Opinion filed March 31, 2010




                                             In The


   Eleventh Court of Appeals
                                          ____________

                                    No. 11-08-00180-CV
                                        __________

          MASGAS, A PARTNERSHIP, AND MHW, INC., Appellants
                               V.
                   E.D. ANDERSON ET AL, Appellees


                           On Appeal from the 90th District Court
                                  Stephens County, Texas
                              Trial Court Cause No. CV29,050


                                          OPINION

       This case involves the ownership of working interests in certain oil and gas properties. There
are three parties involved in a dispute over the ownership of oil and gas leases: Masgas, a
partnership; MHW, Inc.; and E.D. Anderson and his sons. Masgas filed suit against the Andersons
seeking recovery of distributions, an accounting, and a declaratory judgment that Masgas owns the
disputed working interests. MHW filed a plea in intervention for declaratory relief that MHW
owned the disputed working interests. Masgas sought a declaratory judgment against MHW and
alleged a trespass to try title action against MHW. The Andersons brought a counterclaim against
MHW for a declaratory judgment that the Andersons own the disputed working interests. The
Andersons and MHW filed cross-motions for summary judgment. The trial court granted the
Andersons’ motion for summary judgment against MHW and denied MHW’s motions for summary
judgment against both the Andersons and Masgas. The trial court heard the remaining issues during
a bench trial on February 19, 2008. The trial court entered judgment that the Andersons are the
owners of the disputed working interests, that Masgas take nothing in its claims against the
Andersons, that MHW has no interest in the disputed leases, and that the Andersons are entitled to
attorney’s fees. We affirm.
       William Pat Massey, the president and CEO of MHW, is the father of Mike Massey, a partner
in Masgas. Pat and Mike Massey acquired oil and gas leases in the name of MHW and operated the
wells for many years. After a family dispute, Pat and Mike Massey entered into an agreement on
December 1, 1994. After the 1994 agreement, MHW paid Masgas proceeds from the disputed
working interests. MHW sold the leases to the Andersons on August 19, 1996. The Andersons
became operators of the leases and continued to make payments to Masgas based upon
documentation furnished by MHW.
       In October 2005, the Andersons requested Masgas to furnish title information or a
conveyance document to substantiate its claim of ownership of the leases. Masgas provided the
Andersons with the 1994 agreement, a joint operating agreement, and division orders. The
Andersons were not satisfied with the documentation, and they stopped making payments to Masgas.
Masgas filed suit. The trial court found that the Andersons are the owners of the disputed working
interests. This appeal followed.
       Masgas brings four issues on appeal. Masgas first argues that the trial court erred in holding
that the Andersons are the owners of the disputed working interests. The record shows, and Mike
Massey testified, that he and his father, Pat Massey, acquired the oil and gas leases in the name of
MHW. Mike Massey testified that there is no recorded instrument under which Masgas claimed title
to the disputed working interests. Mike Massey stated that the Andersons “knew” about Masgas’s
interests because of the joint operating agreement and the division orders. Masgas claims that the
1994 agreement, the JOA, and the division orders should be read as a single integrated instrument
and that, read together, they comprise a valid deed. The 1994 agreement states:
             Enclosed is a copy of AAPL Form 610-1977, Model Form Operating
       Agreement dated 10-1-84 that is in effect for other W.I. owners in properties operated
       by MHW, INC. Such Operating Agreement applies to the properties operated by
       MHW, INC. that you own an interest in. . . .


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                Also enclosed are Oil & Gas Division Orders covering the properties you own
        an interest in. . . .

                As part of this package, MHW, INC. & W. Pat Massey, First Party, and
        MASGAS, Michael W. Massey & Cheryl Chaney Massey, Second Party, by
        signatures below waive all claims, disputes, etc. between the two parties concerning
        these properties and pledge not to be antagonistic toward each other in the future.

                ....

               Notwithstanding the above . . . properties (leases) presently owned by MHW,
        INC. and future properties (leases) acquired by MHW, INC. that you do not presently
        own an interest in, are excluded from any effect of the Operating Agreement dated
        10-1-84.

        By statute, a deed must be in writing and must be subscribed or delivered by the conveyor
or the conveyor’s agent. TEX . PROP . CODE ANN . § 5.021 (Vernon 2004). For a deed or instrument
to effect conveyance of real property, it is not necessary to have all the formal parts of a deed
formerly recognized at common law or to contain technical words. If, from the whole instrument,
a grantor and grantee can be ascertained, if there are operative words or words of grant showing an
intention of the grantor to convey title to a real property interest to the grantee, and if the instrument
is signed and acknowledged by the grantor, it is a deed that is legally effective as a conveyance.
Harlan v. Vetter, 732 S.W.2d 390, 392 (Tex. App.—Eastland 1987, writ ref’d n.r.e.).
        The 1994 agreement does not contain operative words or words of grant showing an intent
by MHW to convey the disputed working interests to Masgas. The 1994 agreement references “the
properties . . . you own an interest in.” This does not indicate an interest to convey title but, instead,
suggests a prior acquisition. Nor can granting language be found in any attachment.
        The JOA, in fact, disclaims any intent to do so. Article III(B) of the JOA contains the
following language:
         All production of oil and gas from the Contract Area, subject to the payment of
        lessor’s royalties which will be borne by the Joint Account, shall also be owned by
        the parties in the same manner during the term hereof: provided, however, this shall
        not be deemed an assignment or cross-assignment of interests covered hereby.

