As a landman, if you’re not at least familiar with the Duhig Rule, you should take some time to research it, otherwise it may come back to haunt you someday. Here at Bradley Broussard Land Services, Inc., we have encountered several situations where understanding the Duhig Rule has helped us to clean up title, prevented us from leasing minerals that someone thought they owned and even allowed us to lease minerals from an 80 year old widow who didn’t even know she owned them (that’s another great story for the future).
So what is the Duhig Rule? To keep it simple, the Duhig Rule states that any ambiguity in a mineral reservation as to the amount of minerals being conveyed is settled in favor of the buyer, at the expense of the seller. What does that mean? We’ll look at a few real world examples to help you understand it. But first, let’s learn about the history of the Duhig Rule and how it came to be.
W.J. Duhig was the owner of certain lands in Orange County, Texas, which he acquired subject to a reservation of one-half of the minerals. Subsequently, Mr. Duhig conveyed the lands to Miller-Link Lumber (“Miller”, predecessor to Peavey Moore Lumber Company), and in the deed Mr. Duhig reserved one-half of the minerals. The heirs of W.J. Duhig believed they owned one-half of the minerals, however the court found they owned none.
The court reasoned (see Duhig v. Peavey Moore Lumber Company, 135 TEX. 503, 144 S.W.2d 878 (1940)) that because the buyer had a reasonable expectation that he was receiving a one-half interest in the minerals (based on the language, which only stated a reservation of one-half interest), any failure of title would be at the expense of the seller.
You can’t keep more pie than you own!
For example, suppose Broussard owns 100% of surface and minerals in the “BBLS Ranch” acreage and sells to Mayers while reserving a 1/3 interest in the minerals. Then suppose Mayers sells to Breaux and also reserves 1/3 of the minerals, but fails to mention in the deed to Breaux that he only owns 2/3 of the minerals due to the prior reservation by Broussard. Based on the language in the deed from Mayers to Breaux, Breaux has a reasonable expectation that he is acquiring 2/3 of the minerals. Since Mayers only owned 2/3 of the minerals due to the prior reservation by Broussard, Mayers will end up with no minerals and Breaux will end up with 2/3 of the minerals.
This is an example of only one type of situation that can trigger the Duhig Rule, and there are many other similar situations that will also trigger the rule. More often than not, the circumstances wherein the Duhig Rule ends up being applied are created by a misunderstanding of the effects of mineral reservation language and an honest mistake, as opposed to intentionally misleading language in the document. Regardless of why, however, the outcome is the same: Title failure is always at the expense of the seller.
As you can see, it is important to understand the implications of the Duhig Rule. Just as important is knowing which states have adopted the Duhig Rule and to what extent. Here’s a good state by state comparison of the application of the Duhig Rule:
Please note this article offers a very simplistic explanation of the Duhig Rule. If you are dealing with a situation in which the Duhig Rule may apply, you should probably consult a professional who understands the rule thoroughly. As mentioned in the opening paragraph, Bradley Broussard Land Services, Inc. has dealt with situations involving the Duhig Rule many times over the last 35 years.
If you have any questions about the Duhig Rule or any other land and mineral related questions, please don’t hesitate to call us at 337-233-3428.