Were the Mineral Deeds a Gift or a Sale? It Made a Difference.

Co-author Carolina Cuppitelli*

The question presented in Aaron v. Fisher et al: Did mineral deeds bestow separate property upon the grantees by gift, or did they convey a community property interest to the grantees and their spouses by sale for consideration?

Why was the question important? A gift is the grantee’s separate property; a sale is community property if the grantee is married.

In 1971, Lilly Parker conveyed to each of her six children, including W. T. and Chester, an undivided 1/12 interest in minerals in land in Glasscock County, Texas. Each deed recited consideration and referred to the conveyance as “this sale.”

There followed a series of intestate successions, details of which are more tedious than the entire first chapter of the Gospel of Matthew and not significant for our discussion. Among Lilly’s descendants were Aaron, the appellant, and the Elams and the Fishers, the appellees. Pioneer, relying on an affidavit of death and heirship from Aaron and a division order signed by him, paid Aaron royalties that Pioneer credited to the mineral interest originally conveyed from Lilly.

The conveyances were sales for consideration

The Court held that the 1971 deeds conveyed the mineral interests by sale for consideration and not by gift. The deeds expressly referred to the conveyance as a “sale” and recited a purported consideration of $10.00. The Court declared that the plain language of the unambiguous deeds indicated that the parties intended for the conveyances to be sales for consideration. It follows, then, that the mineral interests became the community property of W.T. and Chester and ultimately passed to their spouses. Had the transaction been a gift, the minerals would have passed to their sister, Aaron’s aunt. Did Lilly intend a sale? We suspect not in this mother-to-children transaction, but the plain language of the document required the Court to call it a sale.

Money Had and Received

The trial court granted the Fishers’ claim for money had and received. That remedy is a form of equitable relief to prevent unjust enrichment when the defendant holds money that rightly belongs to the plaintiff. The Fishers prevailed because they established that the royalty payments Aaron received from Pioneer, in equity and good conscience, belonged to them.

Takeaways

First, in any document transferring property is the importance of accurately stating the parties’ intent. Perhaps Lilly intended to give, not sell, the mineral interests to her children, but because of the express language of the deed the court was left with little choice but to declare the conveyance a sale. Had the scrivener clearly stated that Lilly wanted to gift her interests to her children, the result would have been different.

Second, make a will, even though you are currently immortal and therefore don’t need one, and you might have to pay a lawyer. Fail to accomplish this modest task and upon your transition to the hereafter your loved ones will curse you for your indolence and lack of foresight and your memory will be diminished from the dearly departed to the just plain departed. A mournful legacy indeed, but you’ll be dead so maybe you don’t care.

Your musical interlude.

*Carolina is a Gray Reed summer associate and will soon begin her third year at SMU law school.

from Texas Bar Today https://ift.tt/7xO2UJ1
via Abogado Aly Website