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Loose Canons (of Construction) – Barrow Shaver Res. Co. LLC v. NETX Acquisitions, LLC
Barrow Shaver Res. Co. LLC v. NETX Acquisitions, LLC is a trespass-to-try-title action brought by competing lessees based on the interpretation of a 1963 warranty deed recorded in Cass County, Texas (the “1963 Deed”). 1 Prior to the execution of the 1963 Deed, the surface and mineral estate were owned in fee by the Dawson Parties. In conveying an interest to the Stone Family (“Grantees”) in the 1963 Deed, the Dawson Parties (“Grantors”) conveyed “all that certain [tract of land in Cass County described by metes and bounds and] . . . [t]here is likewise conveyed to Grantees by this conveyance one-eighth (1/8) of all Oil, Gas and Other Minerals . . .” (emphasis added). 2 At issue was whether the 1963 Deed conveyed to the Stone Family all of the oil, gas and other minerals under the entire tract of land, or only 1/8th of the oil, gas and other minerals (reserving 7/8ths to the Dawson Parties). 3 The dispute arose when the successors to the original Grantors and Grantees executed oil and gas leases, with the Stone Family successors claiming 100% of the minerals and the Dawson Parties’ successors claiming 7/8ths of the minerals. 4 The trial court held that the 1963 Deed had conveyed 100% of the minerals, however, the Texarkana Court of Appeals reversed and entered judgment in favor of the Dawson Parties. 5 In reaching its decision, the Texarkana Court of Appeals turned to several decisions of the Supreme Court of Texas, including the oft-cited Luckel v. White , 819 S.W.2d 459 (Tex. 1991) and the more recent Wenske v. Ealy , 521 S.W.3d 791 (Tex. 2017). 6 These cases stand for the proposition
that when construing unambiguous deeds, Texas courts should strive to ascertain the intent of the parties from all of the language within the four corners of the instrument. This divining of intent should prevail over the “arbitrary” traditional rules of deed interpretation. Thus, the courts will reject mechanical rules of construction, such as giving priority to certain clauses over others, or requiring the use of “magic words.” Courts will instead attempt to harmonize all the parts of a deed and give effect to each of its provisions, therefore resolving any conflicting terms and considering each part of the document. Despite this recent trend in deed interpretation, NETX Acquisitions (the Stone Family Lessee) attempted to argue four traditional principles of real property law to interpret the 1963 Deed, as follows: A warranty deed will pass all of the estate owned by the grantor at the time of the conveyance un- less there are reservations or exceptions which reduce the estate conveyed, Cockrell v. Texas Gulf Sulphur Co. , 157 Tex. 10, 299 S.W.2d 672, 675 (Tex. 1956) (citing Harris v. Currie , 142 Tex. 93, 176 S.W.2d 302, 304 (Tex. 1943)); 7 Reservations must be made by ‘clear language,’ and courts do not favor reservations by impli- cation, Combest v. Mustang Minerals, LLC , 502 S.W.3d 173, 179-80 (Tex. App.—San Antonio 2016, pet. denied) (quoting Graham v. Prochas- ka , 429 S.W.3d 650, 655 (Tex. App.—San Antonio 2013, pet. denied) (citations omitted)); 8
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No. 06-20-00081-CV, 2021 WL 3571394, at 1 (Tex.
Words in a deed that are of a doubtful mean- ing are construed against the grantor, Reeves v. Towery , 621 S.W.2d 209, 212 (Tex. App.—Corpus
App. Aug. 13, 2021) 2 Id. 3 Id. at 2. 4 Id. 5 Id. 6 Id. at 3.
7 8
Id. Id.
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N a t i o n a l A s s o c i a t i o n o f D i v i s i o n O r d e r A n a l y s t s
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