551 S.W.3d 148
Tex.2018Background
- Grantors (the Bryans) executed a 1951 deed reserving “an undivided one-half (1/2) interest in and to the Oil Royalty, Gas Royalty and Royalty in other Minerals,” followed by language stating “the same being equal to one-sixteenth (1/16) of the production.”
- No lease existed at the time; 1/8 royalty was the customary standard in 1951 and the parties understood the reservation in that context.
- The dispute is whether the deed reserved a fixed royalty (a 1/16 interest in production) or a floating royalty (one-half of whatever royalty a future lease provides).
- The majority of the Court (not included in this excerpt) holds the deed reserved a floating 1/2 of future royalties; Justice Boyd dissents, arguing the deed unambiguously reserves a fixed 1/16 of production.
- Boyd’s dissent applies the holistic interpretive approach from Hysaw v. Dawkins: read all language together, give effect to the parenthetical/definitional clause, and avoid isolating the first clause to create a conflict.
Issues
| Issue | Plaintiff's Argument (Laborde) | Defendant's Argument (Bryans/Heirs) | Held (Boyd dissent view) |
|---|---|---|---|
| Whether the deed reserves a fixed royalty (1/16 of production) or a floating royalty (1/2 of whatever royalty a future lease provides) | The deed’s first clause reads as a floating reservation (1/2 of future lease royalties) | The second clause defines the reservation as equal to 1/16 of production, showing fixed intent | Deed reserved a fixed 1/16 royalty; clauses read together show intent to reserve one-half of the then-standard 1/8 royalty |
Key Cases Cited
- Hysaw v. Dawkins, 483 S.W.3d 1 (Tex. 2016) (requirement to read the entire instrument holistically to ascertain intent)
- Schlittler v. Smith, 101 S.W.2d 543 (Tex. 1937) (interpretation concerned whether reservation was half of royalty rights or half of mineral interest)
- Luckel v. White, 819 S.W.2d 459 (Tex. 1991) (double-fraction language can be fixed or floating; other clauses may determine floating intent)
- Garrett v. Dils Co., 299 S.W.2d 904 (Tex. 1957) (language conveying "one-eighth of all of the oil royalty" construed as conveying a fixed fraction of production)
- Brown v. Havard, 593 S.W.2d 939 (Tex. 1980) (single-fraction royalty language can mean either a fixed royalty or a fraction of royalties)
- Moore v. Noble Energy, Inc., 374 S.W.3d 644 (Tex. App.—Amarillo 2012) (parenthetical parent clause construed as defining a fixed 1/16 interest rather than a floating royalty)
- Helms v. Guthrie, 573 S.W.2d 855 (Tex. Civ. App.—Fort Worth 1978) (similar deed language held to reserve a fixed 1/16 of production)