Consolidated Property Interests, LLC v. Penny Payne

Opinion

ACCEPTED 12-15-00105-CV TWELFTH COURT OF APPEALS TYLER, TEXAS 9/11/2015 4:59:39 PM Pam Estes CLERK

No. 12-15-00105-CV FILED IN 12th COURT OF APPEALS TYLER, TEXAS In the Twelfth Court of Appeals 9/11/2015 4:59:39 PM Tyler, Texas PAM ESTES Clerk

Consolidated Property Interests, LLC, Appellant

v.

Jerry Payne and Penny Payne,

Appellees

Appealed from the 273rd Judicial District Court Sabine County, Texas

APPELLANT’S BRIEF

BRENT L. WATKINS GREG SMITH Texas Bar No. 24033312 Texas Bar No. 18600600 SKELTON SLUSHER RAMEY & FLOCK, P.C. 1616 S. Chestnut 100 E. Ferguson, Suite 500 Lufkin, Texas 75902 Tyler, Texas 75702 Telephone: 936-632-2300 Telephone: 903-597-3301 Facsimile: 936-632-6545 Facsimile: 903-597-2413 bwatkins@skeltonslusher.com gsmith@rameyflock.com

ATTORNEYS FOR APPELLANT

ORAL ARGUMENT REQUESTED The Parties and Their Counsel

I. Appellant:

Consolidated Property Interests, LLC

II. Counsel for Appellant:

Gregory D. Smith (lead counsel on appeal) Nolan Smith RAMEY & FLOCK, P.C. 100 E. Ferguson, Suite 500 Tyler, TX 75702 Telephone: 903-597-3301 Facsimile: 903-597-2413 gregs@rameyflock.com nolans@rameyflock.com

Brent L. Watkins (trial counsel and appellate co-counsel) SKELTON SLUSHER 1616 S. Chestnut Lufkin, TX 75902 Telephone: 936-632-2300 Facsimile: 936-632-6545 bwatkins@skeltonslusher.com

III. Appellees:

Jerry Payne Penny Payne

i IV. Counsel for Appellees: John H. Seale P. O. Box 480 Jasper, TX 75951 Telephone: 409-384-3463 Facsimile: 409-384-3017 katiecmorgan@yahoo.com

V. Other Parties Below: (Cross-defendants at trial)

Consolidated Oil & Gas, LLC Edna Beatrice Casey Debra Lynn Casey Berry Chirstopher Eric Casey Rachelle W. Casey

VI. Counsel for Other Parties Below:

Brent L. Watkins SKELTON SLUSHER 1616 S. Chestnut Lufkin, TX 75902 Telephone: 936-632-2300 Facsimile: 936-632-6545 bwatkins@skeltonslusher.com

/s/ Gregory D. Smith GREGORY D. SMITH

ii Contents

Identity of Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Statement of the Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Statement of Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Statement Regarding Oral Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Summary of Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

I. The trial court erred in its determination of mineral ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

A. The trial court has invoked one of two insupportable conclusions: (i) that the 1907 deed did not grant a community interest or (ii) that the 1931 mineral deed was ineffectual . . . . . 10

1. The 1907 deed gave Pearl Payne a community one-half mineral interest, which her children later inherited . . . . . . . 10

a. The 1904 and 1907 deeds do not reflect a loan but were ordinary, fee-simple conveyances . . . . . . . . . 11

i. Penny’s contrary loan theory belongs on the trash heap of idle speculation . . . . . . . . . . . . 11

ii. The misguided loan theory focuses on immaterial matters . . . . . . . . . . . . . . . 11

iii. Worst of all, the loan theory contradicts the controlling terms of three legal instruments . . . . . 13

iii b. The subject land was Pearl and J. O. Payne’s community property . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

i. Property acquired during marriage is presumed community property (and, absent proper tracing, this presumption is conclusive) . . . . . . . . . . . . . . 19

ii. The subject property was as a matter of law community property . . . . . . . . . . . . . . . . . . . . . . 20

iii. Payne family members, through multiple transactions, recognized the property as community property . . . . . . . . . . . . . . . . . . . . . . . 25

2. The 1931 mineral deed granted Frances and James Jr. a half mineral interest in the subject property . . . . . . . . . . . 28

B. Taken together, the 1907 and 1931 deeds conclusively negate Penny’s position on mineral ownership and confirm Consolidated’s right to judgment . . . . . . . . . . . . . . . . . 36

II. Consolidated is entitled to recover declaratory-judgment attorneys’ fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Conclusion and Prayer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Certificate of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Certificate of Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Appendices: A. Judgment B. 1904 Deed (J. O. Payne to W. A. Polley) C. 1906 Release D. 1907 Deed (W. A. Polley to J. O. Payne) E. Consolidated’s Request for Findings and Conclusions F. Certificate of Mailing

iv Authorities

Cases:

Blakely v. Kanaman, 175 S.W. 674 (Tex. 1915) . . . . . . . . . . . . . . . . . . . . . . 4, 28

Boyd v. Boyd, 131 S.W.3d 605 (Tex. App.-Fort Worth 2004, no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Cherokee Water Co. v. Forderhause, 641 S.W.2d 522 (Tex. 1982) . . . . . . . . . . . 12

Clark v. Widsom, 403 S.W.2d 877 (Tex. Civ. App.- Corpus Christi 1966, writ ref’d n.r.e.) . . . . . . . . . . . . . . . . . . . . . . . . . 15

Coker v. Roberts, 9 S.W. 665 (Tex. 1888) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Colden v. Alexander, 171 S.W.2d 328 (Tex. 1943) . . . . . . . . . . . . . . . . . . . . . . 26

Davis v. Davis, 175 S.W.2d 226 (Tex. 1943) . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Faram v. Geritz-Faram, 895 S.W.2d 839 (Tex. App.- Fort Worth 1995, no writ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Hammett v. Farrar, 29 S.W.2d 949 (Tex. Comm. App. 1930) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Hurley v. Tarrant County, 232 S.W.3d 781 (Tex. App.- Fort Worth 2007, no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Irvin v. Parker, 139 S.W.3d 703 (Tex. App.-Fort Worth 2004, no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 21

Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150 (Tex. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Kachina Pipeline Co., Inc. v. Lillis, ___ S.W.3d ___, 2015 WL 3653272 (Tex. June 12, 2015) . . . . . . . . . . . . . . . . . . . . . . . 40

v Kunkel v. Kunkel, 515 S.W.2d 941 (Tex. App-Amarillo 1974, writ ref’d n.r.e.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Lockhart v. Garner, 298 S.W.2d 108 (Tex. 1957) . . . . . . . . . . . . . . . . . . . . . . . 19

Lozano v. Lozano, 52 S.W.3d 141 (Tex. 2001) . . . . . . . . . . . . . . . . . . . . . . 11, 12

Luckel v. White, 819 S.W.2d 459 (Tex. 1991) . . . . . . . . . . . . . . . . . . . . . . 13, 17

McKinley v. McKinley, 496 S.W.2d 540 (Tex. 1973) . . . . . . . . . . . . . . . . . . . . . 19

Mendoza v. Fid. & Guar. Ins. Underwriters, Inc., 606 S.W.2d 692 (Tex. 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Newland v. Newland, 529 S.W.2d 105 (Tex. Civ. App.- Fort Worth 1975, writ denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Parker v. Coop, 60 Tex. 111 (Tex. 1883) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Patek v. Duncan, 178 S.W.2d 577 (Tex. Civ. App.- Galveston 1944, writ ref’d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 32, 34-35

Pearson v. Fillingim, 332 S.W.3d 361 (Tex. 2011) . . . . . . . . . . . . . . . . . . . . . . . 20

Richardson v. Hart, 185 S.W.2d 563 (Tex. 1945) . . . . . . . . . . . . . . . . . . . . 32-34

Richardson v. Richardson, 424 S.W.3d 691 (Tex. App.- El Paso 2014, no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Roberts v. Roberts, 999 S.W.2d 424 (Tex. App.- El Paso 1999, no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Roberts v. Roberts, 402 S.W.3d 833 (Tex. App.- San Antonio, 2013, no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Robles v. Robles, 965 S.W.2d 605 (Tex. App.-Houston [1st Dist.] 1998, pet. denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

vi SAS Institute, Inc. v. Breitenfeld, 167 S.W.3d 840 (Tex. 2005) . . . . . . . . . . . . . . 13

SAVA gumarska in Kemijska industria d.d. v. Advanced Polymer Sciences, Inc., 128 S.W.3d 304 (Tex. App.- Dallas 2004, no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Smith v. Buss, 144 S.W.2d 529 (Tex. 1940) . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

State Farm Lloyds v. C.M.W., 53 S.W.3d 877 (Tex. App.-Dallas 2001, pet. denied) . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Templeton v. Dreiss, 961 S.W.2d 645 (Tex. App.- San Antonio 1998, pet. denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Welder v. Lamber, 44 S.W. 281 (Tex. 1898) . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Wilson v. Beck, 286 S.W. 315 (Tex. Civ. App.- Dallas 1926, writ ref’d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Woods v. Sims, 273 S.W.2d 617 (Tex. 1954) . . . . . . . . . . . . . . . . . . . . . . . 13, 32

XTO Energy Inc. v. Nikolai, 357 S.W.3d 47 (Tex. App.- Fort Worth 2011, pet. denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Zagorski v. Zagorski, 116 S.W.3d 309 (Tex. App.- Houston [14th Dist.] 2003, pet. denied) . . . . . . . . . . . . . . . . . . . . . . . . 20

RULES, STATUTES AND OTHER AUTHORITIES:

BLACK’S LAW DICTIONARY, 8th Ed. (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Bruce M. Kramer, “The Sisyphean Task of Interpreting Mineral Deeds and Leases: An Encyclopedia of Canons of Construction,” 24 TX. TECH L. REV. 1 (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Frank Elliott, The Fractional Mineral Deed “Subject To” A Lease, 36 TEX. L. REV. 620 (May 1958) . . . . . . . . . . . . . . . . . . . . . . . . . . 31, 34

vii TEX. CIV. PRAC. & REM. CODE § 37.009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

TEX. FAM. CODE ANN. § 3.003(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

TEX. FAM. CODE ANN. § 101.007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

TEX. PROBATE CODE ANN. § 45 (repealed 1993) . . . . . . . . . . . . . . . . . . . . . 4

TEX. REV. CIV. STAT. ANN. art. 1299 (repealed 1963) . . . . . . . . . . . . . . . . . . 4

viii The Case

Consolidated Property Interests, LLC, a successor in interest of Frances

Payne Casey, brought this declaratory-judgment action, to settle a mineral-

interest ownership dispute between two branches of the Payne family: Frances

Payne Casey’s successors (including Consolidated) and the successors of

Frances’s step-mother, Gertrude Payne. Consolidated sought a singular

declaration on the controlling question – whether back in 1907 the subject land

– about 620 acres comprising two Sabine County tracts – had been acquired as

the community property of J. O. Payne and J. O.’s first wife, Pearl (Frances’s

mother). CR 4-9.

Jerry Payne (Gertrude’s son and successor) and Jerry’s wife, Penny Payne,

answered, CR 72-74, counterclaimed against Consolidated, and pled a trespass-

to-try-title action against all the successors in interest of Frances Payne Casey.

Initially, Jerry and Penny simply argued that the land had been acquired in 1907

as J. O. Payne’s separate property. Later, they added a creative attack on the

1931 mineral deed by which J.O. Payne and Gertrude (J. O.’s second wife and

Jerry Payne’s mother), had granted a half mineral interest to Pearl’s children,

Frances (Frances Payne Casey) and James Payne Jr. CR 76. They (Penny and

Jerry) sought ownership of half the subject land’s minerals. CR 75-78.

1 Jerry Payne died before trial. CR 70-71. Penny, his executrix and

beneficiary, stepped into his shoes.

Judge Charles R. Mitchell of the 273rd District Court, Sabine County,

entered judgment for Jerry and Penny and against Consolidated and the other

Frances Payne Casey successors. CR 238-41 (Appendix A). An amended

judgment decrees that Penny owns a half mineral interest in both subject tracts,

CR 240-41, even though Penny’s pleadings only concerned one such tract. E.g.,

CR 34-42. The judgment also denies that Consolidated and the other successors

of Frances Payne Casey maintain any mineral ownership at all in the subject

property, CR 241, even though Consolidated indisputably owns other fractional

mineral interests, carved from an interest this suit has never put in issue. See our

Chain-of-Title Flow Chart, infra.

Judge Mitchell appears to have based his ruling on Penny’s challenge to

the 1931 mineral deed. CR 241. But this remains uncertain, because the trial

court signed no findings of fact or conclusions of law. Consolidated attempted

to request them. Appendix E. But its timely-mailed request didn’t arrive at the

courthouse within the ten days allotted in the mailbox rule. Appendix F. So the

request was ineffectual.

2 The Facts

In 1904, J. O. Payne, then a single man, sold W. A. Polley 2,370 acres of

land (including the roughly 620 acres at issue here1). PX 1; 2 RR 16-17, 76. The

transaction was effected through a recorded warranty deed stating that J. O.

Payne “granted, sold and conveyed” the lands to Polley, for $11,850 “paid and

secured to be paid” by Polley to Payne. PX 1 (Appendix B). The deed also said

that Payne retained a vendor’s lien against the property, and it committed Payne

to defend the conveyance against opposing claimants. Id.

The following year (1905), J. O. Payne married Pearl Leak. PX 2; 2 RR 13.

Then, the next year (1906), J. O. Payne released his vendor’s lien on the

property. PX 3 (Appendix C). The recorded release acknowledged that the 1904

deed “did . . . convey unto W. A. Polley” the lands it described. Id.. The release

also pronounced Payne’s quitclaim of any further rights in the property. Id.

In 1907, during marriage, J. O. Payne bought back some of the previously

sold properties, including both subject-property tracts. PX 4 (Appendix D); 2

RR 14-16, 76.

