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me Author i'i

Ike Howard received ii r1,jr,1h(`V a ri? Y


^?}ai5

Interpreting Mineral Reservations The Duhig Rule


By Mike Howard
Background
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.

Gbc' 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

the University of Oklahoma 1n i

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 otzr 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.

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.

J. FRED HAMBRIGHT, CPL


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Competing Rule
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

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How Does This Rule Apply to Me?


A Duhig-type deed can arise (and

confound) any type of land professional:

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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

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.

in the deed of the outstanding 2/8 interest. Result: The Grantee gets 5/8 of the
minerals. Third party owns 2/8 of the minerals, and Grantor is left with 1/8. 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.

Result: Third Party still has 3/8 of


the mineral interest, Grantee receives 5/8 and the Grantor ends up with

nothing.
Rationale: Grantor attempted to reserve 1/4 of the minerals but there was

already 3/8 which was not excepted.


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

made whole to the extent possible.


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out of the Grantor's share.

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

Summary
Since recognition of the problem

is often half the battle, be alert when examining title to the following
circumstances in which the Duhig need to

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

the parties.
You will, of course, also obtain a rental division order or

rule applies:

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. 22

(1) the instrument is a warranty or mineral deed (not a quitclaim with no warranty of title);

Grantor indicate that he is


excepting from the warranty any prior reservations or

(2) less than the entire mineral

conveyances of record.
Landman / September/October 1996

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 Prior History: Error to the Court of Civil Appeals for the Ninth District,
in an appeal from Orange County. Suit by Peavy-Moore Lumber Company against Mrs. W. J. Duhig 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

having reference to the previously severed and reserved mineral interest.


Buckner v. Keny, 109 S.W. (2d)

and others for the title and possession


of 574 3/8 acres in the Jordan Survey, in Orange County, Texas. Further

361; Sun Oil Co. v. Burns, 125 Texas 549, 84 S.W. (2d) 442; Klein
v. Humble Oil & Refining Co. 67

S.W. (2d) 911. A. M. Huffman, of Beaumont, for defendant in error.


Baker, Botts, Andrews & Wharton, Jesse Andrews, Fulbright, Crooker & Freeman, John H. Freeman, Leon Jaworski, and C. A. Leddy, all of

statement of the facts will be found in


the opinion. The trial court rendered judgment for the plaintiff lumber company

Houston, filed briefs as amici curiae.

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-

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

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

agreed and stipulated that the grantor retained an undivided one-half interest
in all of the mineral rights or minerals

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

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


Landman / September/October 1996

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

judgment of the trial court and rendered judgment in


favor of that company.

(119 S.W. (2d) 688.)


The ownership by Gilmer's and its assignees, of an undivided estate,

one-half interest in the minerals in

the land through the reservation in the

ifrst deed, which was duly recorded, is admitted by the parties. Plaintiffs in
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 Cou rt of Civil Appeals, is that W. J. Duhig, their predecessor, reserved for himself in his

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

the grantee with title to the surface estate and an undivided one-half interest in the
minerals. The deed from W. J. Duhig Link Lumber Company is a general warranty deed, describing the property to

Miller-

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 general warranty and constituting the clause of

r oppotiny

0 pt wl

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
our opinion that the statement in the

of the parties to the deed was to invest


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

3rPublioatiol dots not sirP Me vimin non, ii ia) u z , it v ll be toisidered tar; rest be
rA( r, 'r; rile

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

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

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

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

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

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


clause of general warranty has reference to "the said premises," meaning the land described in the granting clause,

reserved to Duhig an undivided onehalf 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
in the minerals, would warrant the title to the land including the surface estate and all of the minerals.

deed should be given this meaning.


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
affirmed for substantially the same reasons

for the deed warrants the title to the surface estate and also to an undivided
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


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

parties that there be reserved to the grantor Duhig an undivided one-half


interest in the minerals in addition to that previously reserved to Gilmer's

estate, and that when resort is had to


established rules of construction and facts taken into consideration which may properly be [*507] considered, it

Jurisprudence:
"It is a general rule, supported by many authorities, that a deed purporting to convey a fee simple

becomes apparent that the intention

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,
p. 614, Sec. 16. See also Robinson

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
assistance of the courts in breaking

of after-acquired title, it is, we believe, equally fair and effectual and also
appropriate here.

v. Douthit, 64 Texas 101; Baldwin v. Root, 90 Texas 546, [*508] 40 S.W.


3; Jacobs v. Robinson, 113 Texas

the assurance which his covenants


had given."

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

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.

In the instant case, Duhig did not


acquire title to the one-half interest in

deed reserved for himself a one-half interest in the minerals.


The covenant is not construed as

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:

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

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.

"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

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

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.

breach of the warranty.


If such enforcement of the warranty is a fair and effectual remedy in case

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