Court Opinion

ID: 3934061
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:58:54.596438+00
Date Added: 2024-06-11T07:43:08.625717
License: Public Domain

I am unable to agree with the holding of the majority that the lease under construction should be construed as a conveyance to the lessee of the entire ownership of all of the oil in place, and that the provision for royalty on the oil was but an obligation to deliver personal property as a part of the consideration for the lease. The phrase, "1/8 part of the oil saved from that produced," to my mind cannot be distinguished in meaning and effect from the phrase, "1/8 part of all oil produced and saved." The latter phrase has been held to except from the grant one-eighth of the oil. Hager. v. Stakes, 116 Tex. 453, 294 S.W. 835; Reynolds v. McMan Oil  Gas Co. (Tex.Com.App.) 11 S.W.2d 778; Cobb v. Downing (Tex.Civ.App.) 1 S.W.2d 508 (error refused); Harris v. Lone Star Gas Co. (Tex.Civ.App.) 19 S.W.2d 178 (error refused).
To my mind, in order to warrant a distinction between the two phrases it must be presumed that the purpose of the lease under construction was not to produce and save oil, but that the lessee was licensed to waste a certain indefinite portion thereof.
Nor do I think the expression "as a royalty" should be construed to affect the exception from the grant. One of the leases construed in Hager v. Stakes, supra, designated the oil excepted from the grant as a royalty, and this was not given any controlling effect. The controlling provision, to my mind, is that royalty in kind was to be paid, and I cannot believe that, where the obligation is to deliver one-eighth of the oil saved, the effect of the grant should be altered by the fact that this oil is denominated as a royalty.
I concur in the judgment recommended by my associates, because I believe that the instrument before us speaks specifically with respect to the royalty on casinghead gas; that that royalty is four cents per thousand cubic feet of the amount saved and utilized: and that, in specifying that royalty on casinghead gas the parties intended it to cover all the constituent elements thereof, as held in Magnolia Petroleum Co. v. Connellee (Tex.Com.App.) 11 S.W.2d 158, and Magnolia Petroleum Co. v. Akin (Tex.Com.App.) 11 S.W.2d 1113.
Not being able to concur in the other ground upon which the opinion of the majority rests, I have deemed it advisable thus briefly to note my position.