Strip and Gore 2: The Sequel

Originally published by Charles Sartain.

Co-author Ethan Wood

We told you to “Beware of Strips and Gores” back in 2012 and today we bring you Green et al v. Chesapeake et al, the sequel. Unlike cinema’s greatest follow-ups, this entry feels more like an unneeded rehash of the original. Nevertheless, it is a good refresher on the topic.

Rules for the Genre

The strip-and-gore doctrine operates to pass title to lands in addition to the lands described in a conveyance when:

1. The adjoining land is relatively narrow, small in size and value in comparison to the expressly conveyed land, and no longer important or valuable to the grantor of the larger tract;
2. The adjoining land was not included in the property description in the deed at issue; and
3. No other language in the deed indicates that the grantor intended to reserve an interest in the adjoining land.

 

The Plot

In this case, the minerals underlying a 30-acre highway tract passed with a conveyance of the adjacent 55-acre tract primarily because said minerals were inaccessible and therefore valueless at the time of conveyance.

Senter & Co. owned an 85.58 acre tract in Arlington, Texas, and made two conveyances:

• In 1970, Senter conveyed the eastern 30.591 acres to the State of Texas for construction of Highway 360, reserving the minerals and waiving rights of ingress and egress.
• In 1972, Senter conveyed the remaining 54.95 acres to Arlington South Properties in fee simple.

Chesapeake took oil and gas leases from the successors to Arlington South covering the 54.95 acres and a lease on the 30.591 acres from the Senter Trusts (successors to Senter Co.). Chesapeake pooled all of these leases into the I-20 JV Unit.

Chesapeake concluded that the Senter Trusts did not own an interest in the 30.591 acre tract, applying the strip-and-gore doctrine to the 1972 Deed and paid them no royalties. The Senter Trusts sued, arguing that the strip-and-gore doctrine did not apply to the 1972 deed.

A Callback

As in the case we discussed in 2012, a question of “ambiguity” as a requirement for the doctrine to apply was raised by the Senter Trusts. Senter Trusts asserted that the strip-and-gore doctrine only applies when there is uncertainty or ambiguity as to the land intended to be conveyed. The court rejected that argument because later cases hold that ambiguity in a property description is not an element of the doctrine.

Character Development

The central conflict of this sequel is that of character: Was the adjoining tract the type to which the strip-and-gore doctrine presumption applies? In one famous case (Angelo v. Biscamp) the adjoining tract was larger and perhaps more valuable than the land conveyed in a deed. But here, the 30.591 acre tract was 55 percent the size of the tract conveyed in the 1972 deed, and more importantly, was not substantially valuable at the time of the conveyance. The value of the oil and gas underlying the 30.591 acres was virtually nothing in 1972 once Senter conveyed the 54.95 acre tract to Arlington South. This is because at the time, this would have rendered the minerals under the 30.591 acres “inaccessible and … undevelopable” for Senter without pooling. Only 35 years later with the rise of horizontal drilling would this highway tract become accessible and potentially valuable.

The court noted that the strip-and-gore doctrine is a creature of policy—it discourages title disputes and provides certainty in land titles, which encourages the use and development of real property. Here, the doctrine and policy considerations pointed to the same conclusion—Senter Co. conveyed away its oil and gas interests in the 30.591 tract in 1972.

The Soundtrack

Fortunately, this soundtrack stuck with a 1970’s theme and invokes one of the greatest sequel albums of all time. Enjoy.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

from Texas Bar Today http://bit.ly/2FI43gQ
via Abogado Aly Website