Estoppel by Deed; Estoppel by Duhig—

The Indicators and Consequences of Estoppel in Land Titles

Terry I. Cross

Consequence of estoppel

indicator for estoppel Crump v. Sanders, 173 S.W. 559 (Tex.Civ.App.-- Texarkana 1915, no writ) Warranty? yes Grant? The land Anything else? Signed in capacity of trustee Estoppel yes Consequence of estoppel individual’s rights conveyed when he signed as trustee

indicator for estoppel Surtees v. Hobson, 4 S.W.2d 245 (Tex.Civ.App.-El Paso 1928), aff'd, 13 S.W.2d 345 (Tex. Comm'n App.1929). Warranty? yes Grant? The land Anything else? Signed in capacity of guardian Estoppel yes Consequence of estoppel individual’s life estate conveyed when he signed as guardian

indicator for estoppel Fikes v. Buckholts State Bank, 273 S.W. 957 Tex.Civ.App.- Austin 1925, writ dismissed w.o.j.) Warranty? yes Grant? The land Anything else? Signed pro forma with wife Estoppel yes Consequence of estoppel husband’s after acquired title passed because he previously signed pro forma with his wife as she sold her separate property

indicator for estoppel W.D. Cleveland & Sons v. Smith, 156 S.W. 247 (Tex.Civ.App.- Galveston 1913, writ refused) Warranty? yes Grant? The land Anything else? Privity in blood Estoppel yes; dicta Consequence of estoppel one who inherits anything from the grantor/ warrantor can lose after acquired title in the land conveyed by “daddy”

Representative Capacity- Estoppel

MacDonald v. Sanders 207 S.W.2d 155 Tex.Civ.App. 1947 “The rule that title acquired by vendor after his conveyance of property inures to benefit of vendee is inapplicable where title subsequently acquired, actually or constructively, by vendor is held by him in trust for a third party.”

Estoppel- Donees are Beneficiaries

A son, to whom, in consideration of love and affection, his father has conveyed land, warranting the title, has the same right as though the consideration had been a money consideration to avail himself of the rule that title afterwards acquired by the grantor inures to the grantee's benefit. Robinson v. Douthit 64 Tex. 101, 1885 WL 7131(Tex. 1885).

Gilcrease Oil Co. v. Cosby, 132 F.2d 790 (5th Cir. 1943)

A acquired Blackacre by deed and X acquired Whiteacre by deed. A fence was built between them that did not track the boundary, so that a portion of Blackacre was fenced with Whiteacre. The deed from A to B used a land description that included “…'Thence following a fence on the North line of Blackacre …” When B and X litigated over whether X owned the portion of Blackacre that was within the fence, is B estopped by the reference to the fence as being the boundary?

Estoppel-

A acquired Blackacre by deed and X acquired Whiteacre by deed. A fence was built between them that did not track the boundary, so that a portion of Blackacre was fenced with Whiteacre. The deed from A to B used a land description that included “…'Thence following a fence on the North line of Blackacre …” When B and X litigated over whether X owned the portion of Blackacre that was within the fence, is B estopped by the reference to the fence as being the boundary?

Gilcrease Oil-

Aha– “you said the fence was the boundary.” No estoppel: “[I]t is well settled that title to real property can not be acquired by estoppel, especially where it is alleged to flow from deeds and transactions to which the one pleading it was not a party. …Plaintiff must stand or fall upon the strength of its own title.”

Estoppel to Deny Title of Grantor- Greene v. White, 153 S.W.2d 575 (Tex. 1941)

Estoppel-Greene v. White

1. Greene did not own the land when he signed the deed reserving minerals. 2. Garrett, the grantee in the deed from Greene, acquired title through adverse possession.

