Atlantic Refining Company v. Noel

443 S.W.2d 35

• Court: Texas Supreme Court
• Decided: February 19, 1969
• Docket: B-331
• Status: Published

Opinions

POPE, Justice.

Our former opinion is withdrawn and this opinion is substituted for it. This is a vacancy case. Atlantic Refining Company filed a trespass to try title suit against J. S. Lane, Harry Howard and wife, Bankers Life Company, a mortgagee, and W. D. Noel, the holder of a mineral lease covering the alleged vacancies; and the State of Texas intervened on behalf of the Permanent Free School Fund. The case was tried before the court without a jury. The trial court sustained Atlantic’s contentions and rendered judgment that there were no vacancies in the area claimed by the defendants. The court of civil appeals reversed that judgment. 414 S.W.2d 718. The basis for the decision of the court of civil appeals was that Atlantic is estopped to deny the existence of the vacancies. We are of the opinion that there is no basis for principles of estoppel to operate so as to defeat Atlantic’s title to the disputed lands. We reverse the judgment of the court of civil appeals and affirm the judgment of the trial court.

Most of the facts are not in dispute and only a brief summary is necessary. In 1881 H. C. Barton, acting upon valid certificates, located, surveyed and returned the field notes to Blocks 1 and 2, M. K. & T. R. R. Co. in Upton County. All of the odd numbered sections in Blocks 1 and 2 were patented to the railroad. In 1904, John R. Johnston made application to purchase Section 26, Block 1 from the State. In 1905 H. R. Smith made application to purchase Section 10, Block 1. The State awarded the sections to Johnston and Smith, and both awards were based upon the Barton survey and field notes.

Barton’s surveys of Blocks 1 and 2 were done as one continuous work. Both the surveyor for Atlantic and the surveyor for the State so testified. Barton worked in Block 1 on October 6 and the next day moved on to Block 2 which adjoined Block 1 on the north. It is undisputed that Barton called for joinders of Blocks 1 and 2, and set a monument at the northeast corner of Section 10, Block 1, which monument was the same point for the southeast corner of Section 1, Block 2. The north line of Sections 26 and 10, Block 1, and the south line of Block 2 were the same. According to Barton, there was no vacancy between Blocks 1 and 2, and it was upon the basis of his work that the State patented the odd numbered sections and made the awards to Johnston and Smith.

In 1909, Union Land Company, through mesne conveyances from the original awardees, was the owner of both Sections 26 and 10. At that time the state debt had not been paid, and the sections were yet unpatented. Union asked the Land Commissioner to cause a resurvey to be made and in 1913 the Land Commissioner instructed H. S. Dod to resurvey Blocks 1 and 3.

Dod made a resurvey of Block 1 in 1913. Block 2 was apparently not resurveyed. It is undisputed that Dod did not follow the Land Commissioner’s instructions, by reason of which he did not go to at least twelve different monuments set by Barton in Blocks 1 and 2 which were on the ground then and are still there today. Dod’s field notes did not call for adjoinder of the north lines of Sections 26 and 10 with Block 2 which was Barton’s admitted intent. Dod’s resurvey showed 670 acres of land in each of the sections rather than only 640 acres as described by Barton, but Dod’s monuments were located in such a way that they left 60.5 acres between Section 10 in Block 1 and Section 1 to the north in Block 2. His monuments also left 94.5 acres between Section 26 in Block 1 and Section 15 in Block 2 to the north. These are the areas which the court of civil appeals has held to be vacancies. The situation is shown by this sketch.

In 1926 Union Land Company conveyed Sections 26 and 10 to Cordova Union Oil Corporation. In 1943 Cordova conveyed the minerals to Sections 26 and 10 to Atlantic Refining Company, thereby severing the surface and mineral estates. Thereafter Cordova Union conveyed the surface of Section 10 to J. S. Land and conveyed the surface of Section 26 to Harry and Mabel Howard. In 1944 Cordova Union paid the state debt on both sections upon the basis of 670 acres in each survey. Lane and the Howards, the surface owners, later became indebted to Bankers Life Company, and in January 1946 Bankers Life, the mortgagee of the surface owners, applied for and obtained patents to the two sections upon payment for 670 acres of land to the State. The patents were issued based upon the Dod field notes. They were issued in the name of E. G. King, assignee of H. R. Smith, covering Section 10, Block 1, and in the name of John R. Johnston, the original applicant to purchase Section 26, Block 1.

