Face Challenges Confidently

311 Enerlex, Inc. v. Amerada Hess, Inc.

Monday, August 31st, 2015

CASE NOTE

Richard F. Brown

 
The following is not a legal opinion. You should consult your attorney if the case may be of significance to you.
 
Enerlex, Inc. v. Amerada Hess, Inc., 302 S.W.3d 351 (Tex. App.—Eastland 2009, no pet.), held that a deed which conveyed all rights in the described lands with a general warranty but that failed to quantify grantor’s interest was a quitclaim deed. Enerlex sought to avoid the effect of five unrecorded gift deeds by claiming that Enerlex was a bona fide purchaser for value. The deed into Enerlex conveyed “all right, title and interest in and to all of the Oil, Gas . . . from the . . . described lands . . . .” The deed also provided that “Grantor does hereby warrant said title to Grantee . . . .”
 
Enerlex argued that the deed conveyed an interest in property. It was not restricted to any interest which the grantor may have owned, because the grantor conveyed “all right, title and interest” as opposed to all of “my right, title, and interest.” Enerlex also argued that the deed was not a quitclaim deed because it contained a general warranty and did not have “as is” or “without warranty” language. The court rejected these arguments because the mineral deed did not quantify grantor’s interest. “It is more significant that at no point in the deed did [grantor] warrant or represent that she actually owned any mineral interest.” The court effectively construed the deed as conveying all “of grantor’s” interest in the sections conveyed, rather than a specific interest, such as “all.”
 
A conveyance of all of Blackacre with warranty would clearly be a deed with warranty, not a quitclaim deed, and the grantee would be a bona fide purchaser if the grantee was without notice of the unrecorded claim. The court apparently relied upon the recital that “[i]t is the intent of Grantor to convey all interest in the said county whether or not the sections or surveys are specifically described herein” to hold that the conveyance of “all” of the named sections broadly conveys all of grantor’s interest, rather than a specific interest. Because of the difficulty and uncertainty in correctly describing the lands and leases conveyed in complex oil and gas assignments, it is a common practice to include a dragnet clause like the one in this case to catch any interest that was inadvertently omitted or incorrectly described. This case suggests the practice may inadvertently convert a warranty deed into a quitclaim deed.