Face Challenges Confidently

541 Griswold v. EOG Resources, Inc.

Monday, February 1st, 2016

Richard F. Brown

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

Griswold v. EOG Resources, Inc. held that a recital in a deed of an incorrect reason for an exception to the grant does not negate the exception. The parties aligned as the successors in interest to the Grantor and Grantee in a 1993 deed. In 1926, there was a reservation of a 1/2 mineral interest, which was foreclosed in 1938 and merged into the fee title chain, so that Grantor owned the entire fee in 1993. In the 1993 deed, Grantor conveyed all to Grantee:

LESS, SAVE AND EXCEPT an undivided 1/2 of all oil, gas and other minerals found in, under[,] and that may be produced from the above described tract of land heretofore reserved by predecessors in title;

The issue was whether the 1993 deed conveyed all or only 1/2 of the minerals to Grantee.

Grantee argued that the foreclosure in 1938 extinguished the only interest previously reserved by a predecessor in interest. The reservation no longer existed, and excepting a reservation which no longer existed was a nullity. Therefore, the 1993 deed conveyed the entire mineral estate. Grantor argued that the save-and-except clause clearly expressed the intent of the Grantor to except 1/2 of the minerals. The fact that the reason stated was erroneous, false or mistaken did not defeat the expressed intent to make the exception.

The court recognized the distinction between a reservation and exception. A reservation is made in favor of the grantor, wherein grantor reserves unto grantor a royalty interest, mineral rights or other rights. An exception generally does not pass title itself, but it operates to prevent the excepted interest from passing at all. The language in the 1993 deed did not reserve the interest in the minerals to Grantor but excepted them from the grant. The interest, though not passed to the Grantee, was not outstanding in another, and the legal effect of the language excepting it from the grant was to leave it in the Grantor.

The court found Pich v. Lankford, on almost identical facts, to be controlling. The legal effect of the save-and-except clause in that case was to leave the excepted interest in the grantor. Applying that precedent here, the court held that the save and except clause in the 1993 deed excepted a 1/2 interest in the oil, gas, and other minerals in plain and unambiguous language. The phrase “heretofore reserved by predecessors in title,” reciting the purported reason for making the exception, though false, likewise did not operate to alter the interest excepted or to pass it to the Grantee. Although the deed did not reserve the stated interest, the legal effect of the save and except clause was to leave the excepted 1/2 interest in the minerals in Grantor.

The case succinctly explains the differences between reservations and exceptions and follows Pich v. Lankford.