NUMBER 13-12-00449-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

WYNNE/JACKSON DEVELOPMENT,

L.P. AND W/J LAKES, L.P., Appellants,

v.

PAC CAPITAL HOLDINGS, LTD. D/B/A

PAC GROUP, LTD., ET AL., Appellees.

On appeal from the Probate Court

of Denton County, Texas.

MEMORANDUM OPINION ON REHEARING

Before Chief Justice Valdez and Justices Rodriguez and Longoria

Memorandum Opinion on Rehearing by Chief Justice Valdez

We grant appellants’ motion for rehearing, withdraw our opinion and judgment 

dated February 7, 2013, and issue this opinion on rehearing.

Appellants, Wynne/Jackson Development, L.P. and W/J Lakes, L.P. (collectively, 

“Wynne Jackson”), appeal a final summary judgment entered in favor of appellees, PAC 
2

Capital Holdings, Ltd. d/b/a PAC Group, Ltd., Hillwood Oil & Gas Operating Company, 

L.P., Hillwood Energy Texas, L.P., Denton Independent School District (“DISD”), and 

the Owners’ Association at Country Lakes, Inc. (“HOA”). We reverse and render in part 

and remand in part.

I. BACKGROUND1

This is a dispute over the proper calculation of royalties to be paid on minerals 

being produced from wells in Denton County. The appeal centers on the proper 

construction of a clause in the three “Porter Deeds,” which were executed in 1968. The 

Porter Deeds conveyed extensive tracts of land to third party purchasers, but reserved a 

non-participating royalty interest (“NPRI”) in the mineral estate. That NPRI was 

described as “one-half (1/2) of the usual one-eighth (1/8) royalty in and to all oil, gas, 

and other minerals produced, saved and sold from [such property].” 

PAC Capital is the current owner of the NPRI and the successor in title to the 

grantor. The NPRI reservation is identical in each of the three Porter Deeds. PAC 

Capital’s entitlement to receive royalty payments is not at issue; the parties dispute the 

proper calculation of payments due to PAC Capital under the NPRI.

Wynne Jackson, DISD, and the HOA own parcels of land subject to the NPRI 

claimed by PAC Capital. Therefore, the calculation of PAC Capital’s NPRI payments 

will affect each of these parties. 

Hillwood Oil & Gas Operating Company, L.P. and Hillwood Energy Texas, L.P. 

operate the wells at issue. Their leases were executed after the Porter Deeds and 

provide for royalty payments equal to one-fourth (1/4) of production.

 

1

This case is before this Court on transfer from the Fort Worth Court of Appeals pursuant to an 

order issued by the Supreme Court of Texas. See TEX. GOV'T CODE ANN. § 73.001 (West 2005).
3

The parties disagree as to the proper construction of the NPRI reservation. PAC 

Capital contends that the NPRI reserved what is commonly referred to as a “fraction of

royalty.” See, e.g., Range Res. Corp. v. Bradshaw, 266 S.W.3d 490, 493 (Tex. App.—

Fort Worth 2008, pet. denied) (“A ‘fraction of royalty’ conveys a fractional share of the 

royalty that is contained in an oil and gas lease—it is not fixed, but rather ‘floats’ in 

accordance with the size of the landowner’s royalty contained in the lease and, in 

addition to the landowner’s royalty, the fraction of non-participating royalty also shares 

proportionally in any overriding royalty interest reserved in the oil and gas lease, and the 

holder of the executive right owes a duty to the NPRI owner in establishing the 

landowner's royalty in an oil and gas lease.”). If so, this would entitle PAC Capital to 

receive an NPRI equal to one-half of whatever royalties are provided for in mineral 

leases that have been executed since 1968 when the Porter Deeds were executed. 

Wynne Jackson contends that the NPRI reserved what is commonly referred to as a 

“fractional royalty.” Id. (“A ‘fractional royalty’ interest entitles the owner to the specified 

fractional amount stated in the deed of oil, gas, or other minerals produced from the 

land and remains constant regardless of the amount of royalty contained in a 

subsequently-negotiated oil and gas lease.”). This would mean a fixed royalty equal to 

one-half of one-eighth of production, which equals 1/16 and remains fixed regardless of 

the language contained in any mineral lease executed after the Porter Deeds.

