Herein of a case that will probably be of interest only to law professors and title attorneys.
Leo Trial had six brothers and sisters. They inherited 237 acres in Karnes County. In 1983 Leo gave his wife Ruth one-half of his 1/7th interest in the property. In 1992, Leo and his siblings sold the land to the Dragons, reserving the minerals for a term of 15 years. But Leo’s wife Ruth did not join in the deed. The deed included a general warranty of title. The Dragons did not get a title policy and did not investigate the title.
Leo Trial died in 1996 and willed his estate to a trust for Ruth’s life and then to their two sons, Joseph and Michael. Ruth died in 2010, and Ruth’s 1/14th interest in the 237 acres passed to her sons.
The Trials’ 15-year term mineral interest expired in 2008. At the time there was production from the property, and the Dragons contacted the operator to transfer all royalties to them. The operator did so, not realizing that Ruth still had an interest in the property, a fact was not discovered until 2014. The operator then put Ruth’s interest in suspense, and the Dragons filed suit against the Trial sons, seeking to acquire their 1/14th interest in the property under the Duhig doctrine and the doctrine of estoppel by deed.
The rule of estoppel by deed says that “all parties to a deed are bound by the recitals therein, which operate as an estoppel, working on the interest in the land if it be by deed of conveyance, and binding both parties and privies; privies in blood, privies in estate, and privies in law.” The origin of the doctrine and of the phrase “privies in blood, privies in estate, and privies in law” comes from Carver v. Jackson, 29 U.S. (4 Pet.) 1 (1830), opinion by Justice Story. The doctrine was applied by the Texas Supreme Court in Duhig v. Peavy-Moore Lumber Co., 144 S.W.2d 878 (Tex. 1940). In that case, Duhig owned land, subject to a 1/2 mineral reservation by a previous owner. He sold the land and in the deed reserved a 1/2 mineral interest – but the deed was not made subject to the prior reservation of 1/2 of the minerals. The court held that, under the doctrine of estoppel by deed, Duhig’s 1/2 mineral interest passed to his purchaser and Duhig retained no mineral interest. Duhig was estopped from claiming a mineral interest because his deed purported to convey a 1/2 mineral interest, which was all Duhig owned.
The estoppel-by-deed theory also applies to after-acquired title. If, in Duhig, Duhig had signed his deed while owning no mineral interest and had later acquired a 1/2 mineral interest in the property, under this doctrine the interest he acquired would automatically pass to his purchaser. Because he purported to convey a 1/2 mineral interest to his purchaser, Duhig would be estopped from claiming the mineral interest he later acquired.
The Supreme Court held in Trial that these doctrines did not apply to the Dragons’ case. The Trial sons did not acquire their mother’s interest from their father but from their mother, and their mother did not sign the deed to the Dragons: “estoppel by deed does not bind individuals who are not a party to the reciting deed, nor does it bind those who claim title independently from the subject deed in question.” In a footnote, the court said that, if the Trial sons had obtained their title from their father, the outcome might have been different: “We need not and do not decide whether, in other circumstances, Duhig might apply to estop the Trial sons from asserting their ownership interest in the property.”
The court remanded to the trial court to consider the Dragons’ breach of warranty claim. But the court ended with an enigmatic footnote:
This is not to say that a grantee such as the Dragons could recover [damages?] only under a breach of warranty theory. We express no opinion as to whether such a grantee might prevail on causes of action such as unjust enrichment or money had and received, as such claims were not brought in the trial court and are not before us in this appeal.
More fodder for law review articles.