Luckel v. White

LUCKEL, al. F. et Eb WHITE,

Furl et al.

No. D-0080. Texas.

Supreme Court of 23, 1991.

Oct.

Rehearing Jan. 1992. Overruled Slator, III, Houston, Robert C. Bled-

J.M. Herd, Midland, soe, appel- for and Tevis lants. Roberts, Teague, C. A.

Claude William Houston, I. Rex G. Forten- Peeples, Robert Cain, III, Beaumont, Chap berry, B. Liber- Edmonson, Seabrook, ty, Brad- Susan M. Zabel, Pickett, Liberty, A. ford Thomas Krist, Houston, Nor- Stanley J. and E.R. wood, appellees. for Liberty, OPINION GAMMAGE,Justice. construction of This suit concerns the “granting,” “ha- royalty deed in which “warranty” clauses recite bendum” and conveyed, a V32nd and “future lease” “subject but the to” grantee state shall be enti- clauses one-fourth of tled to receive (Luck- grantee’s successors royalties. The el, al.) declaratory judgment sought et in one-fourth an interest under all subse- accounting for quent an oil leases and Both sides production on land. summary judgment. The trial moved conveying a the deed as court construed interest, giving control- fixed Vhnd “granting” clause and ling effect to lease” clause ineffec- holding the “future royal- convey one-fourth of future tive to trial court’s future leases. The ties on Krum, holding follows (Tex.1984). The trial court granted partial summary judgment (White, al.) sev- grantor’s et successors summary judg- to make the ered the cause affirmed. final. The court ment and the leases ... additional other and 485. We reverse by the terms bound grantee shall be and hold appeals, overrule Alford be enti- leases ... shall any such lease” clause was [and] “future that the so-called any and all tled convey a one-fourth effective to said leases. under ties reserved as to future leases. royalties clause] [Final Mary Mayes Etta executed In 1935 Mary agreed that and It is understood Luckel, question to L.C. Jr. royalty deed one-half of the owner of Mayes Etta oil and subject then to an The land was paid the terms royalties to be had, con- lease, Mayes the “Coe lease.” lease, other existing present of the execution of the Coe temporaneously with by her having been transferred one-half royalty lease, one-half of her transferred execution of by and to her children children, consequently her and interest to instrument, Mayes con- Mary Etta this royalty payable only one-half the owned (½6 n ) one-sixteenth veyed one-half of the provided for The Coe lease under lease. by her. royalty now reserved Mayes one-eighth royalty. What usual Luckel was one-half conveyed to eventually expired. The The Coe lease owned, which amounted royalty she deed is by Mayes-Luckel land covered The last clause of the royalty. a Vknd leas- of five other mineral subject now lease had reserved explained that the Coe royal- provide for of these leases es. Four conveying one-eighth royalty and she was (Veth). succes- The Luckel of one-sixth ties the ½6 n owned, royalty she one-half of lease (Luckel) contend the future sors conveyed royalty was one-fourth which all of them to one-fourth clause entitles provided for in the Coe royalty total As current leases. under the royalties in detail The deed is set out lease. the ¾ nn royalty inter- to those four leases at appeals opinion, 792 S.W.2d inter- exceed the Vknd they est claim would 487-88, parts repeat pertinent but we conveyed in the originally est (emphasis supplied): as follows under the in the deed clause and warranted [“Granting” clause] argue respondents Coe lease. White I, [convey Mary Mayes, Etta ... to] only to a entitles Luckel Luckel, thir- L.C. Jr. an undivided one they contend In effect royalty. fixed V32nd (Vsmd)royalty interest in and ty-second mineral estate reverted that when property, following described ... lease, they owned the Coe expiration of the “Warranty” and royalty clauses] negotiated rights any [“Habendum” increase lease” HOLD the above the “future TO HAVE AND TO in future leases because Luck- ... to increase the royalty interest ineffective described Vsmd clause was Luckel, larger royal- heirs Jr. his leases with the said L.C. el share as to new unto they are White, argue warrant and et al. assigns and forever ... ties. Thus increase in the the said Vsmd all of the ... entitled to forever defend ... amount. ty interest [“Subjeet-to” clause] is no contention There premises are that said It is understood of an The construction ambiguous. deed is originally executed to lease now under question of law for is a unambiguous deed shall grantee herein and that the one Coe Blake, 712 S.W.2d the court. Altman provided part of the rentals receive no duty of a 117,118 (Tex.1986). primary lease, shall receive said but for under is to construing a deed such court when any and all parties from intent of the ascertain said lease. the terms paid under a fundamen “four as the lease” known rule of construction clause] tal [“Future Co., 157 v. Dils rule. Garrett agreed comers” and expressly understood It is (1957); 92, 94-95, grantor herein reserved [sic] 16.1 Gas, Ktjntz, § term E. right upon expiration of of Oil and the Law (1987); R. Powell, 6A premises to make of Real on said the Law the lease Co., ¶ v. Dils Garrett 899[3], notice of it. at 81A-108 Rohan cial (P.