Thus, under the Hillwood leases, if PAC Capital is correct, it would receive a oneeighth royalty. If Wynne Jackson is correct, PAC Capital would receive a one-sixteenth 

royalty.
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On May 27, 2012, PAC Capital filed suit, seeking a declaration that its NPRI 

interest under the Porter Deeds was a “fraction of royalty.” Wynne Jackson filed an 

answer and counterclaim, seeking a declaration that the NPRI was a “fractional royalty”

equal to one-sixteenth of production. PAC Capital and Wynne Jackson filed cross 

motions for partial summary judgment on the issue of the proper calculation of the 

NPRI. The trial court ruled in favor of PAC Capital. Pursuant to a rule 11 agreement 

and stipulation by the parties, the trial court subsequently entered a final judgment in 

favor of PAC Capital. See TEX. R. CIV. P. 11. This appeal ensued.2

II. ANALYSIS

A. Standard of Review

We review summary judgments de novo. Alejandro v. Bell, 84 S.W.3d 383, 390 

(Tex. App.—Corpus Christi 2002, no pet.). In a traditional motion for summary 

judgment, the movant has the burden of showing both that there is no genuine issue of 

material fact and entitlement to judgment as a matter of law. TEX. R. CIV. P. 166a(c); 

see also Swilley v. Hughes, 488 S.W.2d 64, 67 (Tex. 1972); Ortega v. City Nat’l Bank, 

97 S.W.3d 765, 772 (Tex. App.—Corpus Christi 2003, no pet.). In deciding whether 

there is a genuine issue of material fact, evidence favorable to the nonmovant is taken 

as true, and all reasonable inferences are made, and all doubts are resolved, in favor of 

the nonmovant. Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). 

Summary judgment is proper if the movant disproves at least one element of each of 

 

2 Other issues in the case were resolved and are not before this Court. The Hillwood parties 

agreed to be bound by the trial court’s determination regarding the NPRI and to continue the deposit of 

funds into the court’s registry via a rule 11 agreement. See TEX. R. CIV. P. 11. An unopposed motion to 

dismiss the Hillwood parties from this appeal is pending before this Court and is hereby granted. Wynne 

Jackson and the HOA had filed cross claims against each other regarding who would bear the brunt of a 

PAC Capital victory (i.e., if PAC Capital’s payments increase, whose will decrease?), but they filed a rule 

11 agreement purporting to resolve their cross claims. See id. The parties entered into a stipulation as to 

PAC Capital’s reasonable and necessary attorney’s fees so as to avoid a trial solely on the issue of fees. 
5

the plaintiff's claims or affirmatively establishes each element of an affirmative defense 

to each claim. Id. The nonmovant has no burden to respond to a traditional summary 

judgment motion unless the movant conclusively establishes its cause of action or 

defense. Swilley, 488 S.W.2d at 68.

When both parties move for summary judgment on the same issue and the trial 

court grants one motion and denies the other, as here, the reviewing court considers the 

summary judgment evidence presented by both sides, determines all questions 

presented, and if the reviewing court determines that the trial court erred, renders the 

judgment the trial court should have rendered. See Fed. Deposit Ins. Corp. v. Lenk, 

361 S.W.3d 602, 611 (Tex. 2012).

B. Applicable Law

The construction of an unambiguous deed is a question of law for the court. 

Altman v. Blake, 712 S.W.2d 117, 118 (Tex. 1986). In interpreting a deed, the primary 

duty of a court is to ascertain the intent of the parties by a fundamental rule of 

construction known as the “four corners” rule. Luckel v. White, 819 S.W.2d 459, 461 

(Tex. 1991). The interpretation of the contract is controlled by the parties’ intentions as 

expressed within the four corners of the instrument. Altman, 712 S.W.2d at 118. In 

seeking to ascertain the intention of the parties, the court must attempt to harmonize all 

parts of a deed. Id. Even if different parts of the deed appear contradictory or 

inconsistent, the court must strive to construe the instrument to give effect to all of its 

provisions. Luckel, 819 S.W.2d at 462.

