Texas Court of Civil Appeals
924 S.W.2d 168 (Tex. Civ. App. 1996)
George and John Hamman (plaintiffs) leased portions of their ranch to Shell Oil Company and Superior Oil Company (bottom leases). Subsequently, the Hammans executed two top leases to John’s son. The top leases each stated: “this lease shall be for a term . . . covering and embracing, and including also, ten (10) years after and subsequent to the forfeiture, or to the expiration, of [the bottom leases].” The top leases also stated that the Hammans’ interests in the bottom leases remained vested throughout the existence of the bottom leases. The bottom leases had no determined end date and could continue in existence indefinitely. Eventually, the bottom leases did terminate. The Hammans brought suit against Bright & Co. (Bright) (defendant), a sublessee under the top leases, to recover underpaid royalties, among other things, under the top leases. The trial court granted Bright summary judgment, finding that the rule against perpetuities invalidated the top leases as a matter of law. The Hammans appealed, arguing, among other things, that ratification agreements and further subleases of the top leases (at that point, no longer top leases) rendered the top leases valid, regardless of their initial invalidity.
Rule of Law
Holding and Reasoning (Dodson, J.)
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