Hynson v. Gulf Production Co. , 232 S.W. 873 ( 1921 )

The contention presented by the assignments in appellants' brief is that the trial court erred when he refused to instruct the jury to find in their favor. In support of the contention appellants insist that the instrument in question did not operate as a conveyance to the petroleum company and its assigns of the legal title to minerals in and under the land, but operated, instead, only as "a lease," quoting from the assignments, "granting to the petroleum company the right to obtain oils and minerals from under the land." There was therefore an implied undertaking on the part of the petroleum company, they say, to discover and develop such minerals, if any, within a reasonable time from the date of the instrument. And it appearing without dispute in the testimony that no steps had been taken during the period of more than 10 years which elapsed between the date of said instrument and the date of the trial to discover such minerals, if any, they insist it appeared as a matter of law that the petroleum company and appellee as its assign, had breached such implied undertaking, and thereby forfeited all rights conferred on them by the instrument.

It may be conceded, without determining, that if the instrument was a mere lease, the trial court, on the theory that it appeared as a matter of law that appellee had abandoned the contract, should have instructed the jury as appellants requested it to (Grubb v. McAfee, 109 Tex. 527,212 S.W. 464); but we think the instrument should not be construed as a lease merely. It must we think, be construed as a conveyance to the petroleum company and its assigns of an indefeasible legal title to minerals, if any, in or under the land.

That minerals, including oil and gas, are a part of the realty while in place in and under land, and that as such they are subject to sale and conveyance, are not open questions in this state. Texas Co. v. Daugherty,107 Tex. 226, 176 S.W. 717, L.R.A. 1917F, 989; Marnett Oil Gas Co. v. Munsey, 232 S.W. 867, decided by this court May 12, 1921, and not yet [officially] reported.

That the instrument evidenced a sale and was intended by the parties to operate as an absolute conveyance of the minerals appeared about as conclusively, it seems to us, as language could have made it appear. That intention, sufficiently shown, perhaps, by the recital that appellants, for the substantial consideration stated, had "granted, bargained, sold, and conveyed" all the minerals "in and under the land" to the petroleum company, "to have and to hold * * * forever," was emphasized and placed beyond question by the further recital that it was intended that the instrument should "have the effect to sever all the minerals in or under said land from the surface thereof and to sell and convey all such minerals."

The minerals being an interest in the land which could be sold and conveyed, and the parties having intended that the transaction between them should operate as a sale and conveyance thereof, no reason is apparent why it should be held that an indefeasible legal title to the minerals did not pass to the petroleum company and its assigns. Appellants insist, however, that if the title did pass, it was on a condition the law would imply, to wit, that the petroleum company and its assigns would within a reasonable time thereafter discover and develop the minerals in and under the land. Appellants argue that the case was therefore within a rule stated in the Daughterty Case, supra, as follows:

"A fee may pass by deed upon a condition subsequent to the same extent as though the condition did not exist, subject to the contingency of being defeated according to the condition."

The argument ignores a difference which made the rule applicable to the facts of the Daugherty Case and inapplicable to the facts of this rule to wit, that in the Daugherty Case the condition of defeasance was one expressed, in the instruments, while in this case, if there was an undertaking on the part of the petroleum company to discover and develop minerals in and under the land within a reasonable time, as claimed by appellants, it was an undertaking the law implied. It was expressly held by the Supreme Court in Grubb v. McAfee, 109 Tex. 527, 212 S.W. 464, that an undertaking of that kind should not be construed as a condition subsequent, failure to comply with which entitled the grantor to a cancellation of the contract, but should be construed as a covenant, a breach of which entitled the grantor to recover damages he was able to show he thereby suffered.

There is no error in the judgment; therefore it is affirmed.