133 S.W.2d 982 | Tex. App. | 1939
This suit was instituted by appellants in the form of trespass to try title to the oil, gas and other minerals in a certain specified 4,985.41 acres in Matagorda County. The common source of title was J. V. Brasfield, who acquired the fee simple title to the land involved on December 4, 1919. On the same day that he acquired the title to such land, Brasfield conveyed to Burke Vancil, Trustee for the benefit of the various and sundry beneficiaries named in the different deeds employed to convey same, the surface rights in the various tracts constituting such 4,985.41 acres, together with 1/8th of the minerals in each such tract. And in each of such deeds Brasfield reserved to himself a 7/8ths interest in the mineral rights in each such tract, using for the purpose of such reservation in each such deed the following language: "Excepting and reserving in me, the grantor herein, a seven-eighths interest in all oil, sulphur and other minerals in or under the surface of said land, with the right to prospect for, and develop, produce and secure, and to transport the same across and from said land, and the right of ingress and egress therefor."
Thereafter, in the year 1920, Brasfield executed oil and gas leases to various lessees on the 7/8ths undivided mineral interest which he had reserved to himself out of the tracts constituting the 4,985.41 acres involved, retaining for himself a 1/8th royalty interest out of such 7/8ths interest. In other words, each lease was a standard commercial Texas oil lease, providing for Brasfield an eighth royalty, and most of such leases being for the primary term of five years, and provided for payment of rentals in lieu of drilling operations. The 1/8th royalty interest reserved to Brasfield was 1/8th of the reserved 7/8ths interest, or 7/64ths: The working interest which was assigned to the lessee was therefore the difference between the 7/8ths and 7/64ths of the minerals.
Appellees were defendants below. Their claim to the 7/8ths interest is based on an execution sale held on March 3, 1925, under an execution issued under a judgment obtained by Matt Pierce against Brasfield in a suit in the district court of Matagorda County, in cause No. 8654 in such court. At such execution sale the sheriff purported to sell all of Brasfield's interest, right, etc., in the 7/8ths of the minerals in the 4,985.41 acres; and Matt Pierce, plaintiff in judgment, and his attorney, bought in such interest for $2,300, being the amount of the judgment, interest and costs on the day of such sale.
Appellants conceded, as we understand it, that said sheriff's sale was valid and effective to transfer the royalty interest retained by Brasfield in such leases, being 1/8th of 7/8ths of the oil and gas under the 4,985.41 acres, and no contention is made that said 7/64ths failed to pass by said sheriff's sale. They contend, however, that Brasfield owned only a "possibility of reverter" in such 49/64ths of the minerals which was then owned by the lessees, and that such an interest was too inchoate and incomplete to be levied upon or caught by an execution, and that therefore nothing passed to the purchasers at such execution sale, save and except the 7/64ths royalty interest in which Brasfield owned the right of present enjoyment. Therefore, so appellants contend, when the leases given by Brasfield, covering 49/64ths of the minerals in the 4,985.41 acres expired — which expiration occurred prior to March 6, 1930, some five years after the execution sale — such 49/64ths interest reverted to Brasfield. On March 6, 1931, Brasfield executed a deed to D. E. Frost, Harry Fisher, and S.D. Boynton, which undertook to convey the 7/8ths mineral interest which Brasfield had reserved in his various deeds to Burke Vancil, Trustee, wherein he conveyed the surface rights and 1/8th of the minerals in the 4,985.41 acres. The grantees, or their successors in interest, in the mineral deed of March 6, 1931, brought this suit (as above indicated) in trespass to try title. In the second count of their petition, they pled their title specially.
The trial was had before the court without a jury, upon an agreed statement of facts, the substance of which has been given above. The trial court found for appellees, and appellants seek to reverse the trial court's judgment in so far as it awards appellees the 49/64ths interests of the oil, gas and other minerals in the 4,985.41 acres.
