Rio Bravo Oil Co. v. McEntire

95 S.W.2d 381
CourtTexas Commission of Appeals
DecidedJune 24, 1936
DocketNo. 1622-6539
StatusPublished

This text of 95 S.W.2d 381 (Rio Bravo Oil Co. v. McEntire) is published on Counsel Stack Legal Research, covering Texas Commission of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rio Bravo Oil Co. v. McEntire, 95 S.W.2d 381 (Tex. Super. Ct. 1936).

Opinion

SMEDLEY, Commissioner.

The subject of controversy herein is the ownership of the minerals in sections 13, 23, and 25 in block 23, Houston & Texas Central Railway Company lands in Sterling county, which sections of land were surveyed for the Houston & Texas Central Railway Company in the year 1867 and patented to it in the years 1884 and 1886. Defendant in error McEntire sued plaintiff in error for the title and possession of the three sections of land, alleging ownership under regular chain of title and also by virtue of the statutes of limitation of three, five, ten and twenty-five years. Defendant in error Gulf Production Company by intervention asserted its ownership of the oil and gas in sections 23 and 25 under an oil and gas lease executed by McEntire and wife. Judgment of the trial court in favor of defendants in error was affirmed by the Court of Civil Appeals. 59 S.W.(2d) 962.

Aside from questions of limitation and innocent purchaser, the positions taken by the parties are, briefly stated: By plaintiff in error, that in sales of the land made by the patentee, the Houston & Texas Central Railway Company, in the year 1882 to one J. M. Kelley, through whom defendants in error claim, all minerals were excepted or reserved to the railway company, and that defendants in error have never acquired title to the minerals; by defendants in error, that, through other instruments than the contracts of sale made in the year 1882 between the railway company and Kelley, they have title to the land, including the minerals, from and under the railway company.

These sections of land, together with other property owned by the railway company, were conveyed by the company in its “Consolidated Mortgage” executed October 1, 1872, to the Farmers Loan & Trust Company as trustee to secure the payment of its bonds in a large amount. It 'is apparent from the instrument that the conveyance was made for the sole purpose of securing the bonds; it being expressly provided that the conveyance was made upon the condition that upon payment of the bonds the estate granted to the trustee should be void and that the title should thereupon revert to and revest in the grantor, its successors or assigns, without reconveyance. The deed of trust empowered the trustee, in the event of default on the part of the railway company, to institute proceedings in a proper court to procure decree of sale of the property or so much thereof as might be necessary to meet the payment in default. It also provided that the trustee upon default might sell the land, or so much thereof as might be necessary, at public or private sale and without legal proceedings, after publication of notice, and authorized it upon such sale to execute a deed conveying the property free of encumbrance and the claims or equities of the railway company. The deed of trust reserved to the railway company the right upon certain conditions to sell the lands covered by it. Such conditions were in substance: That sales should be for certain minimum prices; that sales should be reported to the trustee and at least 10 per cent, of the consideration paid to it; and that bonds and mortgages securing the balance of the consideration should be delivered to it. It was provided that thereupon the trustee “should execute and acknowledge a deed conveying .to such purchaser, his heirs and assigns all the right, title, interest, estate and property of the said trustee of, in and to the section or parcel of land so sold.”

On June 24, 1882, the railway company, apparently without undertaking to comply with the conditions set out in the deed of trust, entered into a contract of sale of section 23 (one of the three sections in controversy) with J. M. Kelley. This instrument, executed both by the railway company and by Kelley, is in form a contract. It recites that the railway company agrees to sell the section of land to Kelley for- a [383]*383consideration of $320 in cash, and like payments to be made in one, two, three, and four years; such deferred payments being evidenced by four promissory notes bearing interest at 8 per cent. Kelley agrees to make punctual payment of the notes and of all taxes and assessments lawfully imposed. The instrument provides that, in case the notes are paid, the railway company will execute to Kelley' a deed conveying the premises with special warranty, “but made subject to the following rights of the said railway company, each and all of which rights are hereby reserved and are not to pass by the deed to be made by said railway company.” One of the rights so reserved is described as a railway right of way 200 feet in width over the land conveyed. The other rights reserved are mineral rights described in a long paragraph, the first part of which is as follows:

“The Houston and Texas Central Railway Company reserves the right at all times hereafter to enter upon the land hereby conveyed and prospect for and make surveys at will, and any part of it for coal, mineral, stone, or any other valuable deposits, and to open upon said land and operate with all machinery, appliances and attachments which it may deem necessary, mines, borings and quarries; and the coal, mineral, stone or other valuable deposits found in and taken from all such mines, borings and quarries shall be the property of said Houston and Texas Central Railway Company, and it shall have the right to remove the same, and for the purpose of ingress and egress to and from such mines, borings and quarries, a further right of way over the land hereby conveyed sixty feet in width to and from such mines, bor-ings and quarries is hereby reserved.”

Then follow in the same paragraph detailed regulations with respect to the use and enjoyment of the reserved mineral rights. After the paragraphs containing the reservations, the instrument contains the following: “The said Joseph M. Kelley by accepting this deed agrees to the reservation aforesaid and to the entire contract hereinabove specified and covenants to and with the said Railway Company and its assigns that it and they shall have and enjoy all the reservations, rights and privileges contained and contracted' for in this deed and further agrees that this covenant shall run with the land hereby sold, and it is stipulated in this agreement that no assignment of the premises shall be valid unless the same shall be endorsed hereon.”

On August 12, 1882, another contract of sale in substantially the same language as the contract of June 24, 1882, was made between the railway company and J. M. Kelley for the sale to Kelley of the other two sections of land in controversy herein, sections 13 and 25, the consideration recited being $576 in cash and the execution by Kelley of four notes each in the sum of $576, due one, two, three, and four years after date. The first of these contracts of sale was filed for record December 17, 1886; the second was filed for record October 4, 1929. Both contracts were executed in duplicate, and plaintiff in error offered in evidence the copies which were retained by the railway company. The copy of the contract of June 24, 1882, was indorsed: “Contract No. 31½0”; and the copy of the contract of August 12, 1882, was indorsed: “Contract No. 58C.”

The eight original notes given by Kelley as part of the consideration for the land sold to him were offered in evidence by defendant in error'McEntire. Each of the four notes in the sum of $320 contained the recital that it was given in part payment for section 23, “sold and conveyed to me by said Houston and Texas Central Railway Company by contract No. 31 y2C

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Bluebook (online)
95 S.W.2d 381, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rio-bravo-oil-co-v-mcentire-texcommnapp-1936.