Estoppel-Greene v. White

1. Grantee bound by recitals and other provisions without signing .(deed poll) 2. Bound by documents referenced in Grantee’s deed

indicator for estoppel Greene v. White, 153 S.W.2d 575 (Tex. 1941) Warranty? yes Grant? The land, with mineral reservation Anything else? Grantor did not own land Estoppel yes Consequence of estoppel grantee cannot challenge mineral reservation

Estoppel-Greene v. White

…[O]ne who has entered into the possession of land under an executory contract of sale is estopped from denying or questioning his vendor's title for the purpose of defeating the agreement or the rights of the vendor thereunder. The principle upon which the rule rests is that the purchaser is estopped to deny the title of the vendor, because he acknowledged it and gained possession by his purchase, and he ought not then in conscience, as between them, be allowed to enjoy the fruits of his contract and not pay the full consideration. It is not the contract alone which estops the purchaser, but the estoppel arises from the purchaser's having obtained the possession of the land on the faith of the contract... 77 Am. Jur. 2d Sec. 343

Estoppel- Waco Bridge Company v. City of Waco, 20 S.W.

137 (Tex. 1892) Grantor acquired tract through multiple deeds, one of which had in its chain a street dedication. Owner disclaimed any claim through that deed to no avail. “Even if it was not a necessary link in its chain of title, if it acquired the title of those holding under it for the purpose of quieting its title, or removing clouds or conflicting claims, it must be held to have taken it with and become bound by its reservations. *** It was sufficient, for the purposes of this case, if it appeared that it was one of the sources under which the plaintiff claimed the land.”

Estoppel-Waco Bridge

one of the sources? What about topleases? What about curative?

Estoppel- protection leases Shell Oil Co. v. Howth, 133 S.W.2d 253 (Tex. Civ. App.-Beaumont 1939), modified 159 S.W.2d 483, (Tex. 1942)

Shell Oil Co. v. Howth - “…in order for Howth to recover, he must allege and prove that Shell Company was not acting in good faith in purchasing what it believed to be an outstanding title; that the claim of the [adverse claimants] was wholly groundless; and that the Shell Company conspired with [lease brokers] to encourage [adverse claimants] to assert a spurious claim, and then purchased and placed of record an oil and gas lease from them, in order to maliciously assert an adverse claim to Howth and repudiate Howth's perfect title to the land.” 159 S.W.2d at 491.

Estoppel-Waco Bridge

What about Waco Bridge? What about curative instruments taken “for the purpose of quieting … title, or removing clouds or conflicting claims?”

Property Owners of Leisure Land Inc., Del Mar Properties Owners Assoc. v. Woolf & Magee, Inc., 786

S.W.2d 757 (Tex. App.-Tyler 1990, no writ) Two chains of title- one not contaminated by the other.

Bruni v. Vidaurri, 166 S.W.2d 81, 87 (Tex. 1942)

The purchase by a person in possession of land of another's claim to or interest in the land may or may not be a recognition of the validity or superiority of the claim or title purchased. In making the purchase the possessor may intend to recognize the adverse title and claim under it. On the other hand, he may buy in order to quiet his possession and protect himself from adverse litigation; he may “buy his peace”. The question is usually one of fact to be determined by the intention as disclosed by what was said by the parties and by the circumstances surrounding the transaction.

Estoppel to Claim After-Acquired Title- Lindsey v. Freeman, 18 S.W. 727 (Tex. 1892) Clark v. Gauntt, 161 S.W.2d 270 (Tex. Com of Appeals, Section B, 1942)

indicator for estoppel

Lindsey (5 daughters) Clark (mortgage) Warranty? No yes Grant? “not QC” QC “right title and interest” Anything else? ? ? Estoppel yes no Consequence of estoppel after acquired passed wanted after acq.

