Court Opinion

ID: 9915030
Source: CourtListenerOpinion
Date Created: 2024-01-04 09:10:26.421255+00
Date Added: 2024-06-11T13:16:33.485443
License: Public Domain

COURT OF APPEALS
                                EIGHTH DISTRICT OF TEXAS
                                     EL PASO, TEXAS

                                                     §
   GARDNER ENERGY
   CORPORATION; BAJA ENERGY,                         §
   LLC, PANDALE LAND &
   MINERALS COMPANY LLC,                             §            No. 08-23-00140-CV
   HEDBERG FAMILY LIMITED
   PARTNERSHIP, and PESCADOR                         §              Appeal from the
   PARTNERS, LTD.,
                                                     §        143rd Judicial District Court
                                   Appellants,
                                                     §          of Reeves County, Texas
  v.
                                                     §          (TC#21-08-24090-CVR)
   McNEIL, McNEIL, & HOLT,
   BILLY McNEIL and JEANNE                           §
   HOLT, both individually and as
   Executors of the Estate of                        §
   GLENDA McNEIL, Deceased,
   JIMMY McNEIL CATTLE                               §
   COMPANY, and WESTWAY
   RANCHES, LLC,                                     §
                                   Appellees.        §

                              MEMORANDUM OPINION

       Appellants and Appellees each own an undivided 1/2 mineral interest in certain Reeves

County property burdened by the State’s 1/16th non-participating royalty interest. In ruling on the

parties’ cross-motions for summary judgment, the trial court found that only the Appellants were

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to bear the burden of the State’s interest based on its construction of a 1976 mineral deed. We

conclude, however, that the language in the deed indicates the burden of the State’s interest is to

be shared proportionately by all of the mineral interest owners. We therefore reverse the trial

court’s order and remand for further proceedings as explained below.

                          FACTUAL AND PROCEDURAL BACKGROUND

        A. The mineral interests

        In 1951, the State of Texas conveyed the subject property (the Property) by “patent” to Earl

Ellis, with the State reserving a 1/16th non-participating royalty interest (NPRI) in case of

production on the Property. 1 In 1964, L.D. McNeil became the successor-in-interest to Ellis’s

ownership interest in the Property. The parties agree that each of the deeds in McNeil’s chain of

title indicated the conveyances were subject to the State’s 1/16th NPRI.

        In 1976, L.D. McNeil and his wife (the Grantors) conveyed by mineral deed an undivided

1/2 mineral interest in the Property to Jimmy Don McNeil, Floyd McNeil, and William C. McNeil

(the McNeil Grantees), while retaining a 1/2 mineral interest in the Property (the Deed). Through

additional transactions, Appellants (the Gardner Group) became the successors-in-interest to the

Grantors’ retained undivided 1/2 mineral interest in the Property, and the Appellees (the McNeil

Group) became the successors-in-interest to the undivided 1/2 mineral interest the Grantors

conveyed to the McNeil Grantees.

        Appellants and Appellees have executed oil and gas leases on the Property, which call for

them to be paid 1/4th of the proceeds from production as their royalty interest. The parties agree

the State’s NPRI entitles it to a 1/16th share of proceeds from the production, and the State’s share

1
 The State’s NPRI exists because the subject property was originally on public school lands owned by the State of
Texas. The State Legislature, through the 1931 Sales Act, required the State to reserve a 1/16th non-participating
royalty interest when selling any portions of such lands. See Wintermann v. McDonald, 102 S.W.2d 167, 173
(Tex. 1937) (discussing Act’s requirements).

                                                        2
was allocated between the two groups in accordance with their proportionate interests until 2018.

However, in 2018, one of the lessees requested a new title opinion, which stated that 100% of the

State’s NPRI should be allocated against the Gardner Group’s share of lease royalties from

production, with none allocated against the McNeil Group’s share. Since then, the entire burden

of the State’s NPRI has been allocated against the Gardner Group’s royalty interest.

