405 Hunsaker v. Brown Distributing Co.

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.
 
Hunsaker v. Brown Distributing Co., Ltd., 373 S.W.3d 153 (Tex. App.—San Antonio 2012, pet. denied) held that a mineral deed conveying 1/2 of Grantor’s interest under the land described conveyed only 1/2 of Grantor’s 1/4 of the minerals.  It was undisputed that at the time of the conveyance Grantor owned a 1/4 mineral interest.  The deed described the lands conveyed by metes and bounds and then recited:  “There is also included in this conveyance one-half (1/2) of all oil, gas and minerals . . . in, on and under said property now owned by Grantor.”  The deed was made “subject to all reservations . . . now outstanding and of record.”  The deed also expressly listed prior reservations of 3/4 of the minerals.  Successors to Grantee argued that Grantor conveyed Grantor’s entire interest in the property without reservation, including 1/2 of the minerals in the property described, which would therefore convey all of Grantor’s 1/4 interest.  Grantor argued that Grantor was not required to reserve anything, because Grantor conveyed only half of Grantor’s mineral interest.
 
The court agreed with Grantor that the deed as a whole conveyed only 1/2 of Grantor’s minerals.  The court also reasoned that “[i]n listing the reservations now outstanding, the deed makes clear that [Grantor] could not own one-half of the oil, gas and other minerals in the property.”  The list of reservations reflected that 3/4 of the minerals had been reserved by others, and therefore, Grantor could not possibly convey 1/2.  Applying the four corners rule shows that Grantor could not have conveyed 1/2 of all the minerals as Grantor did not own 1/2 of the minerals.  The court noted that the line of cases holding that a conveyance of a fractional interest “under the land described” conveys the fractional interest under the entire tract regardless of the interest owned by the grantor, did not apply, because the deed in Hunsaker only applied to minerals “now owned by Grantor.”
 
The significance of the case is the weight given by the court to the words “now owned by Grantor” in construing the intent of the parties to a fractional conveyance of minerals in the land described.
 
Hunsaker v. Brown
Facts:
 

1. Grantor owned 1/4 of the minerals.
2. Grantor conveyed 1/2 of all minerals “in, on and under said property now owned by Grantor.”
3. Deed also recited it was subject to “all reservations . . . now outstanding” and expressly listed prior conveyances of 3/4 of the minerals.

 
Issue:
 
Did Grantor convey 1/2 of the minerals in the land described (and thus all of Grantor’s 1/4), or only 1/2 of the minerals “now owned by Grantor” (1/2 of 1/4 = 1/8)?
 
Holdings:
 

1. Grantor conveyed only 1/2 of 1/4.  Line of cases holding that a fractional conveyance in the “land described” conveys that fractional interest across the land regardless described of Grantor’s interest in a particular tract did not apply.  This deed conveyed only 1/2 of the minerals “now owned by Grantor.”
2. Deed recitals showed 3/4 of the minerals outstanding in others, so, under the four corners rule, 1/2 could not mean 1/2 of all the minerals, but only 1/2 of the minerals “now owned by Grantor.”

 
Significance:
 
The significance of the case is the weight given by the court to the words “now owned by Grantor” in construing the intent of the parties to a fractional conveyance of minerals in the land described.