PROPERTY, intention, 1991). The court “That when ascer- Tex. at 299 S.W.2d at 907. ed. tained, prevails arbitrary over rules.” clause as mere- interpreted the future lease Windsor, Harris v. ly extending the fixed V32nd court, (1956). The granting, habendum seeking to the intention of the ascertain leases, creating warranty clauses to future parts parties, attempts to harmonize all Thus, by this V32nd Blake, the deed. Altman v. at “harmonizing,” con- in- an instrument 118. “[T]he unambiguous lan- that the clear cluded every tend clause to have some effect guage “one-fourth of agree- in their some measure to evidence really meant a under said leases” reserved parts ment.” Id. Even if of the y32nd. different fixed inconsistent, appear contradictory or reasoning not a proper The court’s is to of court must strive harmonize all the rule, “harmonizing” the under four comers construing the instrument to parts, the a number of this court’s and conflicts with Benge provisions. give to all of its effect quarrel with the as- decisions. We do not Scharbauer, 447, 451, v. 259 152 Tex. sumption parties probably that the contem- 166, (1953). court The should plated nothing other than the usual one- deed, any the part strike of “not down assumption does eighth royalty. But that unless there is an irreconcilable conflict parties the not lead to the conclusion that part one of instrument de- wherein the only is fixed V32ndinterest. It intended Id. part in stroys effect another thereof.” parties just logical that the to conclude question The is what effect the one-fourth convey of all re- intended to one-fourth language of the “future lease” clause royalty, the reference and that served have, given these rules of construc- should is “har- to in first three clauses Vknd the tion. of the usual because one-fourth monized” argues to effect all give Luckel that to one-eighth is V32nd. One would deed, particular of express grant- V32nd therefore conclude clause, must inter- lease the deed future convey meant a one- ing only clause to preted one-fourth of royalties, which “har- fourth of (which payable under the Coe lease was extent as the clauses the same monizes” and, production) to V32ndof equal Both this appeals’ analysis. of the court royal- expired, lease one-fourth opposite reasoning em- reasoning and The paid subsequent under all leases. ties ignore appeals of ployed grant- appeals concluded that court of used, produce and differ- express habendum, warranty clauses of ing, parties’ assumptions about what ent conveyed a V32nd intent was. actual lease clause ty interest and that the future convey one-fourth of fu- was ineffective to assumption parties con that the despite express its royalty, reserved ture one-eighth royalty only usual templated offered two The court of terms. actual intent equally consistent with an “harmonizing” of the deed rationales —a interest or a one- convey a fixed Vs2nd application the four comers rule royalty interest. reserved fourth v. Krum. We address issues the actual if the could discern Even order. in that intent, intent of the it is not the actual governs, but the actual intent parties that that all appeals reasoned The court of expressed in the instru harmonized, could be parts of the deed whole, “without reference to as a ment clause, by as- including the future leases form, position relative of mere matters parties to the deed contem- suming that the technicalities, arbitrary or descriptions, provide plated that all future leases Burns, v. Tex. Oil Co. Sun rules.” One-eighth one-eighth for (1935); see 552, 442, in the 1920s royalty so standard “usual” Sims, 59, 65-66, also Woods judi- courts took that all Texas and 1930s forfeited, then and canceled (1954). particular, son becomes 273 S.W.2d event, and all the lease interests given have the clauses labels we land, oil, gas and “warranty,” “habendum” and on said “granting,” future rentals controlling, jointly by are and we privileges lease” not shall be owned “future mineral give owning effect to the substance un- one- respective parties] should each [the language “one- ambiguous provisions. oil, miner- and other half interest royalties reserved and all land, fourth together with in and said als unambig- future leases is clear under” This in all future rents.” one-half interest uous; fact, except for the use of one- granting conflict- court held that the one-half, it rather than tracks fourth clause, lease and that ed the future opinions language of one this court’s resolved favor conflict was one-half describing an undivided what granting clause because royalty interest is. See Schlitter “controlling language” clause was the Smith, 128 expression intent” the fraction- “key but lease clause in The future future lease clause was al interest of the deed recites Mayes-Luckel or con- “nothing than a restatement more grantee “shall be entitled pre- interest deeded in the firmation of the any and all reserved under said instrument,” “redun- portions of the vious language This is as effective to leases.” “unnecessary.” at dant” and 671 S.W.2d hereby “do grant an interest the formal as 872-73. bargain, convey” language grant, sell and only significant be designated The difference “grant- what we have as the Burns, our case and is that ing” present v. 125 tween clause. Sun Oil Co. Alford 553-54, conveyance a frac at 444. Tex. at 84 S.W.2d “We dealt with Alford case present construe this as it is written interest and the must tional mineral by right interpo royalty have no to alter it fractional interest. and we deals with a Dahlberg royalty v. A lation or substitution.” Hol is not material. That difference 179, den, 183, 699, part Tex. 238 S.W.2d 701 in a 150 interest land that is interest an (1951). particular, may interpo In not mineral estate. Nation total State substitute, appeals’ 509, 514, the court of late or as Tex. 143 135 Morgan, al Bank v. done, change “harmonizing” has to 757, (1940). The inter royalty S.W.2d 760 unambiguous grant of an interest clear and is one of property est is a interest that to royalty one-fourth of mean a reserved comprising miner rights and attributes royalty produc fixed interest of V32nd estate; rights other and attributes al erred in The court of “har rentals, tion. right delay receive include the to monizing” the “future lease” to al right in from share benefits secured unambiguous meaning. its clear and ter production payments and the lessee such as like, develop right produce given reason now address the second We minerals, right. Day executive & and the appeals application of this by the court — Inc., Petroleum, 786 v. Texland Co. decision in v. 671 court’s (Tex.1990); 667, 1& n. Altman S.W.2d 669 ap- The court of 870 Blake, royalty at A 118. v. 712 correctly In that applied peals Alford. grantor’s mineral from the interest derives in- mineral interest was an undivided interest nonpossessory is a interest and The clause stated “one- volved. separately alienated. may minerals be one-eighth in and interest half of the 290, 124 Tex. 77 S.W.2d Hogg, oil, minerals in and gas and other Sheffield may (1934). The same instrument 1021 produced from” the may and that be under portion the mineral convey an undivided tract; “subject to” clause described interest, and separate royalty estate and a existing subject deed stated the was ½6 n larg conveyed may royalty interest be covers includes lease “but conveyed in lease,” er or interest smaller due said but the Sims, 154 place. Woodsv. the minerals provided that “in the lease” clause “future 621; 65, at Richardson for Tex. at 273 S.W.2d existing] lease rea- event [the 464 Hart, Summers, 392, 3A 143 Tex. 185 S.W.2d 563 estate. W. The Law Oil Gas, (2d 1958). (1945). provi- royalty may An 601 ed. undivided § conveyed a fraction of sions of the deed are harmonized con- as fixed total struing

