Wagenschein v. Ehlinger, 2019 Tex. App. LEXIS 5949 (Tex. App—Corpus Chisti July 11, 2019, pet. filed)
In this case, the Corpus Christi Court of Appeals held that, when grantors of a 1989 warranty deed signed division orders and accepted royalty payments consistent with treatment of the reservation as creating a joint tenancy with right of survivorship, that established an affirmative defense of quasi-estoppel, subsequently estopping those grantors’ heirs from claiming the reservation created a tenancy in common.
In 1989, all seven heirs of Norman Wagenschein (“Wagenschein Grantors”) executed a warranty deed conveying their surface and mineral estates in a 241-acre tract of land. That deed contained a reservation clause, reserving “an undivided one-half (1/2) of the royalty interest in all the oil, gas and other minerals that are in and under the property and may be produced from it.” The reservation clause contained one sentence saying the interest was in favor of Grantors and Grantors’ “successors” and another indicating the interest was in favor of Grantors and Grantors’ “survivors.” Another sentence in the reservation clause indicated “[t]he reservation contained in this paragraph will continue until the death of the last survivor of the seven (7) individuals referred to as Grantors in this deed.”
This dispute ultimately turned on whether the interest reserved was a tenancy in common or a joint tenancy with right of survivorship. As the court explained, “[u]nder a tenancy in common, the deeded interest descends to the heirs and beneficiaries of the deceased cotenant and not to the surviving tenants. A joint tenancy, on the other hand, carries a right of survivorship. In a survivorship, upon the death of one joint tenant, that tenant’s share in the property does not pass through will or the rules of intestate succession; rather, the remaining tenant or tenants automatically inherit it.”
In 2009, one of the seven Wagenschein Grantors died, leaving two descendants. Rather than credit those descendants with their mother’s undivided 1/7th interest, the six surviving Wagenschein Grantors treated the interest as a joint tenancy with right of survivorship, with each signing division orders for a 1/6th share and thereafter accepting a 1/6th share. Three more Wagenschein Grantors died in 2011, 2012, and 2014, in each instance they left surviving descendants. After each death, the surviving Wagenschein Grantors signed amended division orders continuing to treat the interest as a joint tenancy rather than crediting those descendants with an interest.
In 2015, the descendants of the deceased Wagenschein Grantors filed suit, seeking a judicial declaration that the interests reserved under the 1989 warranty deed were in the form of a tenancy in common (thus, passed to them), not a joint tenancy with right of survivorship.
The Corpus Christi Court of Appeals held that the deceased Wagenschein Grantors were quasi-estopped from taking the position that the 1989 deed created a tenancy in common as opposed to a joint tenancy—because they knowingly treated the interest as a joint tenancy and accepted the benefits of a joint tenancy. The court held that, “having once enjoyed the benefits of joint tenancy with right of survivorship, the now-deceased [Wagenschein Grantors] cannot today, through their heirs, sue to claim benefits as tenants in common . . . it would be unconscionable to allow such a claim.”
The court then turned to interpretation of the deed. The court pointed out that the opening and closing statements of the reservation clause use the word “survivor,” which is indicative of a joint tenancy. While the reservation clause also included the word “successor,” the court indicated that word could apply to either descendants or survivors. As a result, the court concluded that the language of the 1989 warranty deed intended to reserve a royalty in the form of a joint tenancy with right of survivorship.