Court Opinion

ID: 9408559
Source: CourtListenerOpinion
Date Created: 2023-07-13 07:08:39.544937+00
Date Added: 2024-06-11T17:20:44.604890
License: Public Domain

COURT OF APPEALS
                                       EIGHTH DISTRICT OF TEXAS
                                            EL PASO, TEXAS

    SCOTT W. JOHNSON and FLORENCE                           §
    H. CUMMINGS,
                                                            §
                    Appellants/ Cross-Appellees,
                                                            §
    v.                                                                         No. 08-22-00132-CV
                                                            §
    CALE ANDREW CLIFTON,                                                          Appeal from the
    CHRISTOPHER MATTHEW CLIFTON,                            §
    PAMELA PARKER CLIFTON, COG                                              143rd Judicial District Court
    OPERATING, LLC, DESERT                                  §
    PARTNERS IV, LP, KELLI CLIFTON                                           of Reeves County, Texas
    GOSSMANN, LAMBERT LAND CO.,                             §
    LLC, KMF LAND, LLC, McCAMEY                                              (TC# 20-07-23609-CVR)
    FARM & RANCH, L.P., KATHY                               §
    PARKER in her Capacity as Independent
    Executor of the Estate of J. LOYD                       §
    PARKER, III, SPRINGWOOD
    MINERAL 4, LP, ROBBIN LEE                               §
    YOUNG, YOUNG OIL AND GAS, LP
    and LAKE RANCH, LP,                                     §

                   Appellees/Cross-Appellants. 1            §

                                         MEMORANDUM OPINION

           This is an appeal from an order granting summary judgment in favor of the Appellees in

which the trial court interpreted a 1951 deed as conveying a fixed 1/128th royalty interest to the

grantees. Appellants, who are successors-in-interest to the grantees, contend that the trial court

1
    As explained below, only certain Appellees are also Cross-Appellants.
erred and should have instead interpreted the deed to convey a floating 1/16th royalty interest to

the grantees. On cross-appeal, certain Appellees contend that the trial court correctly interpreted

the deed, while others contend that the deed conveyed a 1/128th mineral interest, with a

corresponding 1/128th floating royalty interest. For the reasons set forth below, we reverse the

trial court’s order and render judgment that the deed conveyed a non-participating 1/16th mineral

interest with a corresponding floating 1/16th royalty interest.

       I. FACTUAL AND PROCEDURAL BACKGROUND

           A. The deed and subsequent conveyances

       In 1951, J. B. Young, Elizabeth Cornell, and H. D. Cornell (collectively Grantors)

conveyed by deed an interest in a plot of land comprising several thousand acres in Reeves County,

Texas to W. H. Holcombe and J. Marvin Rape (collectively Grantees). The deed, which we refer

to as the Cornell Deed or the Deed, reads in pertinent part:

       [Grantors] Grant, Sell and Convey, unto [Grantees], an undivided one-one hundred
       and twenty-eighth (1/128) interest in and to all of the oil, gas and other minerals in
       and under the following described tracts of land . . . .

           It is understood and herein stipulated that said land is under oil and gas leases
       providing for a royalty of 1/8 of the oil and certain royalties or rentals for gas and
       other minerals and that Grantees herein shall receive one-sixteenth (1/16) of the
       royalties provided for in said lease insofar as the same cover the above described
       land, but Grantees shall have no interest in or be entitled to nor be entitled to receive
       any part of any rentals paid under said leases, nor shall the Grantees have any
       interest in any bonus money received by Grantors, their heirs or assigns, in any
       future lease or leases given on said land or any part thereof, and it shall not be
       necessary for the Grantees to join in any such subsequent lease or leases so made;
       that Grantees shall only receive under such subsequent lease or leases a 1/128 (1/16
       of the usual 1/8 royalty) part of all of the oil, gas, and other minerals taken and
       saved under such lease or leases and Grantees shall receive same out of the royalty
       provided for in such lease or leases.

           TO HAVE AND TO HOLD the same unto the said Grantees, their heirs and
       assigns forever, and Grantors hereby bind themselves, their heirs, assigns,
       executors and administrators, to warrant and forever defend all and singular the said
       royalty interest herein conveyed unto the said Grantees, their heirs and assigns,

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       against every person whomsoever lawfully claiming, or to claim the same or any
       part thereof . . . . This, the 7th day of May A.D. 1951.

The Cornell Deed has the typed words “Mineral Deed” crossed out but with a question mark next

to it. The words, “Royalty Deed” is handwritten at the top.

       As set forth in the Cornell Deed, at the time of the conveyance, the subject land was under

oil and gas leases that provided for a 1/8th royalty. However, the land is currently under several

leases, some of which provide for royalties of 25% while others provide for royalties of 22.5%. It

is undisputed that since the conveyance, the Grantees and their successors have been paid a fixed

royalty interest of 1/128th in the production of all oil, gas, and minerals produced from the subject

land, and the Grantors and their successors have been paid the remainder.

       Appellants Scott Johnson and Florence Cummings are successors of the Grantees, with

each owning a 1/5th interest in the conveyance. Cummings obtained her interest in December of

2011, while Johnson obtained his interest in June of 2020. Appellees are all successors of the

Grantors.

            B.   Johnson and Cummings’s lawsuit and their motion for partial summary
                 judgment

       In July of 2020, Johnson and Cummings filed the present lawsuit naming all of the

Appellees as defendants, seeking a declaratory judgment that the Cornell Deed conveyed a non-

participating floating 1/16th royalty interest, instead of a fixed 1/128th royalty interest. They also

asserted claims for breach of contract, trespass to try title, monies had and received, and unjust

enrichment, claiming that Appellees had been wrongfully “accepting payment of the disputed

royalty” and had been unjustly enriched thereby.

       Following a limited amount of discovery, Johnson and Cummings filed a traditional motion

for partial summary judgment seeking a ruling on their claim for declaratory judgment that the

                                                  3
Cornell Deed conveyed a floating 1/16th royalty interest. They further sought a trial on the issue

of their damages, costs, and attorney’s fees. Because the Appellees filed varying responses to the

lawsuit and to Johnson and Cummings’s motion for summary judgment, we categorize them into

the following four groups.