production a fraction of the total to be of a Vknd interest interest, (or conveyed royalty if un- royalty as a frac- one-fourth of the reserved lease) existing existing royalty tion of the total its amount der the until (as production) percentage depends expired. lease The interest royalty future leases. an undivided one-fourth total re- Smith, Schlitter v. 630, interest, applied 128 Tex. at served which is, S.W.2d at 544-45. Thus a leases. This reconciliation of the general, subject legal to the same is consistent our rules analysis for construction as a mineral deed. of the deed and method of harmon- Co., v. Dils Garrett izing provisions Texas, typical oil and See also (1957). 299 S.W.2d 904 actually conveys lease the mineral estate Hart, 143 Tex. Richardson v. (less reserved, portions expressly those (1945). S.W.2d 563 Since the deed makes a royalty) as a fee. such determinable conveyance possibility of Stephens County v. Mid-Kansas Oil & reverter, the rule there is no violation of Co., 113 Tex. 160, 173-74, Gas 254 S.W. generally See Delta against perpetuities. “possibility of revert- Simmons, Drilling Co. v. property er” is the real term of art Gar 127-28, (1960); grantor what as a future interest owns Co., rett v. Dils 96-97, Tex. at grant; grant- in a determinable fee it is the In particular, S.W.2d at 906-907. right ownership prop or’s to fee in the real did not condition the effectiveness of the if erty reverting to him the condition termi grant expiration on the of the Coe lease. nating the fee occurs. 2A R. determinable Starkey, Peveto v. (Tex. 645 S.W.2d 770 Cf. op Property, Powell, The Law Real 1982). proper way The to harmonize the (P. 1991). at 20-17 Rohan ed. 11270[9] deed, provisions Mayes-Luckel con the revert, royalty rights may part that prior decisions under the sistent with our revert, may estate that the total mineral rule, upon the four corners is to hold that part possibility of are therefore of this lease, the Luckel owns termination of Coe rights may royalty the be reverter. Since an undivided one-fourth of the reserved alienated, may conveyed separately they in therefore royalty all future leases. We part possibility the of this of reverter v. Krum. overrule Alford may Thus same as the mineral estate be. v. Krum applies analysis the in Alford We do note one distinction between equally royalty to mineral deeds or deeds. granted here royalty the undivided interest Smith, v. Schlittler is, therefore, granted and the one concern not with Our 628, In 128 Tex. 101 S.W.2d 543 appeals’ application the court of of Alford Krum, case, judg v. opinion it that the trial court rendered but with the Alford consideration, royalty grantee deed have ment Upon self. further of not less than incor entitled to receive one-half majority that the concluded one-eighth royalty. observed the usual We rectly failed to harmonize “although very likely neither of the rule and then erred under the four comers less,” thought it there grant” would be applying “repugnant nothing requiring in the deed disregard future lease clause. was rule in of the the share the grantee to receive at least Consequently, application correct Schlittler produce. Mayes-Luckel deed “usual” harmonizing rule to the Smith, 631, v. at 128 Tex. at S.W.2d “fu with conflicts so-called Alford. por modified that Mayes-Luckel 544-45. We therefore provision in the ture lease” In judgment. possibility of tion of the trial presently conveyed the deed “granting” clause’s out fractional reverter to one-fourth royalty means right grant of a %2nd fixed part of the mineral royalty interest as to con- by interpreting express their that the harmonized parties did intent royalty interest. vey a fixed V32nd royalty never should undivided one-fourth of the usual one- fall one-fourth below giving lit- preoccupation The court’s with granted. eighth, expressly %2nd future- of the effect to eral insis- is akin to a Ptolemaic lease clause unambiguous Mayes- conclude the We earth at the center placing on tence properly harmonized to Luckel deed is solely on the focusing the universe. mean that the interest was one- clause, has one the court this words fourth reserved under the three plain terms of at least tortured the leases, provided existing and clauses, fully con- which must be other y32nd less Luckel is to receive not the actual intent of the sidered to ascertain production, which is one-fourth of the usual Blake, parties. See, e.g., Altman v. one-eighth. judgment reverse the We (Tex.1986); Benge 117, judgment render the court of Scharbauer, pay- petitioners are entitled A examination fair existing ments from deed, my opinion, the four comers subject land in accord- future leases on compels different result. ance that construction. We remand face, ap account- the cause to the trial court On its the future-lease proceed- Luckel further in all ing sought pears ings opinion. leases, regardless this consistent with royalties under future royalty. granting, But the