Pearl Payne died in 1909, intestate, 2 RR 65, 138, having birthed two

1 The subject acreage comprises two tracts, which the judgment references as containing 492.02 acres and 127.58 acres, respectively. CR 240.

3 children, Frances and James Jr.2, 2 RR 25-26, who under then effective law3

succeeded to Pearl’s community-property interests. 2 RR 34, 36.

In 1915, J. O. Payne married his second wife, Gertrude Moss. PX 6; 2 RR

23. The couple had five children together, including Jerry Payne, an original

defendant in this suit. 2 RR 146-47. During this marriage, in 1916, J.O. Payne

deeded Gertrude a one-half interest in the subject land (surface and minerals).

PX7. The deed indicated this was J. O. Payne’s entire interest, stating that he was

transferring all of “that certain tract or parcel of land being a one-half interest.”

PX 7; 2 RR 65.

Fifteen years later, in 1931, J. O. Payne and Gertrude entered a 10-year

mineral lease governing the subject property. PX 8.4 A month after signing the

2 After J. O. Payne’s 1936 death, James Jr. changed his name from James O. Payne Jr. to James Payne Bridges. RR 49, 145. He probably did this because, after Pearl died in his infancy, he was raised by the Bridges family. 2 RR 125. 3 The rule for intestate succession of community property, as of 1909 and as later codified, provided: “Upon the dissolution of the marriage relation by death, all property belonging to the community estate of the husband and wife shall go to the survivor, if there be no child or children of the deceased or their descendants; but if there be a child or children of the deceased, or descendants of such child or children, then the survivor shall be entitled to one half of said property, and the other half shall pass to such child or children, or their descendants. . . .” TEX . PROBATE CODE ANN . §45 (repealed Sept. 1, 1993). 4 J.O. Payne’s name appears on the 1931 lease and the subsequent 1931 deed, even though he didn’t own an interest in the property, because at the time a married woman’s conveyance of an interest in real property was invalid if her husband did not join in the conveyance. TEX . REV . CIV . STAT. ANN . art. 1299 (repealed 1963); Blakely v. Kanaman, 175 S.W. 674, 675 (Tex. 1915).

4 lease and collecting any lease bonus, J. O. Payne and Gertrude signed a warranty

mineral deed in favor of Pearl’s children (i.e., Frances and James Jr.). PX 9; 2 RR

66. Memorializing a true conveyance, this deed “granted, sold, conveyed . . . an

undivided ½ interest in and to all of the oil, gas and other minerals in and under,

and that may be produced from” the subject property. PX 9. It further

committed J. O. Payne and Gertrude to “warrant and forever defend” the

conveyance against any opposing claims. Id.

J.O. Payne died, in 1936. PX 11; 2 RR 41-42. Since his death, there have

been many transactions touching ownership in the subject lands. Five are in

respects material here:

(i) A 1938 mineral lease: In 1938, Frances and James Jr. each leased a

one-quarter mineral interest to W.A. Bridges. PX 10. (The other one-half

mineral interest was still under the 1931 10-year lease.)

(ii) A 1945 timber deed: In this instrument, Gertrude, Frances, and

James Jr. conveyed the subject property’s timber. PX 12; 2 RR 69.

(iii) A 1948 sale of a surface interest: In 1948, Frances sold a one-

quarter surface interest to James Jr. (whom the deed referenced as James Payne

Bridges, see note 2, supra). PX 13; 2 RR 70.

(iv) A 1952 multi-party deed: In this transaction, several parties

5 including James Jr. sold certain real-property interests to Southland Paper Mills.

PX 15. The deed listed James Jr.’s interest in the subject land (identified as

“Tract 95"), RR 48-49, as “an undivided one-half interest in 620.6 acres5 (mineral

acres and surface acres).” PX 15.

(v) A 1960 partition deed: Gertrude and her children, including Jerry

Payne, RR 50, entered this partition deed with Southland Paper Mills. PX 16. It

expressly ratifies the ownerships stated in the 1952 deed. 2 RR 51.

Statement Regarding Oral Argument

The record in this case is concise, comprising a one-volume clerk’s

record and a single volume of trial testimony. Nothing about the case suggests

that it could make new law. Rather, by simply applying settled law to undisputed

facts, the controlling issues – (i) Penny’s failure to trace the 1907 purchase-

money consideration and (ii) the 1931 deed’s incontestible grant of a full half

mineral interest to Frances and James Jr. – fall decisively in Consolidated’s favor.

Normally, such a case might not warrant oral argument. Nonetheless, this

particular case requires a working understanding of a cumbersome, hundred-year

5 In the immediately following paragraph, this deed states “309.8 acres (Surface Acres) and 309.8 acres (Mineral Acres), same being an undivided one-half interest in 620.6 acres.” It appears that the drafter incorrectly calculated 309.8 plus 309.8 as equaling 620.6 rather than 619.6. In later transactions and in the judgment, the subject property is accurately described as totaling 619.6 acres. E.g., PX 16. CR 240 (two tracts: 492.02 acres and 127.58 acres.

6 chain of title. See Chain-of-Title Flow Chart, infra §I(D). Given the complexity

of this title chain, Consolidated considers it prudent to request oral argument.

Summary of Argument

The trial court’s determination that Penny Payne owns a half mineral

interest is all wrong. Penny urged two bases for her position, neither of them

even arguable. On the one hand, she argued that her late husband’s father, when

acquiring fee simple title to the subject property, had acquired it as his separate

property, even though he was married at the time. Penny ultimately admitted the

error of this theory. In its place, Penny alternatively, and quite desperately,

argued that the standard-form mineral deed by which her mother in law

(Gertrude Payne) had granted Frances Payne Casey and James Payne, Jr. a half

mineral interest was ineffective. According to Penny, a standard deed proviso –

the deed’s lease termination clause – somehow countermanded the deed’s

straightforward granting clause (never mind that this has never been the case in

any of the other thousands of deeds containing the same mix of clauses).

Even if Penny had not judicially admitted her separate-property

contention out of the case at trial, the argument clearly fell flat: Since the

property was acquired during J. O. Payne’s marriage to his first wife, Pearl, it

would be community property as a matter of law unless Penny could trace it to

7 separate-property funds, with clear and convincing proof. She attempted no

such showing. She instead claimed that the 1900s transactions, in which J. O.

Payne first sold a large acreage then three years later repurchased a small portion

of that acreage, had been a mere loan. But the position was not supported by any

shred of proof and, in any event, ran headlong into the clear (and thus

controlling) objective intention expressed in the deeds’ unambiguous terms. As

for the 1931 mineral deed, established rules of construction require that this

straightforward, standard-form instrument be construed to convey a half mineral

interest to Frances and James Jr.

Frances Payne Casey acquired one quarter interest by inheritance and a

second, like interest by deed from Gertrude. This, taken with subsequent,

unchallenged conveyances in the mineral interest’s chain of title (see our Chain-

of-Title Flow Chart, § I(D) infra), conclusively proves the claims of Consolidated

and Frances’s other successors and establishes the impropriety of judgment in

Penny’s favor.

This Court should (a) grant Consolidated the declaratory judgment it

sought a decree that the subject property was bought in 1907 as community

property), grant Consolidated recovery of its declaratory-judgment attorneys’

fees, and (c) order that Penny take nothing on her claims.

8 Argument

I. The trial court erred in determining mineral ownership.

Consolidated and Penny Payne make overlapping claims to some of the

same mineral interests. Penny variously rested her claim on two inconsistent

theories. On the one hand, Penny initially conceded that the 1931 deed gave

Frances and James Jr. a half mineral interest, but she claimed they never

inherited the other half mineral interest because, she argued, Pearl Payne had not

acquired any community-property interest for Frances and James Jr. to inherit.6

Alternatively, Penny later added an opposing position, conceding that Frances

and James Jr. had in fact inherited a half mineral interest but then arguing that

the 1931 warranty mineral deed did not convey them any additional mineral

interest but merely “reaffirmed” the inherited interests. 2 RR 32, 34 (“ . . . it was

their half interest they inherited.”).7 The trial court has granted Penny’s relief,

determining that, after the 1931 mineral deed, Frances and James Jr. each owned

only a quarter mineral interest, rather than the half interest each would have

owned if they had both inherited Pearl’s community half interest and in 1931

6 At trial, Penny seems to have conceded Consolidated’s position on the characterization of the 1907 purchase. 2 RR 26, 34, 36; discussed infra § I(B)(2)(c) . 7 Penny added her alternative theory in her first amended answer. CR 72-73. Prior to that pleading, Penny had admitted that the 1931 deed conveyed a ½ interest in the minerals to James Jr. and Frances. CR 35 (first amended counterclaim and cross-action). Discussed infra § I(C).

9 been deeded the remaining half interest by Gertrude. CR 240-41.8

A. The trial court has invoked one of two legally insupportable conclusions: (i) that the 1907 deed during marriage did not grant Pearl Payne a community-property interest or (ii) that the 1931 mineral deed was ineffectual to convey anything.

While the trial court appears to have based its adverse decision on Penny’s

challenge to the 1931 deed as a conveyance, the fact is that neither of Penny’s

alternative arguments will support the trial court’s judgment.

1. The 1907 deed gave Pearl Payne a community one-half mineral interest, which her children later inherited.

Penny attacked the 1907 deed frontally and from the flank: (i) alleging that

a prior deed (in 1904 from J. O. Payne to W.A. Polley) was really a mortgage

while the 1907 deed was merely a release of that mortgage; and (ii) alternatively

suggesting that if the subject property was purchased, it was bought as J. O.

Payne’s separate property. CR 72, 76, 85. Both attacks fail as a matter of law.

8 “The court finds that after the execution of the instrument dated March 12, 1931 . . . and considering the recitals in such instrument, that [James Jr. and Frances] were the owners of 1/4 of the minerals each . . .” CR 240-41.

10 a. The 1904 and 1907 deeds do not reflect a loan but were ordinary, fee-simple sales.

i. Penny’s contrary loan theory belongs on the trash heap of idle speculation.

Penny claims J. O. Payne in 1904 needed money to build his fiancee Pearl

a house, so he borrowed the funds from W. A. Polley, putting up his land as

collateral via the 1904 deed from Payne to Polley. CR 85, 2 RR 18. But, aside

from the immaterial fact that J. O. and Pearl appear to have built a house –

during the marriage on a lot bought by Pearl, 2 RR 78 – there is no evidence

even hinting at this.9 It is surmise, through and through, which of course is no

evidence. Hurley v. Tarrant County, 232 S.W.3d 781, 787 (Tex. App.-Fort Worth

2007, no pet.), citing Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 164

(Tex. 2004).

ii. The misguided loan theory focuses on immaterial matters.

Penny’s attack focuses upon J. O. Payne’s liquidity and the parties’

subjectively held beliefs about their unambiguously papered transactions.

9 Because the couple’s construction of a house, during the marriage, is entirely consistent with a fee-simple sale in 1904 to Polley and a 1907 fee-simple sale back to the Payne community, it is no evidence of Penny’s loan theory. See, e.g., Lozano v. Lozano, 52 S.W.3d 141, 148 (Tex. 2001) (evidence that does not tend to make the existence or non-existence of a material fact more or less probable is in law no evidence of the fact).

11 Neither of these matters is material.

J. O. Payne’s liquidity. No amount of proof about J. O. Payne’s

liquidity, whatever it may have been, could discredit the clear recorded deeds in

this case. It is not the least unusual to sell land to raise liquidity or to earmark a

sale’s proceeds for improvements to other property. It happens all the time. J.

O. Payne’s alleged need of cash thus is a road to nowhere, equally consistent

with the sales that the deeds memorialize as with any speculative loan theory. See,

e.g., Lozano v. Lozano, 52 S.W.3d 141, 148 (Tex. 2001) (when circumstances are

consistent with two competing versions of the facts and nothing shows that one

is more probable than the other, neither fact can be inferred).

Subjective intention to make a loan. Even if the parties had

subjectively intended a loan, and even if Penny could have proved this (she has

never purported to do so), the matter of subjective intent would be utterly

immaterial. As this Court well knows, when interpreting a transaction

memorialized in a deed, it is not the parties’ subjective, extrinsic intent that

matters, but the objective intent gleaned from the parties’ written words. Cherokee

Water Co. v. Forderhause, 641 S.W.2d 522, 525 (Tex. 1982).

Sans pleading of fraud, accident or mistake [ which did not occur in this case], extrinsic evidence is inadmissible to show, and the legal effect of the deed cannot be varied or changed by extrinsically showing, that the grantors intended an effect different from that

12 which the language of the deed clearly imports. Kunkel v. Kunkel, 515 S.W.2d 941, 949 (Tex. App-Amarillo 1974, writ ref’d n.r.e.), citing Davis v. Davis, 175 S.W.2d 226 (Tex. 1943).

Penny’s loan theory, because it looks for validation outside the deeds’ four

corners, is an invitation to a worthless exercise. What is worse, it squarely

contradicts the deeds’ clearest objective intent.

iii. The loan theory contradicts the controlling terms of th re e legal instruments.

Construction of an unambiguous deed is a question of law, to be adjudged

de novo on appeal. SAS Institute, Inc. v. Breitenfeld, 167 S.W.3d 840, 841 (Tex. 2005).

The task is to ascertain the objective intent expressed within the deed’s four

corners. Luckel v. White, 819 S.W.2d 459, 461 (Tex. 1991); see also Templeton v.

Dreiss, 961 S.W.2d 645, 657 (Tex. App.-San Antonio 1998, pet. denied) (the

intention expressed in the deed controls over the expression that was intended).

In doing so, the court should

• presume that the parties “intend every clause to have some effect and in some measure to evidence their agreement,” Woods v. Sims, 273 S.W.2d 617, 620 (Tex. 1954); and

• attempt to harmonize all parts of the instrument, if at all possible, even if they might at first appear contradictory or inconsistent. Id.

