Interpreting Mineral Reservations
The Duhig Rule
me
Author i'i
Ike Howard received ii r1,jr,1h(`V a �� ri? Y
By Mike Howard
Background
^?}ai�5
the University of Oklahoma 1n i
Gb�c'� r
obtained ajuris doctorate degree in la v Syr; Okla n
University in 1975. Howard passed ti Pj r? ;;fT11 �' 1
He began his career as an in-house lend.,511 In 19,75 is
Oil Company in Denver, Colorado, Ho,�. � rd was tin r
rr r,3
for Post Petroleum Co., Inc. in Oklahoma City for rig C yeas (19)9
1987), In addition to working in-house for several o°tzr 41e r eri
he has three years of independent field land erperer:e. i ie f5
currently employed in the land adminisiradon department rr-r
Unocal Corp., Houston, Texas.
he Duhig Rule originated from a 1912 Orange County, Texas, deed
Tinterpreted by the Texas Supreme Court in 1940. The significance of
the Duhig Rule is that it is followed in the majority of oil and gas jurisdictions. Louisiana adopted the Duhig Rule in the case of Dillon v. Moran
(362 So. 2d 1130, La. App. 2d Circuit, 1978); Oklahoma adopted it earlier
(Murphy v. Athans, 265 P2d 461, 1954).
According to Williams and Meyers in section 311 of their commentary
on oil and gas law, other states adopting the Duhig Rule are: Alabama,
Colorado, Mississippi, North Dakota and Wyoming.
Statement of the Duhig Rule
The Duhig Rule of interpreting mineral reservations is applied to conveyances of mineral ownership by warranty or mineral deed (but not quitclaim deed) in which the owner of a fractional mineral interest reserves a
fractional share of the mineral estate without also stating in the deed that
there are outstanding mineral interests. The effect of the rule is to estop the
grantor, by his warranty, from claiming the total fractional share of the
minerals he reserved in the deed.
Facts of the Case
Duhig was the grantee of a Warranty Deed wherein his grantor reserved
1/2 of the mineral rights. Thus, at the time Duhig made his conveyance he
was the owner of the surface and 1/2 of the minerals.
In trying to clarify what occurred in the case, the author obtained a copy
of the deed from Orange County. The following references to that deed
point out the major clauses where Duhig failed to except the 1/2 mineral
interest reserved by his grantor.
First, the granting clause contains words of grant and describes the property being conveyed. Second, the clause which begins "To Have and to
Hold" is the habendum clause which defines the duration of the interest.
Third, the warranty clause begins "Warrant and forever defend..."
Duhig attempted to reserve 1/2 of the minerals to himself. According to
the case that clause reads: "But it is expressly agreed and stipulated that
the grantor herein retains an undivided 1/2 interest in and to all mineral
rights or minerals of whatever description in the land."
Duhig's contention was that the above language reserved 1/2 of the minerals to him and that since 1/2 of the minerals were previously outstanding, his grantee received only the surface estate. The grantee contended
that Duhig's deed conveyed the surface and 1/2 of the minerals leaving
Duhig with nothing.
The court held for Duhig's grantee, noting that his warranty covered the
entire surface and mineral estate. Although his reservation showed an
intent to reserve 1/2 of the minerals, Duhig could not warrant title to the
entire mineral interest and also reserve 1/2 of the minerals without
breaching his warranty (because of the outstanding 1/2 mineral interest).
Since both intentions could not be given effect the covenant of warranty
operated to estop Duhig from claiming the 1/2 mineral interest.
21
J. FRED HAMBRIGHT, CPL
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Duhig rule, it would be advisable to
secure a Stipulation of Interest and
Cross-Conveyance and have the
document recorded to give third
parties notice of the intention of
the parties.
You will, of course, also need to
obtain a rental division order or
7rgmP
Michael H. Mann, CPL
Another complicating factor is that,
in the absence of a dispute, the intention of the parties is controlling. In
order to harmonize both rules, you
should contact the parties involved,
if possible, to understand their intent.
Should that intent be contrary to the
transfer order depending on whether
the lease is undeveloped or producing.
Do not hesitate to contact an attorney or in-house counsel if you have any
questions.
Summary
A basic premise in understanding the
Duhig rule is that the court first looks to
make the grantee whole before allowing
the grantor to reserve what is left.
Example #1: Third Party owns 2/8 of the
minerals. Grantor conveys to Grantee by
Mineral Deed all right, title, and interest.
In the deed, Grantor reserves 3/8 of the
minerals to himself but makes no mention
in the deed of the outstanding 2/8 interest.