            C. The COG Defendants’ position

       The COG Defendants include Appellees COG Operating, LLC (COG), Lambert Land Co.,

LLC (Lambert), and KMF Land, LLC (KMF). In response to Johnson and Cummings’s lawsuit,

COG filed a general denial and pled the affirmative defense that Johnson and Cummings’s claims

were barred by the statute of limitations. Lambert and KMF subsequently joined in COG’S

response.

       COG thereafter filed a traditional motion for summary judgment, seeking a judgment that

Johnson and Cummings take nothing on their claims and that the trial court declare that the Cornell

Deed conveyed a fixed 1/128th royalty interest to the Grantees on all past and future leases.

Lambert and KMF joined in this motion.

            D. The Clifton-Parker Defendants’ position

       The Clifton-Parker Defendants include Appellees Cale Andrew Clifton, Pamela Parker

Clifton, Kelli Clifton Gossmann, and Kathy Parker in her Capacity as Independent Executor of the

Estate of J. Loyd Parker, III, Deceased. The Clifton-Parker Defendants filed a joint pleading in

response to Johnson and Cummings’s lawsuit, denying all of their claims and asserting several

affirmative defenses, including statute of limitations, waiver, estoppel, and payment.

       The Clifton-Parker Defendants also filed a traditional motion for summary judgment,

seeking a judgment that Johnson and Cummings take nothing on their claims and a ruling that the

Cornell Deed conveyed a fixed 1/128th royalty interest to the Grantees.

                                                4
             E. The Clifton-McCamey Farm Defendants/Counter-Plaintiffs

          The Clifton-McCamey Farm Defendants include Appellees Christopher Matthew Clifton,

McCamey Farm & Ranch, L.P., Robbin Lee Young, Young Oil and Gas, LP, and Lake Ranch LP.

The Clifton-McCamey Defendants filed a joint general denial to Johnson and Cummings’s lawsuit,

requesting that the court enter a take-nothing judgment on their claims and raising various

affirmative defenses, including statute of limitations, laches, waiver, estoppel release and/or

payment. They also filed a counterclaim, bringing a claim for trespass to try title against Johnson

and Cummings and seeking a declaratory judgment that the Cornell Deed conveyed a floating

1/128th royalty to the Grantees.

          The Clifton-McCamey Farm Defendants filed a traditional motion for partial summary

judgment, seeking a declaration that the Cornell Deed conveyed a non-participating mineral

interest of 1/128th and a corresponding floating 1/128th royalty interest in the 1951 leases as well

as all future leases. They requested that the remainder of their claims proceed to trial on damages,

costs, and attorney’s fees.

             F. The Desert Partners Defendants

          Appellees Desert Partners IV, LP and Springwood Mineral 4, LP filed separate general

denials to Johnson and Cummings’s lawsuit. Thereafter, they filed a joint traditional motion for

summary judgment, seeking a declaration that the Cornell Deed conveyed a “1/128th mineral

interest with a fixed 1/128th royalty for future leases.” Alternatively, they argued that if the court

concluded the Cornell Deed conveyed a non-participating royalty interest rather than a mineral

interest, then the court should conclude that it conveyed a fixed 1/128th royalty interest in all future

leases.

                                                   5
             G. The trial court’s rulings

        After the various parties responded to the pending motions, the trial court first issued its

ruling denying Johnson and Cummings’s motion for partial summary judgment. The trial court

then issued an order purporting to grant all of the pending summary judgment motions filed by the

defendants, ruling: (1) the Cornell Deed conveyed a fixed 1/128th royalty interest to the Grantees;

and (2) Johnson and Cummings take nothing on their claims. 2 The order further stated all other

relief requested but not expressly granted was denied, and it finally disposed of all parties and

claims, making it a final, appealable judgment.

        II. THE PARTIES’ APPEALS AND CROSS-APPEALS

             A. Johnson and Cummings’s appeal

        After the trial court denied their motion for new trial, Johnson and Cummings filed their

notice of appeal. On appeal, Johnson and Cummings argue the trial court erred in granting

Appellees’ motions for partial summary judgment and in declaring that the Cornell Deed conveyed

a fixed 1/128 royalty interest, contending the court should have instead found that the Deed created

a floating 1/16 royalty interest. In response, COG filed its brief, in which all of the other Appellees

have joined, arguing that the trial court properly found that the Deed conveyed a fixed 1/128th

royalty interest.

             B. The cross-appeals

        The Clifton-McCamey Farm Defendants cross-appealed, as did the Clifton-Parker

Defendants and the Desert Partners Defendants. In their cross-appeal, the Clifton-McCamey Farm

Defendants raise an alternative argument that the Cornell Deed conveyed a fixed 1/128th non-

2
  Although the Clifton-McCamey Farm Defendants and the Desert Partners Defendants argued for a different
interpretation of the Cornell Deed, and although the Clifton-McCamey Farm Defendants raised counterclaims against
Johnson and Cummings, the trial court did not directly address the arguments set forth in their respective summary
judgment motions.

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participating mineral interest with a corresponding 1/128th floating royalty interest, and the trial

court therefore erred in dismissing their counterclaim. In their cross-appeal, the Desert Partners

Defendants raise yet another alternative argument, contending that the Cornell Deed conveyed two

separate estates: (1) a 1/128th mineral interest in the land; and (2) a fixed 1/128 royalty interest in

future leases. The Clifton-Parker Defendants did not file a brief on their cross-appeal.

       In addition, COG filed a letter brief, in which several of the other Appellees joined,

contending, among other things, that we should construe the Cornell Deed in the manner in which

it has been construed in the past, as conveying a fixed 1/128th royalty interest, under the so-called

“presumed-grant doctrine” that the Texas Supreme Court recently discussed in Van Dyke v.

Navigator Group, 668 S.W.3d 366-67 (Tex. 2023).

       III. STANDARD OF REVIEW

       We review the grant of summary judgment de novo. Eagle Oil & Gas Co. v. TRO-X, L.P.,

619 S.W.3d 699, 705 (Tex. 2021) (citing Nall v. Plunkett, 404 S.W.3d 552, 555 (Tex. 2013)). In a

traditional motion for summary judgment, the moving party must demonstrate there are no genuine

issues of material fact such that the party is entitled to judgment as a matter of law. Id. (citing

TEX. R. CIV. P. 166a(c)). When both parties move for summary judgment, each party bears the

burden of establishing that it is entitled to judgment as a matter of law. See City of Garland v.