Moreover, when the instrument at issue purports to be a deed, every effort

should be indulged to conclude that it is in fact a deed and that some actual

13 interest has been passed. Coker v. Roberts, 9 S.W. 665, 667 (Tex. 1888); see also

Templeton, 961 S.W.2d at 657; Bruce M. Kramer, “The Sisyphean Task of Interpreting

Mineral Deeds and Leases: An Encyclopedia of Canons of Construction,” 24 TX. TECH L.

REV. 1, 70 (1993). This common-sense harmonizing approach compels

Consolidated’s interpretation of the 1904 and 1907 deeds as conveyances and

dooms any supposed “loan” theory. As Penny has admitted, the subject deeds

simply make no mention of the transaction being a loan as opposed to a sale:

Q: Is there anything in this deed [the 1904 deed] that mentions that being a loan?

A: Well, you’d have to know the family history.

Q: Well, I’m asking you about anything in this deed. Is there anything in this deed [the 1904 deed] that mentions this being a loan?

A: No. 2 RR 18.

This is not at all surprising.

The controlling objective, legal intent is consistently expressed in not one

but three solemnly acknowledged and recorded instruments – two deeds

(executed years apart, by different grantors) and an intervening release of lien.

These documents conclusively recognize a 1904 fee-simple sale of some 2370

acres, by J.O. Payne to W. A. Polley, with a later sale by W.A. Polley to J.O.

Payne of a subset of those lands (the property now at issue).

14 The 1904 deed memorializes a fee-simple sale.

The 1904 deed from Payne to Polley consistently and conclusively

memorializes a fee-simple sale. PX 1 (Appendix B). To this end, the document:

• is titled as a deed, a term of art connoting the transfer of title. Wilson v. Beck, 286 S.W. 315, 320 (Tex. Civ. App.-Dallas 1926, writ ref’d) (deed is an instrument in writing, duly executed and delivered, conveying real estate); Clark v. Widsom, 403 S.W.2d 877, 882 (Tex. Civ. App.-Corpus Christi 1966, writ ref’d n.r.e.) (courts presume parties intended to effect conveyance when construing deed); BLACK’S LAW DICTIONARY, 8th edition (2005) (defines “deed” as “a written instrument by which land is conveyed”);

• identifies the parties not as debtor and creditor or mortgagor and mortgagee but as grantor and grantee, terms characterizing participants in a real-property conveyance, BLACK’S LAW DICTIONARY, 8th edition (2005) (defines “grantor” as “one who conveys property to another”);

• states that identified tracts of real property are “granted, sold, and conveyed,” thus unmistakably indicating a sale, see Hammett v. Farrar, 29 S.W.2d 949, 957 (Tex. Comm. App. 1930) (grant, sell, convey mean a complete alienation);

• identifies the interest being granted as “all [of the identified] certain tracts or parcels of land” – in other words, the fee-simple estate; and

• is titled not merely as a deed but as a “Warranty Deed,” which unequivocally commits the grantor to defend the fee-simple title conferred. See BLACK’S LAW DICTIONARY, 8th edition (2005) (defines “Warranty Deed” as a deed that expressly guarantees the grantor’s good and clear title and covenants defense of title against all claims).

PX 1 (Appendix B). These terms must be given effect. Luckel, 819 S.W.2d at 462

(courts must strive to give effect to all provisions in a deed). That cannot happen

15 if the deed is downgraded to a mere security agreement.

The 1906 release of lien reaffirms the intended transfer of fee-simple title.

In 1906, J. O. Payne executed a written, acknowledged and filed-of-record

release. PX 3 (Appendix C). In that release, J. O. confirms that he in 1904

“convey[ed] unto W. A. Polley certain lands.” In the release, Payne clearly

affirmed – three times – that the 1904 instrument was a “deed.” He also

described the consideration for the 1904 sale as “cash consideration.” And he

concluded forcefully by stating that he released Polley and that he (Payne) in all

respects quitclaimed the property to Polley. PX 3 (Appendix C) (“I [i.e., J.O.

Payne] here now release, relinquish and quit claim to said W. A. Polley the lands

above described.”). At this point, regardless what one might make of the 1904

deed, it is clear that Polley must hold the property’s fee-simple title.

What has Penny made of this decisive document? At trial, she admitted

it was, as purported, a release of lien.

Q: . . . Do you see anything in there [the 1906 release] that mentions this being a loan?

A: I don’t.

Q: In fact, he’s releasing the vendor’s lien at this point; is that correct?

16 A: Yes. 2 RR 19.

The 1907 deed likewise reflects a fee-simple conveyance.

Like the 1904 deed, the 1907 transaction is, by Penny’s own admission,

objectively and unambiguously a conveyance of fee-simple title.

Q: Is there anything in that deed, Exhibit No. 4 [the 1907 deed], that notes the transaction was the result of a loan or the payback of a loan?

A: No. 2 RR19.

As proof of the objective intent to transfer fee-simple, the 1907 deed:

• is titled not as a loan but as a deed;

• identifies the parties not as debtor and creditor but as grantor and grantee;

• states that land is being “granted, sold, and conveyed”;

• identifies the interest conveyed as all the described land, without restriction or reservation; and

• is titled as a “Warranty Deed” and in the accompanying text commits Polley to defend the title unconditionally. PX 4 (Appendix D).

Penny produced no evidence supporting a contrary deed construction. So the

deed’s objective legal intent must be given effect, Luckel, 819 S.W.2d at 462,

which is impossible under Penny’s loan theory.

What is worse, Penny’s loan theory also ignores the fact that the quantum

17 of property transferred in the 1904 deed was considerably greater than that

transferred in 1907 and the recited consideration for the 1904 transaction was

also considerably greater. 2 RR17, 19, 20. What effect would Penny’s theory

have on ownership of the remaining properties? Penny doesn’t say.

In summary: The two 1900s deeds and the 1906 release triply prove that

W.A. Polley, not J.O. Payne, entered 1907 as the owner of the subject land. The

instruments’ clear terms prove two conveyances of title – a 2380-acre

conveyance from J.O. Payne to W.A. Polley, then, in 1907 a conveyance of a

smaller number of acres from W. A. Polley to J. O. Payne. And absent proof of

the exacting requirements for a separate-property acquisition during marriage,

this quite simply means that Pearl in 1907 acquired a community one-half

interest, which Frances and James Jr. inherited at her intestate death.

b. The subject land was Pearl and J. O. Payne’s community property.

Because the 1907 transaction was a purchase during marriage, the law

presumes that the land is community property. Unless Penny rebuts it, this

presumption is conclusive. Penny has not rebutted the presumption, nor could

she. Thus, the subject land was community property, half of which Frances and

James Jr. inherited at their mother’s 1909 intestate death.

18 i. Property acquired during marriage is presumed to be community property (and, absent proper tracing, this presumption becomes conclusive).

For over a century, Texas law has presumed that property acquired by a

spouse during marriage is community property. TEX. FAM. CODE ANN. §

3.003(a); Parker v. Coop, 60 Tex. 111, 115 (1883). This presumption attaches even

if a deed lists only one spouse as grantee, unless the deed includes an express

separate-property recital.10 Robles v. Robles, 965 S.W.2d 605, 615-16 (Tex. App.-

Houston [1st Dist.] 1998, pet. denied). If the community-property presumption

is challenged, a court resolves any doubt as to the character of the property in

favor of the community estate. Richardson v. Richardson, 424 S.W.3d 691, 698 (Tex.

App.-El Paso 2014, no pet.), citing Irvin v. Parker, 139 S.W.3d 703, 708 (Tex.

App.-Fort Worth 2004, no pet.). The presumption cannot be defeated by

surmise or speculation. See McKinley v. McKinley, 496 S.W.2d 540, 544 (Tex. 1973).

To the contrary, absent clear and convincing evidence tracing separate-property

consideration, the presumption is a conclusive one. Lockhart v. Garner, 298

S.W.2d 108, 110 (Tex. 1957).

10 “A recital in an instrument of conveyance is considered to be a ‘separate property recital’ if it states that the consideration is paid from the separate funds of the spouse or that the property is conveyed to his or her separate property.” Roberts v. Roberts, 999 S.W.2d 424, 432 (Tex. App.-El Paso 1999, no pet.).

19 ii. The subject property was as a matter of law community property.

Here, the two tracts at issue were indisputably acquired during J. O.

Payne’s marriage to Pearl Leak, 2 RR 16, via the 1907 deed, which does not

include any pretense of a separate-property recital. PX 4 (Appendix D)

Consequently, Penny at trial had the unenviable burden of tracing the purchase-

money consideration for a hundred-year-old transaction and of doing so to a

level constituting clear and convincing evidence – that is, a “measure or degree

of proof that will produce in the mind of the trier of fact a firm belief or

conviction as to the truth of the allegations sought to be established.”11 Pearson

v. Fillingim, 332 S.W.3d 361, 363 (Tex. 2011).

This burden is quite difficult, Boyd v. Boyd, 131 S.W.3d 605, 612 (Tex.

App.-Fort Worth 2004, no pet.), and would remain so even without the

requirement for clear-and-convincing proof. Richardson, 424 S.W.3d at 698

(tracing “involves establishing the separate origin of the property through

evidence showing the time and means by which the spouse originally obtained

possession of the property”).12 It is not enough to show that separate funds could

11 TEX . FAM . CODE ANN . § 101.007. 12 For cases in which the claimant’s proof met the strict tracing requirement, see: Zagorski v. Zagorski, 116 S.W.3d 309, 316 (Tex. App.-Houston [14th Dist.] 2003, pet. denied) (husband called three tracing witnesses and produced documentary proof clearly establishing the source of funds in a foreign bank account as his separate property); Faram v. Geritz-Faram,

20 have been the source of a subsequent deposit of funds. Rather, the party

asserting separate ownership must actually “trace the assets on hand during the

marriage back to property that, because of its times and manner of acquisition,

is separate in character.” Irvin, 139 S.W.3d at 708. “[M]ere testimony that

property was purchased with separate funds” without actually tracing the funds

“is insufficient to rebut the community property presumption.” Richardson, 424

S.W.3d at 698; Irvin, 139 S.W.3d at 708.

In contrast to the magnitude of her burden, speculation was all Penny

brought to bear. Indeed, Penny at trial freely admitted both (1) that, after the

passage of 110 years, she had no hope of tracing the purchase funds and (2) that

the property was community property that Frances and James Jr. inherited. 2 RR

20, 21.

Respecting her inability to trace: Penny twice conceded that she lacked

the records to even begin a tracing of funds.

Q: [W]ith respect to where [the] money came from for the purchase of this property by Mr. Payne in 1907, do you have anything that would show the source of those funds?

A: I d o n ’t h av e an y 110-y e ar o ld re c o rd s . 2 RR 20.

895 S.W.2d 839, 843 (Tex. App.-Fort Worth 1995, no writ) (documentary proof fully tracing the source of funds); Newland v. Newland, 529 S.W.2d 105, 107 (Tex. Civ. App.-Fort Worth 1975, writ denied) (testimony corroborated with bank records and other documentary evidence).

21 ***

Q: Have you got any documents from Mr. Payne or Mr. Polley that would show the source of these funds that were used to purchase this property in 1907 as identified in Exhibit 4?

A: No. Like I s aid , s in c e th e y ’re 110 y e ars o ld , I d o n ’t h av e th e m . 2 RR 21.

Respecting the community-property characterization: Penny likewise

admitted – three times – that the subject property was community property. 2

RR 26, 34, 36.

(i) Penny first admitted the property’s community nature when discussing

the effect of the 1916 deed, of a ½ interest, from J. O. Payne to Gertrude.

Regarding this transaction, Penny was asked, “so at that point [i.e., after the 1916

conveyance] Gertrude has one-half undivided; Frances and James Jr. retain a

quarter [each]?” 2 RR 26. Penny replied, “exactly.” Id. That admission could be

true only if the property was acquired in 1907 as community property, such that

Frances and James Jr. inherited Pearl’s one-half community interest at her death.

As of 1916, there was no deed into Frances and James Jr. and no other means

for them to have acquired an interest in the subject property except by

inheritance.

(ii) When discussing the 1931 deed, Penny again conceded that Frances

and James Jr. Already owned a ½ interest by inheritance from Pearl. 2 RR 34.

22 (“yes . . . it was their half interest they inherited”). Because J. O. Payne was living

in 1931, Frances and James Jr. could not have inherited the property anywhere

else but from Pearl’s community property.

(iii) Barely two transcript pages later, Penny for a third time admitted the

property’s community characterization. 2 RR 36 (“it was her [Frances’s]

inheritance. They [Frances and James Jr.] inherited a half . . .”).

These testimonial admissions meet all required elements of judicial

admissions. See Mendoza v. Fid. & Guar. Ins. Underwriters, Inc., 606 S.W.2d 692, 694

(Tex. 1980).13 They were made at trial. They contradicted the ownership

fractions embraced in Penny’s theory of recovery and buttressed Consolidated’s

adverse theory of recovery. They were clear and deliberate. And their

recognition as admissions is consistent with fairness, justice, and any relevant

public-policy considerations. Penny’s testimonial admissions thus were

conclusive waivers of proof. Id.

Even without Penny’s admissions, Penny’s failure to offer rebutting

13 Testimonial admissions will be judicial admissions when the testimony: (1) is made in a judicial proceeding; (2) contradicts an essential fact embraced in the theory of recovery or defense asserted by the person giving it; (3) is deliberate, clear, and unequivocal; (4) calls into play a public policy that it would be unjust to allow a party to recover after he has sworn himself out of court; and (5) is not also destructive of the opposing party’s theory of recovery. Mendoza, 606 S.W.2d at 694.

23 evidence has rendered the community-property presumption conclusive. And

for this reason, Consolidated’s declaratory-judgment action should have been

granted.

What is more, a 1960 partition deed signed by Penny’s now-deceased

husband, Jerry Payne, estops Penny from challenging the community-property

character of the property during J. O. Payne’s and Pearl’s marriage. In Texas, the

doctrine of estoppel by deed “precludes parties from alleging title ‘in derogation

of the deed or denying the truth of any material fact asserted in it.’” XTO Energy Inc. v.