From the facts stated, Brasfield was the fee-owner of 7/8ths of the minerals in the 4,985.41 acres before he covered it with mineral leases. The effect of the leases was doubtless to leave in himself the right of present enjoyment of a 1/8th royalty in 7/8ths of the minerals, and to place in the lessees a determinable fee to 49/64ths of the minerals, subject to an inchoate *984
right to a reversion of such 49/64ths, which our Supreme Court has identified as a "possibility of reverter". Stephens County v. Mid-Kansas Oil Gas Co.,
It is appellants' contention, as we understand it, that Brasfield's "possibility of reverter" in the working interest under the leases was in its nature and with reference to its value so undetermined, uncertain and contingent that it would be incapable of being appraised or sold with fairness to both debtor and creditor, and therefore could not be levied upon.
Now we may, for convenience of discussion, break up Erasfield's interest, at the time it was levied upon and sold, into such elements as royalty rights, or as the right to demand and receive the payment of rentals made in lieu of drilling operations, or as his inchoate right to the reversion of the working interest held by the lessees. But actually such elements, at the time of the execution sale, were merged together in one ownership to form "all the right, title, interest and claim which the defendant in execution had in and to the property." The language just quoted comes from Art. 3816. And by the terms of that article when the buyer at an execution sale complies with the terms of the sale he is entitled to a deed to all the right, title, interest and claim which the defendant in execution has in the property sold. The sheriff did not undertake, in the execution sale we are concerned with, to deal with Brasfield's "possibility of reverter" in the working interests under the leases, as such. But the execution deed conveyed all his right, title,interest and claim in the and, It may be that the value of Brasfield's "possibility of reverter" in the working interest under the leases, was difficult or impossible to determine. There seems to have been no proof with reference to that. But the fact that it might have been difficult or impossible to determine the value of the "possibility of reverter" as a segregated element of Brasfield's ownership in the land does not establish that it would have been difficult or impossible to determine the value of "all his right, title, interest or claim" in the 4,985.41 acres. It is a matter of common knowledge that the usual and customary way for a land-owner to realize on the value of his land for oil is to get it leased, retaining royalty rights, and through such royalty rights to share in the profits which it is hoped will issue from his land in the form of oil production, or to sell such royalty rights or portions thereof to others. In other words, the usual method by which the land-owner realizes on his oil rights is through royalty rights; and the thing that gives value to a royalty right prior to actual production is the belief that the working interest, which is created by the selfsame lease that creates the royalty rights, will be developed and operated. See Frost v. Standard Oil Company, Tex. Civ. App.
Assuming, however, that we are wrong in our view that appellants have no right to have Brasfield's "possibility of reverter" treated as being separate and apart from his remaining oil interests in the land in question at the time of the execution sale, we still do not believe that we have any basis for holding that the interest of Brasfield was so undetermined, uncertain and contingent that it was incapable of being sold with fairness to the debtor and creditor, and so, not subject to being levied upon. In support of their contention appellants rely on such cases as Gushwa v. Gushwa,
In the Gushwa case it was held that a "possibility of reverter" was not subject to execution sale. However, it appears that in Indiana, where the case arose, the possibility of reverter after a condition subsequent — which we understand was the case in the Gushwa case — is not assignable. Federal Land Bank v. Luckenbill,
The case of O'Neal v. Clymer, supra, is too long to review; as it seems distinguishable on the facts from the case before us, and is by the court based on Chase v. Bank, supra, we will not review it, the more especially as the Chase case does itself review the Texas cases upon which appellants rely, decided prior to its decisions — March 9, 1896. The facts of the Chase case, briefly stated, were that eleven parties contributed together to the purchase of nine tracts of land, situated near Denison, Texas, and caused the same to be conveyed to one of their number, P. E. Fairbanks, Trustee, by deeds from various parties; that it was the intention of the parties in having the property conveyed to Fairbanks as trustee, that he should have absolute title, to facilitate the transaction, and his only obligation to his various associates being to account to them for the proceeds of the sale.
