Zapatero v. Canales

730 S.W.2d 111, 96 Oil & Gas Rep. 178, 1987 Tex. App. LEXIS 7500
CourtCourt of Appeals of Texas
DecidedApril 15, 1987
Docket04-86-00148-CV
StatusPublished
Cited by14 cases

This text of 730 S.W.2d 111 (Zapatero v. Canales) 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
Zapatero v. Canales, 730 S.W.2d 111, 96 Oil & Gas Rep. 178, 1987 Tex. App. LEXIS 7500 (Tex. Ct. App. 1987).

Opinions

OPINION

REEVES, Justice.

This is an appeal from a summary judgment entered against appellant, Dolores C. Zapatero. The trial court denied Zapate-ro’s motion for summary judgment and granted appellee Canales’ motion for summary judgment that Zapatero take nothing.1

The basic facts of the case are undisputed. Ed Canales (Zapatero’s father) and his brother (appellee), Amando Canales, purchased two adjacent tracts of land. One tract, consisting of a little more than 2,400 acres, was purchased August 15, 1947, and is not involved in this dispute. The second tract, consisting of approximately 2,820 acres, was purchased August 19, 1947, and is the property in dispute. Both tracts were known as La Juana Ranch. The Ca-nales brothers took the land in the second tract expressly subject to “[a] one sixty-fourth (Vm) royalty interest assigned by J.T. Graham to W.R. Perkins and Jacob S. Floyd under date of October 13, 1933 ... and to three sixty-fourths (%4) royalty in[113]*113terest assigned by J.T. Graham, et ux, to R.M. Black, Trustee, under date of October 2, 1933_” The deed with the Vi6 reservation was properly filed of record.

On February 1, 1952, Ed Canales and Amando Canales executed a partition deed of the surface estate of the entire ranch. Ed Canales received the 2,400 acre tract and Amando Canales received the 2,820 acre tract in dispute. Each brother retained an undivided ¥2 interest in the mineral estate of the entire ranch. Zapatero, Ed Canales’ daughter, succeeded to her father’s interest when he died in 1978.

On April 27, 1982, Zapatero and Amando Canales and his wife, executed a partition agreement of the mineral estate of the ranch. Canales and Zapatero received the executive right to make oil and gas leases on their respective tracts plus all bonuses and delay rentals. Each received a %2 nonparticipating royalty interest in the other’s tract. The parties did not discuss the existence of the outstanding Vie royalty interest in Canales’ tract nor is it mentioned in the partition agreement.

Canales executed an oil and gas lease to Gathings Oil Land Division, Inc. Gathings tendered division orders, which provided for an equal division between Zapatero and Canales of the outstanding ¥16 royalty interest: Zapatero was to receive Vis royalty payment, Canales a VÍ6 royalty payment, and the outstanding non-participating royalty owners (Perkins, Floyd, and Black, Trustee) a V16 royalty payment.

Zapatero filed suit seeking to cancel or reform the partition deed on the grounds that both parties were operating under a mutual mistake of fact because Zapatero was unaware of the outstanding ¥16 interest owned by Perkins, et al., and the parties intended that each should receive a full %2 interest.

Canales countered that Zapatero should bear the burden of the outstanding V16 royalty interest alone under the Duhig rule.2 He contends that Zapatero conveyed ¥2 of her mineral estate to him and should therefore absorb the loss of the Vis outstanding interest.

The trial court entered a declaratory summary judgment that Canales and Za-patero share the outstanding Vi6 interest equally: Zapatero takes V16, Canales Vi6, and Perkins, Floyd, and Black, Trustee, the remaining Vi6 interest.

Zapatero initiated this appeal and Ca-nales filed a cross-point, each assailing the trial court’s allocation of the royalty interests.

Appellant contends the trial court erred in granting summary judgment in favor of appellees because appellant pleaded and proved facts entitling her to a rescission and cancellation of the partition agreement due to a mutual mistake.

A mutual mistake is a mistake common to both parties to a contract, each laboring under the same misconception. Commercial Standard Insurance Co. v. White, 423 S.W.2d 427, 433 (Tex.Civ.App.—Amarillo 1967, writ ref’d n.r.e.). The mistake must ordinarily not be due to the negligence of the person seeking the rescission and cancellation. Id.

The summary judgment evidence clearly establishes that appellees, Amando and Betty Canales, knew of the existence of the outstanding Vi6 royalty. The outstanding V16 interest is clearly indicated in appellant’s chain of title (the deed to appellant’s father, from whom she deraigns title) as well as in the document partitioning the surface state between Amando Canales and appellant’s father. Further, the deed and surface partition agreement were recorded in the deed records for Duval County, Texas — the deed since 1947.

Appellant testified she understood that, according to the partition agreement, she was to receive one-half of the oil royalties produced from the appellees’ property. Appellees stated they believed the parties were to divide, half and half, whatever royalties the parties owned. The attorney who prepared the partition agreement also stated he intended the parties to divide the royalties evenly.

[114]*114As a matter of law, we find no mutual mistake existed among the parties concerning the existence of the outstanding royalty nor of the legal effect of the outstanding interest. At most, appellant presented evidence of the existence of a unilateral mistake on her part.

A unilateral mistake by a party to the agreement ordinarily will not constitute grounds for relief when the mistake was not known to or induced by the other party. Johnson v. Snell, 504 S.W.2d 397, 399 (Tex.1973).

In order to obtain a judgment of rescission and cancellation based on a unilateral mistake, appellant must show that (1) the mistake is of so great a consequence that to enforce the contract as made would be unconscionable; (2) the mistake relates to a material feature of the contract; (3) the mistake must have been made regardless of the exercise of ordinary care; and (4) the rescission must not result in prejudice to the other party except for the loss of his bargain. The burden is on the party seeking rescission and cancellation to establish all of these elements. Fonseca v. County of Hidalgo, 527 S.W.2d 474, 478-79 (Tex.Civ.App.—Corpus Christi 1975, writ ref’d n.r.e.).

Amando Canales stated, in his oral deposition, that he knew since 1947 of the outstanding royalty but did not know appellant was unaware of it. He stated he thought everyone knew the outstanding interest existed. Appellant presented no evidence to refute this. She offered no evidence tending to show that appellees were aware of her ignorance or misapprehension of the facts.

Appellant failed to establish that her misapprehension was either known to appel-lees or induced by them.

Further, the trial court stated, and we find sufficient evidence to support it, that the outstanding interest was fully described in the deed records. A party is charged with knowledge of all limitations to his title found through the deed records. First Savings & Loan Association of El Paso v. Avila, 538 S.W.2d 846, 849 (Tex. Civ.App.—El Paso 1976, writ ref’d n.r.e.); TEX.REV.CIV.STAT.ANN. art. 6646 (Vernon 1969). We find no evidence to support appellants’ assertion of unilateral mistake.

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Zapatero v. Canales
730 S.W.2d 111 (Court of Appeals of Texas, 1987)

Cite This Page — Counsel Stack

Bluebook (online)
730 S.W.2d 111, 96 Oil & Gas Rep. 178, 1987 Tex. App. LEXIS 7500, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zapatero-v-canales-texapp-1987.