Nikolai, 357 S.W.3d 47, 56 (Tex. App.-Fort Worth 2011, pet. denied). The 1960

deed stipulates that Southland Paper Mills, Inc. owns an undivided ½ surface

interest in the property. PX16. This surface interest derives straight from Pearl’s

community-property ½ ownership and from James Jr. and Frances’s inheritance

of that interest. Specifically, Southland received its ½ surface interest from James

Jr. in 1954. PX15. James Jr. owned that ½ interest in the surface via two

transactions: (1) inheritance of one-quarter surface interest from his mother

Pearl, and (2) 1948 deed from Frances to James Jr. in which Frances conveyed

to James Jr. a one-quarter surface interest. PX13. In order for James Jr. to have

a ½ surface interest to convey to Southland in 1954, James Jr. must have

received a one-quarter interest in the surface when his mother died. In other

24 words, when Jerry conceded Southland’s ½ surface interest in 1960, he

conceded the property’s community character and Frances’s 1909 inheritance.

Penny’s attempt to argue against these facts is “in derogation of” her husband’s

partition deed and thus an impermissible allegation.

iii. Payne family members, through multiple transactions, recognized that the property was acquired in 1907 as community property.

Having failed to attempt the necessary tracing, Penny has argued that

subsequent events in the property’s title history might somehow nullify the

property’s community-property nature. E.g., CR72-73 (“J.O. Payne treated the

mineral interest owned by him as being 100% between December 17, 1907 and

1931, and . . . James Payne and Frances Payne Casey, made no claim to any

interest in the minerals”); CR87 (“this title history indicates that the 492 acre

tract was the separate property of J.O. Payne”). This is so far off base it is not

even in the field of play.

For one thing, Penny’s invocation of subsequent transactions is a bald

attempt to circumvent her tracing burden. Any effort to do so is a nullity per

current Texas law. Roberts v. Roberts, 402 S.W.3d 833, 838 (Tex. App.–San

Antonio 2013, no pet.)(to overcome the community-property presumption, “a

spouse must generally trace and identify, by clear and convincing evidence, the

25 property” claimed as separate property). The transactions Penny invokes, having

occurred after the 1907 purchase, are as a matter of law incapable of altering the

property’s previously attached community-property character, a matter fixed at

the time of acquisition. Smith v. Buss, 144 S.W.2d 529, 532 (Tex. 1940); Welder v.

Lamber, 44 S.W. 281 (Tex. 1898);. Colden v. Alexander, 171 S.W.2d 328 (Tex.

1943). And finally, if events occurring after 1907 could hold any sway, it would

not benefit Penny. The post-1907 transactions, when correctly understood, show

the opposite of Penny’s surmise. Indeed, Penny’s predecessors in interest –

including J. O. Payne (twice), Gertrude Payne (three times), and Gertrude’s

children – have through the years unmistakably recognized the property’s

community-property origin. To wit:

J. O . Pay n e ’s 1916 d e e d : J.O. Payne, in 1916, signed a deed conveying

a ½ interest in the property and acknowledging this transferred his entire interest

in the property. PX7 (“ . . . do Grant, Sell, and Convey . . . all that certain tract

. . . being a one-half undivided interest.”). 2 RR 24. That recital is true only if

Pearl Payne owned a community ½ interest.

T h e 1938 le as e s : In 1938, James Jr. and Frances each leased a one-fourth

interest in the minerals to W.A. Bridges. PX 10; 2 RR 36, 39. They could do so

only because in 1909 they had inherited a ½ community-property interest from

26 their mother, Pearl, such that the 1931 lease signed by J. O. Payne and Gertrude

covered only Gertrude’s ½ community-property interest (which J. O. Payne in

1916 had conveyed to Gertrude, PX 7). PX 8. Otherwise, the 1931 mineral lease

would have bound the entire mineral interest.

T h e 1945 tim b e r d e e d : Gertrude, James Jr., and Frances, in 1945, joined

in a timber deed to Roy Williams. PX 12; 2 RR 44-45. If the property had been

acquired in 1907 as J.O. Payne’s separate property, J.O. Payne would have

owned a ½ interest in the subject property at his death in 1936 (because, it is

undisputed, J. O. Payne made only one surface-interest conveyance during his

lifetime – the 1916 conveyance of a ½ interest in surface and minerals to his

wife, Gertrude). If that had been the case, J. O. Payne’s children by Gertrude

would have inherited fractional interests in the surface and minerals at J. O.

Payne’s death, which would have made them necessary parties to the 1945

timber deed. But the children born to Gertrude were not parties to the timber

deed, because everyone then living – Gertrude, J. O Payne’s children by Pearl, and

Gertrude’s own children – all understood that J. O. Payne had only owned a ½ community

share. PX 12; 2 RR 46.

T h e 1948 s u rfac e d e e d : Frances, in 1948, sold a one-quarter surface

interest to her brother, James Jr. (referenced in the deed as James Payne

27 Bridges). There is no deed conveying any such surface interest to Frances. Thus,

the only source of the interest Frances conveyed is inheritance out of her

mother’s community-property interest.

Penny outright conceded much of this in her testimony. E.g., 2 RR 46-47

(admitting that under her separate-property theory, Frances would not have had

any surface interest to transfer in 1948); 2 RR 44-45 (conceding “I have no idea”

as to how Frances acquired any surface interest if the property had been J. O.

Payne’s separate property).

2. The 1931 mineral deed granted Frances and James Jr. the remaining half mineral interest in the subject property.

In the 1931 mineral deed, J.O. Payne and Gertrude by the clearest terms

granted James Jr. and Frances the half interest that J. O. Payne, in 1916, had

deeded Gertrude. PX9. The deed’s unambiguous granting clause stated that J.

O. Payne and Gertrude

granted, sold, conveyed, assigned and delivered . . . unto the said grantees [i.e., James Jr. and Frances], an undivided ½ interest in and to all of the oil, gas and other minerals in and under, and that may be produced from” the subject land. PX 9.14

14 J.O. Payne’s joinder in the 1931 deed is no evidence that he retained any mineral interest after in 1916 conveying his community-property half. Rather, as previously mentioned, for Gertrude to effectively convey the half interest deeded to her in 1916, the law then in effect dictated that J. O. Payne, as her husband, join in the transfer. In 1931, a married woman could not transfer even her separate real property unless her husband joined the conveyance. TEX . REV . CIV . STAT. ANN . art. 1299 (repealed 1963); Blakely v. Kanaman, 175 S.W. 674, 675

28 Then, the same deed committed J. O. Payne, Gertrude, and their successors to

defend this grant against any opposing claims.

[W]e do hereby bind our heirs, executors and administrators to warrant and forever defend, all and singular the said property unto the said grantees, herein their heirs, and assigns, and against every person whomever lawfully claiming or to claim the same or any part thereof. PX 9.

In a move contradicting virtually everything the law teaches about the

rules for deed construction (discussed later in this sub-section), Penny proposes just

to ignore these provisions. To this end, Penny at trial quite implausibly alleged

that the deed wasn’t meant to convey any of Gertrude’s mineral interest but

merely made it “official” that “the lease–half of the lease–belonged to James and

Frances.” 2 RR 33. With this position, Penny squarely contradicted both her prior

pleading and her own trial testimony. CR 35 In the prior pleading, Penny

explicitly conceded that the 1931 deed conveyed a half mineral interest:

The other one-half (½) of the minerals in and under the above mentioned 493.02 acres was conveyed by mineral deed from J.O. Payne and wife, Gertrude Payne to James O. Payne Jr. and Frances Payne Casey, dated March 12, 1931 . . .” CR 35.

And at trial, Penny likewise admitted the 1931 deed was effective to pass a half

mineral interest:

Q: But they did transfer the minerals, didn’t they?

(Tex. 1915).

29 A: They transferred half the minerals. 2 RR 33-34.

Despite these admissions, Penny, through counsel, advocated an

opposing interpretation of the 1931 deed. She did so based on a transparently

wrong characterization of one proviso, deep within the 1931 mineral deed: a

proviso stating that if the then-existing lease should expire, then James Jr. and

Frances should enjoy half of post-lease benefits, “they owning one-half of oil,

gas, and other minerals in and under said lands. . .” CR 86; see also CR 76.15

Penny, through counsel, agreed this did not serve as a reservation. 2 RR 31

(“we’ll concede there is not a reservation”). But she nonetheless sought the

benefits of a reservation, maintaining that the proviso was a “recital[] . . . that the

other one half was to be owned and retained by Mr. J.O. Payne and Gertrude

Payne.” 2 RR 8; see also 2 RR 31 (“there is a recital in there”). Gibberish. Either

the deed reserves a mineral interest or it doesn’t. Regardless, the cited proviso

does not stipulate away what the same deed’s granting clause has clearly

conveyed. As Consolidated’s witness, Bobby Moffett testified, that would take

a stipulation of interest executed by all parties, or some other provision which the

15 The 1931 mineral deed states “[i]t is understood and agreed that one-half of the money rentals which may be paid to extend the terms within which a well may be begun under the terms of said lease is to be paid to the said grantees and in event that the above described lease for any reason becomes cancelled or forfeited, then and in that event an undivided one- half of the lease interest and all future rentals on said land for oil, gas, and other mineral privileges shall be owned by said grantees, they owning ½ of all oil, gas and other minerals in and under said lands, together with ½ interest in all future revenues.” PX 9.

30 1931 deed doesn’t contain. 2 RR 67.

Per the clear rules for interpreting deeds, Penny’s internally inconsistent

interpretation of the 1931 deed cannot be tolerated if there is any plausible deed

interpretation that does harmonize the deed’s terms. See Luckel, 819 S.W.2d at

462. And there is. In fact, at the time of the 1931 transaction, the proviso Penny

invokes (i.e., the proviso stating that “they owning one half of all oil gas and

other minerals . . .”) was a standard “lease termination clause” commonly

included in the “typical deed conveying a mineral interest subject to an existing

lease.” See Frank Elliot, The Fractional Mineral Deed “Subject To” a Lease, 36 TEX.

L. REV. 620, 621 (May 1958). It had a recognized function, independent of

whether the grantee claims additional mineral ownership acquired in other

transactions. Id. And to this day the term has never – by any appellate court –

been viewed as even potentially supporting a construction such as Penny

proposes.

Instead, this proviso was commonly and consistently seen not as a recital,

stipulation, or other commentary on the grantees’ total ownership from all

sources, but merely as part of a means for clearly delineating between the

mineral interest conveyed in the granting clause and the potentially different

splits of the contract rights conferred under existing and future leases. See Elliot,

31 36 TEX. L REV. at 621; see also Patek v. Duncan, 178 S.W.2d 577, 578-79 (Tex. Civ.

App.–Galveston 1944, writ ref’d) (construing a nearly identical deed); Richardson

v. Hart, 185 S.W.2d 563, 565 (Tex. 1945).

As of 1931, deeds conveying mineral interests subject to existing leases

generally contained four key provisos (in three paragraphs), conveying two

distinct estates: (a) a permanent interest in the minerals in place; and (b) an

interest in whatever royalties may come due under the existing lease. Woods v.

Sims, 273 S.W.2d 617, 621 (Tex. 1954); Richardson, 185 S.W.2d at 565. Such

deeds:

(i) granted an undivided fractional interest “in and to all of the oil, gas and

other minerals in and under, and that may be produced from” the land;

(ii) pronounced that the sale was “subject to the terms of” an existing mineral

lease;

(iii) set out the fractional interest the grantee was to receive in the contractual

rights under the existing lease, by stating that the deed “covers and

includes” the stated fraction “of all the oil royalty and gas rental due and

to be paid under the terms of said lease”; and

(iv) provided that if the existing mineral lease were to “for any reason become

cancelled or forfeited,” then all future royalties attaching to the mineral

32 interest being conveyed “shall be owned by said Grantee, he owning [the

stated fraction] of all oil, gas and other minerals in and under said lands.”

Richardson, 185 S.W.2d at 565.

So it is here.

The 1931 deed, which J. O. Payne and Gertrude granted subject to their

existing 10–year mineral lease, provides:

• the grantors “grant, sell, convey, assign, and deliver unto the said grantees, an undivided ½ interest in and to all of the oil, gas, and other minerals in and under, and that may be produced from the following described land . . .”;

• “ . . . it is understood and agreed that this sale is made subject to the terms of said lease, but covers and includes ½ of all of the oil royalty, and gas rental or royalty, due and to be paid under the terms of said lease ”; and

• “ . . . and in the event that the above described lease for any reason becomes cancelled or forfeited, then and in that event an undivided one- half of the lease interest and all future rentals on said land for oil, gas and other mineral privileges shall be owned by said grantees, they owning ½ of all oil, gas and other minerals in and under said lease, together with ½ interest in all future rents.” PX 9.

The deed thus created both a permanent interest in the minerals in place, stated

in the granting clause, and a second estate in the oil royalty and gas rental due

under the then-existing lease. The proviso Penny misconstrues by no means

speculated upon any mineral ownership the grantees may or may not have

acquired independently, apart from the deed. Nor did it countermand the deed’s

33 granting clause. See, e.g., Richardson, 185 S.W.2d at 565; Patek, 178 S.W.2d at 579

(construing almost identical deed to grant a ½ mineral interest). In fact, when,

as here, the fraction stated in the lease termination clause does not vary from the

fractions in the granting and royalty-transfer clauses, the job of the court is

simple. See Elliot, 36 TEX. L. REV. at 624. In such cases, the deed is effective to

convey the fractional mineral interest stated in the granting clause and later

restated in the lease termination clause. Id.; accord Richardson, 185 S.W.2d at 563;

Patek, 178 S.W.2d at 579.

Penny’s contrary and outlandish position relies on speculation and ignores

and contradicts the deed’s key terms, such as “deed,” “grant,” “convey,” “½ of

all” “warrant,” defend” and the like. It thus is inimical to deed construction.

Penny would have the 1931 deed pass no mineral interest at all, rendering the

granting clause toothless surplusage, such that there would be nothing for J. O.