A mineral estate consists of five interests: (1) the right to develop; (2) the right to 

lease; (3) the right to receive bonus payments; (4) the right to receive delay rentals; and 
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(5) the right to receive royalty payments. French v. Chevron U.S.A., 896 S.W.2d 795, 

797 (Tex. 1995). A mineral fee owner has a possessory estate in the land. Pickens v. 

Hope, 764 S.W.2d 256, 263 (Tex. App.—San Antonio 1988, writ denied). As such, he 

has the right to develop the minerals himself or the exclusive power to lease the land to 

another for mineral development. Elick v. Champlin Petroleum Co., 697 S.W.2d 1, 3–4 

(Tex. App.—Houston [14th Dist.] 1985, writ ref’d n.r.e.); Campbell v. Dreier, 382 S.W.2d 

179, 183 (Tex. Civ. App.—San Antonio 1964, writ ref’d n.r.e.). In contrast, a nonparticipating royalty owner has no possessory estate in the land, and hence, no right to 

lease the land to another for mineral development or to produce the minerals himself. 

Pickens, 764 S.W.2d at 264. A “non-participating royalty” does not entitle the owner to 

produce the minerals himself, or permit him to join in a lease of the mineral estate to 

which the royalty is appurtenant, or entitle him to share in bonus or delay rentals that 

may be paid for the lease, but merely entitles him to a share of production under the 

lease free of exploration and production expenses. Id.

A “fractional royalty” is a fixed amount of the minerals that are produced. See, 

e.g., White v. White, 830 S.W.2d 767, 770 (Tex. App.—Houston [1st Dist.] 1992, writ 

denied) (“[T]he grantor intended to convey three-eighths of all the oil and gas and other 

minerals ‘produced and saved,’ in other words, a fractional royalty, not a fraction of 

royalty.”); Helms v. Guthrie, 573 S.W.2d 855, 857 (Tex. App.—Fort Worth 1978, writ 

ref’d n.r.e.) (“Our holding is that [grantor] contractually provided that he should own a 

‘fractional royalty’ of 1/16th of the total production, not a ‘fraction of royalty,’

determinable upon the execution of some future lease.”). A fractional royalty remains 

constant regardless of the amount of royalty provided for under any particular mineral 
7

lease. Range Res. Corp. v. Bradshaw, 266 S.W.3d 490, 493 (Tex. App.—Fort Worth 

2008, pet. denied) (“A ‘fractional royalty’ interest entitles the owner to the specified 

fractional amount stated in the deed of oil, gas, or other minerals produced from the 

land and remains constant regardless of the amount of royalty contained in a 

subsequently-negotiated oil and gas lease.”); Hawkins v. Tex. Oil & Gas Corp., 724 

S.W.2d 878, 889 (Tex. App.—Waco 1987, writ ref’d n.r.e.) (“A conveyance of ‘1/2 of the 

1/8th royalty interest’ has been held to convey a 1/16th fractional royalty, entitling the 

royalty owner to one out of every sixteen parts of production regardless of the royalty 

retained in any lease.”).

A “fraction of royalty” conveys a fractional share of the royalty that is contained in 

an oil and gas lease—it is not fixed, but rather “floats” in accordance with the size of the 

landowner’s royalty contained in the lease and, in addition to the landowner’s royalty, 

the fraction of non-participating royalty also shares proportionally in any overriding 

royalty interest reserved in the oil and gas lease, and the holder of the executive right 

owes a duty to the NPRI owner in establishing the landowner’s royalty in an oil and gas 

lease. Range Res. Corp., 266 S.W.3d at 493. The amount to be paid to the owner is 

determinable upon the execution of some future lease and is calculated by multiplying 

the fraction in the royalty reservation by the royalty provided in a lease. Id. 