In 1961, W. D. Noel filed a mineral application to lease the 60.53 acre-tract and the 94.5-acre tract above mentioned, contending that such tracts were unsurveyed lands belonging to the Public Free School Fund. See, Article 5421c, Vernon’s Ann. Tex. Stats. The alleged vacancies were recognized by the Land Commissioner and Noel’s application was approved. Later patents covering such tracts were issued to J. S. Lane and to Harry and Mabel Howard as good faith claimants.

It is not disputed that Atlantic proved its title to the lands and that there is no vacancy unless Atlantic is estopped to claim under the Barton survey. It is our opinion that there is no vacancy. Dod’s mistakes in surveying are not the reasons for our conclusion that there is no vacancy. It is our opinion that the court of civil appeals erred in its holding that Atlantic is estopped to deny the existence of the vacancy. There can be only three possible acts which could afford the basis of an estoppel, none of which, in law has ever previously been held sufficient to divest a landowner of his vested rights. They are (1) Union Land’s request for a resurvey, (2) the Land Commissioner’s acceptance of the resurvey, or (3) the acceptance of a patent by the surface owners who were outside of Atlantic’s chain of title and which patents used the Dod field notes in describing the land. No precedents support an estoppel based upon any of the stated theories.

When Johnston and Smith obtained their respective awards for Sections 26 and 10, each for 640 acres, those lands had been segregated from the public domain. At that time Johnston and Smith had rights which would support a legal action including a suit for trespass to try title. Art. 7375, Vern.Tex.Civ.Stats.; Duren v. Houston & T. C. Ry. Co., 86 Tex. 287, 291, 24 S.W. 258 (1893); See, Lange, 3 Texas Practice, Land Titles, § 112.

The survey, location, and return followed by the awards based upon those acts vested legal rights in Johnston and Smith. Threadgill v. Bickerstaff, 87 Tex. 520, 29 S.W. 757 (1895); Ross v. Early, 39 Tex. 390 (1873); Howard v. Perry, 7 Tex. 259 (1851); Stubblefield v. Hanson, 94 S.W. 406 (Tex.Civ.App., 1906, writ ref.); Watts v. Bruce, 31 Tex.Civ.App. 347, 72 S.W. 258 (1903, writ ref.). It was said in Hamilton v. Avery, 20 Tex. 612, 635:

“Our courts have recognized a survey, by virtue of a valid certificate, as a valid right; a right of property, as fully as any other rights. It is a right binding on the government; upon which the government, through the commissioner of the general land office, can be compelled, by judicial process, to issue a patent * * *. It is recognized by the government as his property, and not public domain, by being taxed and sold for taxes, the same as titled lands * * *. It confers the right to maintain a suit upon it, to try the title and eject trespassers. It gives a right which is the subject of possession; of purchase; and of inheritance. It is sold under execution, and administered in courts of probate. It is regarded in the community as possessing but little less marketable value than patented land.” (Emphasis supplied)

In Morrill v. Bartlett, 58 Tex. 644, 649 (1883), the question was whether the rights of a party acquired under a valid certificate followed by a survey, location, and return of the field notes were changed by the issuance of a patent which used a different set of field notes to describe the land. The court wrote:

“It is not disputed but that this grant was located upon vacant land by virtue of a genuine certificate; that it was legally surveyed by the proper officer; that it was correctly traced upon the county map in the surveyor’s office; that the certificate, survey, field notes and a copy of the map were duly filed in the general land office; and that, according to these, the land has a common corner with the Gooch survey at the end of its second line. These facts established, and no- error in the field notes being shown, nor other reason why the patent should not issue in accordance with the actual survey made, the grantee had a just and equitable right to- the whole Ictnd thus surveyed and described; a title upon which he could recover, against any party claiming under a junior grant, any portion of the land included within the boundaries of such survey. Not only so, but he became authorized to have his title evidenced by a patent describing the land precisely as surveyed, and to compel the commissioner of the general land office to issue it to him. * * *

“The law no where recognizes his right to change the calls of the field notes, or leave out any portion of them, so as to grant to the patentee a different tract of land from that actually run out by the surveyor.” (Emphasis supplied)

The issuance of a patent is a mere ministerial act. Whether it is issued or not does not defeat legal rights, which are vested. Seibert v. Richardson, 86 Tex. 295, 297, 24 S.W. 261, 262 (1893); Adams v. Houston & T. C. R. Co., 70 Tex. 252, 268, 7 S.W. 729 (1888); Gullett v. O’Connor, 54 Tex. 408 (1881); Gould v. West, 32 Tex. 338, 339, 351 (1869); State v. Delesdenier, 7 Tex. 76 (1851). The rights of parties are determined “by the priority of valid location, not by the mere issuance of the patent. A survey under a valid location, although un-patented, will prevail over a patent issued under a location subsequently made upon the same land.” Whitman v. Rhomberg, 25 S.W. 451 (Tex.Civ.App.1894, no writ).