        B. The Gardner Group’s lawsuit

        On August 16, 2021, the Gardner Group filed a lawsuit against the McNeil Group seeking

a declaratory judgment that the burden of the State’s NPRI is to be borne by both groups’ share of

production in proportion to their respective interests. The Gardner Group also sought damages for

“Money Had and Received and/or Unjust Enrichment” for the allegedly erroneous apportionment

of the State’s NPRI since 2018. The McNeil Group denied the allegations.

        The Gardner Group thereafter filed a motion for partial summary judgment, seeking a

declaratory judgment that the State’s NPRI was to be “borne by all mineral owners proportionate

to their respective mineral interests.” In its motion, the Gardner Group argued the Deed, while not

expressly referring to the State’s NPRI, reflected the Grantors’ intent that the burden of the State’s

NPRI was to be allocated proportionately between the Grantors’ reserved 1/2 mineral interest and

the 1/2 interest they conveyed to the McNeil Grantees. The McNeil Group opposed the motion

and filed a cross-motion for summary judgment, arguing that because the Deed did not expressly

refer to the State’s NPRI, the conveyance to the McNeil Grantees “was not made subject to the

State[’s] NPRI.” The McNeil Group argued the burden remained entirely with the Grantors’ 1/2

reserved interest, which is now owned by the Gardner Group, and therefore, only the Gardner

Group’s interest is burdened by the State’s NPRI. The McNeil Group sought dismissal of the

lawsuit in its entirety.

                                                  3
       Following a hearing and supplemental briefing, the trial court issued a final judgment in

favor of the McNeil Group, finding that the McNeil Group “shall bear no portion of the burden of

the State of Texas’s 1/16th non-participating royalty interest in the Property (the “State NPRI”),

and that the burden of the State NPRI shall be apportioned to [the Gardner Group] and their

respective heirs, executors, successors and assigns.” The trial court ruled that the Gardner Group

take nothing and dismissed the lawsuit with prejudice. This appeal followed.

                                       ISSUE ON APPEAL

       On appeal, the Gardner Group contends the trial court erred in denying its partial motion

for summary judgment and in granting the McNeil Group’s cross-motion. At issue is the

interpretation of the Deed and whether the Grantors intended to convey the proportionate burden

of the State’s NPRI to the McNeil Grantees or whether they intended the entire burden to be

allocated to their reserved 1/2 interest. As explained below, we conclude the Deed allocates the

burden of the State’s NPRI proportionately to both parties and their successors, and the trial court

therefore erred in granting summary judgment in favor of the McNeil Group.

                                    STANDARD OF REVIEW

       We review the grant of a motion for summary judgment de novo. Merriman v. XTO Energy,

Inc., 407 S.W.3d 244, 248 (Tex. 2013). When, as here, opposing parties file cross summary

judgment motions on the same issues and the trial court grants one motion and denies the other,

we consider the summary judgment evidence presented by both sides, determine all questions of

law presented, and if we determine that the trial court erred, we render the judgment the trial court

should have rendered. Id. at 248.

       Here, because the parties do not argue the Deed was ambiguous and we agree it is not, we

treat the Deed interpretation as a question of law, which we review de novo. See Luckel v. White,

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819 S.W.2d 459, 461 (Tex. 1991) (“The construction of an unambiguous deed is a question of law

for the court”); see also Greer v. Shook, 503 S.W.3d 571, 582 (Tex. App.—El Paso 2016, pet.

denied) (issues involving deed construction raised questions of law that we review de novo) (citing

Anadarko Petroleum Corp. v. Thompson, 94 S.W.3d 550, 554 (Tex. 2002)). Our primary duty is

to ascertain the intent of the parties from the four corners of the instrument. U.S. Shale Energy II,

LLC v. Laborde Properties, L.P., 551 S.W.3d 148, 151 (Tex. 2018) (citing Wenske v. Ealy, 521

S.W.3d 791, 794 (Tex. 2017)). Because we use a holistic approach in determining the parties’

intent, we examine the entire deed, seeking to harmonize and give effect to all of its provisions,

such that no provision is rendered meaningless. See U.S. Shale, 551 S.W.3d at 151; see also Hysaw

v. Dawkins, 483 S.W.3d 1, 13 (Tex. 2016) (reaffirming the court’s “commitment to a holistic

approach aimed at ascertaining intent from all words and all parts of the conveying instrument”).