Payne or Gertrude to warrant and defend. Penny thus fails to harmonize the

deed’s terms. Rather, she approaches its construction as a party in search of

conflict.

It is borderline silly to even think that reasonable parties would sign a

solemn warranty deed if they subjectively intended merely to acknowledge a

prior inheritance. And in any event, subjective intent has no sway over a deed’s

34 controlling, objective terms.

Consolidated, on the other hand, construes the straightforward deed as

doing exactly what it says – conveying a one-half mineral interest to Frances and

James Jr. This construction meets all cannons of deed construction. It (i) passes

an interest, (ii) gives effect to every clause, (iii) harmonizes the deed, and (iv)

comports with how other courts have interpreted nearly identical deeds. See, e.g.

Patek v. Duncan, 178 S.W.2d 577, 578 (Tex. Civ. App.-Galveston 1944, writ ref’d).

Contrary to Penny’s assertion, the deed does not begin to estop the grantees

from claiming both the interest the deed conveys and the interest they already

owned through intestate succession.

Penny’s construction of the 1931 deed makes it all but impossible for oil-

and-gas attorneys to write title opinions, without which the entire industry would

grind to a halt. Under Penny’s view, every time a title attorney sat to examine a

deed containing the common lease-termination clause – that is, in just about

every examination of a mineral title located in an area prospective for oil or gas

in the 1930s through 1960s – the lawyer would be at a loss to construe the deed

from within its four corners. According to Penny, no deed made subject to an

existing lease could be sorted out without first plumbing the extrinsic matter of

the grantee’s other, independently-sourced ownership interests.

35 Think of how Penny’s deed analysis would work: By Penny’s reasoning,

if Frances and James Jr. didn’t already own any mineral interest in the subject

property, the 1931 deed would afford them a full half mineral interest. But if

they happened to have already procured a quarter mineral interest elsewhere,

Penny would say that the same deed conveyed only an additional quarter

interest. And if, as is the case here, the grantees already had inherited a half

mineral interest, Penny would say that this same deed, expressing the same

objective intent, was ineffectual to convey anything at all. That simply is not how

deed construction works.

B. Taken together, the 1907 and 1931 deeds conclusively negate Penny’s position on mineral ownership and confirm Consolidated’s right to judgment.

Going into 1931, Gertrude owned a ½ mineral interest (the interest that

J. O. granted her in 1916). No one disputes that. The 1931 mineral deed, as a

matter of law, conveyed that interest to Frances and James Jr. And because

Frances and James Jr. already owned Pearl’s half mineral interest through

intestate succession, this also means they after the 1931 mineral deed,

collectively owned the subject property’s entire mineral interest. Nothing in the

1931 deed could have estopped Frances or James Jr. from claiming this

ownership or could now estop Consolidated and the rest of Frances’s successors

36 from claiming their rightful mineral interests. E.g., 2 RR 85, 124-25.16

Now, knowing both that the property was a community asset of Pearl and

J. O. Payne and the 1931 deed transferred an undivided ½ mineral interest, the

chain of mineral title into Frances’s successors in interest is decisively

established, as depicted visually then described verbally, on the following two

pages:

16 Penny also incorrectly asserts that James Jr. and Frances recognized that they collectively owned only a ½ interest in the minerals when, in 1938, they each leased only a 1/4 interest in the minerals. CR 87. This too is foolishness. The simple answer is that in 1938 the ½ interest they acquired by intestate succession back in 1909 was the only quantum of interest not under existing lease. They had acquired the other one half in 1931 subject to the pre- existing 10-year lease. PX 8.

37 MI = Mineral Interest J.O. Payne SI = Surface Interest 100% MI & 100% SI CP = Community Property 1904 deed (PX1)

W.A. Polley 100% MI & 100% SI 1907 deed (PX4)

J.O. Payne Pearl Payne 50% CP MI & 50% CP SI 50% CP MI & 50% CP SI Pearl dies 1909 intestate

James Jr. Frances 25% MI & 25% SI 25% MI & 25% SI 1916 deed (PX7) Gertrude Payne 50% MI & 50% SI 1931 mineral deed (PX9)

Gertrude James Jr. Frances 50% SI 50% MI & 25% SI 50% MI & 25% SI Surface deed (PX13) (Frances to James)

James Jr. Mineral deed Frances 50% MI & 50% SI (PX14) 50% MI (Frances to Shelby) 1952 deed (PX15)

J.T. Shelby Frances 25% MI 25% MI Southland Paper Mills 50% MI & 50% SI ••• ••• 1960 partition deed (PX16)

Gertrude Southland Paper Mills Consolidated et al Consolidated et al 0%/100%* SI 50% MI & 100%/0% SI 25% MI 25% MI

*After the partition, Gertrude owned 0% of the surface interest in the 127 acre tract and 100% surface interest in the 492 acre tract; The percentages for Southland are the reverse. When Pearl died intestate, her community half interest (surface and minerals) passed

to her children, Frances and James Jr. See TEX. PROB. CODE ANN. §45 (repealed) (under

intestate-succession rules, children inherited their deceased parents’ community interests).

In 1916, J. O. Payne conveyed his entire community half interest (surface and minerals) to

his new wife, Gertrude. PX 7. Fifteen years later, Gertrude (joined by J. O., as law then

required) conveyed her half mineral interest to Frances and James Jr., equally. PX 9. At that

point, Gertrude owned a half surface interest while Frances and James Jr. each owned a half

mineral interest and a quarter surface interest in the subject property.

In May 1948, Frances sold her quarter surface interest to her brother. PX 13. Weeks

later, she sold a quarter mineral interest to J. T. Shelby. PX 14. The property was then

owned: Gertrude - a half surface interest, no minerals; James Jr. - half interests in both

surface and minerals; Shelby - quarter mineral interest; Frances - quarter mineral interest.

In 1952, James Jr. conveyed his entire interest (surface and minerals) to Southland

Paper Mills. PX 15. Eight years later, Gertrude and her children, including Jerry Payne,

signed a partition deed conveying to Southland Gertrude’s half surface interest. PX 16. At

that point, the property was owned: Southland - the entire surface estate and a half mineral

interest; Shelby - a quarter mineral interest; Frances - the final quarter mineral interest.

Today, Consolidated and various Frances Casey heirs are successors to Frances’s

quarter mineral interest. 2 RR 57, 124. Consolidated also owns a second fraction of the

subject property’s minerals, which it bought from J. T. Shelby. The Court should reverse and render judgment (1) declaring that the 1907

deed created a community-property interest and (2) ordering that Penny take

nothing on her counterclaims.

II. Consolidated is entitled to recover declaratory-judgment attorney’s fees.

In addition to reversing the trial court’s judgment, the Court should render

judgment that Consolidated is entitled to attorney’s fees, and then remand the issue

of the amount of attorney’s fees.

Under the Uniform Declaratory Judgments Act, a trial court may in its

discretion award costs and attorney’s fees. TEX. CIV. PRAC. & REM. CODE §37.009.

A decision not to award attorney’s fees thus is reversible for abuse of discretion.

State Farm Lloyds v. C.M.W., 53 S.W.3d 877, 893-94 (Tex. App.-Dallas 2001, pet.

denied). Here, the trial court found against Consolidated on the merits, so it never

reached the question of Consolidated’s recovery of attorney’s fees. But this Court,

on reversing the trial court’s merits ruling, should declare that Consolidated is

entitled to recover its reasonable attorney’s fees. A reversal on attorney’s fees is

proper where the appellate court reverses the merits of a declaratory-judgment

claim. See Kachina Pipeline Co., Inc. v. Lillis, ___ S.W.3d ___, 2015 WL 3653272 at *7

(Tex. June 12, 2015) (attorney’s fee award was properly reversed on appeal after

appellate court correctly reversed trial court’s declarations); see also SAVA gumarska

40 in Kemijska industria d.d. v. Advanced Polymer Sciences, Inc., 128 S.W.3d 304, 325 (Tex.

App.-Dallas 2004, no pet.).

In the context of this case, a failure to award Consolidated its attorney’s fees

would be an abuse of discretion.17 Consequently, in rendering the judgment that the

trial court should have rendered, the Court should order that Consolidated recover

its reasonable attorney’s fees, with the amount of the fee award to be determined

by the trial court, in a limited remand. Alternatively, if the Court does to render

judgment that Consolidated recover its attorney’s fees, the Court should in that

even remand all issues concerning Consolidated’s request for fees, including liability

as well as the fee amount.

Conclusion and Prayer

For the reasons stated, the Court should:

(1) reverse the judgment of the trial court,

(2) declare that through the 1907 deed Pearl and J. O. Payne acquired the

subject lands as their community property,

17 Indeed, the necessity for this suit falls squarely on Penny’s shoulders. Before this lawsuit, Consolidated asked Penny to provide Consolidated the basis of appellee’s ownership claim so that Consolidated could correctly assess its ownership claim and create a title opinion. Her counsel claimed to have documentary proof of Penny’s claim and would forward it. Then, months later, Penny’s position changed. Counsel still claimed to have possession of documentary proof but refused to furnish it. So Consolidated had to file suit. Now, the trial has proved that there never were any such documents.

41 (3) render judgment in part that (a) Penny Payne take nothing and (b)

Consolidated recover its reasonable attorney’s fees, and

(4) direct a limited remand, for further proceedings determining the proper

attorney’s fee amount (or, alternatively, remand the issue of entitlement to,

as well as the amount of, Consolidated’s attorney’s fees).

Consolidated of course also requests all other relief, additional or subsidiary, that

this appeal authorizes.

Respectfully submitted,

/s/ Greg Smith

BRENT L. WATKINS GREG SMITH Texas Bar No. 24033312 Texas Bar No. 18600600 SKELTON SLUSHER Nolan Smith 1616 S. Chestnut Texas Bar No. 24075632 Lufkin, Texas 75902 RAMEY & FLOCK, P.C. Telephone: 936-632-2300 100 E. Ferguson, Suite 500 Facsimile: 936-632-6545 Tyler, Texas 75702 bwatkins@skeltonslusher.com Telephone: 903-597-3301 Facsimile: 903-597-2413 gsmith@rameyflock.com nolans@rameyflock.com

C OUNSEL FOR A PPELLANT

42 Certificate of Service

This brief was served electronically and via email, in accordance with the

applicable Texas Rules of Civil Procedure, on this the 11 th day of September, 2015,

on the following:

Via email katiecmorgan@yahoo.com John H. Seale Attorney at Law P. O. Box 480 Jasper, TX 75951

lsi Greg Smith Greg Smith

Certificate of Compliance

1. Tlus brief complies with the type-volume limitation ofTEX. R. App. P. 9.4 because it contains 9675 words, excluding the parts of the brief exempted by TEX. R. App. P. 9.4(i)(2)(B).

2. This brief complies with the typeface requirements ofTEX. R. App. P. 9.4(e) because it has been prepared in the proportionally spaced typeface using Word Perfect X5 in 14 point Garamond font.

Dated: September 11, 2015.

lsi Greg Smith Greg Smith

43 No. 12-15-00105-CV

In the Twelfth Court of Appeals Tyler, Texas

Consolidated Property Interests, LLC Appellant

v.

Jerry Payne and Penny Payne

Appellees

Appealed from the 273rd Judicial District Court Sabine County, Texas

APPENDICES

A. Judgment B. 1904 Deed (J. O. Payne to W. A. Polley) C. 1906 Release D. 1907 Deed (W. A. Polley to J. O. Payne) E. Consolidated’s Request for Findings and Conclusions F. Certificate of Mailing Appendix Tab A IN IN THE THE DISTRICT DISTRlCT COURT COURT OF OF SABINE SABINE COUNTY COUNTY

STATE STATE OF OF TEXAS TEXAS ALcflh~c~ AJ:Jsh~c& CONSOLIDA TED PROPERTY CONS()LIDATED PROPERTY §§ MAR 13 2015 MAR 13 TANYA INTERESTS, LLC INTERESTS,LLC §§ §§ VS. § NO. 12,827 12,827 §§ JERRY PAYNE JERRY PAYNE AND AND PENNY PENNY PAYNE PAYNE §§

JUDGMENT JUDGMENT

It is ORDERED, ORDERED, AI)JUDGED ADJUDGED and and DECREED DECREED that that the the Judgment Judgment rendered rendered and signed signed

by this Court Court on February February 24, 2015 2015 is hereby hereby vacated vacated and and set aside, aside, and and this this instrUInent instrument nov\" now

becomes the becomes the Judgment Judgment in this this case. case.

()n the 15 th day On the day of of January, 2015, came January, 2015, came on to be heard heard the the above-entitled above-entitled and

nUlnbered cause, numbered which Consolidated cause, in which Consolidated Property Interests, LLC Property Interests, LLC was was the the original Plaintiff original PJaintitf

and Jerry and Jerry Payne Payne and and Penny Penny Payne Payne were were the the original original Defendants, Defendants, and and then then Jerry Payn~ and Jerry Payne 3nd

Penny Payne Penny Payne\vere Counter-PlaintitIs were Counter- and Consolidated Plaintiffs and Consolidated Property Property Interests, Interests, LLC ",-as Counter- LLC was Counter-

Defendant, and Defendant, and Jerry Payne and Jerry Payne and Penny Penny Payne Payne were were Cross-Plaintiffs, Cross-Plaintiffs, and and Consolidated Consolidated Oil & Oil &

Gas, LLC, Gas, LLC, Edna Edna Beatrice Beatrice Casey, Casey, Debra Debra Lynn Lynn Casey Casey Berry, Berry, Christopher Christopher Eric Eric Casey Casey and and

J{achelJe W. Rachelle W. Casey Casey were were Cross-Defendants. Cross-Defendants. Jerry Jerry Payne Payne died died during during the the pendency pendency of ofthe the suit. suit.

and before and before the the trial, trial, and and all all interests interests of ofJerry Jerry Payne Payne passed passed to to Penny Penny Payne Payne as as aa result l)fthe result of the

will \vill of of Jerry Jerry Payne, Payne, deceased. deceased.

