,” it meant the minerals under the entire physical tracts described in the deed by metes and bounds. Id. at 262. The dissent correctly notes that here the interest conveyed is the same as the interest described. However, Grande reserved one-fourth of the royalty from the lands described, not from the interest described.

The deed further evidences an intent to reserve one-fourth of the royalty from the minerals under the entire land when it reserved “Vrth of the royalty covering all of the oil, gas and other minerals ... in and under and that may be produced from the lands above described” (emphasis added). Middleton, 504 S.W.2d at 843; King, 192 S.W.2d at 263. We therefore hold that the Grande to Fogelman deed reserved to Grande an undivided one-fourth of the royalty from the minerals produced from the whole of the tracts described in the deed.

Regardless of the appeal of Averyt’s argument that the “subject to” clause is part of the description of the land, its adoption now would disturb the ownership of all minerals granted or reserved in deeds prepared according to the long standing rule here applied. King was written in 1946. Since then, numerous cases have relied on the King rule to apportion ownership of minerals. Middleton, 504 S.W.2d at 843; Gibson v. Turner, 156 Tex. 289, 294 S.W.2d 781 (1956); McElmurray v. McElmurray, 270 S.W.2d 880 (Tex.Civ.App.—Eastland 1954, writ ref’d); Miller v. Speed, 259 S.W.2d 235, 236 (Tex.Civ.App.—Eastland 1952), no writ); R. Lacy, Inc. v. Jarrett, 214 S.W.2d 692 (Tex.Civ.App.—Texarkana 1948, writ ref’d). For other states relying on the King rule, see Price v. Atlantic Refining Co., 79 N.M. 629, 447 P.2d 509 (1968); Williams v. Sohio Petroleum Co., 18 Ill.App.2d 194, 151 N.E.2d 645 (1958); Ferguson v. Morgan, 220 Miss. 266, 70 So.2d 866 (1954); Pollock v. McAlester Fuel Co., 215 Ark. 842, 223 S.W.2d 813 (1949). Cf. Krauss v. Fry, 209 La. 250, 24 So.2d 464 (1946) (“land described” held ambiguous, parol evidence considered). Also, virtually all of the commentators set out the King rule as governing this type of situation. Hemingway, Law of Oil and Gas § 3.2, pp. 113-14 (2nd ed. 1983); 1 Kuntz, Oil and Gas § 14.5, p. 331 (1960); 1 Williams and Meyers, Oil and Gas Law § 312, p. 600 n. 4 (1970); Barber, Duhig to Date: Problems in the Conveyancing of Fractional Mineral Interests 13 Sw. L.J. 321, 323 (1959); Masterson, Double Fraction Problems in Instruments Involving Mineral Interests 11 Sw. L.J. 281, 282-83 (1957). Undoubtedly, numerous deeds, in addition to the one in this case, were prepared according to these rules. We should be loathe to change long-standing rules in the oil and gas field when doing so would alter the ownership of minerals conveyed in deeds which rely on the law established by this court and followed by lower courts, commentators, and especially lawyers advising their clients.

Averyt also complains that the trial court erred in failing to file findings of fact and conclusions of law. Averyt properly requested findings of fact and conclusions of law, which the trial court did not file. However, the record does not reveal a complaint filed “in writing, within five days after” the findings were due as required by Tex.R.Civ.P. 297. Averyt waived this complaint.

We overrule all of Averyt’s points of error. Accordingly, we affirm the judgment of the court of appeals and that of the trial court.

KILGARLIN, J., joined by RAY and WALLACE, JJ., dissents.