The Clayton Sam Colt Hamilton Trust owns a 3,200 acre ranch in Val Verde County. It is near the City of Del Rio, Texas. As you might expect, there's not any water on the ranch, but it lies just above the Edwards-Trinity Aquifer, and can pump water from the Aquifer.
In 1997, the Trust sold 15 acres to the City of Del Rio, and the tract is wholly surrounded by ranch land. The Deed says:
GRANTOR reserves unto Grantor, its successors, heirs and assigns forever all water rights associated with said tract, however, Grantor may not use any portion of the surface of said tract for exploring, drilling or producing any such water.
So, the City bought the property without any water rights at all. But, three years after buying the tract, the City started drilled a water well on the tract. When the Trust manager objected, the City said "too bad", and replied to the inevitable lawsuit by saying that it had the right to drill for water. The City claimed that you can't own (and can't reserve) water until it is pumped out of the ground. According to the City in the case, "only through the most strained interpretation of the Trust's reservation of 'water rights' may the Court reach the conclusion that there is an accompanying prohibition on the City's pumping rights." So, the City claimed that there is such a thing as "pumping rights" that are distinct from the thing you are pumping. As the Court noted in its opinion - the City cited no authority for this assertion.
The Texas Supreme Court had consistently, and for over 100 years, held that you can separate water rights from the land that is being sold, and that you can therefore reserve the water rights when you sell the surface estate.
Thank you, San Antonio Court of Appeals, for the lesson in obviousness so clearly underappreciated by the City of Del Rio.
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