C. Discussion

In this case, the relevant language in the Porter Deeds provides as follows:

There is excepted herefrom and reserved unto Grantor a non-participating 

royalty of one-half (1/2) of the usual one-eighth (1/8) royalty in and to all 

oil, gas, and other materials produced, saved and sold from the abovedescribed property, provided, however, that although said reserved royalty 

is non-participating and Grantee shall own and possess all leasing rights 

in and to all oil, gas and other minerals, Grantor shall, nevertheless, have 
8

the right to receive one-half (1/2) of any bonus, overriding royalty interest, 

or other payments, similar or dissimilar, payable under the terms of any 

oil, gas and mineral lease covering the above-described property.

The foregoing language covers four of the five components of the mineral estate: 

(1) the right to lease, which is conveyed in its entirety; (2) the right to receive bonus 

payments, which is conveyed subject to a reservation; (3) the right to receive delay 

rentals, which is conveyed subject to a reservation; and (4) the right to receive royalty 

payments, which is conveyed subject to a reservation. At issue in this case is the 

proper construction of the reservation with respect to the right to receive royalty 

payments.

The relevant clause states, “There is excepted herefrom and reserved unto 

Grantor a non-participating royalty of one-half (1/2) of the usual one-eighth (1/8) royalty 

in and to all oil, gas, and other materials produced, saved and sold from the abovedescribed property.” In Harriss v. Ritter, the Texas Supreme Court was presented with 

a deed that included a nearly identical reservation of “one-half of one-eighth of the oil, 

gas and other mineral royalty.” Harriss v. Ritter, 279 S.W.2d 845, 847 (Tex. 1955). In 

its decision, the Texas Supreme Court held, “[T]he reservation is susceptible of but one 

interpretation.” Id. The court held, “as a matter of law that the term ‘one-half of oneeighth of the oil, gas and other mineral royalty’ could have but one meaning and that is 

1/16th of the royalty on all the oil, gas and other minerals that may be produced from 

said land.” Id. Again, this is consistent with the interest being a fractional royalty. Here, 

the only difference in the relevant language is that the words “the usual” are used to 

qualify the one-eighth royalty.
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Similar language was interpreted by the San Antonio Court of Appeals in 

Pickens. Pickens, 764 S.W.2d at 258–59. In Pickens, the language provided for “an 

undivided 1/4 of the usual 1/8 royalty in all of the oil, gas or other minerals produced, 

saved and sold from the premises conveyed under the terms of any valid oil and gas 

lease.” Id. The court held that the language reserved a “stated fraction” (i.e., 1/32) of 

the minerals produced as a royalty. Id. at 267. The court further held that, in the event 

of production, the grantor was entitled to “no more and no less” than the stated 

fraction—“and this irrespective of who manages the lease or upon what terms were 

contained in a lease.” Id. Thus, the court treated the interest as a fractional royalty.

Based on the foregoing precedent, we conclude that the interest in this case is a 

fractional royalty, not a fraction of royalty. In so holding, we note that appellees have 

cited and relied upon the decision of the Fort Worth Court of Appeals in Sundance 

Minerals. See Sundance Minerals, L.P. v. Moore, 354 S.W.3d 507, 510 (Tex. App.—

Fort Worth 2011, pet. denied). Unfortunately, the opinion in Sundance Minerals did not 

quote the operative language of the deed in its entirety; instead, the court summarized 

the language, thus making it impossible to compare it directly to the language at issue in 

this case. In its opinion, the Fort Worth Court of Appeals indicated that the deed 

included language that reserved “an undivided and non-participating one-half interest in 

the oil, gas, and other mineral rights.” See id. The court noted that, if the language had 

not been qualified, it would have entitled the grantees to receive one-half of any royalty 

paid under a lease, as well as a one-half interest in any bonuses and rentals. Id. 