the size of warranty, and habendum clauses MAUZY, J., opinion. concurs and files an convey unambiguously war PHILLIPS, C.J., GONZALEZ, joined by As rant a Vknd interest forever. JJ., HIGHTOWER, dissents and COOK and Mayes- acknowledges, the court opinion. files an most deed was executed Luckel provided for private oil and leases Justice, MAUZY, concurring. a nn Nat’l Bank v. State See join regret- in overruling I our 509, 516, 143 Morgan, table decision 671 Alford (1940). of judicial If take notice we go I one S.W.2d 870 would fact, before, may we as this have however, further, step adopt Chief Jus- parties aware of this that the were sume dissenting Pope’s opinion tice in that case. they drafted the royalty when standard observed, Pope our As Chief Justice inter- (Delaware) Co. deed. See Sun Oil of not dictated pretation deeds should be (Tex.1981); Madeley, S.W.2d by arbitrary “repugnant the to rules like Co., Garret v. Dils grant” the rule which moved the Alford par I the believe Rather, for under- majority. our method a one-fourth contemplate that ties failed to meaning a should standing the of be always might not royalties of future share parties, of “to ascertain the intention the production, carelessly equal V32ndof can be ascertained from a consider- when it leases the interest under future referred to parts of instrument.” ation of all the royalties of rather as one-fourth case, present In the the at 876. of a one fourth Vsth to parties con- evident intention to interpretation us harmon- This allows vey one-fourth of the contradictory language apparently the ize existing and all future leases. under the granting the of the future-lease with reason, I concur. For that permanent grant Vfend of a clause’s whole, I Construing the deed a interest. PHILLIPS, Justice, dissenting. Chief parties intended that conclude would merely to extend agree future-lease clause I with respectfully I dissent. both grant perma- of a that the effect the trial court and court future leases. royalty interest to may nent Vtand provisions best granting argues just it is as reason- effect court that really clause, following “repugnant in- suppose able to that the grant a in all grant” party tended to one-fourth interest present rule. no their mistake find, and that con- urged, has nor a does using language appropriate to a came in flict clause and between royalty interest V32nd because I deed. therefore other clause they thought that the two interests would question of the contin- reserve always interpreta- same. this be the Under viability of for a case that ued (1) tion, to Luckel a pro- presents an actual conflict between fourth of the interest one of a deed. visions lease, or a V32nd payable ties under the Coe (2) separate present a interest royalty, and HIGHTOWER, GONZALEZ, COOK re- Mayes’s possibility in a fraction JJ., join in this dissent. of the Coe lease. verter termination warranty, To avoid a breach of