238 238 VOLe_t_D_p_ PGS1S VOL,_t_D_~_ PG .Stl S _ Plaintiff Plaintiff and Counter-Defendant Counter-Defendant Consolidated Consolidated Property Property Interests, Interests, LLC appeared by by

representative and its attorney, its representative attorney, Defendant Defendant and Counter-Plaintiff Counter-Plaintiff Penny Payne appeared

person and by her attorney, in person attorney, and Cross-Defendants Cross-Defendants Consolidated Consolidated Oil & Gas, LLC, Edna

Beatrice Casey, Debra Beatrice Debra Lynn Casey Berry, Christopher Christopher Eric Casey and Rachelle W. W. Casey

appeared by counsel appeared counsel only, and all parties parties announced announced ready for trial. Thereupon, Thereupon, the parties

submitted the matters submitted matters in controversy, controversy, of of fact as well as of of law, to the Court without the

intervention of intervention of a jury. jury. The Court Court heard the evidence evidence and the argument argument of of counsel, and is is of

opinion that judgment the opinion should be rendered judgment should rendered in favor of ofthe Defendant and Counter-Plaintiff the Defendant Counter-Plaintiff

Penny Payne, and against Penny against Plaintiff Plaintiff and Counter-Defendant Counter-Defendant Consolidated Consolidated Interests Interests LLC, and

against Cross-Defendants against Consolidated Oil & Cross-Defendants Consolidated Beatrice Casey~ Edna Beatrice & Gas, LLC, Edna Casey, Debra Lynn

Berry, Christopher Casey Berry, Christopher Eric Casey Rachelle W. Casey. Casey and Rachelle

It is therefore ORDERED, ADJUDGED therefore ORDERED, DECREED that Plaintiff ADJlJDGED and DECREED Consolidated Plaintiff Consolidated

Interests, Interests, LLC take nothing nothing against Defendant Penny against Defendant Penny Payne, and that Counter-Plaintiff C ounter-Plaintiff Penny

Payne Payne is awarded awarded title title to and possession possession of of one-half one-half (1/2) (112) of of the oil, gas and other minerals In inerals

in and under under the land originally originally described described as follows:

"One "One Tract Tract known known as the Polley Polley old place place in Sabine Sabine County, County, Texas, containing containing about about 400 400 acres acres a part part of of the John Frazier Frazier original original survey survey beginning beginning at a comer corner on the Colerow Colerow creek creek at a stake from which which a gum stands stands 5 feet marked Inarked J. P. and on ironiron wood wood 8 feet and a water water oak both marked 1. both marked J. P. Thence Thence down down said said creek creek with with its various various meanderings meanderings to the Patroon Patroon Creek. Thence Thence up saidsaid Patroon Patroon Creek Creek with with its meanders meanders to the bridge bridge across said creek creek on the road road leading leading from Sexton Sexton to East East Hamilton. Hamilton. Thence Thence along and with with said said road road towards towards Sexton Sexton it being being the North North West West boundary boundary line to where the Sexton Sexton and Milam Milam intersect intersect each each other. Thence Thence down down said said Sexton and Milam Milam road road towards towards Milam Milam it being being the South South boundary boundary line to the Place of of beginning." beginning."

239 239 VOL. VOL. 1)D0 \)00 And:

"130 acres of John McAdams, "130 McAdams, in Sabine Co. about one mile mile S.E. S.E. from from Sexton, on Sexton, on Milam on on Old Old Sexton road, onon the west side of the Patroon Creek,Creek, about 11 mile S. S. E. froln from the town of exton, and this survey includes W. W. A. A. Polley Farm, on a 260 acre Survey on the John McAdams McAdams Survey: Beginning S. E. Cor. of said farm on the west bank of Patroon at the S. Patroon Creek. Witness Witness an elm brs. S 17 17 3/4 E 1 2/5 vrs. a Sweet gum brs S. S. 55 55 1/2 1/2 E. 10 10 vrs. maple brs S. 28 1/4 S. 1/4 E. 6 25 vrs. Then S. S. 44 E. 540 vrs. to Cor. a Sweet gum brs N. 44 W. W. 1 2/5 vrs. a Sweet gum brs. N. 1I 1/2 1/2 W. 1 112 1/2 vrs. Thence Thence S.S. 3 3/4 W. 220 vrs to Cor. in Sexton & & Milam Milam road a post oak brs. N. 12 12 W. 4 2/5 vrs. a pine brs. N. 68 W. 5 2/5 vrs. Thence Thence with said road as follows. 1stsr N. 65 W. W. 187 187 vrs. nd nd Robert Lolley North Cor. on with said road N. 35 2 , , N. 44 W. 310 vrs. Robert 35 112 112 nd nd rd W. 182 vrs., 2 N. 59 1/2 W. 220 vrs., 3 ,, N. 23 112 1/2 W. 168 168 vrs. to Cor. On Colorow Creek the Colorow Creek just just below below the witness a white oak brs. S. S. 67 W. 4 vrs. a pine brs. W. 68 E. 3 1/5 1/5 vrs. Thence Thence down the creek creek with its meanders meanders its general general course course being being W.62 W.62 1141/4 E. 1350 vrs. to mouth mouth of of said creek thence down the Patroon Creek S. 41 1/2 Patroon Creek 1/2 E. 80 vrs. to place place of of beginning beginning bearing Inarked marked X. Variation Variation 8 East Survey March 12, 12, 1906 by Jim A. McLaurin McLaurin Survey of of San Augustine Augustine Co." Co."

The Court Court finds that that this is the same land described described after re-surveys re-surveys as 492.02 acres in the

John Frazier Frazier Survey, Abstract 104, and 127.58 acres in the John Survey, Abstract John McAdams McAdams Survey, Abstract A.bstract

Sabine County, 159, Sabine County, Texas, Texas, such such tracts tracts being being described described by metes metes and bounds bounds in the surface

only Partition Partition Deed Deed between between Southland Southland Paper Paper Mills, Inc. and Gertrude Gertrude Payne, Payne, a widow,

et aI, dated dated November Novelnber 12, 1950, and and recorded recorded in Vol. 94 at Page Page 635 of of the Deed Records

of of Sabine Sabine County, County, Texas. Texas.

The Court The Court finds that that after after the the execution execution of of the instrument instrument dated dated March March 12, 1931, and

recorded recorded in Vol. Vol. 34 at Page Page 613 of of the the Sabine Sabine County County Deed Deed Records, Records, in which which 1. O. Payne Payne

and wife and wife Gertrude Gertrude Payne Payne were were Grantors, Grantors, and and James James O. Payne, Payne, Jr. and and Frances Frances Casey Casey were were

Grantees, Grantees, and and considering considering the the recitals recitals in such such instrument, instrument, that that the the Grantees Grantees were were the owners owners

240 240 VOL. \)t>0 PG 51/ 1 1/4ofofthe ofof114 theminerals mineralseach, each,and andthe theGrantors Grantorstogether togetherwere werethe theowners ownersofthe of theremaining remaining 112 112

of ofthe theminerals lnineralsininand andunder underthe theabove abovedescribed describedland. land. The TheCourt Courtfinds findsthat thatthe 112interest the 1/2 interest

in the in the minerals minerals then then owned owned by by J.J. O. O. Payne Payne and and Gertrude Gertrude Payne Payne passed passed by by virtue virtue of oflegal legal

instruments instrumentsand andinheritance inheritanceto toDefendant Defendantand andCounter-Plaintiff Counter-PlaintiffPenny PennyPayne, Payne,the 1/4interest the 114 interest

in in the the minerals minerals then then owned owned by by Frances Frances Casey Casey was was conveyed conveyedby by Frances Frances Casey Casey to to 1. J. T. T.

Shelby by Shelby by mineral mineral deed deed dated dated March March 15, 15, 1949, 1949, and and recorded recorded in in Vol. Vol. 64 64 at at Page Page 100 100 of ofthe the

Sabine County Sabine County Deed Deed Records, Records, and and is is now now owned owned by by the the heirs heirs or or assigns ofJ.J. T. assigns of T. Shelby, Shelby, and and

the 114 interest the interest in the the minerals minerals then then owned owned by by James James O. O. Payne, Payne, Jr. Jr. is is now now owned owned by the heirs heirs

and and assigns assigns of of James James O. Payne, Payne, Jr. The The Court Court further further finds that that the Cross-Defendants Cross-Defendants

Consolidated Consolidated Oil & Gas, LLC, LLC, Edna Edna Beatrice Beatrice Casey, Casey, Debra Debra Lynn Lynn Casey Casey Berry, Berry, Christopher Christopher

Rachelle W. Casey have no interest Eric Casey and Rachelle interest in the minerals, minerals, since their claim would

come only as heirs as Frances Frances Casey, and the said Frances Frances Casey, deceased, owned no

interest in the minerals minerals after she conveyed conveyed her 114 1/4 interest to 1. 1. T. Shelby as set forth above.

This Judgment This Judgment finally finally disposes disposes of of all all parties parties and and all all claims claims and and is is appealable. appealable.

Costs of Costs of Court Court are are adjudged adjudged against against the the Plaintiff Plaintiff and and Counter-Defendant Counter-Defendant Consolidated Consolidated

Property Property Interests, Interests, LLC. LLC. 71:2- f4 RENDERED RENDERED and and SIGNED this ~ SIGNED this __I / __ day day of of March, March, 2015. 2015.

JUDGE PRESIDING JUDGE PRESIDING

241 241 DU VOL. \)bDU VOL. Appendix Tab B . ," ..

. ~ER~IFI~D COpy 4-·'. . ·.· J3 :2;:~V·i Attest. . . . : _ Co , 20 .. . County Clerk . S1{bin¢X:ou[)IltJ:I:~1

~ XHIBIT

. : "." .:', .;. .:: '":'," '~ ': ~ '; , ::, ' -:':'.. ~ :..... " ~ ... :.- . :'.;;:'i ; ~'. ;~::.... __..... .. ._...:. .... '. ' " ..... '.': . .. ..... .. ..... .':.. , ... >:"-:"}' . -../ - ' .. i·

.. ........... :.. Appendix Tab C .. ' , , I I heroby certify that the forBlloinB ,inst,rument was filed for rocord in my , duly l uffice on th" 22nd dny of barch 1906 at B o'clock A.H. end/recorded on the ~~ ,!

i: ~ ----- ; nEI.EIISE OJ.'" 'F-NOOn' ~ r.IBt! I; J .0. PAYt/ :,:

I U TO Piled for record March 2B, 190&,nt J o'clock P.M.

I 11. 1\, l'OLLI':Y

~ STA'~II; OF' -,'!:,x.f\S

~ 'C:OUII :v: 01" slIi:~OY KNOW ALI. MEN OY 'IlIESE PRF,5EtlTS, That ~lhereas , I JHmus ~ j O. 1'1'::'"" o.f San AuguHtine, CDunty, Texas, did,lDn the 10th doy of Hay A.D.

" I lW)!~ II convey unto Yf. A.Polloy certain Innde as de.cribed in 80i

j being" recorded in VDltUlle T. Jlag"s nos. 2fl9, 290 and 2'H, deod records of l~ ~j.oidnc County, 'l'ttXQ.::I, nnd whereas', There is a recital 1n soid deed that a

l Vendor's Lil!fl was r .. tained to seCure th .. nt ",1' money 'a~ sp(lcified in pnym ..

i 3ait! dsed wh"n in truth ond in fact the cDnsidoration for said'lond" was a f~ cash co~u"ldor(\tl;)n ~hou(~h said dec:d rttcitoa ths.t R Vendorl .s lidn was retainod D

~ nnd r hern now relense, relinquish oncl quit clnim to said ,I. A. Polley the

~ londs nbovu described tree trom tho line aforesoid. ! ~ James O. Peyne 1STA ~.: ~ , 01' 'j'1:XA '!

~ C'.I:!t,',?y 0'"' SIIBLIW HEFO!E me J. M. Sanders County Judee or Shelby County,

i TflXUfI, lwr.sonu),.ly nppoared JRmeR o. !'nyne known to me to be the person "'hose

,I n"'"" I. is 9\Jbscrl b ••

I ~ ij Oi'{en und .. r ..~' hand andsenl on this the 27th dny 0.1' March A. O. 1906. (L.S. ) J. M. Sanders CDunty Judee Shelby.County, '. . ·exns. I~ , hereby certl1'~', that tha for0f.\0ior; instrument was filed for record in my

1 Df.':ice tho 2eth' day of tlarch 190& nt J o'clock P.M. and duly recDrded lillIe

l 30th day 0.1' Horch 1906 nt 5 o'clolrk I'.t!. j J. A. Watson Clerk Co. Ct. (! II~ by: \t. II. SlnHh, Peputy So bine Coun ty, '.L'uxns.

