Jackson v. Wildflower Production Co.

505 S.W.3d 80, 2016 Tex. App. LEXIS 11216, 2016 WL 6024387
CourtCourt of Appeals of Texas
DecidedOctober 13, 2016
DocketNo. 07-15-00070-CV
StatusPublished
Cited by13 cases

This text of 505 S.W.3d 80 (Jackson v. Wildflower Production Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jackson v. Wildflower Production Co., 505 S.W.3d 80, 2016 Tex. App. LEXIS 11216, 2016 WL 6024387 (Tex. Ct. App. 2016).

Opinion

OPINION

Patrick A. Pirtle, Justice

This appeal involves conflicting claims of ownership pertaining to an oil and gas royalty interest and right of reversion, as it pertains to certain real property located in Wheeler County, Texas. Appellant, Jane Fuller Jackson, claims ownership of the property in dispute by virtue of a Mineral Deed Without Warranty dated November 23, 1993, which was recorded ten days later on December 3,1993. Appellee, Wildflower Production Company, Inc., claims ownership of those same property interests by virtue of a Mineral Deed Without Warranty, from the same grantor, dated seven days later on November 30, 1993, and recorded on December 14, 1993.1 Both deeds purport to convey, in part, the same property interests, being the property in controversy. Following a bench trial, the trial court found that Wildflower acquired a “superior claim of title” by virtue of being an innocent purchaser for value without actual or constructive notice of Jackson’s ownership interest. Jackson contends that Wildflower is not entitled to the protections of an innocent purchaser for value because it acquired its interest by means of a quitclaim deed. Wildflower contends that Jackson waived this claim by failing to assert that argument to the trial court; and, it further contends that, in any event, the conveyance document in question was not a quitclaim deed because it conveyed property, not just the grantor’s interests in the property.

Finding that Jackson did not waive her claim that Wildflower acquired its interest in the property in controversy via a quitclaim deed and that Wildflower did, in fact, acquire its interest by that means, we conclude the trial court erred in finding Wildflower acquired its interest without notice of the earlier conveyance. Accordingly, we reverse and render, in part, and reverse and remand, in part.

BackgRound

On September 14, 1972, R.P. Fuller and wife, Lloyd Elaine Fuller, executed a deed conveying an undivided one-fourth interest in all of the oil, gas, and other minerals in and under and that may be produced from two tracts of land situated in Wheeler County, Texas, to their three children, Rex Fuller, Ann Fuller Cope, and Jane Fuller Jackson. The first tract contained 121.86 acres and the second tract contained 155.4 acres, for a total acreage of 277.26 acres, [84]*84more or less.2 Jackson’s undivided one-twelfth interest (one-third of one-fourth) in the oil, gas, and other minerals in and under and that may be produced from this acreage is the property in controversy in this case.

On April 7, 1977, the three Fuller children and others, executed an Oil, Gas & Mineral Lease covering these two tracts in favor of W.R. Gray & Associates. The lease was for a primary term of three years and as long thereafter as oil, gas, or other minerals were produced from the property. The lease provided for the payment of a three-sixteenth (3/16) royalty, proportionately reduced to the interest owned by each party. The lease also contained a pooling clause authorizing the formation of a 640-acre unit for the production of gas. W.R. Gray & Associates subsequently assigned the lease to Grace Petroleum Corporation, who then executed a Designation of Gas Unit, placing the mineral interests the subject of the earlier lease into a gas unit known as the No. 1 C.A. Stein Unit. Thereafter, the lease became a part of a pooled unit. Under the terms of the pooling agreement, all royalties were payable in proportion to the acreage each tract bore to the total acreage in the 640-acre unit. During the primary term of the lease, a gas well (the “Stein Well”) was drilled and completed within the pooled unit.

On June 15, 1990, Rex Fuller, Jackson, Lydick-Jackson Joint Ventee, and others, as grantors, executed a deed of trust in favor of John C. Sims, as Trustee for the First National Bank at Lubbock,3 to secure payment of a debt in the original principal amount of $1,000,000. That same day, Cope, Lydick-Jackson Joint Venture, and others, as grantors, also executed a deed of trust in favor of Sims, as Trustee for the Bank, to secure an indebtedness in the original principal amount of $250,000. The two deeds of trust encumbered the ownership interests of the grantors in vari[85]*85ous tracts of real property located in the following Texas Counties: Carson, Lipscomb, Wheeler, Hemphill, Hansford, Ochil-tree, Fayette, Archer, Roberts, Reeves, Brazoria, Hutchinson, Hockley, Cochran, and Moore. Although the legal description used in the two deeds of trust did not track the legal description of the 277.26 acres described in the deed from R.P. and Lloyd Elaine Fuller to their three children, all parties agree that the property interest described in the deeds of trust encompassed Jackson’s property interest in that acreage. On September 7, 1993, as a result of a subsequent default in payment on the notes secured by the two deeds of trust, the Bank foreclosed upon the grantor’s property interests in the various tracts of property. FBGA Financial Services, Inc., the Bank’s nominee and agent, purchased the property for the benefit of the Bank and received a separate Substitute Trustee’s Deed with respect to each deed of trust.

Prior to foreclosure, the Bank had agreed to not seek a deficiency judgment against any of the Fuller children, and subsequent to the foreclosure, Leete Jackson III, Jane Fuller Jackson’s husband, consummated an arrangement with the Bank to purchase her former interest (being the property in controversy) from the interest the Bank obtained through foreclosure. Pursuant to that agreement, on November 23, 1993, FBGA executed and delivered a quitclaim instrument, entitled Mineral Deed Without Warranty, conveying to Leete the Bank’s interest in the property in controversy.4 In this document, the 277.26 acres were described by the same metes and bounds description used in the September 14, 1972 deed from R.P. Fuller and Lloyd Elaine Fuller to their children. This instrument was subsequently recorded in the official property records of Wheeler County on December 3, 1993.

During this same period of time, the Bank was also negotiating with Rex to sell some of the property interest the Bank intended to acquire at foreclosure. Relevant to this dispute, Rex consummated those negotiations by agreeing with the Bank that Wildflower, a corporation owned and controlled by Rex, would purchase a portion of the property interest the Bank obtained through foreclosure of the two deeds of trust. Pursuant to that agreement, on November 30, 1993, FBGA executed and delivered to Wildflower an instrument entitled Mineral Deed Without Warranty, purporting to convey to Wildflower whatever property interest the Bank acquired through foreclosure in and to all or part of seven sections of property located in Wheeler County, Texas. This instrument was subsequently recorded in the official property records of Wheeler County on December 14,1993, and provided, in relevant part, as follows:

FBGA Services, Inc., ... does hereby grant, bargain, sell, convey, transfer, asT sign and deliver unto WILDFLOWER PRODUCTION COMPANY, INC., ...

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Bluebook (online)
505 S.W.3d 80, 2016 Tex. App. LEXIS 11216, 2016 WL 6024387, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jackson-v-wildflower-production-co-texapp-2016.