How long – if ever – has it been since you pondered the difference between a “tenancy in common” and a “joint tenancy”? Same for us, until the wheels came off a family relationship and a lawsuit was filed in Wagenschein v. Ehlinger. This brings to us – and you – the opportunity to review a little Texas property law. Landmen and title examiners, perk up.

Tenancy in common v. joint tenancy

Texas recognizes two types of co-tenancies:

• A tenancy in common: The deeded interest descends to the heirs and beneficiaries of the deceased cotenant.
• A joint tenancy with right of survivorship: Upon the death of one joint tenant, that tenant’s share in the property passes to the surviving joint tenants, not the heirs of the deceased joint tenant. Once all of the joint tenants pass away, the joint tenancy is extinguished.

The dispute was over property in Dewitt County owned by seven individuals, the “Wagenschein Heirs”, as tenants in common. In 1989, the Wagenschein Heirs sold the property and executed a deed with this royalty reservation:

THERE IS HEREBY RESERVED AND EXCEPTED … for Grantors and the survivor of Grantors, a reservation until the survivor’s death, of an undivided one-half (1/2) of the royalty interest in all the oil, gas and other minerals … . Grantors and Grantors’ successors will not participate in the making of any oil, gas and mineral lease covering the property, but will be entitled to one-half (1/2) of any bonus paid for any such lease and one-half (1/2) of any royalty … paid under any such lease. The 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.

Pioneer drilled a producing well in 2010 and began paying royalties to the Wagenschein Heirs. As each Wagenschein Heir died, Pioneer credited their royalty interest to the deceased Heir’s surviving heirs, thus increasing their respective royalty payments.

All was copacetic until 2015, when the children of a deceased Wagenschein Heir sued, alleging that the deed crediting the royalty reservation to “Grantors and Grantors’ successors” created a “tenancy in common” and not a “joint tenancy”. If the deed created a tenancy in common, the children of the deceased Wagenschein Heirs, rather than the surviving Wagenschein Heirs, would inherit their parents’ royalty interests.

The trial and appellate courts disagreed. Though the deed used “successor” once, it unambiguously reserved the royalty interest to the Wagenschein Heirs and the “survivor[s]” of the Wagenschein Heirs, not their “successors”, “heirs” or “beneficiaries.” The deed unambiguously created a joint tenancy with right of survivorship, not an inheritable tenancy in common. As each Wagenschein Heir died, their interest in the property passed to their surviving siblings, not to their children.

Quasi estoppel

The court also held that the acceptance by some of the plaintiffs of the benefits (royalty payments) of joint tenancy quasi-estopped them from arguing otherwise in this litigation (see pages 6-10 of the opinion).

Your musical interlude 

Survival: not always as great as advertised.

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