In discerning the parties’ intent, “words and phrases must be construed together and in context,

not in isolation.” Hysaw, 483 S.W.3d at 13 (citing Plainsman Trading Co. v. Crews, 898 S.W.2d

786, 789 (Tex. 1995)). Words and phrases generally bear their ordinary meaning unless the context

supports a technical meaning or a different understanding. Id. (citing In re Office of the Att’y Gen.

of Texas, 456 S.W.3d 153, 155–56 (Tex. 2015)). “Similarly, apparent inconsistencies or

contradictions must be harmonized, to the extent possible, by construing the document as a whole.”

Id. (citing Luckel, 819 S.W.2d at 462).

       The Texas Supreme Court has “‘incrementally cast off rigid, mechanical rules’ and

‘warned against quick resort to . . . default or arbitrary rules’ in favor of determining intent by

‘conducting a careful and detailed examination of a deed in its entirety, rather than applying some

default rule that appears nowhere in the deed’s text.’” Piranha Partners, 596 S.W.3d at 746

(quoting Wenske, 521 S.W.3d at 792). In following this guidance, our Court has expressly rejected

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“rules of construction which give priority to certain clauses over others or require the use of so-

called ‘magic words.’” WTX Fund, LLC v. Brown, 595 S.W.3d 285, 293 (Tex. App.—El Paso

2020, pet. denied) (quoting Wenske, 521 S.W.3d at 794).

                                             ANALYSIS

        A. The granting clause

        We start with the Deed’s granting clause, which states the Grantors were conveying “unto

[the McNeil Grantees . . .] an undivided one-half (1/2) interest in and to all of the oil, gas and other

minerals in and under and that may be produced from” the Property. The parties agree the granting

clause did not refer to the State’s NPRI or expressly address the allocation of the State’s NPRI

burden. The McNeil Group argues the failure to mention the State’s NPRI reflects the Grantors’

intent to convey an undivided 1/2 mineral interest in fee simple in the Property, unburdened by the

NRPI.

        In support of its position, the McNeil Group relies primarily on our sister court’s holding

in Selman v. Bristow, 402 S.W.2d 520, 522–23 (Tex. App.—Tyler 1966, writ ref’d n.r.e.). There,

the plaintiffs purchased property subject to a previously reserved 1/8th royalty interest (the

reserved royalty). Id. at 522–23. The plaintiffs then conveyed the property to the defendant,

reserving a 1/4th mineral interest for themselves. Id. A question later arose regarding whether the

plaintiffs intended to convey the burden of the reserved royalty to the defendant in proportion to

his interest, or whether the plaintiffs intended to convey a 3/4th mineral interest to the defendant

in fee simple, unburdened by the reserved royalty. Id. at 522. The court of appeals held the deed

conveyed an unburdened fee simple interest in the property, finding the express language in the

deed’s granting clause “purported to convey all the interest in the land except the reserved 1/4th

interest in the minerals.” Id. at 522. And the court concluded that without a “reservation clause”

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addressing how the reserved royalty was to be allocated, the “deed clearly implies a grant of all of

the surface and a full 3/4ths of the mineral estate.” Id.

       Here, the McNeil Group finds it significant that, as in Selman, there is no reservation clause

in the Deed describing how the burden of the State’s NPRI is to be allocated. The McNeil Group

therefore contends the Deed should be similarly interpreted to convey to them a full, undivided

1/2 mineral interest in fee simple unburdened by the State’s NRPI. If we were to consider the

granting clause in complete isolation, we might be persuaded by the McNeil Group’s position.

