Til Death Do Us Part: Joint Tenancy by Quasi-Estoppel and Revisiting the Wagenschein Decision
Texas
In Wagenschein v. Ehlinger , 581 S.W.3d 851 (Tex. App.—Corpus Christi 2019, pet. denied) the Corpus Christi Court of Appeals interpreted a royalty reservation in a warranty deed. The disagreement turned on whether the reservation created a joint tenancy or a tenancy in common. The Court held that all but one of the plaintiffs were quasi-estopped from arguing that the deed created a tenancy in common. This was because those plaintiffs had previously “accepted the benefits” of a joint tenancy. Further, the Court determined that the deed’s language was unambiguous and that the parties had intended to create a joint tenancy. Importantly, the Court held that various “words of survival” used in the deed reservation were determinative when concluding that the parties intended to create a joint tenancy rather than a tenancy in common. Texas recognizes two types of co-tenancies: a joint tenancy and a tenancy in common. A joint tenancy is distinguished by the “right of survivorship.” Thus, upon the death of one joint tenant, his interest will automatically vest in the remaining joint tenants (as opposed to passing through inheritance). Under a tenancy in common, a decedent’s interest will instead pass to the heirs and beneficiaries of the decedent (as opposed to passing to the remaining co-tenants). In Wagenschein , the defendants were the surviving members of a group of seven siblings (the “Heirs”) who inherited a 241.69-acre tract of land from their parents. In 1989, the Heirs executed a warranty deed (the “Deed”) conveying the surface and mineral estates to Harvey and Jane Mueller (the “Muellers”). The Deed included the following reservation (emphasis added):
of any oil, gas and mineral lease covering the property, but will be entitled to one-half (1/2) of any bonus paid for any such lease and one- half (1/2) of any royalty, rental or shut-in gas well royalty paid under any such lease. The reservation contained in this paragraph will continue until the death of the last survivor of the seven (7) individuals referred to as Grantors in this deed.
In 2006, the Muellers executed an oil, gas and mineral leasewithTrinityEnergy Services, who subsequently assigned the lease to Pioneer Natural Resources (“Pioneer”). Clara, one of the original seven Heirs, died in 2009, leaving Carol Edwards (one of the plaintiffs) as one of her heirs. In 2010, Pioneer obtained production from its first well on the property and each of the surviving Heirs signed a division order “accepting and receiving their respective shares of what would have been Clara’s interest.” Id. at *853. Essentially, by executing the division order the Heirs implicitly “accepted” a benefit of the right of survivorship inherent in a joint tenancy. Over the next five years, several more of the original seven Heirs died. “After each death, Pioneer [similarly] distributed the decedent’s interest by signed division orders to the then-surviving Wagenschein Heirs.” Id . at *853. Thus, in each instance the surviving heirs executed a division order in which their interest was increased consistent with joint ownership. In 2015, the children of some of the original seven Heirs petitioned the Court to declare that the 1989 Deed created a tenancy in common. These plaintiffs argued that the interests in question should have passed to them through inheritance instead of being divided among the surviving Heirs. The plaintiffs relied on the Deed’s use of the word “successor” in claiming that the Deed created a tenancy in common and that they were the intended recipients of their deceased parents’ interests. The defendants argued that the 1989 Deed unambiguously created a joint tenancy, and alternatively that the plaintiffs were estopped from bringing their claims because the plaintiffs’ parents received the benefits of the deed reservation as joint tenants. Id . at *854.
THERE IS HEREBY RESERVED AND EXCEPTED from this conveyance for Grantors and the survivor of Grantors, a reservation until the survivor’s death , of an undivided one-half (1/2) of the royalty interest in all the oil, gas and other minerals that are in and under the property and that may be produced from it. Grantors and Grantors’ successors will not participate in the making
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