Rita Gonzalez as Trustee of RG Family Trust and Ramon Gonzalez v. Don A. Janssen and Debra Janssen
553 S.W.3d 633
| Tex. App. | 2018Background
- In 1977 a deed reserved an undivided 1/16th reversionary royalty interest in two tracts; that reserved interest would expire in twenty years without production.
- In 1985 C.J. Janssen conveyed the reversionary royalty interest in undivided shares to his four children, including Don.
- On September 15, 1988 Don and others executed two warranty deeds conveying the 101.43-acre tract to Ramon Gonzalez Jr. and the 209.97-acre tract to the Ramon Gonzalez, M.D., P.A., Employees Pension Plan and Trust; each deed described the land and then stated the conveyance was "SUBJECT TO" specified earlier instruments (including the 1977 and the 1985 royalty instruments).
- The reserved royalty interest expired in 1997; in 2011 Gonzalez leased the property and production royalties were paid, prompting Don to claim entitlement to his share as never conveyed.
- The Gonzalezes sued for declaratory relief seeking a judicial determination that Don’s undivided share of the reversionary royalty passed in the 1988 deeds; the Janssens countered that the deeds excluded (or were ambiguous as to) that royalty interest and alternatively sought reformation/mutual mistake.
- The trial court granted summary judgment to the Janssens holding the deeds excluded the 1985 gift deed from the grant; the Fourth Court of Appeals reversed and rendered judgment for the Gonzalezes, holding the deeds conveyed Don’s undivided share.
Issues
| Issue | Plaintiff's Argument (Gonzalezes) | Defendant's Argument (Janssens) | Held |
|---|---|---|---|
| Whether the 1988 deeds conveyed Don’s undivided share of the reversionary royalty interest | Deeds convey "all" described property; "subject to" clauses only give notice of existing encumbrances and do not reserve or except the royalty | The second "subject to" clause functionally operates as an exception limiting the grant (and its placement before the habendum shows it limits the estate) | Held: Deeds unambiguous; "subject to" notices do not except or reserve Don’s share; royalty passed to grantees |
| Whether the deeds are ambiguous requiring extrinsic evidence/remand | No — plain four-corners construction resolves intent; no ambiguity | Yes — deeds ambiguous, so factual hearing should determine intent | Held: Deeds are unambiguous; no remand for extrinsic evidence |
| Whether Bass v. Harper controls (placement of "subject to" before habendum) | Bass is distinguishable because its wording tied the "subject to" specifically to the grant; here clauses merely follow descriptions | Placement and context show intent to limit the grant | Held: Bass limited to its specific language and not controlling; court follows Wenske guidance |
| Whether reservations/exceptions may be implied without clear language | Grantor must use clear language to reserve/except; lacking clear reservation/exception, grantee receives greatest estate grantor owned | Grantor need not use "magic words"; functional effect suffices | Held: Reservations/exceptions require clear, specific language; functional argument insufficient here |
Key Cases Cited
- Wenske v. Ealy, 521 S.W.3d 791 (Tex. 2017) (primary guidance that deeds must be construed from their four corners and that "subject to" clauses ordinarily give notice of outstanding interests)
- Combest v. Mustang Minerals, L.L.C., 502 S.W.3d 173 (Tex. App.—San Antonio 2016) (unambiguous deeds construed to give grantee the greatest estate permitted by instrument)
- Luckel v. White, 819 S.W.2d 459 (Tex. 1991) (deed construction focuses on ascertaining parties' intent from instrument itself)
- Bass v. Harper, 441 S.W.2d 825 (Tex. 1969) (specific deed language can make "subject to" clause limit the grant; limited by later precedent to facts/language in that case)
- Klein v. Humble Oil & Refining Co., 86 S.W.2d 1077 (Tex. 1935) (reservations are strictly construed: a reservation takes back part of the interest granted and must be clear)