Justice QUINN delivered the Opinion of the Court.
We granted certiorari to review the decision of the court of appeals in O'Brien v. Village Land Company, 780 P.2d 1 (Colo.App.1988). The court of appeals, in construing an unambiguous deed which conveyed a fee simple interest in a sixty-acre parcel of land and reserved an undivided
On September 9, 1981, Village Land Company (Village Land) purchased from Albert Bloom, the personal representative of the Estate of Jennie Ogren, a 380-acre tract of land located in Boulder County, Colorado, for the sum of $850,000. A personal representative's deed containing a detailed description of the property was executed on September 9, 1981, and was duly recorded in the Boulder County Clerk and Recorder's office on the following day. The Ogren Estate-Village Land deed contained the following provision:
On the same day on which Village Land acquired title to the 380-acre tract of land from the Ogren Estate, Village Land conveyed out of the 380-acre tract a sixty-acre parcel by general warranty deed to G.B. Henderson, who is now deceased, for the sum of $120,000. The granting clause of the Village Land-Henderson deed stated that Village Land was conveying the sixty acres together with "all and singular the hereditaments and appurtenances thereto belonging, or in any wise appertaining, ... and all the estate, right, title, interest, claim and demand whatsoever of [Village Land] ... in and to the above bargained premises." The deed also contained the following reservation:
The warranty clause of the Village Land-Henderson deed stated that Village Land was "well seized of the premises above conveyed ... in fee simple" with full power to convey, and further provided, as pertinent here, that the property was free of all encumbrances "EXCEPT easements and rights-of-way of record and all leases whatsoever of record and special use permits, restrictive covenants and any and all other items and agreements of record." The Village Land-Henderson deed was also recorded in the Boulder County Clerk and Recorder's Office on the following day a few minutes after the recording of the Ogren Estate-Village Land deed.
Sometime in 1982, after Village Land's conveyance to Henderson, Vessels Oil and Gas Company began oil and gas production on the sixty-acre tract of land deeded to Henderson. Based on the reservation clause in the Village Land-Henderson deed, Vessels Oil made royalty payments to Village Land. Henderson was not aware of these payments until $16,000 in royalties had been paid to Village Land, at which time Henderson, and later the personal representatives of his estate, directed several requests to Village Land to refund the royalties paid by Vessels Oil. Village Land refused such requests, claiming that it was the rightful owner of the mineral interests
On March 31, 1986, the personal representatives of the Henderson Estate filed suit against Village Land. Claiming that the reservation in the Village Land-Henderson deed was the result of a mutual mistake, the Henderson Estate requested that the Village Land-Henderson deed be reformed to make clear that Village Land conveyed to Henderson all of the sixty-acre parcel except one-half of the mineral interests reserved in the Ogren Estate-Village Land deed, and further requested that the $16,000 in royalties paid to Village Land be refunded to the Henderson Estate on the theory of unjust enrichment. Village Land in its answer denied that the Village Land-Henderson deed was the result of a mutual mistake and asserted that the deed was not intended to convey any mineral or royalty interest to Henderson.
The Henderson Estate filed a motion for partial summary judgment, and Village Land filed a cross motion for summary judgment. The district court conducted a hearing on the motions and granted summary judgment in favor of the Henderson Estate.
The effect of the district court's ruling was to grant the Henderson Estate a one-half interest in the minerals on the sixy-acre parcel described in the Village Land-Henderson deed, with the other one-half interest remaining in the Ogren Estate pursuant to the reservation in the Ogren Estate-Village Land deed. Subsequent to this ruling, the Henderson Estate filed a motion for summary judgment on its claim for unjust enrichment. The court granted the motion and entered judgment in favor of the Henderson Estate for $18,597.21, plus interest.
Village Land appealed to the court of appeals, which reversed the judgment. Although the court acknowledged that the Village Land-Henderson deed was unambiguous, the court relied on the technical distinction between an "exception" and a "reservation," as well as that part of the warranty clause "excepting ... any and all other items and agreements of record," in resolving the appeal. Remarking that "a reservation, as here, can benefit only the grantor," the court of appeals then drew upon the terms of the Ogren Estate-Village Land deed in construing the Village Land-Henderson deed and reasoned as follows:
Village Land, 780 P.2d at 3 (citations omitted). We granted the Henderson Estate's petition for certiorari to consider whether the court of appeals erred in looking beyond the four corners of the unambiguous warranty deed to Henderson in order to determine the fractional mineral interests conveyed by that deed.