holds Luckel’s fractional that equal now possibility of reverter is royalties reserved under

one fourth of all leases, royalty, is or a V32nd whichever

greater.

Indeed, interpretation possible is one this reconciling provisions. How- way of all the COMPANY, Petitioner, JUPITER OIL ever, truly I do not believe that it harmon- comports izes it probably sense us was what common tells SNOW, Respondent. M. Gene Although parties. possi- the intent of D-0811. No. ble, unlikely grantor it intended that the separate the future-lease clause Supreme Court Texas. granted by the in addition to that 23, 1991. Oct. “The deed. oft-re- other clauses expression grantor has the peated Rehearing Jan. 1992. Overruled convey by instrument differ- power to one possibility in the reverter ent interests subsisting not lease should

and under the very grantors few fact

obscure the

really convey interests differ- intend Mey- & magnitude.” H. Williams C.

ent 340.2, ers, at 242-43 Oil and Gas Law § fu- interpreting Rather I grant, as an additional

ture-lease clause unambig- effect to the clear give habendum, granting,

uous clauses, express all of which warranty V32ndinter- intent

est. holding that no irreconcil-

Finally, despite exist

able conflicts between deed, necessary it deems

overrule Alford confronted In that irreconcilable to be an what we believed granting clause conflict between deed, gave of a

the future-lease

Case Details

Case Name: Luckel v. White

Court Name: Texas Supreme Court

Date Published: Jan 8, 1992

Citation: 819 S.W.2d 459

Docket Number: D-0080

Court Abbreviation: Tex.