Dallas Morning News, 22 S.W.3d 351, 356 (Tex. 2000). And when, as here, both parties move for

summary judgment on the same issue and the trial court grants one motion and denies the other,

we consider the evidence presented by both sides, determine all questions presented, and either

affirm the judgment or render the judgment the trial court should have rendered. Valence

Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); see also Posse Energy, Ltd. v. Parsley

Energy, LP, 632 S.W.3d 677, 686 (Tex. App.—El Paso 2021, pet. denied) (“When cross-motions

                                                  7
for summary judgment are filed, a court of appeals considers each motion and renders the judgment

the trial court should have reached.”).

        IV. APPLICABLE LAW

            A. General principles of contract construction

        Because none of the parties contend that the Cornell Deed was ambiguous, our primary

duty in construing the Deed is to “ascertain the intent of the parties from all of the language within

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). In doing

so, we must examine the entire document, and we must seek to harmonize any seemingly

inconsistent or contradictory provisions, giving “effect to all provisions so that none will be

meaningless.” Id. (citing Gilbert Texas Constr., L.P. v. Underwriters at Lloyd’s London, 327

S.W.3d 118, 126 (Tex. 2010)); Luckel v. White, 819 S.W.2d 459, 462 (Tex. 1991). In other words,

we must take a “holistic approach aimed at ascertaining intent from all words and all parts of the

deed.” U.S. Shale Energy, 551 S.W.3d at 151 (citing Hysaw v. Dawkins, 483 S.W.3d 1, 13

(Tex. 2016)).

        In interpreting the terms used in a document, unless otherwise defined in the text, courts

will adopt a term’s ordinary meaning. Van Dyke, 668 S.W.3d at 359 (citing URI, Inc. v. Kleberg

County, 543 S.W.3d 755, 763–64 (Tex. 2018)). However, we must also be guided by the principle

that the text “retains the same meaning today that it had when it was drafted,” and therefore, the

words used in a deed must be given the meaning they had at that time. Id. (citing Hysaw, 483

S.W.3d at 13). And as explained below, oil and gas deeds of the era in which the Cornell Deed

was drafted used terms that conveyed a certain meaning, which we must consider in discerning the

parties’ intent. Id.

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           B. The nature of a mineral estate

       Because the parties disagree on whether the Cornell Deed conveyed an interest in a mineral

estate or a simply a royalty interest—as well as the amount of any such interest—we find it helpful

to provide a brief overview of the nature of those interests. A “mineral estate is comprised of five

severable rights or attributes: (1) the right to develop; (2) the right to lease—which is also known

as the executive interest; (3) the right to receive bonus payments; (4) the right to receive royalty

payments; and (5) the right to receive delay rentals.” WTX Fund, LLC v. Brown, 595 S.W.3d 285,

294 (Tex. App.—El Paso 2020, pet. denied) (citing Hysaw, 483 S.W.3d at 9). However, because

each attribute of the estate is an independent property right, the various rights may be “severed

into a separate interest whether separately conveyed or reserved by the owner.” Ridgefield

Permian, LLC v. Diamondback E & P LLC, 626 S.W.3d 357, 363 (Tex. App.—El Paso 2021,

pet. denied) (citing Concord Oil. Co. v. Pennzoil Expl. & Prod. Co., 966 S.W.2d 451, 453, 457

(Tex. 1998)). Thus, a grantor may independently convey only a royalty interest of a certain size to

the grantee without conveying any of the other attributes of the mineral estate to the grantee. See

French v. Chevron U.S.A. Inc., 896 S.W.2d 795, 797 (Tex. 1995) (recognizing that a “conveyance

of a mineral estate need not dispose of all interests; individual interests can be held back, or

reserved, in the grantor”); see also Luckel, 819 S.W.2d at 463 (a royalty interest is “a

nonpossessory interest in minerals that may be separately alienated”). This is considered a non-

participating royalty interest, which carries with it no rights other than to receive royalty payments.

See KCM Fin. LLC v. Bradshaw, 457 S.W.3d 70, 75 (Tex. 2015) (describing a non-participating

royalty interest as “an interest in the gross production of oil, gas, and other minerals carved out of

the mineral fee estate as a free royalty” that does not include “the right to participate in the

                                                  9
execution of, the [b]onus payable for, or the delay rentals to accrue under oil, gas, and mineral

leases executed by the owner of the mineral fee estate”).

        “Royalty interests may be conveyed or reserved ‘as a fixed fraction of total production’

(fractional royalty interest) or ‘as a fraction of the total royalty interest’ (fraction of royalty

interest).” Hysaw, 483 S.W.3d at 9 (quoting Luckel, 819 S.W.2d at 464). A fractional royalty

interest, commonly referred to as a “fixed” royalty interest remains constant and is not affected by

the royalty amount in an oil, gas, or mineral lease. Id. (citation omitted). On the other hand, a

“fraction of” royalty interest, commonly referred to as a “floating” royalty interest, varies

depending on the royalty in an oil, gas, or mineral lease. Id. (recognizing that a floating royalty

interest is calculated by multiplying the fraction of the royalty interest by the lease’s royalty, which

can change over time depending on lease terms.) The language used in the deed determines

whether a royalty interest is fixed or floating. Id.

        Alternatively, a grantor may choose to convey a mineral estate to the grantee, but may then

designate certain attributes of the estate it intends to reserve. See Altman v. Blake, 712 S.W.2d 117,

118–19 (Tex. 1986). For example, a grantor may convey a mineral estate shorn of all but a royalty

interest; importantly, however, a mineral estate grant is not transformed into a royalty interest

merely because the grantor chooses to reserve certain attributes of the mineral estate for himself.

Id.; see also Greer v. Shook, 503 S.W.3d 571, 578 (Tex. App.—El Paso 2016, pet. denied) (the

mineral interest conveys even if it is “shorn of the executive right and the right to receive delay

rentals remains an interest in the mineral fee”). A mineral estate shorn of all attributes but for the

right to receive royalty payments is known as a non-participating or non-executive mineral interest.

