Court Opinion

ID: 3904951
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:34:28.717992+00
Date Added: 2024-06-11T14:15:53.277401
License: Public Domain

On Rehearing.
We are convinced that, in our original opinion, we wrongly construed the written instrument in question. The interest conveyed by said instrument is one of two different things, namely: (a) It is a conveyance of 1/8 of the royalty provided to be paid by the lessee to the lessor in the leases by N. H. Jones and wife to Clayton, and by said lessors to the Texas company; (b) or it is a conveyance of a 1/64 interest in and to all the oil, gas, and other minerals in and under the lands subject to the terms and provisions of said leases. If it can be determined, from the terms and provisions of the instrument alone, which of these two different characters of interests was intended to be conveyed, it is our duty to make such determination without reference to any parol testimony designed to show the intention of the parties. The only difficulty in ascertaining the intention of the parties arises from the employment of the figures 1/8 of 1/8 and the word "royalty" in connection therewith, throughout the instrument, but particularly in the granting clause, as follows: "1/8 of 1/8 royalty." If we omit entirely this word "royalty" as here used, the instrument becomes clear and unambiguous and shows a conveyance of 1/64 of the oil, gas, and other minerals in and under the land subject to the terms and pro visions of a lease of 80 acres to the Texas company, and of the remainder of the land to E. A. Clayton. It is thus clearly shown that the effect of subjecting the conveyance to said leases is to give the grantee a 1/64 of all of the oil royalty and gas rental or royalty due, and to be paid under the terms of said leases. If a proper construction of the instrument required us to determine with certainty the sense or meaning which the word "royalty" was intended to have, it may be that the entire instrument could not be construed unless aided by extrinsic evidence. But it is not necessary, we think, to ascertain just what was meant by the use of the word, provided we can certainly determine that it was not used in the sense of referring exclusively to the royalty provided to be paid under the terms of said leases. The instrument itself, when read in the light of the well-known rules of construction, shows clearly that the word was employed in no such sense. The instrument conveyed more than a mere royalty interest. It precisely defined the interest of the grantee in the oil, gas, and other minerals to exist after the leases, for any reason, should become canceled or forfeited. In defining such *Page 308 
interest the instrument did not purport to grant the same as something else, or in addition to the interest stated in the granting clause. On the contrary, it certainly appears, we think, that the granting clause included the full extent of the estate sought to be conveyed. The subsequent provisions were intended: (1) To subject the full estate granted to the terms of the existing leases; (2) to define the effect of subjecting same to said leases, namely, to limit the interest of the grantee to the same proportionate interest in the royalties and rentals as his interest in all the minerals; (3) to declare that, after cancellation or forfeiture of the leases, the interest should be the same as stated in the granting clause (with a certain reservation in the grantors to execute future leases); and (4) to make clear that under future leases the actual beneficial interest of the grantees was to be limited to the same proportionate interest in royalties and rentals as the interest in the entire mineral estate. It being clear from the instrument that the interest or estate granted included more than the particular royalty interest payable under the terms of the leases, it becomes unimportant just what was meant by the use of the word "royalty," since whatever it was, other portions of the instrument show clearly that the conveyance was of a 1/8 of 1/8 or 1/64, interest in and to all the oil, gas, and other minerals, subject to the leases, but carrying with it the same reversionary interest after the leases ceased to be enforced.
It is interesting to speculate why the parties said "1/8 of 1/8" rather than "1/64." This, as we see it, is the sole support of the contention that the last "1/8" referred to a 1/8 royalty provided to be paid under the terms of the lenses. A most, effective answer to this argument is to be found in the subsequent provision of the lease to the effect that after the leases should become canceled or forfeited, "an undivided 1/8 of 1/8 of the lease interest and all future rentals," etc., should be owned by the grantees "owning 1/8 of 1/8 of all oil, gas and other minerals," etc. In these provisions the expression "1/8 of 1/8" can mean nothing else than the exact equivalent of 1/64, and at any rate cannot have reference to the particular 1/8 royalty provided in the existing leases. It is not reasonable that "1/8 of 1/8" appearing in the granting clause meant anything different from 1/8 of 1/8 in the provision just quoted, which is certainly used with reference to the estate to exist when there is no lease upon it, and when there is some future lease which, as we well know, may provide a different royalty than 1/8 of the production. Therefore, just as in the case of ascertaining the exact meaning of the word "royalty," it becomes unnecessary for us to determine just why the parties said "1/8 of 1/8" instead of "1/64," since whatever the reason it is made certain from a reading of the entire instrument that the factors, 1/8 of 1/8, were used as meaning the same thing as 1/64.
From this interpretation of the instrument it clearly appears that the judgment of the trial court was erroneous. It correctly adjudges the interest conveyed to be a 1/64 mineral interest, but incorrectly adjudges the plaintiffs to be entitled to 1/8 of the royalties or rentals. The judgment fails to subject the 1/64 mineral interest to the terms of the leases and thereby limit the interest of the grantees in the accumulated royalty proceeds to 1/64 thereof. The tendered fund being the difference between 1/8 of the royalty and 1/64 of the royalty, should, under the terms of the instrument as we have interpreted it, have been adjudged to the appellants.
The motion for rehearing will therefore be granted, our former judgment set aside, and judgment will be rendered for the appellants for $312.19, with the order that same be paid over to them, and for costs, etc., all of which is accordingly so ordered.