Result: The Grantee gets 5/8 of the
Example #2: Third Party owns 3/8 of
the minerals. Grantor owns the balance. Grantor conveys to Grantee all
right, title and interest by Warranty
Deed and makes no mention of the
outstanding 3/8 mineral interest.
Grantor reserves 1/4 of the minerals.
Result: Third Party still has 3/8 of
the mineral interest, Grantee receives
5/8 and the Grantor ends up with
nothing.
minerals. Third party owns 2/8 of the
minerals, and Grantor is left with 1/8.
Rationale: Grantor attempted to
reserve 1/4 of the minerals but there was
Rationale: The Grantor warranted
title to all of the minerals and attempted to convey 5/8 of the minerals to
Grantee and reserve 3/8 to himself.
Since the Grantee was to receive 3/4 of
the minerals, there has been a breach
of warranty with the Grantee being
Since there was no language in the
deed excepting the outstanding 2/8
mineral interest, this portion was taken
out of the Grantor's share.
22
already 3/8 which was not excepted.
made whole to the extent possible.
How Does This Rule Apply to Me?
A Duhig-type deed can arise (and
confound) any type of land professional:
Since recognition of the problem
is often half the battle, be alert
when examining title to the following
circumstances in which the Duhig
rule applies:
(1) the instrument is a warranty or
mineral deed (not a quitclaim
with no warranty of title);
(2) less than the entire mineral
ownership is being transferred
(i.e., grantor is reserving part
of the mineral interest);
(3) the Grantor owns less than
the entire mineral interest at
the time of conveyance;
(4) nowhere in the deed does the
Grantor indicate that he is
excepting from the warranty
any prior reservations or
conveyances of record.
Landman / September/October 1996
Prior History: Error to the Court of
Civil Appeals for the Ninth District,
having reference to the previously
severed and reserved mineral interest.
judgment of the trial court and rendered
in an appeal from Orange County.
Buckner v. Keny, 109 S.W. (2d)
(119 S.W. (2d) 688.)
361; Sun Oil Co. v. Burns, 125
Texas 549, 84 S.W. (2d) 442; Klein
The ownership by Gilmer's estate,
and its assignees, of an undivided
v. Humble Oil & Refining Co. 67
one-half interest in the minerals in
S.W. (2d) 911. A. M. Huffman,
of Beaumont, for defendant in error.
the land through the reservation in the
Baker, Botts, Andrews & Wharton,
Jesse Andrews, Fulbright, Crooker &
Freeman, John H. Freeman, Leon
Jaworski, and C. A. Leddy, all of
error, Mrs. Duhig and others, make no
claim of title to the surface estate, but
their contention, sustained by the trial
court and denied by the Court of Civil
Appeals, is that W. J. Duhig, their predecessor, reserved for himself in his
Suit by Peavy-Moore Lumber
Company against Mrs. W. J. Duhig
and others for the title and possession
of 574 3/8 acres in the Jordan Survey,
in Orange County, Texas. Further
statement of the facts will be found in
the opinion. The trial court rendered
judgment for the plaintiff lumber company
for the title and possession of the land
but not as to the mineral rights. This
judgment was reversed by the Court
of Civil Appeals which rendered judg-
ment in favor of the lumber company
for the entire fee including the minerals,
119 S.W. (2d) 688, and the defendants
have brought error to the Supreme Court.
The case was submitted to the court
sitting with the Commission of Appeals
and an opinion written by Mr. Judge
Smedley of the Commission was adopted
as the opinion of the court.
The judgment of the Court of Civil
Appeals was affirmed.
Counsel: Strong, Moore & Strong,
K. W. Stephenson and Oscar C. Dancy,
Jr., all of Beaumont, for plaintiffs in
error.
Where a deed reserved to the grantor
a one-half interest in the minerals in
and under said tract of land, thereby
severing same from the surface right,
a subsequent deed by the said vendee
could not be construed as conveying
all the minerals under said land,
because the description in the deed of
the term "all that certain tract or parcel
of land," did not include the previously
reserved one-half mineral interest, and
therefore said subsequent reservation
of the one-half mineral interest cannot
be construed as an exception and as
Landman / September/October 1996
Houston, filed briefs as amici curiae.
Opinion by Smedley
Through conveyance from the executor
of the estate of Alexander Gilmer,
deceased, W. J. Duhig became the
owner of the Josiah Jordan Survey in
Orange County, subject, however, to
reservation by the grantor of an undivided
one-half interest in the minerals. Thereafter
Duhig conveyed the survey to Miller-Link
Lumber Company, and in the deed it was
judgment in favor of that company.
ifrst deed, which was duly recorded, is
admitted by the parties. Plaintiffs in
conveyance of the land to Miller-Link
Lumber Company the remaining undivided one-half interest in the minerals.