However, unlike the deed in Selman, the Deed contains a “subject-to” clause limiting the nature

of the conveyance.

       B. The subject-to clause

       The 1976 Deed’s subject-to clause states:

       This sale is made subject to any rights now existing to any lessee or assigns under
       any valid and subsisting oil and gas lease heretofore executed and now of legal
       record; it being understood and agreed that said Grantee shall have, receive and
       enjoy the herein granted undivided interest in and to all bonuses, rents, royalties
       and other benefits which may accrue thereunder from and after the date hereof,
       precisely as if the Grantee herein had been at the date of making said lease and/or
       leases the owner of a similar undivided interest in and to the lands above described
       and none other and Grantee one of the lessors therein.

       A subject-to clause in a deed plays a significant role in determining the grantor’s intent.

The Texas Supreme Court has recognized that the phrase “subject to” as used in its ordinary sense

means “subordinate to, subservient to or limited by.” Wenske, 521 S.W.3d at 796 (quoting

Kokernot v. Caldwell, 231 S.W.2d 528, 531 (Tex. App.—Dallas 1950, writ ref’d)). Thus, a subject-

to clause in a deed serves to limit “the rights granted to a party.” See Crow v. Lookadoo, No. 04-

17-00338-CV, 2018 WL 4096400, at *7 (Tex. App.—San Antonio Aug. 29, 2018, no pet.)

(mem. op.) (citing Averyt v. Grande, Inc., 717 S.W.2d 891, 894 (Tex. 1986) (recognizing that a

subject-to clause in a deed “does limit the estate granted and warranted”)).

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        The Wenske Court examined the role a deed’s subject-to clause played in determining a

grantor’s intent in conveying property burdened by a third party’s preexisting 1/4th NPRI. Wenske,

521 S.W.3d 791. The owners of the property (the Wenskes) sold a 55-acre parcel to the grantees

(the Ealys), while reserving a 3/8ths mineral interest for themselves. Id. at 793. After the Wenskes

and Ealys entered into oil-and-gas leases providing for a royalty on production, a dispute arose

regarding whether the parties were to share the burden of the pre-existing NPRI or whether it only

burdened the Ealys’ interest. The Texas Supreme Court found it significant that, although the

deed’s granting clause did not address the NPRI, the deed contained a subject-to clause providing

the grant was “subject to the Reservations from Conveyance and the Exceptions to Conveyance

and Warranty.” Id. at 796. In turn, the “Reservation” clause referenced the Wenskes’ 3/8ths

mineral interest reservation, while the “Exceptions” clause identified the deed in which the third

party had reserved her NPRI and made “reference” to that deed “for all purposes.” Id. at 796. In

addition, the deed’s mineral-reservation paragraph concluded as follows: “If the mineral estate is

subject to existing production or an existing lease, the production, the lease and the benefits from

it are allocated in proportion to ownership in the minerals.” Id. at 798. According to the court, the

deed therefore put the Ealys “on notice that the entirety of the minerals [were] subject to the

outstanding . . . NPRI,” and the NPRI burden was to be allocated in proportion to the parties’

respective interests. Id. at 798.

        In reaching its conclusion regarding the deed language, the “principles of oil-and-gas law

inform[ed] [the Wenske Court’s] interpretation.” Id. at 797. Specifically, it recognized that, in

general, a “conveyance of an interest in the minerals in place carries with it by operation of law

the right to a corresponding interest in the royalty.” Id. (citing Woods v. Sims, 273 S.W.2d 617,

621 (Tex. 1954); Benge v. Scharbauer, 259 S.W.2d 166, 169 (Tex. 1953) (“The fractional part of

