448
Opinion of Stevens, J.
ation paid to it if TXO's attorney determined that "title had failed." 2
Shortly after the agreement was signed, TXO's attorneys discovered a 1958 deed conveying certain mineral rights in the Tract from respondent Tug Fork Land Company, a predecessor in interest of Alliance, to a coal operator named Leo J. Signaigo, Jr., who had later conveyed those rights to the Hawley Coal Mines Company, which had, in turn, reconveyed them to the Virginia Crews Coal Company (Virginia Crews). Interviews with Signaigo, and with representatives of Hawley and Virginia Crews, established that the parties all understood that only the right to mine coal had been involved in those transactions; none of them claimed any interest in oil or gas development rights. Moreover, the text of the 1958 deed made it "perfectly clear" that the grantor had reserved "all the oil and gas underlying" the Blevins Tract.3
TXO first advised Alliance of the "distinct possibility or probability" that its "leasehold title fails" in July 1985.4 In
the meantime, despite its knowledge that any claim that the 1958 deed created a cloud on title to the oil and gas develop-2 The agreement provided, in pertinent part: "Assignor [Alliance] hereby warrants title to the extent that in the event of conducting title examination of the assigned acreage, Assignee's examining attorney determines that title has failed to all or any part of the assigned acreage, Assignor will reimburse to Assignee the consideration paid to it for any such lands to which title is determined to have failed." See 187 W. Va., at 463, n. 1, 419 S. E. 2d, at 876, n. 1.
3 The West Virginia Supreme Court of Appeals "unequivocally [found] that the deed was unambiguous," id., at 464, 419 S. E. 2d, at 877, stating that "[a]lthough the deed does not demonstrate the most artful drafting, it does clearly reserve all of the oil and gas under the Blevins Tract to Tug Fork Land Company," id., at 463-464, 419 S. E. 2d, at 876-877 (emphasis in original). The entire deed is reprinted as Appendix A to the opinion of the State Supreme Court of Appeals. See id., at 467-471, 419 S. E. 2d, at 890-894.
4 See Plaintiff's Exhibit No. 4, reprinted in App. to Reply Brief for Petitioner 1a.
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