Lesley v. Veterans Land Bd. of State, 352 S.W.3d 479, 481 (Tex. 2011). Unless a grantor intends

to convey more than one estate to the grantee, the amount of the grantee’s mineral interest will

                                                  10
determine the amount of royalties to which he is entitled. See Gibson v. Turner, 294 S.W.2d 781,

786 (Tex. 1956) (recognizing that unless a deed conveys two separate estates, the “fractional part

of the . . . royalties that one is to receive under a mineral lease usually or normally is the same as

his fractional mineral interest”). Thus, for example, the grant of a 1/2 mineral interest will come

with a corresponding right to receive 1/2 of the royalties in a lease, which in effect makes it a

“floating” royalty. See Greer, 503 S.W.3d at 592 (where grantor conveyed a 1/2 mineral interest

to grantee, it included a corresponding 1/2 floating royalty interest in both existing and future

leases) (citing Concord Oil Co., 966 S.W.2d at 457 (“finding that the grantor intended to convey

one estate, consisting of a 1/2 mineral interest, which included a corresponding 1/2 royalty

interest”); see also Bank One, Texas Nat’l Ass’n v. Alexander, 910 S.W.2d 530, 535 (Tex. App.—

Austin 1995, writ denied) (a reservation of a 1/16th mineral interest in a deed entitled the grantors

to 1/16th floating royalty).

       We note, however, that a grantor may decide to convey both an “undivided portion of the

mineral estate and a separate royalty interest” in the same land, either in the same or in a separate

instrument. Hysaw, 483 S.W.3d at 9. These two estates may be of equal size, or the lease holder

may convey two interests of a different size. In other words, the lease holder may convey a royalty

interest that is “larger or smaller than the interest conveyed in the minerals in place.” Id. (citing

Luckel, 819 S.W.2d at 463); see also Greer, 503 S.W.3d at 588–89 (recognizing that a grantor may

convey two separate estates to a grantee in a mineral deed, which may or may not be of equal size

or duration—a concept often referred to as the “two estates” doctrine).

       V. THE CORNELL DEED CONVEYED A MINERAL INTEREST

       We first address the question of whether the Deed conveyed a mineral estate stripped of all

attributes but for the royalty interest, as the Clifton-McCamey Farm and Desert Partners

                                                 11
Defendants contend, or whether it conveyed an independent royalty interest, as the remaining

parties contend. For the reasons set forth below, we conclude that the Grantors intended to convey

a mineral estate shorn of all attributes but for the right to receive royalty payments on any

production on the land.

       Important to our decision, we note that a mineral estate is considered an interest in the

minerals that are in place on the land prior to production, while in contrast, a royalty interest is

simply an interest in receiving payments after the minerals have been produced. Altman, 712

S.W.2d at 118–19. Therefore, as Texas courts have consistently held, when a deed provides that it

is conveying (or retaining) an interest in the minerals “in and under” the land, such language

demonstrates an intent to convey (or retain) a mineral estate. Id. (finding deed that conveyed “an

undivided one-sixteenth (1/16) interest in and to all of the oil, gas and other minerals in and under

and that may be produced from” the land conveyed a mineral interest); Reed v. Maltsberger/Storey

Ranch, LLC, 534 S.W.3d 51 (Tex. App.—San Antonio 2017, pet. denied) (recognizing that the

language used to create an interest in the mineral estate—as opposed to merely an interest in the

royalties—is a reference to the oil, gas, and other minerals “in and under” the described land);

Temple-Inland Forest Products Corp. v. Henderson Family P’ship, Ltd., 958 S.W.2d 183, 185

(Tex. 1997) (deed stating that “[g]rantor retains title to a 1/16 interest in and to all of the oil, gas

and other minerals in and under and that may be produced from said land[,]” standing alone,

referred to a reservation of a mineral interest); Watkins v. Slaughter, 189 S.W.2d 699, 700

(Tex. 1945) (recognizing that a deed retaining an interest “in and to all of the oil, gas and other

minerals in and under and that may be produced from said land[,]” without more, would denote

the reservation of a mineral estate). As our sister court has recognized, the term “in and under” has

“become a kind of shorthand for a statement that the interest described bears the expense of

                                                  12
production and is therefore to be classified as a mineral interest[.]” Barker v. Levy, 507 S.W.2d

613, 615 (Tex. App.— Houston [14th Dist.] 1974, writ ref’d n.r.e.); see also Laura H. Burney,

Interpreting Mineral and Royalty Deeds: The Legacy of the One-Eighth Royalty and Other Stories,

33 ST. MARY’S L.J. 1, 30–31 (2001). However, the initial clause [in a deed] does not conclusively

determine that a mineral interest was created when subsequent language indicates the parties

intended to create a royalty interest. See Bank One, 910 S.W.2d at 532.

        Here, the granting clause in the Deed provided that the Grantors were conveying an

“undivided one-one hundred and twenty-eighth (1/128) interest in and to all of the oil, gas and

other minerals in and under the following described tracts of land[.]” It then provided the Grantees

had the right to receive royalties from production on the land in current and future leases, but

provided the Grantees had none of the other attributes of the mineral estate. That is, it stripped

them of the right to receive rentals or bonus money under any existing or future leases, and it

would “not be necessary for the Grantees to join in any such subsequent lease or leases so made[.]”

We find that the Grantors intended to convey a mineral interest shorn of all attributes of the mineral

estate but for the royalty interest. See French, 896 S.W.2d at 797 (deed whose granting clause

conveyed “all of the oil, gas and other minerals, in, under and that may be produced,” but provided

that the conveyance was a “royalty interest only,” conveyed a mineral interest stripped of all

attributes except the right to receive royalties).

        The remainder of the Cornell Deed describes the nature of the royalty interest being

conveyed. However, if we were to focus solely on royalty interest language and ignore the

language in the granting clause itself, which speaks of a mineral interest, we would be disregarding

our duty to consider the Deed holistically and ensure all provisions are considered and harmonized.

                                                     13
See Hysaw, 483 S.W.3d at 13 (cautioning that words in a deed must not be considered in

“isolation.”).

         And here, we can only reconcile the whole Deed by interpreting the granting clause as

conveying a mineral estate and the remainder of the Deed as clarifying that the Grantors intended

to strip away all attributes of the mineral estate but for the royalty interest. 3 See French, 896

S.W.2d at 796–96 (interpreting deed as conveying a non-participating mineral interest, despite fact

that deed stated it was conveying “a royalty interest only,” where granting clause stated it was

conveying an interest in the minerals in place); Bank One, 910 S.W.2d at 532 (recognizing that the

only way to harmonize a deed in which granting clause used language purporting to convey a

mineral interest while remaining provisions referred to royalty interests was to determine it

conveyed a non-participating mineral interest stripped of all attributes but for the right to receive

royalty payments).

