Hamman v. Bright & Co.
Texas Court of Civil Appeals
924 S.W.2d 168 (Tex. Civ. App. 1996)
George and John Hamman (plaintiffs) leased ranch land to Shell Oil and Superior Oil under "bottom leases" with no fixed end date. The Hammans then granted John's son two "top leases," set to begin ten years after the bottom leases expired or were forfeited. The bottom leases eventually did end. The Hammans sued Bright & Co. (defendant), a sublessee under the top leases, for underpaid royalties. The trial court granted Bright summary judgment, holding the rule against perpetuities invalidated the top leases as a matter of law. The Hammans appealed, arguing later ratification agreements and subleases cured any initial invalidity.
Whether a top lease that will not become effective until the expiration or termination of an existing lease with no definitive end date is void ab initio under the rule against perpetuities.