                                                 8
the bonuses, rentals and royalties that one is to receive under a mineral lease usually or normally

is the same as his fractional mineral interest . . . .”)). In turn, the court observed that a “severed

fraction of the royalty interest—like the [third party’s] NPRI—generally would burden the entire

mineral estate because it necessarily limits the royalty interests attached to the underlying mineral

interests.” Id. at 797; see also Pich v. Lankford, 302 S.W.2d 645, 650 (Tex. 1957) (recognizing

default rule that a reserved royalty interest “would be carved proportionately from the two mineral

ownerships”); Brooke-Willbanks v. Flatland Mineral Fund, LP, 660 S.W.3d 559, 565

(Tex. App.—Eastland 2023, no pet.) (recognizing same principle). The court, however, was quick

to acknowledge that parties to a deed are “free to contract” for a different result and are therefore

free to allocate the burden of a reserved royalty interest in any way that “suits them.” Wenske, 521

S.W.3d at 797. However, the court was clear that if parties “want their agreement to operate

differently from this basic principle of mineral conveyance . . . they should plainly and in a formal

way express that intention.” Id. (citing Benge, 259 S.W.2d at 169) (internal quotation marks

omitted). Because it saw “no expression of such intent, plain or not, in the deed here[,]” the court

concluded the parties intended for the pre-existing NPRI to be allocated to all mineral interest

owners in proportion to their respective interests. Id.

       Here, as in the deed in Wenske, there is no expression in the Deed that would lead us to

conclude the parties sought to deviate from the general principle that a severed royalty interest,

such as the State’s NPRI, is to be allocated proportionately to all mineral interest owners. To the

contrary, the Deed’s subject-to clause supports a finding that the Grantors intended to convey the

burden of the State’s NPRI to the McNeil Grantees in proportion to their respective interests

because it provides the conveyance was subject to “any rights now existing to any lessee or assigns

under any valid and subsisting oil and gas lease.” It further stated that the McNeil Grantees were

                                                  9
only entitled to receive the royalties and other benefits that may accrue under those leases

“precisely as if the Grantee[s] herein had been at the date of making said lease and/or leases the

owner of a similar undivided interest in and to the lands above described and none other and

Grantee[s] one of the lessors therein.” This language effectively has the McNeil Grantees step into

the Grantors’ shoes under the terms of the existing leases, entitling them to receive the same

royalties and benefits as the Grantors were receiving at the time of the conveyance. It is undisputed

that, as of the date of the conveyance, the Grantors’ right to receive royalties was burdened by the

State’s NPRI. Accordingly, the subject-to clause confirms that the McNeil Grantees’ rights would

also be burdened by the State’s NPRI.

       The McNeil Group argues, though, that unlike the deed in Wenske, nowhere did the Deed

expressly mention the State’s NPRI. And, they argue, absent a reference to the State’s NPRI, we

should not conclude the parties intended the burden of the NPRI to pass to the McNeil Grantees.

Id. We disagree.

       The Eastland Court of Appeals rejected a similar argument in finding a deed conveyed the

burden of a reserved royalty interest despite making no express mention of the same. Brooke-

Willbanks, 660 S.W.3d 559. In that case, the grantor owned an “undivided 144-acre mineral

interest” in property burdened by two previously reserved NPRIs. Id. at 561. The grantor conveyed

by deed an undivided fee simple mineral interest in 72 acres, which included “the right to receive

royalty payments therefrom.” Id. at 561, 564. A dispute later arose regarding how to allocate the

burden of the reserved NPRIs; the grantee argued the grantor must have intended for the property

to pass to him in fee simple, unburdened by the NPRIs, because the deed did not refer to the

reserved NPRIs. Id. at 566. Disagreeing, the court followed Wenske and examined all provisions

in the parties’ deed to ascertain the grantor’s intent. Id. at 564. And it found that, even though the

                                                 10
deed made no mention of the NPRIs, the deed’s subject-to clause demonstrated the grantor’s intent

to allocate the burden of the reserved NPRIs to both parties in proportion to their respective

interests. Id. at 565–67.