Estoppel- assumption

National Bank of Commerce of Houston v. Dunn, 361 S.W2d 654 (Tex. Civ. App.- Houston 1964, writ refd n.r.e.) “Subject to” = powerful words Revive dead rights; assume obligations that do not run with the land

Estoppel- revivor and ratification

"It is ... understood and herein stipulated that said land is under an Oil and Gas lease providing for a royalty of 1/8 of the oil and certain royalties or rentals for gas and other minerals . . .“ Loeffler v. King, 236 S.W.2d 772 (Tex. 1951) held that this language in a deed precluded the grantee from later asserting that the lease covering the tract had at the time of the deed terminated for failure to produce in paying quantities.

Estoppel- revivor and ratification

Morgan v. Fox, 536 S.W.2d 644 (Tex. Civ. App. -- Corpus Christi 1976, writ ref'd n.r.e.) yielded a similar holding under the following language in a deed: "Subject to Oil, Gas and Mineral Lease dated 15 June 1970 from Jesse Cross, et ux, to William D. Johnson . . ."

Estoppel- Too Much Info

TMI in title commitments ok; TMI in conveyances– not ok for grantee

Estoppel

“subject to” Don’t curtsy or bow to things you have not vetted carefully

Estoppel- antidote

This Conveyance is made subject to any right now existing in favor of any oil and gas lessee or its assigns under any valid and subsisting oil and gas lease on the land, but this Conveyance shall not serve to or be deemed a ratification or revivor of any previously granted oil and gas lease which is no longer valid, in force and effect.

Estoppel- antidote

“subject to everything of record”???? Draft “subject to” solely to address grantor’s issue of protection against warranty and not as assumption, adoption or ratification.

Estoppel- antidote

But what if the prior agreement does not run with the land? Is “subject to” fatal? National Bank of Commerce of Houston v. Dunn, 361 S.W2d 654 (Tex. Civ. App.- Houston 1964, writ ref’d n.r.e.) says yes. Westland Oil Development Corp. v. Gulf Oil Corp., 637 S.W.2d 903 (Tex. 1982) says emphatic no in dicta.

Estoppel- deed restrictions

deed restrictions- maybe different analysis Teal Trading and Development, LP v. Champee Springs Ranches Property Owners Ass’n., 432 S.W.3d 381 (Tex. App- San Antonio 2014, pet denied)- invalid ab initio Stout v. Rhodes, 373 S.W.2d 94 (Tex. Civ. App- San Antonio 1963, writ ref'd n.r.e.)- abandoned Joe T. Garcia’s Enterprises, Inc. v. Snadon, 751 S.W.2d 914 (Tex. App.—Dallas 1988, writ denied)- did not cover this land

Estoppel- protection against warranty?

Get your story straight— Is there a warranty? Would this encumbrance breach it? Would there be damages? Lowe v. Ragland, 297 S.W.2d 668, 671-672 (Tex. 1957) “it is rather speculative to assume that the grantor was so concerned about a possible liability for nominal damages under her warranties that she felt it necessary to protect herself…”

Estoppel- By Mischaracterization Canter v. Lindsey, 575 S.W.2d 331, 334 (Tex. Civ. App.-El Paso 1978, writ ref'd n.r.e.) - the exception mistakenly referred to an outstanding 1/4 of 1/8 royalty, or 1/32 royalty, as a one-fourth (1/4) non-participating royalty. Does the owner of the misdescribed interest benefit? By getting the larger interest? No. not a grantee; not a party. The owner of the misdescribed interest was a prior owner in the chain. By estoppel? No. Estoppel goes only downstream to parties and their successors.

Estoppel- By Mischaracterization Henderson v. Book, 128 S.W.2d 117 Tex.Civ.App.- San

Antonio 1939, writ ref’d) •A conveyed to B in 1931, reserving 1/16 mineral interest. •When B conveyed the land to C in 1932, the interest of A was referred to as a “1/16 royalty.”

•When A conveyed his interest to X in 1935, the interest was referred to as a “1/16 royalty.” •Various instruments through the years referred to the “outstanding 1/16 royalty.”