"It is a universally accepted principle of law that when a deed is unambiguous and unequivocal, the intention of the parties thereto must be determined from the deed itself, and extrinsic evidence to alter, vary, explain or change the deed by any such evidence is not permissible." Brown v. Kirk, 127 Colo. 453, 456, 257 P.2d 1045, 1046 (1953).
It is well established that a conveyance of land by general description, without any reservation of a mineral interest, passes title to both the land and the underlying mineral deposits. 3 American Law of Mining ¶ 15.13, at 144 (1982). The Village Land-Henderson deed conveyed to Henderson the sixty-acre tract together with all "hereditaments and appurtenances thereto" and all "right, title, [and] interest" of Village Land in the premises, and expressly reserved only "an undivided one-half interest in and to all oil, gas and other minerals" in the sixty-acre parcel. The deed further provided that Village Land was seized in fee simple of the premises described in the deed and that Village Land had full power and authority to convey those premises free and clear of any encumbrances. The clear and unambiguous terms of the Village Land-Henderson deed demonstrate that Village Land was reserving from the grant one-half, and only one-half,
In its ruling, the court of appeals placed significant weight on the following two factors: the fact that the Village Land-Henderson deed was cast in terms of a reservation rather than an exception; and the fact that the warranty clause in the Village Land-Henderson deed excepted "any and all other items and agreements of record." This latter factor, the court of appeals clearly implied, put Henderson on notice of the reservation clause in the Ogren Estate-Village Land deed and thereby limited the interest conveyed by the Village Land-Henderson deed to an undivided one-quarter interest in the minerals. We reject this analysis.
Although historically a distinction has been drawn between an exception, which refers to some part of the property not included in the conveyance and with which the grantor never parts, and a reservation, which has been interpreted as the creation in the grantor of a new right or interest in the premises conveyed, see Brown, 127 Colo. at 456-57, 257 P.2d at 1046-47; 2 C. Krendl, Colorado Practice ¶ 1721 (3d ed. 1983); II A. Casner, American Law of Property § 10.6, at 517 (1952), our case law recognizes that these terms are often used interchangeably without any intent to preserve the historical distinction and that the historical distinction is without significance when the deed itself unambiguously manifests the intent of the parties. See Corlett v. Cox, 138 Colo. 325, 328-29, 333 P.2d 619, 621 (1958) (in order to give effect to grantor's intent, "exception may be construed as a reservation, and vice versa"); Brown, 127 Colo. at 457, 257 P.2d at 1047 ("It is obvious from the deed here in question that the verbs `except' and `reserve' as well as the noun `reservation' were used interchangeably, synonymously, and without reference or regard to their technical, legal meaning."). In light of the unambiguous terms of the Village Land-Henderson deed, which conveyed a fee simple interest in the sixty-acre parcel and reserved only an undivided one-half interest in the minerals, the court of appeals' reliance on the historical distinction between an exception and a reservation was misplaced.
