Chief Justice Jimmy Blacklock
The Texas Supreme Court has reversed a Fort Worth Court of Appeals decision overturning a trial court judgment awarding various equitable remedies to a plaintiff in a dispute over royalty payments owed on mineral leases in West Virginia. The Court’s ruling rejects the so-called “gist rule” for determining subject matter jurisdiction in suits involving foreign real property in favor of the traditional in personam/in rem distinction.
Braxton Minerals III, LLC v. Robert Scott Bauer and Braxton Minerals II, LLC (No. 24-0438; May 15, 2026) arose from a dispute over royalty payments. Bauer, a Texas resident, and his partner formed Braxton Minerals II (BM2) in 2015. They met with EnerQuest Oil & Gas to discuss the purchase of mineral rights in West Virginia and elsewhere. The parties formed an Oklahoma company, Braxton Minerals III (BR3), for that purpose. EnerQuest owned 75% of BM3, and Bauer and his partner, through a company called Braxton Minerals-Appalachia (BMA) would own the rest. EnerQuest contributed $10 million to BM3 in exchange for Bauer and his partner’s agreement to sell certain mineral rights held by BM2 and BM3 in accordance with a schedule, as provided in BM3’s company agreement.
BM3 purchased several mineral rights from BM2, and further purchases were completed by “draw requests” submitted by Bauer’s partner to EnerQuest, which funded them. From November 2015 to April 2016, EnerQuest received 11 such requests. Two of them, both approved by EnerQuest and including 30 mineral deeds, gave rise to the dispute. Nineteen of the deeds reflected BM2 as the grantee, not BM3. BM2 thus received the royalty payments. When BM3 asked Bauer to correct the deeds to list it as the grantee, Bauer refused. BM3 brought suit in Tarrant County, seeking reformation of the deeds, specific performance, declaratory judgment, constructive trust, and injunctive relief. Bauer BM2 counterclaimed, asserting fraud. Bauer and BM2 moved to dismiss BM3’s suit for lack of subject matter jurisdiction. The court granted summary judgment to BM3 instead. The court of appeals reversed on the basis that the mineral rights at issue were located in West Virginia, and it lacked jurisdiction over adjudication to title of foreign real property interests. BM3 appealed.
In an opinion by Chief Justice Blacklock, SCOTX reversed. The issue was a classic one: where does the boundary of jurisdiction lie in a suit involving foreign property? The court of appeals ruled that the “gist” of BM3’s allegations “revolve[s] around its claims of ownership of the mineral interests in question,” so Texas courts couldn’t do anything about it. But, as the Chief Justice pointed out, SCOTX has never adopted the so-called “gist” rule, although other intermediate courts of appeals have. Instead, the Court has considered the question as “turn[ing] on the classical distinction between suits in personam and suits in rem.” In his review of SCOTX precedent, Chief Justice Blacklock concluded that prior authority “illustrate[s] a sound rule that long pre-dated [such authority] and that continues in force today: While courts lack jurisdiction over in rem suits about foreign property, there is generally no jurisdictional impediment to in personam suits about foreign property, assuming the court has jurisdiction over the parties” [citations omitted].
This authority stretches back deep into the common law of England, adopted as the law of Texas shortly after independence and enshrined in American law in Penn v. Lord Baltimore, 10 U.S. 148 (1810). As developed by SCOTX, primarily in three decisions, a “clear rule” emerged that “[i]if a person be under a contractual obligation to convey lands, a court of equity having jurisdiction over his person may compel him to make the necessary conveyance, although the land is in another state.” Tex. & Pac. Ry. v. Gay, 26 S.W. 599, 605 (Tex. 1894). In other words, if the suit seeks “a judgment that will bind the defendant to his legal obligation to convey the property—rather than a judgment that will vest title in the plaintiff of the judgment’s own force—the suit is in personam, and the out-of-state location of the property is no bar to jurisdiction.”
The Court proceeded to disapprove of the “gist rule” applied by the court of appeals. That rule had previously been used by the Corpus Christi-Edinburg, Houston [14th], and Austin courts of appeals as well. Rejecting the reasoning of these rulings, the Court instructed that “a permissible in personam breach-of-contract action or claim for royalty payments is not converted into an impermissible in rem suit to try title merely because resolution of the claim requires the court to decide whether one party or the other holds title to foreign lands.” If the constitutional duty of the courts is to “render judgments that resolve cases,” courts must be able to render judgments that bind only the parties by enforcing their legal obligations to one another.
In this case, the trial court awarded BM3 specific performance of the parties’ agreements, reformation of the 19 offending mineral deeds, a declaration affirming BM3’s ownership of the royalties, and an injunction prohibiting the defendants from transferring the deeds or royalty payments to themselves. All of those things operate in personam and, consequently, were in the jurisdiction of Texas courts. And the equitable remedies granted by the trial court were entirely consistent with the types of in personam relief historically awarded “even though ‘lands not within the jurisdiction of the court may be affected by the decree.’” Nothing in the judgment, the Court went on, annulled or established a title. The Court reversed the court of appeals’ decision and remanded to the court for consideration of the remaining arguments.