       Similar to the subject-to clause in the Deed here, the subject-to clause in Brooke-Willbanks

provided the conveyance was “made subject to the terms of any valid and subsisting oil, gas and

other mineral lease or leases,” and the grantors were conveying to “the Grantee, their heirs,

successors and assigns, the above stated interest of Grantor’s interest in and to the rights, rentals,

royalties and other benefits accruing or to accrue under said lease or leases from the above

described land.” Id. at 561–62. In Brooke-Willbanks, the property was subject to an oil and gas

lease at the time of the conveyance, and the court concluded the subject-to clause clarified the

grantee’s entitlement to receive only the same interest the grantor had to royalties under the

existing lease. Id. at 565–66. And since the grantor’s mineral interest was burdened by the reserved

NPRIs at that time, the court held the parties intended the grantee’s interest would be “burdened

by the previously reserved NPRIs to the same extent that [the grantor] was burdened prior to this

conveyance.” Id. at 566.

       Here, too, though the Deed did not expressly mention the State’s NPRI, we find the subject-

to clause confirms that the McNeil Grantees are subject to the property’s existing leases, entitling

them only to the royalty interest to which the Grantors were entitled. And we find this reference

to the Grantors’ right to receive royalties under the existing leases sufficient to put the McNeil

Grantees on notice that their rights were being limited thereby. “A purchaser is bound by every

recital, reference, and reservation contained in or fairly disclosed by any instrument that forms an

essential link in the chain of title under which he claims.” See Posse Energy, Ltd. v. Parsley

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Energy, LP, 632 S.W.3d 677, 696 (Tex. App.—El Paso 2021, pet. denied) (citing Westland Oil

Dev. Corp. v. Gulf Oil Corp., 637 S.W.2d 903, 908 (Tex. 1982)).

       “The rationale of the rule is that any description, recital of fact, or reference to other
       documents puts the purchaser upon inquiry, and he is bound to follow up this
       inquiry, step by step, from one discovery to another and from one instrument to
       another, until the whole series of title deeds is exhausted and a complete knowledge
       of all the matters referred to and affecting the estate is obtained.”

Westland, 637 S.W.2d 903, 908 (Tex. 1982) (emphasis in original) (quoting Loomis v. Cobb, 159

S.W. 305, 307 (Tex. App.—El Paso 1913, writ ref’d)). The Deed’s reference to existing leases put

the McNeil Grantees on notice of the same, at which point they could have made inquiries and

discovered the burden of the State’s NPRI.

       C. The warranty and further-assurances clauses

       Finally, we reject the McNeil Grantees’ argument that the Deed’s warranty and further-

assurances clauses compel a different result. The Deed’s warranty clause provides the McNeil

Grantees were to

       HAVE AND TO HOLD The above described property and easement with all and
       singular the rights, privileges and appurtenances thereunder or any wise belonging
       to the said Grantee[s] herein [and] their . . . successors . . . forever, and Grantor[s]
       do hereby bind themselves [and their] successors . . . to warrant and forever defend
       all and singular the said property unto the said Grantee[s] herein[,] [and their
       successors] . . . against every person whomsoever lawfully claiming or to claim the
       same or any part thereof.

       In arguing that the warranty clause demonstrates an intent to convey a fee simple interest

to the McNeil Grantees unburdened by the State’s NPRI, the McNeil Group relies on our sister

court’s holding in Farm & Ranch for the proposition that “[a] general warranty deed conveys all

of the grantor’s interest unless there is language in the instrument that clearly shows an intention

to convey a lesser interest.” See Farm & Ranch Investors, Ltd. v. Titan Operating, L.L.C., 369

S.W.3d 679, 681 (Tex. App.—Fort Worth 2012, pet. denied) (citing Reeves v. Towery, 621 S.W.2d

                                                  12
209, 212 (Tex. App.—Corpus Christi 1981, writ ref’d n.r.e.); Waters v. Ellis, 312 S.W.2d 231, 234

(Tex. 1958)). We do not disagree with that proposition, but as stated above, the Deed does in fact

demonstrate the Grantors intended to limit the conveyance by reserving a 1/2 mineral interest for

themselves and clarifying in the subject-to clause that both the conveyed and reserved interests

were burdened by the State’s NPRI. And the Deed’s warranty clause only purported to warrant the

“above described” property interests being conveyed to the McNeil Grantees.

