Duhig v. Peavy-Moore Lumber Co.
135 Tex. 503, 1940 Tex. LEXIS 234, 144 S.W.2d 878 (1940)
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Rule of Law:
When a grantor executes a general warranty deed purporting to convey a certain estate and attempts to reserve an interest that, combined with previously outstanding interests, exceeds the total estate conveyed, the reservation will be construed as an exception of the outstanding interest to satisfy the warranty, rather than creating a new interest for the grantor.
Facts:
- The executor of Alexander Gilmer's estate conveyed the Josiah Jordan Survey in Orange County to W. J. Duhig.
- The deed from Gilmer's estate reserved an undivided one-half interest in the minerals, which was duly recorded.
- W. J. Duhig subsequently conveyed the Jordan Survey to Miller-Link Lumber Company via a general warranty deed.
- The deed from Duhig to Miller-Link Lumber Company stated that the grantor (Duhig) 'retains an undivided one-half interest in and to all mineral rights or minerals'.
- Peavy-Moore Lumber Company later acquired whatever title and estate Miller-Link Lumber Company obtained from Duhig for 574 3/8 acres of the survey.
- The ownership by Gilmer’s estate of an undivided one-half interest in the minerals through the first reservation was admitted by all parties.
Procedural Posture:
- Peavy-Moore Lumber Company (defendant in error) sued Mrs. W. J. Duhig and others (plaintiffs in error) in a state trial court for title and possession of the 574 3/8 acres in the Jordan Survey.
- The trial court entered judgment for Peavy-Moore Lumber Company for the surface estate, but ruled that it take nothing as to the minerals and mineral rights against the defendants.
- Peavy-Moore Lumber Company appealed the trial court's judgment to the Court of Civil Appeals.
- The Court of Civil Appeals reversed the trial court's judgment and rendered judgment in favor of Peavy-Moore Lumber Company.
- Mrs. W. J. Duhig and others (plaintiffs in error) sought review from the Supreme Court of Texas (via the Commission of Appeals).
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Issue:
Does a grantor, who conveys land by a general warranty deed that purports to transfer a full fee simple estate (including all minerals), but then explicitly reserves a one-half mineral interest, thereby breach the warranty when an existing and recorded one-half mineral interest already prevents the grantor from owning the full mineral estate, or is the grantor estopped from asserting title to the reserved interest such that it operates to satisfy the warranty by acknowledging the prior interest?
Opinions:
Majority - Mr. Judge Smedley
No, the grantor (W. J. Duhig) is estopped from asserting title to the one-half mineral interest purportedly reserved in the deed, because such an assertion would breach the general warranty included in the deed. The court found that the granting clause of Duhig's deed purported to convey the entire 'tract or parcel of land known as the Jordan Survey,' which included both the surface and all mineral estates. The general warranty clause then warranted the title to these 'said premises.' However, a prior, recorded deed from Gilmer's estate had already reserved an undivided one-half mineral interest, meaning Duhig only owned an undivided one-half mineral interest at the time of his conveyance to Miller-Link. If Duhig's subsequent reservation of 'an undivided one-half interest in the minerals' were interpreted as retaining an additional interest for himself, it would mean the grantee would receive no mineral interest, thus breaching Duhig's warranty to convey the land, including minerals. Applying the principle of estoppel by deed, the Court held that a grantor cannot assert title in contradiction to a general warranty provided in their deed. Although Duhig did not acquire title after the conveyance, the principle that denies a grantor the ability to set up an after-acquired title against their warranty is equally applicable when the grantor attempts to retain an interest in the deed itself that causes a breach of warranty. Therefore, the reservation in Duhig's deed is interpreted as excepting the previously reserved one-half mineral interest by Gilmer's estate, thereby ensuring the grantee receives an undivided one-half mineral interest and preserving the warranty.
Analysis:
The Duhig rule, as established in this case, is a cornerstone of mineral conveyancing, particularly in Texas. It resolves ambiguities and shortfalls in mineral grants by prioritizing the grantor's warranty over an attempted reservation when the sum of reserved and outstanding interests exceeds the purported grant. This principle prevents grantors from benefiting from inconsistent deed drafting at the expense of grantees who rely on a warranty. It has significant implications for title examination and litigation involving mineral interests, ensuring a more predictable interpretation of conflicting clauses in warranty deeds and protecting the integrity of the warranty covenant.
