Face Challenges Confidently

210 Hamilton v. Hamilton

Monday, August 31st, 2015

Richard F. Brown

The following is not a legal opinion. You should consult your attorney if the case may be of significance to you.

Hamilton v. Hamilton, No. 04-06-00046-CV, 2006 WL 3612876 (Tex. App.—San Antonio 2006, pet. denied) holds that a grant conveying 15% of “all rights owned,” save and except listed burdens, was not free from unlisted burdens. Richardson conveyed land to George Hamilton reserving a non-participating royalty interest. George and Sharon Hamilton, while married, conveyed the same interest to Hamilton-Encinos Minerals, Ltd., a partnership owned by the couple. The deed conveyed:

….all rights, title and interest in our oil, gas, other minerals, royalties, rentals and executive leasing privileges in, on, and under and appurtenant to [the property] subject to all valid and subsisting restrictions, conditions, easements, mineral reservations, leases and other documents of record…

Later in the same year, George and Sharon divorced. Per the divorce settlement agreement, Hamilton-Encinos conveyed to Sharon:

… subject to the reservations herein after set out, an undivided fifteen (15%) percent of all of the mineral interests (including delay rentals, royalties and other benefits hereafter accruing under each currently existing, valid and subsisting oil, gas and/or mineral lease conveyed to Hamilton-Encinos Minerals, Ltd. save and except all executive leasing rights which are reserved by Grantor.

George claimed that Sharon’s interest was limited by all restrictions, exceptions, and reservations burdening the Hamilton-Encinos interest, including Richardson’s non-participating royalty interest. He argued that because the Hamilton-Encinos interest was burdened by all documents of record, Sharon’s interest was similarly burdened. Sharon claimed that because her deed did not expressly subject her interest to other interests of record, and because the only exception related to the executive rights, she held a net fifteen percent (15%) interest, not restricted by other reserved interests.

The court held, “In its plainest terms, the Divorce Deed language grants Sharon an undivided 15% of whatever mineral interests Hamilton-Encinos received under the 2000 conveyance from George and Sharon. Therefore, Sharon only received 15% in the mineral interest actually owned by Hamilton-Encinos. The opinion is silent, but presumably the Divorce Deed was without warranty. Even if the Divorce Deed was with warranty, the same result may have followed, because 15% of “all rights owned” is not a conveyance of a specific fixed interest.

The significance of the case is that a conveyance of 15% of “all rights owned,” save and except listed rights, does not make the grant free of its proportionate part of unlisted burdens.