Estoppel- By Mischaracterization

[W]hen Henderson came into the title, on March 11, 1936, all parties in the respective chains of title had theretofore recognized the Graham reservation to be a royalty interest. Henderson v. Book

Estoppel- By Mischaracterization

•Overstatement of the outstanding interest in Canter did not help the owner of the outstanding interest.

•Overstatement of the outstanding interest in Henderson v. Book did help the owner of the outstanding interest because….both chains agreed on the characterization.

Estoppel- By Mischaracterization Pich v. Lankford, 302 S.W.2d 645 (Tex.1957)

“save and except [overstatement of outstanding interest] which have been heretofore reserved.” Good reservation even with false statement imbedded.

Estoppel- By Mischaracterization Roberson v. El Paso Exploration & Prod. Co., L.P., 2012 WL 3805956 (Tex.App.-Texarkana Sep 04, 2012 no pet.)

“It being understood and agreed that all oil, gas, and other minerals, excluding coal, lignite and clay, in and under the above described tract have heretofore been reserved and excepted.” False statement but no reservation.

Estoppel- By (Valid) Deed

Republic Nat'l Bank of Dallas v. Stetson, 390 S.W.2d 257, 260 (Tex.1965)

No land description when the deed signed. Void. No estoppel. But this argument for estoppel was tried against the grantor of the void deed.

Estoppel- By (Valid) Deed

Angell v. Bailey, 225 S.W.3d 834, 837 (Tex.App.-El Paso 2007, no pet.)

“save and except” 2 acres not described and 10 acres not described. Does exception fail? Grantee estopped to argue.

Estoppel- By (Valid) Deed

XTO Energy Inc. v. Nikolai, 357 S.W.3d 47 (Tex.App.—Fort Worth 2011, pet. denied) Mineral reservation in 1904 deed that did not have sufficient land description. Even though the deed into Nicolai is GWD without reservation or reference to the 1904 deed, prior deeds in Nicolai’s chain refer to the 1904 deed and reservation. Grantee estopped to argue that reservation not valid.

Estoppel-

Duhig v. Peavy-Moore Lumber Co., 144 S.W.2d 878, 880 (1940)

Estoppel-Duhig v. Peavy-Moore

1. 50% minerals previously reserved. 2. Grantor reserves ½ minerals. 3. So, did grantee get zero minerals?

indicator for estoppel Duhig v. Peavy-Moore Lumber Co., 144 S.W.2d 878, 880 (1940) Warranty? yes Grant? Fee simple with 1/2 mineral reservation Anything else? No “subject to”; no reference to outstanding interest Estoppel yes Consequence of estoppel shut up about the mineral reservation

indicator for estoppel

Benge v, Scharbauer, 259 S.W.2d 166 (1953) Warranty? yes Grant? Fee simple with 3/8 mineral reservation and reservation of 5/8 of future lease benefits Anything else? No “subject to”; no reference to outstanding interest Estoppel yes on the grant, but separate grant of lease benefits saves material value Consequence of estoppel painless

indicator for estoppel Gibson v. Turner, 294 S.W.2d 781 (Tex. 1956) Warranty? yes Grant? Oil and gas lease Anything else? Deleted proportionate reduction Estoppel no; because lessee had all minerals leased from other owners Consequence of estoppel NA

Estoppel- McMahon v. Christmann, 303 S.W.2d 341 (Tex. 1957)

court not too proud of Duhig

Estoppel-McMahon v. Christmann

OGL Granting clause? Warranty? How about after-acquired interests?

indicator for estoppel McMahon v. Christmann, 303 S.W.2d 341 (Tex. 1957) Warranty? yes Grant? Oil and gas lease Anything else? 1/8 royalty with proportionate reduction; 1/32 additional royalty “without reduction” Estoppel no Consequence of estoppel NA

Estoppel- Role of Constructive Knowledge

Scarmardo v. Potter, 613 SW2d 756 (Tex. App. – Houston [14th Dist.] 1981 writ ref’d n.r.e.)- “The estoppel by deed rule in Duhig emanates from the scope of the warranty clause and therefore the knowledge of the grantee is immaterial.” (at least if the instrument has warranty)

Estoppel- Role of Warranty

Blanton v. Bruce, 688 S.W.2d 908 (Tex. App.-Eastland 1985, writ ref’d n.r.e.)