         Accordingly, we must now determine the size of that mineral interest and reconcile the

varying fractions set forth in the Deed.

         VI. DETERMINING THE SIZE OF THE CONVEYANCE

             A. The inconsistencies in the deed

         The granting clause states the Grantors were conveying a “1/128th interest in and to all of

the oil, gas and other minerals in and under the following described tracts of land . . . .” If we were

to interpret this clause as conveying a 1/128th mineral interest, this would give the Grantees a

corresponding 1/128th floating royalty interest. The next provision in the Deed states that the land

3
   We similarly do not view in isolation the fact that the Cornell Deed had the term “mineral deed” crossed out and
the term “royalty deed” handwritten in. This is consistent with our interpretation that the Grantors intended to convey
a mineral estate stripped of all attributes but for the royalty interest—the notation simply reflected that this was the
only attribute of the estate being conveyed. The question mark next to the marked-out term “mineral deed” suggests
that the parties may have been unsure about how to label the conveyance.

                                                          14
is currently under an oil and gas lease with a 1/8th royalty, and thus, if the Grantees only had a

1/128th mineral interest, they would be entitled to only a 1/1024th (1/128th of 1/8) share in the

production. However, the next provision states that the Grantees are entitled to a 1/16th interest in

that lease, which would provide them with a 1/128th (1/16 of 1/8) share in the production—a much

larger share than a 1/128th mineral interest would convey. As well, the future lease clause provides

that the Grantees were entitled to receive 1/16th of the usual 1/8th royalty, which again—assuming

a lease with a 1/8th royalty would give them a 1/128th share in production. How then can we

reconcile these conflicting fractions? We do so by applying two doctrines applicable to deeds of

this era: the estate-misconception doctrine and the legacy of the 1/8th royalty. Before doing so, we

explain why we disagree with the Cross-Appellants’ approach in their attempts to reconcile the

differing fractions.

            B. Cross-Appellants’ arguments

        The Clifton-McCamey Farm Defendants contend that we should interpret the language in

the granting clause in the Cornell Deed as conveying a 1/128th mineral interest with a

corresponding 1/128th floating royalty interest. They look solely to the granting clause and the

future lease clause, pointing out that both clauses use the fraction 1/128. And they conclude that

this interpretation is the only way to harmonize all provisions in the Deed. However, their

interpretation overlooks the existing lease clause providing for a 1/16th royalty interest in the then-

existing 1/8th royalty leases on the property (a 1/128th share of the production), which gives the

Grantees a much larger share of production than a 1/128th mineral interest would convey (a

1/1024th share of production). In addition, it overlooks the double fraction in the future lease

clause providing for a royalty interest equivalent to 1/16th of the “usual 1/8th royalty,” which again

would give the Grantees a much larger royalty than a 1/128th mineral interest would convey. And

                                                  15
the Clifton-McCamey Farm Defendants provide no explanation for how we are to harmonize these

conflicting provisions.

         The Desert Partner Defendants provide us with a slightly different approach, contending

that the Deed created a 1/128th mineral interest but then conveyed a second estate in the future

lease clause, conveying a larger, fixed 1/128th royalty interest in all future leases, utilizing the

two-grant theory. See Greer, 503 S.W.3d at 588–89 (recognizing that a grantor may convey two

separate estates to a grantee in a mineral deed, which may or may not be of equal size or duration—

a concept often referred to as the “two estates” doctrine) (citing Richardson v. Hart, 185 S.W.2d

563, 564 (Tex. 1945) (construing deed as conveying two separate and distinct estates in the land)).

This approach suffers from similar defects as the Clifton-McCamey Farm Defendants’ approach.

As the Desert Partner Defendants themselves recognize, if we were to construe the deed as

conveying a 1/128th mineral interest, the Grantees would only be entitled to a 1/1024th share of

production in the existing leases and yet, as set forth above, the existing lease clause conveys a

larger royalty interest of 1/16th of the 1/8th royalty provided in the leases, or a 1/128th share in

production. And they further concede there is a “presumption that royalty interests should be

proportionate to the mineral estate received.” Patrick v. Barrett, 734 S.W.2d 646, 648 (Tex. 1987).

However, the Desert Partners Defendants fail to address the inconsistency between the granting

clause and the existing lease clause; instead, they leap to the future lease clause, contending it

conveyed a separate estate consisting of a fixed1/128th royalty interest, an admittedly larger estate

than the granting clause provided. 4 And, although the Desert Partners Defendants point out that

4
  We also note that the Desert Partners Defendants fail to address whether they believe that the 1/128th mineral estate
conveyed was intended to be a temporary estate (to expire at the termination of the existing leases) or a permanent
estate (to exist in addition to the grant of the fixed 1/128th royalty interest). Nor is there any language in the Cornell
Deed that would convince us that the Grantors intended to convey two estates, whether of a temporary or a permanent
nature. Cf. Pan Am. Petroleum Corp. v. Texas Pac. Coal & Oil Co., 340 S.W.2d 548, 557 (Tex. App.—El Paso 1960,
writ ref’d n.r.e.) (two estates were conveyed when the deed clearly stated that grantees were to be given a temporary
1/4 royalty interest in three existing leases on the property as well as a permanent 1/32 interest in the mineral estate).

                                                           16
the leases described in the Deed no longer exist, we cannot simply ignore the existing lease clause

in our analysis.

       As our task is to harmonize all provisions in the Deed, we do so by applying the estate-

misconception doctrine and the legacy of the 1/8th royalty doctrine without resorting to a two-

grant theory. See Concord Oil, 966 S.W.2d at 458–59 (rejecting argument that a deed with

conflicting fractions conveyed two estates of differing magnitudes and duration, where court was

able to reconcile and harmonize the deed’s use of conflicting fractions in concluding that only one

estate was conveyed).

