Toni Combest and Mountain Laurel Minerals, LLC v. Mustang Minerals, LLC, 502 S.W.3d 173

Background

Horace and Inga Combest owned an undivided one-half mineral interest under 80 acres by virtue of three 1967–1968 source deeds that reserved one-half of the minerals to the grantor.
In 2003 the Combests executed a warranty deed (the Combest Deed) conveying the described 80 acres to Preston and Toni Combest, which included language: "excepts from this conveyance and reserves unto themselves . . . an undivided one-half interest in and to all of the oil, gas, and/or other minerals," and other "subject to"/reservation clauses.
Toni leased minerals to Chesapeake in 2012; Chesapeake initially paid royalties to Toni and Mountain Laurel (a 2013 transferee of half of Toni’s claimed interest) but stopped after Mustang (successor to prior reservations) claimed full mineral ownership.
Mountain Laurel sued Mustang in trespass to try title; Toni intervened. Competing summary-judgment motions argued conflicting deed interpretations: Toni/Mountain Laurel said the deed conveyed a one-half mineral interest to Toni; Mustang said the deed conveyed only the surface and reserved the one-half mineral interest to the grantors.
The trial court ultimately granted Mustang’s summary judgment and rendered take‑nothing judgments against Mountain Laurel and Toni. Mountain Laurel later abandoned its appeal; only Toni appealed and argued deed construction, ambiguity, and that Mustang (a foreign LLC) was barred from affirmative relief for failing to register in Texas.

Issues

Issue	Plaintiff's Argument (Combest)	Defendant's Argument (Mustang)	Held
Construction of the Combest Deed — did it convey a one-half mineral interest?	The deed "excepts from this conveyance" only what the grantors owned and thus conveyed one-half of the grantors' mineral interest to Toni (relying on interpretation like Hooks).	The deed reserves an undivided one-half of the minerals under the described land (King/Averyt rule), so the grantors retained the one-half mineral interest and only the surface (or lesser estate) passed.	The court held the deed reserves a fraction of minerals from the land described (King/Averyt rule); Toni received no mineral interest.
Ambiguity of the deed — was extrinsic evidence required?	Combest: deed is reasonably susceptible to both interpretations, so ambiguity exists and summary judgment is improper.	Mustang: deed is unambiguous and supports Mustang’s construction.	The court held the deed is not ambiguous as a matter of law and affirmed summary judgment.
Applicability of Duhig estoppel — does reserving minerals here breach warranty so grantor is estopped from asserting reserved interest?	Combest: reservation should be estopped under Duhig because deed appears to convey minerals while reserving them.	Mustang: the deed contained explicit limiting language subjecting the conveyance to prior reservations/transfers, so no Duhig estoppel applies.	The court held Duhig does not apply because the deed’s limiting clause expressly subjected the conveyance to prior reservations/transfers.
Effect of Mustang's failure to register as foreign entity — can Mustang obtain a take‑nothing judgment?	Combest: Mustang’s lack of Texas registration under the Business Organizations Code bars it from receiving affirmative relief (a take‑nothing judgment effectively vests title).	Mustang: Texas law allows an unregistered foreign entity to defend an action; the take‑nothing judgment resulted from its defense (summary judgment).	The court held Mustang could defend and receive the take‑nothing judgment; the registration statute did not bar Mustang’s defense or the judgment.

Key Cases Cited

Averyt v. Grande, Inc., 717 S.W.2d 891 (Tex. 1986) (distinguishes reservations of minerals "under the land conveyed" from those "under the land described," and applies the latter to reserve fractional minerals under the entire described tract)
King v. First Nat’l Bank of Wichita Falls, 192 S.W.2d 260 (Tex. 1946) (reservation referencing the "lands described" reserves minerals from the entire physical tract)
Hooks v. Neill, 21 S.W.2d 532 (Tex. Civ. App.—Galveston 1929) (reservation limited to the interest actually conveyed)
Duhig v. Peavy-Moore Lumber Co., 144 S.W.2d 878 (Tex. 1940) (estoppel where grantor’s warranty appears to convey more than grantor actually owns)
Luckel v. White, 819 S.W.2d 459 (Tex. 1991) (rules on deed construction: ascertain intent from whole instrument)