Finally, the division orders do not contain words of grant or conveyance and, by themselves, are not
a conveyance of an oil and gas interest. Gavenda v. Strata Energy, Inc., 705 S.W.2d 690, 691 (Tex.

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1986). Because there are no operative words of grant conveying title to Masgas, the 1994 agreement
is not a valid deed.
       Masgas further claims that, even if the 1994 agreement is not a deed, then it is enforceable
as a contract pursuant to TEX . PROP . CODE ANN . § 5.002 (Vernon 2004). Section 5.002 states that
“[a]n instrument intended as a conveyance of real property or an interest in real property that,
because of this chapter, fails as a conveyance in whole or in part is enforceable to the extent
permitted by law as a contract to convey the property or interest.” A deed based on a valuable
consideration but ineffectual to operate as a conveyance is treated in equity as a contract to convey.
Magee v. Young, 198 S.W.2d 883, 886 (Tex. 1946). Unlike the document in Magee, the 1994
agreement does not show an intent to convey an interest in real property; it merely references
interests already owned by Masgas. Masgas further claims ownership of the disputed working
interests pursuant to estoppel by contract. Estoppel by deed or contract precludes parties to a valid
instrument from denying its force and effect. Angell v. Bailey, 225 S.W.3d 834, 841 (Tex.
App.—El Paso 2007, no pet.); Schroeder v. Tex. Iron Works, Inc., 769 S.W.2d 625, 628-29 (Tex.
App.—Corpus Christi 1989), aff'd on other grounds, 813 S.W.2d 483 (Tex. 1991). Estoppel by deed
is the product of a good and valid deed. Angell, 225 S.W.3d at 842; Powers v. Wallis, 258 S.W.2d
360, 362-63 (Tex. Civ. App.—Eastland 1953, writ ref’d n.r.e.). The effect of the doctrine is to
prevent a party to the deed from denying the truth of the recitals in a valid deed. Freeman v.
Stephens Prod. Co., 171 S.W.3d 651, 654 (Tex. App.—Corpus Christ1 2005, pet. denied). Because
the 1994 agreement is not a valid deed, this doctrine does not apply.
       Masgas also argues that MHW and the Andersons have waived any right to contest Masgas’s
ownership of the disputed working interests because of their uninterrupted payments of the proceeds
from the interests. Masgas claims that silence or inaction for so long a period as to show an intention
to yield the known right is enough to prove waiver (citing Tenneco Inc. v. Enterprise Products Co.,
925 S.W.2d 640, 643 (Tex. 1996)). Tenneco does not allow the conveyance of an interest in property
based upon waiver. MHW agreed to pay Masgas a percentage of the proceeds from the disputed
working interests, and the Andersons continued paying the proceeds. The Andersons subsequently
revoked the division orders and discontinued payments. The Andersons did not waive their right to
contest ownership of the disputed working interests.


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         The trial court did not err when it found that the Andersons are the owners of the working
interests. Masgas produced no evidence that it acquired title to the disputed interests, the Andersons
did establish record title, and the Andersons are not estopped or otherwise precluded from denying
Masgas’s claim. We overrule Masgas’s first issue on appeal.
         Masgas argues in its second issue that the trial court erred when it denied Masgas’s claim to
establish its overriding royalty interest in the “Choate #B6” well.1 Mike Massey testified that he
acquired an overriding royalty interest in the Choate #6 back in the “early '90s.” Mike Massey
further testified that MHW recognized his overriding royalty interest in the Choate #6 but that he did
not receive payments from the Andersons on the interest.
         The record shows that Mike Massey and Pat Massey acquired oil and gas leases in the name
of MHW. Mike Massey testified that there is no document in his possession or on record that
transfers to him any interest in the Choate #6. Consequently, the trial court did not err by denying
Masgas’s claim to an overriding royalty interest in the Choate #6. We overrule Masgas’s second
issue.
         MHW argues in two issues that the trial court erred when it denied its motions for summary
judgment and when it granted the Andersons’ motion for summary judgment. When, as here, a party
files a traditional motion for summary judgment, the standard of review is well settled. Questions
of law are reviewed de novo. Jeffries v. Pat A. Madison, Inc., 269 S.W.3d 689, 690 (Tex.
App.—Eastland 2008, no pet.). When cross-motions are filed and the trial court grants one and
denies the other, we review all issues presented and enter the judgment that the trial court should
have entered. Bradley v. State ex rel. White, 990 S.W.2d 245, 247 (Tex. 1999); Moon Royalty,
LLC v. Boldrick Partners, 244 S.W.3d 391, 394 (Tex. App.—Eastland 2007, no pet.). To determine
if a fact question exists, we must consider whether reasonable and fair-minded jurors could differ
in their conclusions in light of all the evidence presented. Goodyear Tire & Rubber Co. v. Mayes,
236 S.W.3d 754 (Tex. 2007). We must consider all the evidence in the light most favorable to the
nonmovant, indulging all reasonable inferences in favor of the nonmovant, and determine whether
the movant proved that there were no genuine issues of material fact and that it was entitled to



