Farm & Ranch Investors, Ltd. v. Titan Operating, L.L.C.
369 S.W.3d 679
| Tex. App. | 2012Background
- Caldwell’s Creek, Ltd. owned about 60 acres in Colleyville and recorded restrictions in 1994 reserving mineral rights to Caldwell’s Creek, Ltd.
- Restrictive deeds conveyed lots subject to recorded restrictions, but did not include a separate mineral reservation.
- In 2005 Caldwell’s Creek, Ltd. conveyed all oil, gas, and mineral rights to Farm & Ranch by a special mineral deed, believing it retained the minerals due to the restrictions and deed language.
- Farm & Ranch joined CAMRA to negotiate mineral leases; Titan ultimately declined CAMRA’s lease and instead leased to the nine lot owners individually.
- Titan sued Farm & Ranch for declaratory judgment that Titan owns the minerals; Farm & Ranch counterclaimed; the trial court granted Titan’s motion and denied Farm & Ranch’s, declaring Titan owns the minerals.
- On appeal, the court held that the mineral rights passed to Titan because the restrictions did not reserve minerals and the deeds conveyed both surface and mineral interests, subject to but not reserving minerals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Caldwell’s Creek, Ltd. reserve the minerals? | Farm & Ranch argues restrictions reserved minerals for Caldwell’s Creek, Ltd. | Titan contends restrictions did not create a valid reservation of minerals; the minerals remained with Caldwell’s Creek, Ltd. and passed with the deeds. | Minerals passed to Titan; restrictions failed to reserve minerals. |
| Does 'subject to' language import restrictions into deeds as reservations? | Farm & Ranch asserts 'subject to' imports restriction language and creates notice and reservation. | Titan argues 'subject to' is a warranty limitation, not a reservation, and does not reserve minerals. | ‘Subject to’ is a warranty limitation, not a reservation; it does not retroactively reserve minerals. |
Key Cases Cited
- Reeves v. Towery, 621 S.W.2d 209 (Tex.App.-Corpus Christi 1981) (general warranty deed conveys all unless clearly reduced; reservation not favored)
- Waters v. Ellis, 158 Tex. 342, 312 S.W.2d 231 (Tex. 1958) (reservation by implication not favored; conveyance language controls)
- Wright v. E.P. Operating L.P., 978 S.W.2d 684 (Tex.App.-Eastland 1998) (‘subject to’ as finite warranty limitation, not nullity)
- Averyt v. Grande, Inc., 686 S.W.2d 632 (Tex.App.-Texarkana 1984) (‘subject to’ limits conveyance and protect warranty)
- Johnson v. Conner, 260 S.W.3d 575 (Tex.App.-Tyler 2008) (deed language not explicit reservation conveys minerals)