CERTIFIED COPY ' ' Attest: ' ""1- ~ lO - JANICE McDANIEL, C;;ounty Clerk , 20li " ,r ,

l-I..- ., :. -~~ ,==__~~=-__~ ___~-= ~ouny Ter!0=/ ~.A11u.t ~ __ ,Deputy ~_=~_ _~==~!b_ ' __= -

__----rtfP1L_I~~~~ ','," ,j"'j~!v_~1~~~1~~'t;iV\~';i;~~!:t. .:. ; ..... : .... :.::::. ·.:~: . ::,:.:,. 'i ' .. ~.' :'~..,. i 5" : ;~f' ~Jjll

~ i ~~~~~~~~~~~~~~~~~~~~~~~~~~~-'~-~.;--~--~-.~;;~~'~'-~';'~-~-~'~'~"~"~-~- '~~~;;~~~,N J" .'. ' 11;'

f :'. ~"." DF.@

..~!~ . W. A. PI CKF.'1IN(} m., .'"" ".,""' ,,",. ". "'" "' J "' d"" '.". I :~1 ' ,::t . 'STATB O~' TI~AS I ':'J COllI! "r 0" Si\"IH!~ K!TO\'I ALL H::N ~y THF.SR P'lr:'lF:"T'l, ~hRt. I" ii. A. Polley :. 1 . ~ . .~ .:':~ of tho Gounty of SAbine snd StRte, of ~exos, for ond !.n considerRtion of tho 1,I ' Sum of Fifteen thousand seven hundred fifty three " 75/100 (515753.75) dollArs ! to me pllicl nnd secured to. hH p'dd by \i. A. Pickering RS follo}ls: ~'ive ~ho\l9nnd ~

two hundred and rifty ana and 25/100 ($5251.25) Dollnrs ' cnsh the receipt ! of which is hereby acknowledged and tHO proMisno)'Y' no:;e, of even date with . I this deod OMOtmt of Five thOUSAnd two ·hundrod "nd fifty one and 25/100 dollRrs !~ '. 'I i each with 6% interest frOM date until I'ldd. Inte're , t pn:;~!>lo Anuol17 .GS it

accruAd; SRid 'notes due nod payobln re.poctively on or bofor" 12 ",onth. Hnd } ~ ,

2!, months after date executed h~ W.,A.Pickerinl~ in favor of snid ~,. A. POlley 'Ii

aRch retaining Vondor's lien nn the heroinnftor dR3crlbod trncts of land; ·. iI ~ . hova grllntnd, sold snd cdnveyed oml hy these presents do Ilrent, ~f\ll ood i r'. convey tin'to tho soid H. A.Pickerinf:uf the County of dnckson nnd Stat .. of '1 ,i!I Missouri, all th03e certnin tro,cts or lnnd situ.ted in !'1AbiQe County, TAXAS; I I· .. rid More definitnly described es follows, to""/it: I 1st TIlACT: ' F.ir,ht hundred Rnd sixty nin" ocres a psrt of the W. fl. 1'1'n7,1er

H. R. SU1'V«y, \/hich ,co"o,! outJ'of a 1029 ncre trAct which i~ described as follo",', to wit: Bellimin!\ on the ri.;ht hAnk of Sabine n'i ver ot tho N. :~.

cornor, of a SU " voy mode foC" John lloyd fir,t corner n steke frOI

North 00 dC!l~ Wost 26')0 varas to second corner stAke pine Ma)'kod B heRrs

N. : 32 ~, 0 $'/10 VllrAn Hickory mkd X . S. 32 Jo; !, 5/10 VO,rSB, Thance South 25

HA"t 1'100 voras on Il<>ydn :-1. II. tho third corner on N. ll. lin~ <>f R. Slaughter

Survey a beech ",kd . Il. S. 32 J:; 16 v~ras Bi'g"'. N 3 R 12 vnrn3. ?nence 11

65 w 1~00 varns fourth corner stAke whito oak S )0 H Mlcd II. !! 1 vore Blo"k onk 00, Enst !, VAras Thence N ,25 r; on Tippet ,and holys line 21,00 vr •• to

t~ho l'ifth corne',; A. l1orriaes S. ~I. COlmer a stoka ' pine II 10!~ W l~ vr •• 'led

oak S. 4J r; 230 vrs. "hence ti 65 F; 1400 vr~. to Horrisons lint. llj80 varos to .1, aixth cornur atelc" r,lun 11 64 F. 12 voras hlo'ck OAk N 73 l, 10 varos, Thence '

N 27 deg; E. on 110rrisee' :~.,n. i~ne llj" ' l , v"raa Co seventy corner on S. bnnk

of MArtin"s B,you stake Fo,an OIorked A;H. l! [,8 Ii 10 2/10 vorns red ook S )[,

W, lO v,'res. Thence down the bayou wi th i ~s bank" S 62 l~ hO::; vnra~ to stnku

et tho ",,,,,th of the Cre"k .. black OAk S 10 vnroa Blck ook 65 I. 12 41.10

varas. Ttltlnce down the river with ite ", ..indore S 23 E 1000 varas S 55 I~ 1000

varas 5 14 ~ 600 vr:; to the bor,inning, C ontoinin 1029 AC,ra8 of in?d .exc.ptin~ ,. out of this Sllrve;r 160 ,acras .~ld to If.H. Aennett ,which begine at Bennetts ( ...",~-=,=====I====~-====="';~~~==~-~=====-~=========-='=~:"'---=--:,;;.'-===~! .; O ; " 1 :. II. E. corner u1" his. hOllle plnce on the SAbin!! Riv!!r thence' "I' lIaill Snbine

[l1vllr n 'ad1"I'iclent ellatance to a corn ..... Thance West a. au1"ricient distance to a

'IOrn .. r. '!'hence' .South to W.Il. El ;.nnet tN. EloundA ry line. Thence .wi th Benne t ts N. B.

line to tha place 01" boginning ao ns to contain 10.0 acras 01" land in s squnre

ahrips, which leaves out of s!lid lOi:!9 ncres trllct 8b9 acres intendod too be con-

v e yud h~' this debd to the said W. A.Pickering. ·

2nd TRACT: 6b2~ ncres 01' lUrid. 01". the Richerd Haley league SIIrv01 lying

,m the Hllrtinos Bn:r.ou, Bel~inninll nt a . point on th" F.. n. linn of the 'Iichard

llo1uy 'Iu'vey S. 26 dell. II 100 vrs. !'r01ll whare the Richard lialey line crosa!1s

the Hartinns ':re · k wHness a·Hickory IIIkd. x: Th.:nce S Bb D d .. g. '1 I~JO v'· ras

t ') a cornur A bench hrs. ~ )S'~ dug .: 2 215 vrll. Thunce II 41!~ ilW50l~ vrs. O~·;" to n c:.lrnor a j, o!Jt ."nk br5. S. l~l~ deg ~: 1 1/5 vr5. n pine ·hrs. S )5 der, 'I II I~ 2/5 " 1'11. Thence " )O'~ deg 1!;4 vrs. to corne .. on the HartinA9 I";re .. k , ~

1 witn ••ss a .l-lhi~" · 1II1k brll. 51 d .. g. g 1 vara. Thence up enid craok with the ;

""nndor.9 AU 1"ol1ows , to "it: 1st. II !Ill dsS. H ,1050 Vl'~. 2nd. II 11)-18 ~I )20 ili' •

.1rd . II 3Y clell. II ? 0 vr5. to c orner SAid "reek A bench brs. S B deg. W' 7 vra.

n hench l'r~. N. 'Ill deg. " 12 vr •• Thence '1. )0 dr.S W at 7)0 vr5. a rood to

!',.lmo rs lit '/,)0 "1'11. aame rood nlll.in at 1120 varas corner a pine hr5. 1/ ))

dug. ',1 f, vrs. ~~I",nc" with thu old [11.1"'81' 1'00.1 as 1"ollow.: 1st S 42~ deg F. 9S .vllras

2nd S 1:; deg. l'.100 varas, 3rd. S 50!~ dell ''/ 100 varDs. I~th S b!)',t d~'g !I 100

vorns. 5th S 2)~ dep' \/ 1110 vnras. [,th S 2b deg. W 100 VAras to the n. I':. i' . 8 :1rn8)' 01" a lOll Acre survey mllde 1"01' W. A.Polley on with the old !'nlm .. r rand Alao

' Dllll,,<1 thw Poll!::r lind Payntl old mill road 7th S )2l:! deg II 2)0 VAras '8th S

l~) U 1110 9th S Illl:! II 11;; VAr'·s 10th S 55 d"c: If )b2 vn rDS 00 corn .. r on the S·. B.

11n" O!' thu nichnrd Ual"y Surv"y ''''ing thu S. ;0; . Corns!" of tI. A. Polley 1116

ncre Su ..vey \-/i tnosll 8 pine brs. N 211 deg. !; 5 )/5 Vl'S. varos a pas tonk br ••

S bill:! dog. W 1\ )/S va.ros, Thence S 64 !i on lIaleys S. 3. linn 1800 vrs. to

cO"n .. ,' in th" road Ienrling 1"1':1'" Sexton to ~:ast Hamilton witness n (line brs.

tl. 41~ ~ I S )/5 vnrns. Thenco with noid road as ,'ol1o"s 1st N 41 d i. 1l ,: 1~00 voraa 2nd HOI'th 64

5th II 56 dOlI I': 2(15 Vtlr·· ". "th N 57 delI ,: IS? vrs. to the corner on the Enat

side Ol~ R ~p!'ing·.BrBnch just below tlu; Sp)·i .n(: a swe"t !:lllI\ bra. S. 45J,j der,

. 1/ 1 v~ra nn ir,m,:,ood brs N .1,4'~ If: 1 )/5 vnr"s, Thence S 24 deg r: 17l~ vnros to

corn.o r of the Sexton lind F.a~t. jial'lllton rand n pine bs. S )'l' dag. B 7 4/5 Vr3.

Thune", wi ':h snid rOI1e1 liS f:>1 owsl 1st N 7) deg H 101 vrs. 2nd N )5~ [,; 200 vr ••

, )rd II 5~i ,: 135 Vl'n. to IInleys E. Po, lin •• Thence II 26 F. with 'I noid line.' 290

varnA to th" plnce Cli' h"I:lnn-1n(\. '::ho nbove field notes includes 795~ ncrtos le8,8

1):1 noros sold to lIil:(11n:l l"nving b6~ ncrOR "hich this trnct wns ounel &0

,r. .')ntain tay nn flctunl SUMuy hy J. n. HcLlInrin SurvhY0l" or 3an Au,~ustine Co. .~ . •Inrch bth l~Ob. a-----. L '.

,r

..; . ....:. .' .3rd, TRACT; Rein!: " part of the Sion Smith 11. fl. 'Survey aboUt 3 milHS South 01' the Town of Homphill Ber,inning at tho S. E. Corne~ of A 50 Aero Sur""y on the E: il. line. of (John Smi th SurvHY; Thance S )2 elef. II 960 vrs. n ntak" on .S ion Smith S. n; Li.n .. ; Thun,,;, N !:i8 \./ with Sion S",ith S.!'. line 1033 l,eco"lUs , S. E. ' c~rner; Thence N 33 ·deg. B with heco"'e~ F.. 8. linu 1))8

vr::l. S. \/. cornHr 61' soicl 50 nero Surv;P.y ~t "1,6 V)'s, its fl. I~. G()t"ner, 'J.'hence S )2 \./ at 370 VJ'!J. the ~. W.C:or-

h':t;inning, containing r!23 Acres o · lnnci, Also 11 ncrpn or th~ .snmf'l 3urvcy rle~crlbRcl'

as f"llolls, to Hit! nellinning .at :;hp, S. R. Gorner of n 50 ncr" S'UI'VRY o~ ~he ft: ~/. B. lin!' of nnotlwr 50 ncre survey both of which helonlls to J, ,;. anc\ E. 0'• . '1Ji . '.'ruvi", ltwnce S 3d \I nt 370 Varn" S. II. Cornel' of thn last ~O ncre survey.

Thene" S 58 E ',r". S. cornui' of ,".",e. "'hence fl 32 E 278 vr". to a stp.Ke frol'l "hich 0 white onk 15 in. brs. N. 50 dR·Il. I~ 257 varns to tho placc of be-

ginn Inc; . cnn toln!n~ 17 ueros of land~ !~th ~MCT: A pArt of the John HcAdal'lA H.R. Survoy elcsc'ribed sa follow".

ne.r;innlnG a~ the orillinal II. E. Corner of the John McAdn",. · Survey where th'l

I Colorow Crack unitos 'with Patroon' Creek i Thence down th~ PII~roon Creek S ' &4 .E ~O v(lrns ' to : ot:nor on suld Creak the N ~ 'tI. cornel~ of n tract ~f ·61... 0 6c~ns Icno~n

uu the gr:1l '.hnl"s . trAct ~Iitnesa R bo~ aldo." ·bra. N 51 f. h v~r.~:'l B Sycnrnnro trt.c

sol.,; II 7 2/5 vo.rll" Thonce S ,:6 der; bI's. 1/ II wi',h ~he II. Il. · linp. of !;l'Iithers ·····1 .. tract ot l&OU 'vara" Sexton ond Hilnm ronn at 2110 var(ls to cor-nor wl·tn~s3 B

pir.e brs. S b3!::; j; ) 1/10 vrs. pine brs. S 6 3/1~ \/ 2 vorns. Thonc" N 6!J >I 7!Jh

Varu'!: to cnrnf'r on the S.1.:~. A. c. l~.n(i Df the~obArt 1':)110;' SO (\crt' tract w!tnegs

a refl onk "'nrked P. bro. S 16 deg ~ 5 vnrn" 0 pine bl's.N ·12

witnes" dee'" to Robert Polley line 6ILl VaraA to cornor l.n th,,:"ext:,n o.nd Mil"m rand

0 post onk brs. l 37 dell Ii 5 voras a pinp, hrs ~ S 6 7l~ II !J lis VOI'O;, Thence ' ..1 I' I :~~,~~~~ Hith ""id road os follow.: 1st. N '35~ W Hi2 varns 2nd 59l::; ,/ 2?0 varn" .• )rd N 23!~ H Ibn .varl\a .to· corner .o n the Oolorow Cr~"k Just holo,; th .. brld[;e ' soid

I ~l I !~:~i;:(~ corn~r is on 0 hl.lIh 1I1ui'f bank witness a wh!.t .. ook brs. S 67 dUEl II !~ varus a pine II 60 (leg E 3 liS varano ?hence down. the Colol'ow t;raek with its l'Iuanders it" eonnrnl course beinl: II 621~ ,; 1530 varas ~' O the plac~ of bugi';ninl: contoining