Estoppel-Role of Warranty "Duhig must be viewed in the context of its facts. There, with the deed containing a "general warranty,” the court cites cases which use the covenant of warranty as a vehicle to support the passage of after-acquired title…. The court does not say that the announced rule will apply only when the deed contains a "general warranty." In Lindsay v. Freeman, 18 S.W. 727 (1892), the Supreme Court held that covenants of warranty are not necessary for the passage of after-acquired title by estoppel if the conveyance purports to convey a definite estate." Blanton v. Bruce, 688 S.W.2d 908 at Page 911 (Tex.Civ.App. - 1985)

Estoppel-Role of Warranty " The estoppel in the after-acquired title cases arises from the assertion of ownership made by the grantor in the covenant of warranty, express or implied, or in other recitals in the deed. Such assertion is a representation that the grantor owns the land or the estate or interest to which it relates, and having thus represented the fact of ownership, the grantor is estopped to deny that fact..." Blanton v. Bruce, 688 S.W.2d 908 at Page 912 (Tex.Civ.App. - 1985)

Estoppel- Reformation

Common pattern: 1. Farm and Ranch Earnest Money Contract drafted by realtor addresses mineral allocation between buyer and seller in mutually agreed layman speak. 2. Title company prepared deed and tried to translate the mineral allocation terms to form deed conventions.

Estoppel- Reformation

Common pattern: 3. Deed did not navigate Duhig or other conveyancing requirements properly to reflect the layman deal. 4. Problem not apparent until oil and gas activity starts in the area.

indicator for estoppel Miles v. Martin, 321 S.W.2d 62 (Tex. 1959) Warranty? yes Grant? Fee simple with mineral reservation Anything else? No “subject to”; no reference to outstanding interest Estoppel no; reformation Consequence of estoppel NA

Estoppel- How to avoid Harris v. Windsor, 294 S.W.2d 798 (Tex. 1956): And being the same land described in Warranty deed from The Federal Land Bank of Houston to W. C. Windsor, recorded in Vol. X-2, Page 119, Deed Records of Marion County, Texas, reference to which is made for all purposes.

Estoppel- How to not avoid Sharp v. Fowler, 252 S.W.2d 153, (Tex. 1952) : referred to the deed that created the outstanding interest, but followed that reference with “being the same land described in a deed from Frost Lumber Industries, Inc. of Texas…” only supplements land description

Estoppel- How to avoid Helms v. Guthrie, 573 S.W.2d 855 (Tex.Civ.App. – Fort Worth 1978, writ ref’d n.r.e.): Identification of the instrument creating the interest saved the grantor from his misstatement regarding the quantity of that outstanding interest.

Estoppel- How to avoid Gore Oil Co. v. Roosth, 158 S.W. 3d 596, 599 (Tex. App.-Eastland 2005, no pet.): there are worse things than ambiguity; feels like reformation.

Estoppel- How to avoid Philipello v. Taylor, 2012 WL 435171(Tex.App.-Waco Apr 25, 2012, no pet.): “subject to all leases, easements, restrictions, covenants, encroachments and ordinances of record and actually affecting the property on the ground” was sufficient to protect the grantor’s reservation from being diminished to cover an outstanding severed mineral interest that was not identified with specificity.” Feels like reformation.

Estoppel Estopped to do what? • Assert “representative capacity” • Assert after-acquired title. Lindsey v.

Freeman • Assert reservation. Duhig • Deny anything printed in your deed or

another instrument in your chain of title (even very long time ago involving people you never met or heard of)

Conclusion