The category is “terms that confuse us” for one hundred dollars. Without resorting to your favorite legal dictionary or lawyer, explain the difference between a reservation and an exception in a Texas warranty deed. Stumped? Valence Operating v. Davidson answers the question.
The deeds
1956: Myrtle and grandson Jackie Ray Briggs conveyed to Edmond and Mildred Coleman the surface in fee of a 64.5 acre tract in Panola County, and 1/2 interest in the minerals, reserving a life estate in the mineral interest to Myrtle.
1964: The Colemans conveyed the tract to the Carters. The warranty deed stipulated, “… all Oil, Gas and other Minerals have been excepted and reserved by former owners.” This is the interest claimed by Valence.
2012: Mildred Coleman conveyed to Dickerson by mineral deed all of her right, title and interest in all of the oil, gas and liquid and gaseous hydrocarbons.
2013: Dickerson conveyed to Smith 1/2 of the minerals. This is the interest Davidson claims.
Valence argued that the provision in the 1964 deed was an exception to both the conveyance and the warranty but only to the extent of the exception and reservation in the 1956 deed. As a result, the 1964 grantors conveyed all they had gotten in 1956.
Davidson/Smith argued that the 1964 Coleman-to-Carter deed was a reservation to Mildred to which they eventually succeeded.
The court
The trial court quieted title in favor of Davidson/ Smith. The court of appeals reversed and remanded. Davidson/Smith could not prove superior title through a chain of title in their trespass to try title claim.
The question for the court of appeals: Whether the grantors in the 1964 Coleman deed reserved an interest in the minerals for themselves or excepted any portion of the mineral estate from the conveyances.
The court explained the difference between exceptions and reservations: “The words ‘exception’ and ‘reservation,’ though at times used interchangeably, each has its own separate meaning.” … “A reservation is the creation of a new right in favor of the grantor.” … “An exception, by contrast, operates to exclude some interest from the grant.”). … “[A]ny ‘reservation’ must be ‘by clear language’ and cannot be implied, and a reservation is a form of ‘exception’ through which the grantor excludes for itself a portion of that which would otherwise fall within the deed’s description of the interest granted.”
The Colemans did not reserve ay mineral interest in the 1964 deed; they merely recited that mineral interests were reserved and excepted in the past. The effect was to notify the Carters of the existence of a prior reservation and exempt the Colemans from liability on their warranty of title had there been a previous reservation an exception (which, of course, there was.)
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