W. P. Rice, one of these parties, had contributed $14,000 to the venture and M. H. French $6,000. They transferred their respective interests in said trust to other parties, of which said transfers the plaintiff, York County Savings Bank, had no notice at the time of their levy and attachment on the interests of said Rice and French in the land, in their suit for a judgment against Rice and French and foreclosure of their claimed attachment lien — the transfer not being recorded at said time.
The trial court decided the question in favor of Rice and French's transferees and rendered judgment in their favor, but the Court of Civil Appeals reversed the judgment of the trial court and rendered judgment for the bank, and the transferees secured a writ and assigned as error the ruling of the Court of Civil Appeals; and the Supreme Court reversed the judgment of the Court of Civil Appeals and reinstated that of the district court, Chase v. York County Savings Bank,
The Supreme Court pointed out that equitable interests were not subject to execution sale at common law, and that to enable creditors to subject to the payment of their debts such interests of their debtors in lands as were held by others in trust for them, the Statute of 29 Charles II, Ch. 3, provided: "`that * * * it shall * * * be lawful for every sheriff or other officer to whom any writ or precept * * * shall be directed, * * * upon any judgment,' etc., `to do, make and deliver execution unto the party in that behalf suing, of all such lands * * * as any other person * * * shall be seized or possessed in trust for him against whom execution is so sued.' * * * `This statute made a change in the common law, and, up to a certain extent, at least, made a trust the subject of inquiry and cognizance in a legal proceeding. We think that the trust that is to be thus treated must be a clear and simple trust for the benefit of the debtor; the object of the statute * * * to be merely to remove the technical objection arising from the interest in lands being legally vested in another person, where it is so vested for the benefit of the debtor.'" [
In Moser v. Tucker,
"It must be conceded that no property or interest in property is subject to sale under execution or like process unless the *986 debtor, if sui juris, has power to pass title to such property or interest in property by his own act. [Citing authorities.]
"There is no doubt that uncertain or contingent vested estates or rights in property may ordinarily be subjected to payment of debts through execution or like process * * *
"It is not, however, every interest in property a debtor may have right to or to acquire that may be subjected to sale under execution or otherwise for payment of his debts, for in many instances his right is so remote and contingent that it is deemed more likely to subserve the ends of justice not so to subject it than to take the risk of sacrifice of contingent right by procedure which will most likely be of no practical benefit to the creditor, or may be ruinous to the debtor.
"This is illustrated by cases decided in this state." (Citing Daugherty v. Cox,
Each of the cases cited related to the question of whether a mere equity could be subjected to execution. And, as indicated in the Chase case, such an interest is not subject to execution sale.
The true rule, as to property which can be levied on by a writ of execution and sold, where not exempt, is, we believe, indicated in Gregg v. First National Bank, Tex.Com.App., 26 S.W.2d 179, 181, in these words: "He possessed such an interest in the property as might be transferred by assignment, consequently it was subject to sale under execution." (Citing authorities)
There are exceptions to such rule, such as are indicated by the Chase case, supra. A mere expectancy of inheritance is another. Hale v. Hollon,
We have been greatly aided in the consideration of this case by the exceptionally able and well prepared briefs filed by both sides, and take pleasure in thus acknowledging our indebtedness to counsel.
Believing that the judgment of the court below was correct, it is affirmed.
Affirmed.
In order, therefore, for appellants to have shown that the property sold at execution sale, was not subject to execution, they would have had to have shown either that it was a mere equity, as distinguished from an equity title to property, or that it was property that had been made exempt by statute or constitution, changing the common law relative to executions. It is not pretended that Brasfield owned a mere equity to acquire title. He owned *987 the fee simple title to the oil rights in 7/8ths of the mineral, less the working-interest, at the time of the execution sale.
We adhere to the views expressed in our former opinion; and for those reasons, and for these reasons, appellants' motion for rehearing is refused.
Refused.