Defendant in error, Peavy-Moore Lumber
Company, takes the position that the
deed last referred to did not reserve
to or for the grantor such remaining
one-half interest in the minerals, but
that it in effect excepted only the onehalf interest that had theretofore been
reserved by Gilmer's estate and invested
agreed and stipulated that the grantor
retained an undivided one-half interest
the grantee with title to the surface
estate and an undivided one-half interest
in all of the mineral rights or minerals
in the minerals.
The deed from W. J. Duhig to MillerLink Lumber Company is a general
warranty deed, describing the property
in and on the land. Peavy-Moore Lumber
Company became the owner of whatever
title and estate Miller-Link Lumber
Company acquired by the deed from
Duhig in 574 3/8 acres of the said survey.
The suit is by defendant in error,
Peavy-Moore Lumber Company,
against plaintiffs in error, Mrs. W. J.
Duhig and others, who claim under W.
J. Duhig, for the title and possession of
the 574 3/8 [**8791 acres in the Jordan
Survey. The trial court's judgment was
that the plaintiff, Peavy-Moore Lumber
Company, recover the title and possession
of the land, except all minerals and
mineral rights therein, and that as to
the minerals and mineral rights, it take
nothing against the defendants. On appeal
by Peavy-Moore Lumber Company, the
Court of Civil Appeals reversed the
conveyed as that certain tract or parcel
of land in Orange County, Texas, known
as the Josiah Jordan Survey, further
identifying [*5061 the land by survey
and certificate number and giving a
description by metes and bounds.
After the metes and bounds, the following matter of description is added:
"* * * and being the same tract of
land formerly owned by the TalbotDuhig Lumber Company, and after
the dissolution of said company, conveyed to W. J. Duhig by B. M. Talbot."
After the habendum and the clause of
general warranty and constituting the
last paragraph in the deed, appears the
following: "But it is expressly agreed
and stipulated that the grantor herein
retains an undivided one-half interest
in and to all mineral rights or minerals
of whatever description in the land."
We cannot agree with plaintiffs in
error's contention that the granting
paragraph of the deed purports to convey
only the surface estate and an undivided
one-half interest in the minerals. It is
r oppotiny
0
pt
wl
3r�Publioatiol dots not
„�sirP Me vimin non, ii ia) �u•
z , it v ll be toisidered
tar; rest be
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our opinion that the statement in the
deed, that the land described is the
same tract as that formerly owned by
Talbot-Duhig Lumber Company and
conveyed to Duhig by Talbot, is not
intended to define or qualify the estate
or interest conveyed but that it is
inserted to further identify the tract
or area described by metes and bounds.
The deed, of course, does not actually
convey what the grantor does not own.
Richardson v. Levi, 67 Texas 359, 365,
3 S.W. 444. But the granting clause in
this deed describes what is conveyed as
the tract or parcel of land known as the
Jordan Survey. This description includes
Steve M. Dillard
Wichita, KS
the minerals, as well as the surface, and
thus the granting clause purports to
convey both the surface estate and
all of the mineral estate. Holloway's
Unknown Heirs v. Whatley, 133 Texas
608, 131 S.W. (2d) 89; Schlittler v. Smith,
128 Texas 628, 101 S.W. (2d) 543; Bibb
v. Nolan, 6 S.W. (2d) 156 (application
the grantee with title to the surface and
a one-half [**880] interest in the minerals,
excepting or withholding from the
operation of the conveyance only the
one-half interest theretofore reserved
in the deed from Gilmer's estate to
Duhig. It is the court's opinion, however,
that the judgment of the Court of Civil
Appeals should be affirmed by the
application of a well settled principle
of estoppel.
The granting clause of the deed, as
has been said, purports to convey to
the grantee the land described, that is,
the surface estate and all of the mineral
estate. The covenant warrants the title
to "the said premises." The last paragraph
of the deed retains an undivided one-half
interest in the minerals. Thus the deed
is so written that the general warranty
extends to the full fee simple title to
the land except an undivided one-half
interest in the minerals.
The language used in the last paragraph
of the deed is that "grantor retains an
undivided one-half interest in the
minerals." The word "retain" ordinarily
means to hold or keep what one already
owns. 54 C.J. p. 738; Words & Phrases,
Second Series, Vol. 4, p. 371, Fourth
Series, Vol. 3, p. 400; Webster's New
International Dictionary. If controlling
effect is given to the use of the word
"retains," it follows that the deed
for writ of error refused). Likewise the
reserved to Duhig an undivided one-
clause of general warranty has reference
to "the said premises," meaning the
land described in the granting clause,
half interest in the minerals and that
the grantee, Miller-Link Lumber Company,
acquired by and through the deed only
the surface estate. We assume that the
and, but for the last paragraph of the
deed retaining an undivided interest
deed should be given this meaning.
in the minerals, would warrant the title
to the land including the surface estate
and all of the minerals.