         1
             The record reflects that the parties used “Choate #B6” and “Choate #6” to refer to the same well.

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judgment as a matter of law. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546 (Tex. 1985); City of
Houston v. Clear Creek Basin Auth., 589 S.W.2d 671 (Tex. 1979).
       MHW and the Andersons entered into an assignment of oil and gas leases and bill of sale that
contains the language:
              MHW . . . has, BARGAINED, SOLD, TRANSFERRED ASSIGNED AND
       CONVEYED and by these presents BARGAINS, SELLS, TRANSFERS, ASSIGNS
       AND CONVEYS in equal shares unto [the Andersons] their heirs, successors and
       assigns, all of MHW, Inc.’s right, title and interest in and to the oil and gas leases
       described in Exhibit “A” attached hereto and made a part hereof for all purposes. . . .

               . . . MHW . . . does covenant [the Andersons] . . . that MHW, Inc. is the lawful
       owner of said leases described in Exhibit “A.” . . . MHW, Inc. further warrants that it
       is the owner of the working interest as set out beside each leasehold estate name in
       Exhibit “A.”

       Whether a document is ambiguous is a question of law. Moon Royalty, 244 S.W.3d at 394.
A document is ambiguous when the application of the pertinent rules of interpretation to the face of
the instrument leaves the court genuinely uncertain which one of two or more meanings is the proper
meaning. Universal C. I. T. Credit Corp. v. Daniel, 243 S.W.2d 154, 157 (Tex. 1951); Moon
Royalty, 244 S.W.3d at 394. Lack of clarity does not create an ambiguity. Forbau v. Aetna Life Ins.
Co., 876 S.W.2d 132, 134 (Tex. 1994). Neither party argues that the assignment is ambiguous, and
we do not find it to be ambiguous.
       MHW filed a plea in intervention arguing that it retained some title to the disputed working
interests. The assignment states that MHW assigns all of its rights to oil and gas leases described
in Exhibit “A.” Exhibit “A” specifically names seven leases. Each named lease is labeled with a
percentage working interest. MHW argues that it only assigned the fractional interest noted on
Exhibit “A” and retained title to the “disputed working interests.”
       The granting clause states that MHW “SELLS, TRANSFERS, ASSIGNS, AND CONVEYS
. . . all of [MHW’s] right, title and interest in . . . the oil and gas leases described in Exhibit ‘A’”
(emphasis added). We give each word its plain grammatical meaning unless it definitely appears that
the intention of the parties would thereby be defeated. McMillan v. Dooley, 144 S.W.3d 159 (Tex.
App.—Eastland 2004, pet. denied). Therefore, the assignment provides that MHW grants to the
Andersons its entire interests in the leases described in Exhibit “A.” The reference to MHW’s

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fractional interest was in the warranty provision. While MHW assigned all of its interests, it only
warranted that it owned the fractional interests described in Exhibit “A.” The trial court did not err
when it granted the Andersons’ motion for summary judgment and neither did it err when it denied
MHW’s motions for summary judgment. We overrule MHW’s first and second issues on appeal.
       Masgas claims in its third issue on appeal that the trial court erred when it awarded attorney’s
fees to the Andersons and when it denied Masgas’s attorney’s fees. MHW argues in its third issue
on appeal that the trial court erred when it denied MHW’s recovery of attorney’s fees for its claims
against Masgas. The parties in this suit sought relief under the Declaratory Judgments Act.2 The
trial court was authorized to award “costs and reasonable and necessary attorney’s fees as are
equitable and just.” TEX . CIV . PRAC. & REM . CODE ANN . § 37.009 (Vernon 2008). The trial court
found that the Andersons were the owners of the disputed working interests and that Masgas was to
take nothing against the Andersons. The trial court further found that MHW was not entitled to any
requested relief. The trial court did not err when it awarded attorney’s fees to the Andersons and
when it denied Masgas’s and MHW’s claims for attorney’s fees. We overrule both Masgas’s and
MHW’s third issues on appeal.
       In its fourth issue on appeal, Masgas argues that the trial court correctly denied MHW’s claim
against Masgas. We held that MHW assigned all of its interests to the Andersons and that the trial
court was correct in finding that the Andersons are the owners of the disputed interests. Because we
agree that the Andersons are the owners of the disputed working interests, we need not reach this
issue on appeal. TEX . R. APP . P. 47.1. We have considered all issues on appeal, and all are
overruled.
       The judgment of the trial court is affirmed.




March 31, 2010                                                              JIM R. WRIGHT
Panel consists of: Wright, C.J.,                                            CHIEF JUSTICE
McCall, J., and Strange, J.



       2
           TEX. CIV. PRAC. & REM. CODE ANN. §§ 37.001-.011 (Vernon 2008).

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