From these principles, we conclude that Johnston and Smith by force of their awards owned an equitable title in lands that had been segregated from the public domain at the time the awards were validly issued. “The state retained in herself the legal title to land to secure the payment of Hilliard’s ‘obligation or note.’ The state was concerned with the land no further than as such security.” Elliott v. Nelson, 113 Tex. 62, 251 S.W. 501 (1923). We reach, therefore, the question whether these vested rights were terminated in some way.

Union Land in 1913 requested a resurvey, which the Land Commissioner authorized and which Dod made. Union Land and its successors did nothing after the resurvey. It did not accept patents based upon Dod’s erroneous survey. Union Land’s vendee, Cordova Union, did not request or accept patents; and Atlantic, the vendee of the mineral estate, did not request or accept patents based upon the Dod field notes. Neither Atlantic nor its predecessors ever acted in recognition of the Dod survey. In fact, nothing on the face of the Dod field notes showed that there was a vacancy or that those holding under valid awards owned less than 640 acres. Dod’s field notes showed and would lead the owners to believe that they in fact owned an excess of thirty acres more than Barton’s survey showed. The maps in the office of the Land Commissioner showed no vacancy.

The Land Commissioner accepted and filed the Dod resurvey, but he did not cancel the Barton survey. In any event, a Land Commissioner is not possessed of power to divest title nor to enlarge titles to lands by the ordering and acceptance of resurveys. It has been the consistent holdings of this court that the acceptance of a resurvey can not authorize the inclusion of lands not included in the original survey. Turner v. Smith, 122 Tex. 338, 61 S.W.2d 792, 801 (1933); State v. Post, 106 Tex. 468, 500, 169 S.W. 407, 408 (1914); Texas & P. Ry. Co. v. Thompson, 65 Tex. 186 (1885). Neither should property rights which have already vested be the subject of divestiture by the acceptance of a resurvey by the Commissioner. Carmichall v. Stanolind Oil & Gas Co., 256 S.W.2d 129 (Tex.Civ.App.1952, writ ref.).

We do not question the settled rule that vested rights in unpatented lands may be lost by an owner’s acts which estop him to claim outside his patent calls. We do, however, question the power of a remote surface vendee who is outside of Atlantic’s chain of title, to accept a patent and thereby work an estoppel which divests Atlantic of its severed mineral rights. Atlantic and its predecessors have never accepted a patent which recognized the Dod survey.

The act relied upon for the creation of an estoppel against Atlantic Refining Company as owner of the mineral estate is the act of the owners of the surface to Sections 26 and 10. It is an act of the surface owners done long after the mineral and surface estate had been severed and after Atlantic obtained its title to the minerals in 1943. To estop Atlantic under such circumstances would mean that the owner of a mineral estate can be estopped by conduct of the surface owner over whom he has no right of control. It would mean that a mineral owner may be estopped by the conduct of the surface owner after the sever-anee of the mineral and surface estates and about which the mineral owner had neither constructive nor actual notice.

At the time the surface owners accepted patents the mineral estate had already been severed. The severance resulted in surface and mineral estates which were separate and distinct. Humphreys-Mexia Co. v. Gammon, 113 Tex. 247, 254 S.W. 296, 29 A.L.R. 607 (1923); Hager v. Stakes, 116 Tex. 453, 294 S.W. 835, 842 (1927); Yates v. State, 3 S.W.2d 114, 118 (Tex.Civ.App.1928, writ ref.); Slack v. Magee Heirs (Tex.Civ.App.), 252 S.W.2d 274, 278, aff’d Magee Heirs v. Slack, 152 Tex. 427, 258 S.W.2d 797 (1953). It follows that the acceptance of the patents by the surface owners in 1945 was not in the chain of title to the mineral estate which was severed in 1943. Andretta v. West, Tex.Civ.App., 402 S.W.2d 543, rev. 415 S.W.2d 638 (Sup.Ct.1967); White v. McGregor, 92 Tex. 556, 50 S.W. 564, 71 Am. St.Rep. 875 (1899). This point was presented in State v. Alford, 175 S.W.2d 678 (Tex.Civ.App.1943, writ ref. w. o. m.). The case held that a vendor, Parsons, by the acceptance of a corrected patent could not disparage the title of his prior vendee. The court said:

“James A. S. Parsons, having parted with his title to said land and his interest in said certificate on December 18, 1852, by his deed to William Harnage, could do nothing to disparage the title Harnage had to said land by his action in attempting to cancel the original patent of the H. B. Dance survey and to secure a corrected patent for himself from the Commissioner of the General Land Office * * *.

“Appellants contend, however, that appellees had constructive notice of the proceedings in connection with the cancellation of the original patent and of the reissuance of a corrected patent. This contention cannot be sustained, since the registration of an instrument is notice only to those who claim through and under the grantor or mortgagor by whom the instrument was executed. White v. McGregor, 92 Tex. 556, 50 S.W. 564, 71 Am.St.Rep. 875; 36 Tex.Jur. 476.

‘‘The corrected patent of the Dance survey was issued on September 11, 1860, eight years after Harnage acquired the land from Parsons, and was therefore not a part of the chain of title of Harn-age or his vendees herein.” (Emphasis supplied)

Atlantic and its predecessors in title in no way participated in the actual acceptance of the patent by the surface owners. We have found no decision which holds that an estoppel arises under such a state of facts. In Austin v. Dungan, 46 Tex. 236 (1876) an estoppel arose against the one who “applied for and obtained the patent upon this resurvey.” In Anderson v. Robison, 111 Tex. 402, 229 S.W. 459, rev’d. on rehearing, 111 Tex. 402, 238 S.W. 883 (1922) an es-toppel was held to exist against an owner’s predecessor who prepared corrected field notes, and “calls for his patent and accepted it, * * In Holmes v. Yates, 122 Tex. 428, 61 S.W.2d 771 (1933) an estoppel operated to defeat an owner’s rights to 233 acres of land because “Miller (the owner) accepted title to his 407 acres, abandoning all claim to more land.” In Miller v. Yates, 122 Tex. 435, 61 S.W.2d 767 (1933) the one estopped was held to be the one who “accepts a patent.” In Turner v. Smith, 122 Tex. 338, 61 S.W.2d 792 (1933) the court held that the “patentee, and those claiming under him are estopped to claim any land lying outside the bounds of that patent.” It has always previously been the one who accepts a patent and those claiming under him who has been estopped. Stanolind Oil & Gas Co. v. State, 136 Tex. 5, 133 S.W.2d 767 (1939); Wofford v. Miller, 381 S.W.2d 640, 647 (Tex.Civ.App.1964, writ ref. n. r. e.); Proctor v. Markham, 271 S.W.2d 685, 690, 691 (Tex.Civ.App.1954, writ ref. n. r. e.). The correct principle is summarized in the last cited case:

“ * * * No overt acts by appellants and their predecessors in title are alleged or proved. We think that before the rule as laid down in Miller v. Yates, supra, would apply, the appellant must have requested and received a patent on said Estes field notes. This has not been done, and we hold ihat they have not lost any rights they had under the original field notes.” (Emphasis supplied)

A rule which would permit the acts of a surface owner to reduce the ownership of the mineral estate, even without notice or knowledge of the facts by the mineral owner, is one which should be announced with some caution. It would mean that Cordova Union, which owned both the minerals and surface prior to 1943 could first convey the minerals, later accept a patent with reduced acreage, and estop its vendee even though this would be in derogation of its own deed. Cordova Union could then assert a good faith claim not only to the surface but to the mineral estate which it had effectively defeated. Cordova Union could, sub silentio, empower its remote surface vendees with the same power to accept a patent and reduce the mineral acreage.

Atlantic instituted this suit to try its title to the mineral estate which it claimed to own. The State of Texas intervened and by cross action sued in trespass to try title as to the mineral interest only. The surface of the claimed vacancy is not in issue in this action, and we make no adjudication of the surface ownership. We reverse the judgment of the court of civil appeals and affirm the judgment of the trial court that there is no vacancy with respect to the mineral estate, in the lands described above, and that Atlantic have judgment for the two described mineral tracts.

The motion for rehearing of the State of Texas is overruled.