Similarly misplaced was the court of appeals' reliance on that part of the Village Land-Henderson warranty clause which excepted from the warranty "any and all other items and agreements of record." We initially note that when the Village Land-Henderson deed was executed on September 9, 1981, the Ogren Estate-Village Land deed had not been recorded and was not filed of record until the following day. More important to our analysis, however, is the fact that even if Henderson had actual knowledge of the one-half mineral interest reservation in the Ogren Estate-Village Land deed, such knowledge would not have placed Henderson on notice that Village Land was unable to convey the other one-half mineral interest not previously reserved by Village Land's predecessor in title. The actual interest conveyed by the plain terms of the Village Land-Henderson deed was within the power of the grantor to convey, and under these circumstances, any actual or constructive knowledge on the part of Henderson of the prior reservation in the Ogren Estate-Village Land deed did not serve to diminish the interest conveyed to him by the granting clause of the deed — namely, a fee simple
Moreover, the court of appeals' analysis fails to distinguish between a granting clause and a warranty clause. The purpose of a granting clause is "to define and designate the estate conveyed." Kynerd v. Hulen, 5 F.2d 160, 161, (5th Cir.), cert. denied, 269 U.S. 560, 46 S.Ct. 20, 70 L.Ed. 411 (1925). A covenant of general warranty, on the other hand, is a guarantee that the grantor is vested of an estate in fee simple with full power to convey, that the property is free of all encumbrances except as listed in the deed, and that the grantor will guarantee title and peaceful possession and will defend the grantee's title to the property. See § 38-30-113, 16A C.R.S. (1982); 2 Colorado Practice ¶ 1702; 6A R. Powell and R. Rohan, Powell on the Law of Real Property ¶ 900(2). Exceptions inserted into a covenant of warranty are intended only to protect the grantor on the warranty and are not intended as a limitation on the nature of the interest conveyed by the granting clause. See e.g., United States v. McKenzie County, 187 F.Supp. 470 (D.N.D.1960), aff'd sub nom. Murray v. United States, 291 F.2d 161 (8th Cir.1961); First Nat'l Bank of Denver v. Allard, 182 Colo. 297, 513 P.2d 455 (1973); Williams v. McCann, 385 P.2d 788 (Okl. 1963). Because the face of the Village Land-Henderson deed purported to convey all mineral interests except the one-half expressly reserved by the terms of the deed, Village Land as grantor conveyed and warranted title to one-half of the mineral interests with respect to the sixty-acre parcel conveyed by the deed to Henderson. See Peterson v. Simpson, 286 Ark. 177, 690 S.W.2d 720 (1985); Garraway v. Bryant, 224 Miss. 459, 80 So.2d 59 (1955); Kadrmas v. Sauvageau, 188 N.W.2d 753 (N.D.1971); Murphy v. Athans, 265 P.2d 461 (Okl.1953).
Our conclusion that the Village Land-Henderson deed conveyed to Henderson an undivided one-half mineral interest in the sixty-acre parcel is supported by this court's decision in Brown v. Kirk, 127 Colo. 453, 257 P.2d 1045, a 1953 case analytically indistinguishable from the instant controversy. In Brown, the Federal Land Bank conveyed a quarter section of land by deed and "excepted and reserved" an undivided one-fourth interest in the minerals. Subsequently, the Browns acquired the same property and conveyed it to Kirk and Linch by warranty deed that excepted and reserved an undivided one-half interest in the minerals and warranted the title to the property, "subject to the reservations above mentioned." The Browns later filed a lawsuit to establish their right to the minerals, claiming that Kirk and Linch only held an undivided one-quarter interest in the minerals. Kirk and Linch, on the other hand, claimed an undivided one-half interest in the minerals pursuant to the Brown-Kirk deed. The Federal Land Bank's outstanding one-quarter interest was not disputed. The trial court found that the Brown-Kirk deed unambiguously conveyed one-half of the mineral interest to Kirk and Linch, and reserved one-half of the mineral interest in the Browns, with the result that the Browns and the bank each held one-fourth of the mineral interest and Kirk and Linch held one-half of the mineral interest. In affirming the judgment, this court concluded that the Browns knew that the bank excepted and reserved a one-quarter interest in the land and that the Browns, as grantors, were protecting themselves on the warranty deed by excepting fifty percent of the oil, gas, and mineral rights while undertaking to warrant and defend the title to the remainder thereof. 127 Colo. at 457, 257 P.2d at 1047. Similarly here, Village Land, as is clearly evidenced on the face of the deed, reserved an undivided one-half interest in the oil, gas, and other minerals and conveyed title to the remaining one-half to Henderson, while concomitantly undertaking to warrant and defend the title to that one-half interest conveyed to Henderson.
We accordingly reverse the judgment of the court of appeals and remand the case to
The complex analysis employed in Duhig has been criticized as contrived, especially because, as the opinion states, "[t]he result is that the grantor has breached his warranty, but that he has and holds in virtue of the deed containing the warranty the very interest, one-half of the minerals, required to remedy the breach." 144 S.W.2d at 880. One commentator has offered the following criticism of this analysis:
W. Ellis, Rethinking the Duhig Doctrine, 28 Rocky Mtn.Min.L.Inst. 947, 952-53 (1982) (footnote omitted). We do not employ the Duhig analysis in this case and instead reach our result by giving effect to the unambiguous and unequivocal terms of the Village Land-Henderson deed.