When the deed is so interpreted, the
warranty is breached at the very time of
the execution and delivery of the deed,
The writer believes that the judgment
of the Court of Civil Appeals should be
for the deed warrants the title to the
surface estate and also to an undivided
affirmed for substantially the same reasons
one-half interest in the minerals. The
result is that the grantor has breached
as those set out in the opinion of that
court, that is, that the language of the
deed as a whole does not clearly and
plainly disclose the intention of the
his warranty, but that he has and holds
interest in the minerals in addition to
that previously reserved to Gilmer's
in virtue of the deed containing the
warranty the very interest, one-half
of the minerals, required to remedy
the breach. Such state of facts at once
suggests the rule as to after-acquired
title, which is thus stated in American
estate, and that when resort is had to
Jurisprudence:
parties that there be reserved to the
grantor Duhig an undivided one-half
established rules of construction and
facts taken into consideration which
may properly be [*507] considered, it
becomes apparent that the intention
24
of the parties to the deed was to invest
"It is a general rule, supported
by many authorities, that a deed
purporting to convey a fee simple
Landman / September/October 1996
or a lesser definite estate in land
and containing covenants of general
warranty of title or of ownership
will operate to estop the grantor
from asserting an after-acquired
title or interest in the land, or the
estate which the deed purports to
convey, as against the grantee and
those claiming under him." Vol. 19,
suffered afterwards to acquire or
assert a title and turn his grantee
over to a suit upon his covenants
for redress; the short and effectual
method of redress is to deny him
the liberty of setting up his afteracquired title as against his previous conveyance; that is merely
refusing him the countenance and
p. 614, Sec. 16. See also Robinson
assistance of the courts in breaking
v. Douthit, 64 Texas 101; Baldwin v.
Root, 90 Texas 546, [*508] 40 S.W.
had given."
3; Jacobs v. Robinson, 113 Texas
231, 254 S.W. 309; Caswell v. Llano
Oil Company, 120 Texas 139, 36
S.W. (2d) 208; Moore v. Crawford,
130 U.S. 122, 32 L. Ed. 878.
The case last cited quotes from a
decision of the Michigan court the
following clear statement of the rule
and the reasons supporting it:
"When one assumes, by his deed,
to convey a title, and by any form
of assurance obligates himself to
protect the grantee in the enjoyment of that which the deed purports to give him, he will not be
the assurance which his covenants
of after-acquired title, it is, we believe,
equally fair and effectual and also
appropriate here.
We recognize the rule that the
covenant of general warranty does
not enlarge the title conveyed and
does not determine the character of
the title. Richardson v. Levi, 67 Texas
359, 365-366, 3 S.W. 444; White v.
Frank, 91 Texas 66, 70, 40 S.W. 962.
The decision here made assumes, as
has been stated, that Duhig by the
In the instant case, Duhig did not
acquire title to the one-half interest in
the minerals after he executed the deed
containing the general warranty, but he
retained or reserved it in that deed.
Plaintiffs in error, who claim under
him, insist that they should be permitted to set up and maintain that title
against the suit of defendant in error
and to require it to seek redress in a
suit for breach of the warranty. What
the rule above quoted prohibits is the
assertion of title in contradiction or
breach of the warranty.
If such enforcement of the warranty
is a fair and effectual remedy in case
deed reserved for himself a one-half
interest in the minerals.
The covenant is not construed as
affecting or impairing the title so
reserved. It operates as an estoppel
denying to the grantor and those
claiming under him the right to set
up such title against the grantee
and those who claim under it.
For the foregoing reasons, the judgment of the Court of Civil Appeals is
affirmed.
Opinion adopted by the Supreme
Court, Oct. 16, 1940.
Rehearing overruled Dec. 18, 1940.
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AREA CONTACTS
Reverdy H. Jones
Land Supervisor North American Exploration
ph: (713) 874 8832
fax: (713) 874 3571
Charlie Hughes
Land Supervisor Offshore
ph: (713) 874 8715
fax: (713) 874 8714
Glen McPhail
Land Supervisor North American Development
ph: (713) 874 8846
fax:
(713) 874 1687
Anadarko Petroleum Corporation
17001 Northchase
Houston, Texas 77060
ph: (713) 875 1101
Larry Brown
Land Supervisor Unconventional Reservoirs
ph: (713) 874 1624
fax: (713) 873 1389
:-tendman [September/October 1996
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