           C. The estate-misconception doctrine

       As the court in Van Dyke recently observed, special rules apply to interpreting deeds of a

certain era that contain conflicting fractions. Van Dyke, 668 S.W.3d at 363. The first is the “estate-

misconception doctrine,” which “reflects the prevalent (but, as it turns out, mistaken) belief that in

entering into an oil-and-gas lease, a lessor retained only a 1/8 interest in the minerals rather than

the entire mineral estate in fee simple determinable with the possibility of reverter of the entire

estate.” Id. at 363 (citing Hysaw, 483 S.W.3d at 10); Concord Oil Co., 966 S.W.2d at 460).

Therefore, as the court explained, “for many years, lessors would refer to what they thought

reflected their entire interest in the ‘mineral estate’ with a simple term they understood to convey

the same message: ‘1/8.’” Id. “This widespread and mistaken belief ran rampant in instruments of

this time involving the reservation or conveyance of a mineral interest—so much so that courts

have taken judicial notice of this widespread phenomenon.” Id. (citing Hysaw, 483 S.W.3d at 9–

10). The court explained that the very use of 1/8 in a double fraction in a deed of this era “should

be considered patent evidence that the parties were functioning under the estate misconception.”

Id. (citing Laura H. Burney, The Regrettable Rebirth of the Two-Grant Doctrine in Texas Deed

                                                 17
Construction, 34 S. TEX. L. REV. 73, 90 (1993); see also Hysaw, 483 S.W.3d at 10–11 (recognizing

that “there is ‘little explanation’ for the use of double fractions to express a fixed interest absent a

misunderstanding about the grantor’s retained ownership interest or use of 1/8 as a proxy for the

customary royalty.”) (citations omitted). As the court explained in Hysaw, when a landowner

laboring under this misconception conveyed a mineral interest to a third party in land that was

already subject to a lease, he would often use a fraction of 1/8 to express what interest he intended

to convey. Hysaw, 483 S.W.3d at 10. And in light of this widespread misconception, the Texas

Supreme Court recently held that there is a “rebuttable presumption that the term 1/8 in a double

fraction in mineral instruments of this era refers to the entire mineral estate.” Van Dyke, 668

S.W.3d at 360, 364.

        Here, as the Appellees point out, we do not have a double fraction in the granting clause,

and therefore, they contend the Van Dyke presumption does not apply. However, the estate-

misconception doctrine is applicable not only when a deed contains a double fraction but also

when it uses a fraction that is a multiple of 1/8. As an example, the court in Hysaw noted that a

grantor who has “leased the entire mineral estate, but desires to sell-one half [sic] of the minerals,

would assume that he owned 1/8 of the minerals due to the existing lease . . . [and] would use the

fraction 1/16, or a double fraction, 1/2 of 1/8, to convey 1/2 of what he perceived he owned.”

Hysaw, 483 S.W.3d 10 (quoting Laura H. Burney, The Regrettable Rebirth of the Two–Grant

Doctrine in Texas Deed Construction, 34 S. TEX. L. REV. 73, 89 (1993). In other words, the estate-

misconception doctrine may apply in situations in which the granting clause contains a double

fraction, such as 1/2 of 1/8th, as well as when it contains a multiple of a 1/8th fraction, such as

1/16th. Compare Van Dyke, 668 S.W.3d at 368 (deed reserving a “one-half of one-eighth of all

minerals and mineral rights” in said land reserved a 1/2 mineral interest); with Greer, 503 S.W.3d

                                                  18
at 580 (Tex. App.—El Paso 2016, pet. denied) (deed with a granting clause conveying a 1/16th

mineral interest interpreted as conveying a 1/2 mineral interest in light of other provisions in the

deed). Accordingly, although we may not necessarily apply the Van Dyke presumption in

construing the granting clause, we nevertheless apply the doctrine in construing the Cornell Deed.

             D. The legacy of the 1/8 royalty

         Our analysis also turns on the related doctrine of the “legacy of the 1/8 royalty” or the

theory of “historical standardization,” which stems from the “special meaning that 1/8 acquired in

the standard-royalty context.” Van Dyke, 668 S.W.3d at 363. As the Texas Supreme Court has

repeatedly noted, oil and gas leases of a “certain vintage” almost invariably set forth a 1/8th

royalty, and the prevalent belief was that a royalty interest would always be 1/8. Id. (referring to

the “near ubiquitous nature of the 1/8 royalty” in oil and gas leases of a certain vintage) (citing

Hysaw, 483 S.W.3d at 9–10). Thus, “parties would use the term 1/8 as a placeholder for future

royalties generally—without anyone understanding that reference to set an arithmetical value.” Id.

Accordingly, courts have long recognized that a deed’s use of a 1/8th fraction in describing a

royalty interest was the result of the parties’ erroneous belief about the nature of a royalty interest.

Id. In fact, the Van Dyke court noted that although it was possible the parties to a deed of this era

intended a double fraction with the term 1/8 to be “aimed at simple multiplication,” it was not

aware of any such instances. 5 Id. at 364.

5
  In their letter briefs, certain of the Appellees argue that the 1951 Deed was outside of this era and that we should
not apply these special rules of construction in interpreting the Deed. They contend that by the early 1930s, both courts
and commentators alike understood that an oil and gas royalty may be larger or smaller than 1/8th, citing Jones v.
Bedford, 56 S.W.2d 305, 308 (Tex. App.— Eastland 1932, writ ref’d) (recognizing that royalties may not always be
1/8th) and A.W. Walker, Jr., Oil Payments, 20 TEX. L. REV. 259, 273-74 (1942) (recognizing that “it is not at all
uncommon” for royalties to be something other than 1/8th”). We note, however, that although the Texas Supreme
Court has not defined what it considers to be the era in which the special rules involving 1/8th fractions apply, it has
applied these rules to deeds drafted during the late 1940s and early 1950s, well within the timeframe in which the
Cornell Deed was drafted. See U.S. Shale Energy II, LLC v. Laborde Props., L.P., 551 S.W.3d 148, 153 (Tex. 2018)
(utilizing the legacy of the 1/8th royalty doctrine in construing a 1951 deed); Hysaw v. Dawkins, 483 S.W.3d 1, 6
(Tex. 2016) (applying doctrine to a 1947 will that conveyed a royalty interest); KCM Fin. LLC v. Bradshaw, 457

                                                          19
             E. Arriving at a 1/16th mineral interest with a corresponding floating 1/16th
                royalty interest

         As set forth above, the granting clause in the Cornell Deed stated that the Grantors were

conveying an “undivided one-one hundred and twenty-eighth (1/128) interest in and to all of the

oil, gas and other minerals in and under the following described tracts of land[.]” The 1/128th

fraction is a multiple of 1/8 and therefore gives rise to the estate-misconception doctrine—it raises

the presumption that the Grantors believed they only retained a 1/8th interest in the mineral estate

and rather than conveying a 1/128th interest, they intended to convey 1/16th of what they believed

they had. The result is a 1/16th mineral interest conveyance, which has a corresponding 1/16th

floating royalty interest, allowing us to reconcile the other ostensibly conflicting fractions used to

describe the nature of the royalty interest conveyed. See Greer, 503 S.W.3d at 590–91 (use of

conflicting fractions demonstrates applicability of the estate-misconception theory).

