Wednesday, April 17, 2013

More on Adverse Possession

I've already started a summary of the Texas Law of Oil and Gas Second Edition's section on Adverse Possession.  This post will be a continuation of that summary. 

One thing to consider with regard to a severance vis a vis the statute of limitations is that the severance *must* occur prior to the claimant's entry onto the surface.  Put another way - an adverse claimant who takes possession of a tract of land that is not severed takes possession of the entire tract (the surface and the minerals).  A subsequent severance would be subject to that possession and would require the ouster of the claimant.  The authors note a limited exception where the owner conveys the surface estate to the adverse possessor by a deed wherein he reserves the mineral interest.

The next section of the text then discusses Thomas v. Southwestern Settlement & Development Co., where the court held that when there's a purported severance by a person who doesn't held good title the subsequent occupancy/entry of the surface will not affect the title of the mineral estate.  Please note that the court here was dealing with a claim under the 5 year statute of limitations.  On the other hand - a severance completed by the adverse claimant who maintains the surface "has no more effect on the running of the statute of limitations than a severance by a true owner after an adverse entry takes place." (see Texas Law of Oil and Gas, Page 2-7).  The text also notes that the most common cases involve oil and gas leases that the adverse claimant who occupies the surface.  So, if you adversely claim a tract, and then execute an oil and gas lease, you need the continued surface occupancy to benefit the mineral estate.  The opposite has been held to be true, as well, where an adverse possessor who conveyed the surface and reserved the minerals - where there is a continuous surface occupancy by the grantee, the limitation title to the mineral estate is ripened. 

Now, you can acquire title to a mineral estate through adverse possession where the estate's been severed, however, according to Blocker v. Davis (241 S.W.2d 698, 702 (Tex. Civ. App. - Fort Worth 1951, write ref'd n.r.e.), "such a dominion exercised over said minerals as would have become notice to owners of the mineral estate" must be exercised.  This would probably include drilling followed by production (continuous) of minerals over the severed estate.  The text also provides other examples - check the book for those.

The text also discusses claims to limitation title by a lessee that remained in possession and continued to produce after the lease terminated because of a period of Non-production, e.g. Natural Gas Pipeline Co. v. Pool (124 S.W.3d 188 (Tex. 2003), but it's best to read this on your own, as well... particularly given the length of this post already. 

Next time, we'll get into section 2.1[A][1]b - Attributes of the Mineral Estate

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