Interpreting the deed as a whole, the court concluded that the language was applicable 

only to the right to receive royalty payments. Id. 
10

In this case, the language of the deeds does not purport to reserve an undivided 

interest in the entire mineral estate, as did the deed in Sundance Minerals. Moreover, 

unlike the deed in Sundance Minerals, the deeds in this case clearly reserve the rights 

of the grantor as they relate to bonus payments and delay rentals. Appellees argue that 

the reservations should be lumped together and construed as a single reservation; 

however, this would blur the distinction between the different components of the mineral 

estate when the deeds clearly sought to maintain that distinction.

In sum, we are guided by the precedent of the Texas Supreme Court in Harriss

and the precedent of the San Antonio Court of Appeals in Pickens in concluding that the 

deeds in this case reserved what is known as a fractional royalty. We are mindful of the 

Fort Worth Court of Appeals’ decision in Sundance Minerals; however, we believe this 

case is sufficiently distinguishable to preclude any conflict with that decision. 

Accordingly, we conclude that Wynne Jackson is entitled to judgment as a matter of 

law. The trial court’s ruling to the contrary was error. Therefore, Wynne Jackson’s

issue is sustained.

III. ATTORNEY’S FEES

In its motion for rehearing, Wynne Jackson requests that we remand the case to 

the trial court for resolution of its claim for attorney’s fees under the Uniform Declaratory 

Judgment Act (“UDJA”). See TEX. CIV. PRAC. & REM. CODE ANN. §§ 37.004(a) & 37.009 

(West 2008). The Court requested a response from appellees. See TEX. R. APP. P.

49.2. PAC has filed a response, stating that although it opposes Wynne Jackson’s 

motion for rehearing, it “agrees with the general proposition that a court of appeals may 

remand a decision in a declaratory judgment action solely on the issue of attorney’s 
11

fees under the UDJA.” PAC also states that “it is the trial court that should decide 

whether Wynne Jackson is entitled to its attorney’s fees.” HOA has also filed a 

response. HOA states that it “has no opposition to [the] motion for rehearing whereby 

[Wynne Jackson] request[s] that the Court amend its Memorandum Opinion and 

Judgment to include a remand to the trial court on the issue of . . . attorney’s fees under 

the Declaratory Judgment Act.”

A. Applicable Law

Section 37.009 of the Texas Civil Practice and Remedies Code provides that “[i]n 

any proceeding under this chapter, the court may award costs and reasonable and 

necessary attorney’s fees as are equitable and just.” See TEX. CIV. PRAC. & REM. CODE 

ANN. § 37.009. The Texas Supreme Court has interpreted this language to mean that 

the decision to award attorney’s fees is within the discretion of the trial court. See 

Bocquet v. Herring, 972 S.W.2d 19, 20 (Tex. 1998) (“[The UDJA] provides that the court 

‘may’ award attorney fees. The statute thus affords the trial court a measure of 

discretion in deciding whether to award attorney fees or not.”). “[W]hen we reverse a 

declaratory judgment, and the trial court awarded attorney’s fees to the party who 

prevailed [in the] trial [court], we may remand the attorney’s fee award for 

reconsideration in light of our disposition on appeal.” Sava Gumarska in Kemijska 

Industria D.D. v. Advanced Polymer Sciences, Inc., 128 S.W.3d 304, 324 (Tex. App.—

Dallas 2004, no pet.). 

B. Discussion

Based on the foregoing, we conclude that it is appropriate to remand the 

attorney’s fee award for reconsideration in light of our disposition on appeal. See 
12

Mohican Oil & Gas, LLC v. Scorpion Exploration & Prod., 337 S.W.3d 310, 324 (Tex. 

App.—Corpus Christi 2011, pet. denied) (“Therefore, we will remand the issue of 

attorneys’ fees for determination by the trial court.”).

IV. CONCLUSION

The judgment of the trial court is reversed and a judgment is rendered in favor of 

Wynne Jackson. We reverse and remand the issue of attorney’s fees to the trial court.

____________________

ROGELIO VALDEZ

Chief Justice

Delivered and filed the 

6th day of June, 2013.