         First, this interpretation reconciles the provisions in the existing lease clause, which

provides that the Grantees were entitled to a 1/16th royalty interest in existing leases. A 1/16th

mineral interest would give the Grantees a 1/16th floating royalty interest in any existing or future

leases, thereby allowing us to harmonize the granting clause with the existing lease clause.

         Second, this interpretation also reconciles the provisions in the Deed’s future lease clause,

which provides that the “Grantees shall only receive under such subsequent lease or leases a 1/128

S.W.3d 70, 75 (Tex. 2015) (recognizing that a “one-eighth royalty appears to have been commonplace in the general
era in which the 1960 deeds were executed”); see also WTX Fund, LLC v. Brown, 595 S.W.3d 285, 296 (Tex. App.—
El Paso 2020, pet. denied) (applying doctrine to a 1951 deed). In fact, some courts and commentators have recognized
that leases containing royalties larger than one-eighth did not become common until the mid-1970s. See Graham v.
Prochaska, 429 S.W.3d 650, 657 (Tex. App.—San Antonio 2013, pet. denied) (citing 1 Smith & Weaver, Texas Law
of Oil & Gas § 2.4[B][1], at 2–64 (2d ed. 1998)) (noting that in the 1970s royalties larger than 1/8th became more
commonplace in leases); see also II. TITLE AND CONVEYANCING ISSUES, 2016 WL 10609408 (“From the beginning
of the oil and gas industry in Texas until the mid-1970s, the lessor’s royalty under an oil and gas lease was almost
always 1/8.”); IV. WHAT COURTS CONSIDER TO DIVINE “OBJECTIVE INTENT,” 2019 TXCLE-ACAP 11-IV, 2019 WL
4579707 (noting that “it was not until the 1970s that royalty interests greater than 1/8 became increasingly common.”)
(citing Garrett v. Dils Co., 299 S.W.2d 904, 907 (Tex. 1957) (taking “judicial knowledge of the fact that the usual
royalty provided in mineral leases is one-eighth”).

                                                         20
(1/16 of the usual 1/8 royalty) part of all the oil, gas and other minerals taken and saved under such

lease or leases . . . .” This classic double fraction, using the term “usual” to refer to the 1/8 royalty,

is the exact type of language that triggers the application of the doctrine of the legacy of the

1/8 royalty. 6 See Hysaw, 483 S.W.3d at 4 (the double-fraction problem emerges when an

instrument expresses a royalty interest as the product of two fractions, such as “1/2 of the usual

1/8”); see also Graham v. Prochaska, 429 S.W.3d 650, 658 (Tex. App.—San Antonio 2013, pet.

denied) (“When a deed contains a reservation of . . . ‘a fraction of the usual one-eighth royalty,’ a

party may argue that ‘one-eighth’ should be understood as a stand-in for the landowner’s royalty

and therefore convey or reserve unto them a floating royalty interest.”). And in applying this

doctrine, we conclude that the use of the double fraction 1/16th of the “usual” 1/8th royalty is

consistent with a description of a floating 1/16th royalty. See Luckel, 819 S.W.2d at 462 (in

applying the “legacy of the 1/8 royalty,” the court construed language granting a 1/4 interest in the

“usual” 1/8 royalty as granting a floating 1/4 royalty interest); see also Coghill v. Griffith, 358

S.W.3d 834, 837–40 (Tex. App.—Tyler 2012, pet. denied) (holding reservation of “an undivided

one-eighth (1/8) of the usual one-eighth (1/8) royalties provided for in any future oil, gas and/or

6
  The Clifton-Parker Defendants argue we should not apply this doctrine in interpreting the Deed—because the double
fraction was within a parenthetical, which functions as a nonrestrictive dependent clause, it should not be considered
central to the meaning of the sentence. And in turn, they argue that we should essentially ignore the incidental
information in the parenthetical and instead focus on the single fraction (1/128th) that precedes it. We recognize, as
we did in Bridges v. Uhl, 663 S.W.3d 252 (Tex. App.—El Paso 2022, no pet.), that information contained in a
nonrestrictive dependent clause may, as a matter of grammatical construction, be viewed merely as being helpful, but
nonessential information, in interpreting the meaning of a sentence. Id. at 265. However, we did not mean to suggest
that such clauses should be entirely overlooked when construing a deed, nor can they be. Here, the nonrestrictive
dependent clause serves as an explanation of 1/128. Ignoring a double fraction in a deed of this era—regardless of its
placement in a nonrestrictive dependent clause—would go against the Texas Supreme Court’s directives in both
Hysaw and Van Dyke. As set forth above, in both cases, the court made it clear that when a deed of this era contains a
double fraction involving 1/8, there can be little other explanation for its use other than a “misunderstanding about the
grantor’s retained ownership interest or use of 1/8 as a proxy for the customary royalty.” Van Dyke v. Navigator
Group, 668 S.W.3d 353, 363 (Tex. 2023) (citing Hysaw, 483 S.W.3d at 10–11). And as the court recognized, it would
“be odd to say one-half of one-eighth rather than simply one-sixteenth if all that was intended by one-half of one-
eighth was 1/16.” Id. (citing Hysaw, 483 S.W.3d at 12) (internal quotation marks omitted). Accordingly, we conclude
that the legacy of the 1/8th doctrine must inform our interpretation of the Deed.

                                                          21
mineral leases” described a floating 1/8th royalty); Hysaw, 483 S.W.3d at 15–16 (finding that a

conveyance of a “one-third (1/3) of an undivided one-eighth (1/8)” royalty interest conveyed a

floating or fraction of 1/3 royalty rather than a 1/24 fixed or fractional royalty).