.2&0 ocro" les" 130 ncres roserved hy ~t.. A. Pullp.y f"or forI'! now occi'pied by I ~1

lIonry' ~;v'~'n. nnd .aiel 130 acr.'s re"ervod 'describod o.s follows 1 Hdr,innin[t At ths .! .I I· S. ~;. cornor of soid "rom. on tha W. blink of Pnbroon CrA~k witness ' on "11'1 brs. !, S 1 ·' 31!~ I·; 1 2/5 V· ras, a Sweet r.nM brs. S 55!~·E 10 Voro." 1\ 1·lnpla. br •• S 28 1/4 ! i:: 6 2/5 voros. 'Thence S 114 " 540 voros. to corner.a aweet [\ll1'1 hrs·. N 4!J . II 1 2/5

varns 0 "we"t. glll'J brs.il 1'::; " 1 215 voras, ThencR s··? 3/h vnrnJJ if 2?0 VOI'All t 'o I! cornel' on the Sexton .a (ld Milam fioad 0 Post Oitli: bra." 12 de!l. II I~ 215 varna R i pine hr". II 68 der, II 5 215 varas, 'Thance w1th aoid roael as follows 1st N I,!i dOll I' ./ 100 vorns 2nd N 44 'w 3io varas Hobert Polluy~ North corner on the said rand . -

I .-~ : . ~ ~~"": ':" .. 60

~ ,

l ! N' J5!. ,II 1[\2 varns 2nd II 59~ U 220 varD~ Jrd II ~Jl:! ', I lbll VArE'~ corner on the I ~ 11 jp"lorow Cre .. k just holOlI tho bridge witn"s" a white onk brs. S 67 deg. 1'1 l~ 1 ? ',vara.~ ,n I.ine brs, ,n b[\ 'dOil , ': J 1/5 v ',ras, thence down the Calorow Croek with its l' I:-.eundering~ its general coursu heinEI N 62~ E 15JO varas to the m"uth 01" SAid

I: ! Cro .. k, ':hence down thu SAid Patroon cre"k S l~l!a' I; 80 varas to the plnce 01' be- tI i~ Il:nning as lIurvuy"d by Janles S HclCllyrub Surveyor or Snn Aucustino C". March 12, \j r. ~ !! 190b,. ~! ~;,th TRACT: Boin!; n pnrt of the J. :l. , Lnr:te 'lurvey consistin/; of 199 acree

.,r bOli,,:ht' ~rom [I. ! A. , Th:II'1\l90n ott that, certain t,rnct of lnnd belonlling to R. A. , I '. ~ , ~ ~ : ';'h.. ,mpsoo a" ,~u.j,,: 01' Ihn A. ~hompson !mown as th .. J. S. Lan .. HeAdri/:ht- 99~ acroll l " ,- .. ',' ij mur t: or los'S ..e:ls.o a tract or land purchostJd by n. A. Thompson from O. H. Toms ~ . . . ~"., . o , ~''', nil urI":,' R~d',;,!,corded in Sabine County, Texas, in th .. recorders office or said i & ~• COUll Cy bo~ng'# n" iJ8 l't of' the J. S. r,llno H. n. consl~s t1nl~ or qq~ OI:ru8 mOre 01' ItJ8s t I' ,

~ ~ .!Jnel fUJ"thtir rnferHnCf) descriptinn and bouo.dsl'ies rererence Is g1 uen, to !'~lrveyor8 : II ! ~ ofJ'it:e 01' tht~ County or Sabina a.nd St.a tti or Toxas Ynel'e tho 8 bove described '1, ! prO(lerty 1~ situ';.f~d. To hAV" And to hold the move de.cr'.bed pre",ises, tOKeth .. r ~ .~ wi ttl nil und slnguillr the r1i~ht8 n.nd 8 :"pul'tenancas t hereto in anyw1su belonging

~ t ·j·unto th" sRid H. A. I'ickerini: his heirs a nd as.iBll8 , forever And I do he reb:' bind , /. I roysnl!" m~' heil's eXHClltors And a dl'linilltrators to warrant a nd forever derOnA 1\'11 .~ ! ' " ~ lind 9iol.;1I1Ar the suid premise. unto the said II. iI. l'ickoJ'inll hl:s hHirs nnd

~ , Iln9ill'no 0l.lllin.t "very 11(Irson whomsoever lawfully cloimin/; or to claim tho sam"

i J or aoy part thar!:of. ;~ fIllt i t ill ex(.resnly agrhed a od stipulAted thAt tho Vendor'lI linu is re- ri ~~ :~ to in.,,1. "I:a '.ns t th .. Rh:JV!' described property premisas nnd improvelllen ts until

i' lj tho ahoy,. described n:Jt~s nnd all intorest' there em are fully pnid accordin!; to rt ! ~ th.,ir, 1'Aco and thoor e;·1'ec,t 00.\ reod101: whan this deed shall becollle a b901ute. ~ l litn.,." my hRnd n,t SClxton this 2bth day of .1. r eh A.D, 1906.

t ~ Ii A~TF.ST: W. A. Polhy

~ j D. Pro t t ~ ' ~ 1,\. :, ',Pratt ~~ I ~ TilE S'l'A'i'I': 01·' T,·:XA:; , ./ .1!'· ! C;JI/H'Y OP SHRLAY. flF.:FORB Ille M. fl. C:nrter Justice "eace f~x O.fncio Notary I· ~l ! ,ff, ,ll'ubll.C: ~n ' A!1d for ';"bine fJounty, TI':;

~~i' ~~:~ ~~ ~i~~ . , Public in and for Sabin.. County. Texos.

1 - - - - -.... " :~~i .- ,. . . . . .: . ... . ,." ::>"'...::a.•.t:....==--u:.=_ _ .".,..~ _________=.=.-=_=__

lli'i I ·~~L. . ~:~--------~~~ . ~. ,', '. !

: r· ..... ' ' :!, '; ~: ,.. ~' ~',;.•~\:, ~·:;:~;,-'trr.~~lIh~;;if;:,. ~:\1:' :i~(i~;~ .:.....~~ ..,.:~..,;.,:.., ~:,: .,:,.! ;:~ ;.~:,:~.,.'~ :{~ ,J;~ F'~~V:,,·:- .. .

., ":" "'" i~;~"<;1f.'~:~::*i'.;~?~!~~;~~~~~;~;~;:,'",::::':'?t;::: " ":': -,.. :,,:,,: " ' .. ~ ..": ~·~~!0;\L:r~..:;;~:"'~:..:: ,'": ::<:!:-: " ~'H"! ~:~~::!'?~! 1iZ~~7):J!~'=--;~ ... ..- OEBoW

I hereby certify that the foregoinr, instrument ws" filed for record in my

office thn 28th'. dny or "~rch 1'106 at 3 0' clock P.M. and duly recorded the

31st day of knrch A.D. · 190& at 12 o'clock M.

J. A. Wataon Clerk Co. ct .

Uy: W. H. Sl'lith, l).puty SnhinB Count:r, TBxn s ~

WARMNTY DEED

D. T. MEIGS & WIFE Filed 1'0r rocord March 30, 1906 at Il 0' clo';k A.M.

OF SABINE KNOW ALL MEN BY nlESE PRESENTS, That WB' D. T. Meigs and

Jemin. Meigs of the County of Sftbine St~t> of T.xas for Rnd in con.id.ration "

fiv. dollars to u. paid and .ocured to b • .paid by W. S.

rollows' C,ulh, hElve granted,. 8 old ~nd con.'1~. ,.~d :tnd by t hwS6

do gr"n~, aoll and convey unto the said W. S. Smith of tho County or

State or Texa. all that certain or land situated in Sabino County, Taxaa,

being a port of the Donald HcDon~ld Languo and moro fully d04crib.d, to- t: Boginning on th .. rOlld at Lewis L .. tnay. S. W. Corner, Thonc. ~ 60" W 160 vra

in rOfld, Thonce N 2&" E 130 Vra. to Lewis W~ro OriginRl N·. E. Cor. Thonoe

vra. Thenco N 500 E 32 vra. Thence S 100 E to placo of beginning .' . 2 aCroa of land~ To havo and to hold the obovo doscribod premi.e •

aingular the ' righta ond. ppurtenancos thoreto in on1"iso

longing unto tho add ·".S. Snith l!'irs and assigna forever, And wo do heraby

oxeoutors andodministratora to warrant and forever defend

singular the ... id premia"s unto tho sald W. ~.~ith heiraond ••• iBn.

every porson whom.oever lawrully olaiming or to claim th" •• ma or any

hands at Brookeland thi. 22nd day of March A.D. 190&.

D. T. Moiga her Jomlna X Meiga mark OF TEXAS BEFORE ' m~ H. A. Hooke Hotory Publlcin · and for Sabin~

Toxas on this day poraonally o·ppoaredD.' T. Moigs woll known . to me to

person. who ... nallle is subscribed to the rorogoi'ng inatr\.lll\ont • nd acknow-ledgod

he oxeouted . the asm 0 for tho purpoa.s and oonsidoration therein

Given Under.". hand and .. al of office ' this 22nd day or "arch A.D 1906.

(L;S.) w. A. ' Hooks NotR17 Publio

' in lind , tor Sabin. COWlty, Toxa •• Appendix Tab D · '.

CERTIFIED C9f'Y I Atlest !:L- l ,20ft JANICE ' County qerk

'Deputy""

'~ i Appendix Tab E IN THE DISTRICT COURT OF SABINE COUNTY F I LED At O'ClQCK_M STATE OF TEXAS APR 16 2015 TANYA WALKE"- Clerk District Court CONSOLIDATED PROPERTY § Sabine County, Texas INTERESTS, LLC § § ~---=----------- V. § CAUSE NO. 12,827 § JERRY PAYNE AND PENNY PAYNE §

PLAINTIFF'S REQUEST FOR FINDINGS OF FACT AND CONCLUSIONS OF LAW IN CONNECTION WITH THE COURT'S MARCH 13, 2015 JUDGMENT

COMES NOW, Plaintiff, Consolidated Property Interests, LLC, and asks the court to file

findings of fact and conclusions of law.

I.

The cOUli signed a Judgment on March 13, 2015.

II.

Plaintiff asks the court to file findings of fact and conclusions of law, in connection with

the March 13 judgment, as required by Texas Rule of Civil Procedure 297.

III.

The requested findings and conclusions are due April 21, 2015, which is twenty days

after this request.

IV.

This request is timely as it is filed within twenty days of the date the court signed the

applicable judgment.

Plaintiffs Request for Findings of Fact and Conclusions of Law in Connection with the Court's March 13,2015 Judgment Page 1 Respectfully submitted,

BRENT L. WATKINS State Bar No. 24033312 SKELTON SLUSHER BARNHILL WATKINS WELLS, PLLC 1616 S. Chestnut Lufkin, TX 75902-1728 Telephone: (936) 632-2300 Facsimile: (936) 632-6545

RAMEY & FLOCK, P.C. 100 E. Ferguson, Suite 500 Tyler, Texas 75702 903-597-3301 903-597-2413 - Fax

neys for Plaintiff

CERTIFICATE OF SERVICE

I hereby celiify that a true and correct copy of the above and foregoing document has

forwarded to the following counsel of record by facsimile on this the 15t day of April, 2015:

Via Fax 409-384-3017 Mr. John H. Seale SEALE STOVER & BISBEY P. O. Box 480 Jasper, TX 75951

GREGSMI

[

Plaintifrs Request for Findings of Fact and Conclusions of Law in Connection with the Court's March 13,2015 Judgment Page 2 Appendix Tab F APR-17-2015 13:15 FROM: TO: 19035972413

TANYA WALKER, DISTRICT CLERK COUNTY OF SABINE

FACSIMILE TRANSMI'rTAI. SHEE'r

'J'O PROM:

COMPA~~~ OA'l'E:

I{- /t~ ;to!S ~AX NUMBER, TOTAL NO. Ol~ P.M3HS, INCL.UDING COVER.

PHONb: NUMPBR! SJ!ND~R'S 3 R.IlFURIlNCH NUMnBR!

RoB: YOUR REFB.RENCE NUMBBR:

o URGENT 0 "OR RIlV"lw CI PI.EASE COMMIiNT 0 I'LE,\SG REI'LY Ci 1'1.llASE RRCYCL8

NOTES/COMMENT.~: APR-17-2015 13:15 FROM: TO: 19035972413 It 1,I. ,.j.lI,j"T I. oJl.J /'1-' I. I I. l.V I.J 1.(. I \1.1 1 1'1

AJJt~~Cga.M APR 172015 APR-17-2015 13:15 FROM: TO: 19035972413 P.3"3 Apr. 17.2015 12:03PM No. 3384 P. 2/3

RAMEY FLOCK Greg Smllll AU0mtIY "'lOW Dire/:! DII!J: 90M1ChS222 Emiit mth®ovolWllnds pgm Attorneys and Counselors at Law

April 1,2015 FTLED At.L:.tS.::.Il'CIOCK ::f2M

TlUlya Wall(er APR 1720 Sabine County District Clerk P. O. Box 8:50 HlIlnphill, TX 75948

Re: Caulc No, 12,827; Consoitdllted Proputy I1J'(ereJ'I$, LLC v. J/!/'T)I PflJ'II' and Penlly Payne; II> the Dlstriet CQurt of Sabine County, Tan. De(ll: Ms. Walker:

Enclosed for filing In the above-referenced case Ill't an original and one copy of the following;

1. Plamtif.f"s Notice of Appearance of AdditiQllIIl COllllsel; and

2. PlaintilI'E Request for Findings of Fact and Conclusi01lS of Law in Connection wltb tho Court's MILTCh 13. 2015 Judgment.

Pl~llse aoknowlodge reeeipt of same by placing your filc-stlUlll? 011 thfl enra copy of the pleading and l-ctun, II confonned copy of this doclllU®t tQ mo In the enclosed postage-paid envelope.

Thmlk you for :roUJ; assiatance In these regno

Very truly yours,

GSihhs Enclosures

ce: Via Fax Mr. John H. Seale Sellle StoveI' & Bisbey

VlaFu Mr. BrentL. Watkinll Skelton Slusher BiltIlhill Watkins Wells

100 E. Ferguson, Sle. 500 . Tyler, Texas 75702 • Phone: 900.597.3301 . Fax; 903.597,2413 ' www.l'8I1Ieyfloek.com