413 May v. Buck

Richard F. Brown

 
The following is not a legal opinion.  You should consult your attorney if the case may be of significance to you.
 
May v. Buck, 375 S.W.3d 568 (Tex. App.—Dallas 2012, no pet.) held that a property description contained in a letter agreement did not satisfy the statute of frauds because the writing did not furnish enough data to identify the property with reasonable certainty.  The parties entered into a letter agreement (“Agreement”) regarding the acquisition of mineral rights in Leon County, Texas.  The Agreement provided that May would provide the capital to lease the acreage and Buck would lease the acreage to acquire the mineral rights.  Pursuant to the Agreement, May provided the capital; however, Buck did not assign the mineral rights to May.  The Agreement required Buck to assign “all the mineral rights and a 100 acre spacing centered around the David Morris Gas Unit #1 in Leon County, Texas.”  The Agreement recites that the acreage is more particularly described on Exhibit A to the Agreement, and Exhibit A described 563.465 acres in four tracts.  There was a “David Morris Gas Unit” recorded in the deed records describing a rectangular tract of 216.42 acres, but no “David Morris Gas Unit No. 1.”  There were Texas Railroad Commission records referring to a “David Morris Gas Unit Well No. 1.”  It was undisputed that the four tracts described on Exhibit A to the Agreement did not conform to the “David Morris Gas Unit” and there was no document further identifying “a 100-acre spacing centered around the David Morris Gas Unit #1” as described in the Agreement.  Moreover, not all of the 216.42‑acre David Morris Gas Unit was contained within the 563.465 acres described on Exhibit A to the Agreement.
 
The statute of frauds requires that all contracts for the sale of real estate be in writing and signed by the person to be charged.  “To be sufficient, the writing must furnish within itself, or by reference to some other existing writing, the means or data by which the land to be conveyed may be identified with reasonable certainty.”  To determine the sufficiency of the description, the trial court may consider evidence to determine whether “a person familiar with the area can locate the premises with reasonable certainty.”  “Parol evidence may be used to explain or clarify the written agreement, but not to supply the essential terms.”
 
Pursuant to the rules stated in Morrow v. Shotwell (writing must furnish data to identify property with reasonable certainty), Reiland v. Patrick Thomas Properties, Inc. (legal description must contain information regarding size, shape, and boundaries), and Butler v. Benefield (statute of frauds not satisfied when it is reasonably possible to locate more than one tract of land fitting the description given), the court concluded that the property description in the Agreement did not meet the requirements of the statue of frauds.
 
The industry commonly uses letter agreements and other similar agreements to memorialize their broad intent to share or divide an existing or future leasehold.  However, any agreement affecting real property interests will be subject to the requirement of the statute of frauds that the writing must furnish within itself, or by reference to some other existing writing, an adequate legal description.