       This interpretation of the Cornell Deed harmonizes the future lease clause with the other

two provisions in the Deed, i.e., as conveying a 1/16th mineral interest with a commensurate 1/16th

floating royalty interest. It is the only way to harmonize the conflicting fractions in the Cornell

Deed and give meaning to every provision in the Deed. We therefore conclude the trial court erred

in granting the Appellees’ motions for summary judgment and in declaring that the Deed conveyed

a fixed 1/128th royalty interest.

       Appellants Johnson and Cummings’s Issue One is sustained, and the issues raised by the

Cross-Appellants Clifton-McCamey Farm and the Desert Partners Defendants are overruled.

       VII. THE PRESUMED-GRANT THEORY

       In letter briefs filed after the Texas Supreme Court issued its opinion in Van Dyke,

Appellees raise the issue of whether we should apply the presumed-grant theory in construing the

Deed. Van Dyke noted the “presumed-grant doctrine, ‘also referred to as title by circumstantial

evidence, has been described as a common law form of adverse possession.’” Van Dyke, 668

S.W.3d at 366 (citing Fair v. Arp Club Lake, Inc., 437 S.W.3d 619, 626 (Tex. App.—Tyler 2014,

no pet.)). The doctrine “requires its proponent to establish three elements: (1) a long-asserted and

open claim, adverse to that of the apparent owner; (2) nonclaim by the apparent owner; and (3)

acquiescence by the apparent owner in the adverse claim.” Id. (citing Magee v. Paul, 221 S.W.

254, 257 (Tex. 1920). The court left open the question of whether a fourth element was required,

i.e., a “gap in the title,” finding that even if necessary, there was a gap in the title in the deed in

                                                  22
that case that justified the doctrine’s application. 7 Id.; see also Balmorhea Ranches, Inc. v.

Heymann, 656 S.W.3d 441, 448–49 (Tex. App.—El Paso 2022, no pet.) (explaining that “gap in

title before the Twentieth century” raises presumed-grant doctrine application); Purnell v. Gulihur,

339 S.W.2d 86, 92 (Tex. App.—El Paso 1960, writ ref’d n.r.e.) (presumed-grant doctrine was

developed with the intent to “settle titles where the land was understood to belong to one who does

not have a complete record title, but [said person] has claimed [ownership for] a long time”). Here,

there is no evidence of a gap in the record, and Appellees contend the presumed-grant doctrine

should lead us to conclude that because the parties construed the Deed as conveying a 1/128th

mineral interest for the last 70 years, we should continue to construe it this way.

         Regardless of whether we can or should apply the presumed-grant theory here, none of the

Appellees raised this issue in their trial court pleadings, in their summary judgment motions, or in

their appellate briefing. Like adverse possession, we construe the presumed-grant theory as an

affirmative defense that must be pleaded in the trial court to be preserved as an issue for appeal.

Bridges v. Uhl, 663 S.W.3d 252, 269 (Tex. App.—El Paso 2022, no pet.) (concluding that

appellees waived the right to raise the presumed-grant theory on appeal as a basis for supporting

the trial court’s ruling on summary judgment where they failed to plead presumed grant and the

issue was not tried by consent in the trial court, even though Appellees affirmatively pleaded

equitable defenses of estoppel, quasi-estoppel, and adverse possession in their answers);

TEX. R. CIV. P. 94 (“In pleading to a preceding pleading, a party shall set forth affirmatively . . .

any . . . matter constituting an avoidance or affirmative defense.”); see also Vortt Expl. Co., Inc. v.

7
  In Van Dyke, the court discussed the presumed-grant theory as a means of confirming that it had correctly interpreted
a 1924 deed, recognizing that the parties had similarly construed the deed for over 90 years. Van Dyke, 668 S.W.3d at
366. In other words, the court utilized the theory to “remove any remaining doubts” it might have had regarding its
interpretation of the deed. Id. at 368. Here, we are in an opposite position, as we have concluded the parties have
wrongly interpreted the Cornell Deed since it was first drafted in 1951.

                                                         23
EOG Res. Inc., No. 11-07-00159-CV, 2009 WL 1522661, at *6–7 (Tex. App.—Eastland May 29,

2009, no pet.) (treating adverse possession as an affirmative defense to a counterclaim brought by

mineral estate owners seeking a declaration that an oil and gas operator’s lease was no longer in

effect); Haby v. Howard, 757 S.W.2d 34, 38 (Tex. App.—San Antonio 1988, writ denied) (treating

adverse possession as an affirmative defense to a trespass to try title claim). The presumed-grant

theory involves factual issues that must be decided by a trial court in the first instance, such as

whether any parties had in the past challenged the Deed’s interpretation. See generally Howland

v. Hough, 570 S.W.2d 876, 879–81 (Tex. 1978) (describing the doctrine as being a “presumption

of fact” that must be resolved by looking to the evidence presented in the trial court).

        Finally, we deny Appellees’ request that “in the interest of justice” we remand the matter

to the trial court for a determination of whether the doctrine applies, intimating that Van Dyke

announced this doctrine for the first time (after the parties filed their appeals in this case). Contrary

to Appellees’ suggestion, the presumed-grant doctrine is not a new theory as of Van Dyke. It is a

long-standing doctrine Appellees could have pleaded in the trial court. See Balmorhea, 656 S.W.3d

at 448 (recognizing that the United States Supreme Court described the doctrine as early as 1887

(citing Fletcher v. Fuller, 120 U.S. 534, 551 (1887)); see also Howland, 570 S.W.2d at 878–79

(discussing the doctrine in 1978).

        We therefore conclude that Appellees waived their right to raise this issue for the first time

on appeal.

        VIII. CONCLUSION

        We reverse the trial court’s order granting Appellees’ motions for summary judgment,

issuing a take-nothing judgment on Johnson and Cummings’s claims, and interpreting the Cornell

Deed as conveying a fixed 1/128th royalty interest to the Grantees. Although we arrive at the

                                                   24
conclusion that Johnson and Cummings were instead entitled to a floating 1/16th royalty interest

by different means than they suggested, we render judgment in favor of Johnson and Cummings

on their claim for a declaratory judgment. We remand the case for further proceedings on Johnson

and Cummings’s remaining claims for relief.

                                              LISA J. SOTO, Justice

July 10, 2023

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

                                                 25