       As the Farm & Ranch Court recognized, a “warranty clause does not convey title nor does

it determine the character of the title conveyed[, instead] it warrants that the same estate or any

right, title, or interest therein has not been conveyed to any person other than the grantee and that

the property is free from encumbrances.” Farm & Ranch, 369 S.W.3d at 684 (quoting Stewman

Ranch, Inc. v. Double M. Ranch, Ltd., 192 S.W.3d 808, 811 (Tex. App.—Eastland 2006, pet.

denied) (internal citations omitted)). In other words, “[a] warranty clause in a conveyance, either

general or limited, is no part of the conveyance proper; it neither strengthens, enlarges, nor limits

the title conveyed, but is a separate contract on the part of the grantor to pay damages in the event

of failure of title.” See Chicago Title Ins. Co. v. Cochran Investments, Inc., 602 S.W.3d 895, 902

(Tex. 2020). Thus, when, as here, a subject-to clause limits the nature of the grantor’s conveyance,

it also serves as “a limitation of the warranty.” Farm & Ranch, 369 S.W.3d at 683 (citing Wright

v. E.P. Operating L.P., 978 S.W.2d 684, 688 (Tex. App.—Eastland 1998, pet. denied)). Such a

subject-to clause limitation protects a grantor from a breach-of-warranty claim, as it not only limits

the nature of the conveyance itself, but also limits the grantor’s responsibilities under a warranty

clause. See Wenske, 521 S.W.3d at 796–98 (recognizing that a mineral deed’s subject-to clause

that limits a conveyance may be viewed as expressing an intent “to protect a grantor against a

claim for breach of warranty when some mineral interest is already outstanding”). Accordingly,

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the Deed’s warranty clause does not, and cannot, expand the nature of the conveyance to the

McNeil Grantees.

        We reach a similar conclusion regarding the Deed’s further-assurance clause. The further-

assurance clause states the “grantor agrees to execute such further assurances as may be requisite

for the full and complete enjoyment of the rights herein granted[.]” The McNeil Group argues the

Deed’s further-assurance language reflects the Grantors’ intent to ensure the McNeil Grantees

received the “full benefits associated with owning the 1/2 mineral interest conveyed through the

1976 Deed, including the full right to receive 1/2 of the royalties stated therewith.” We disagree.

This clause only assures the McNeil Grantees that they would have the full right to enjoy the

“rights herein granted,” which as set forth above, were limited. As is the case with the warranty

clause, we conclude the further-assurance clause did not expand the interests the McNeil Grantees

were entitled to receive under the Deed.

                                           CONCLUSION

        The only interpretation of the Deed harmonizing all of its provisions is that the Grantors

intended to convey to the McNeil Grantees a 1/2 mineral interest burdened by the State’s NPRI

in proportion to its interest.

        We therefore conclude the trial court erred in granting the McNeil Group’s summary

judgment motion and in denying the Gardner Group’s partial summary judgment motion. We

reverse the trial court’s judgment and render judgment in favor of the Gardner Group, granting its

request to declare that the burden of the State’s NPRI is to be allocated proportionately to all

mineral interest owners in accordance with their respective interests. We remand to the trial court

for further proceedings on the Gardner Group’s claim for “Money Had and Received and/or Unjust

Enrichment.”

                                                14
                                             LISA J. SOTO, Justice

December 27, 2023

Before Alley, C.J., Palafox, and Soto, JJ.

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