Court Opinion

ID: 9671589
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:39:55.802407+00
Date Added: 2024-06-11T18:16:10.794403
License: Public Domain

*70WALKER, Justice
(dissenting).
The outcome of this case is a tribute to effective appellate advocacy. Petitioners have insisted from the beginning that the intention of the parties to the lease must be ascertained by first determining the meaning of the first royalty clause when considered alone, and then construing all of the other, provisions in such manner that they will be in harmony with the previously determined meaning of such clause. To assist in presenting their oral argument, counsel for petitioners had prepared large poster boards with the relevant lease provisions printed thereon. Throughout most of their argument, however, they allowed us to see only the first royalty clause and kept the other portions of the display covered. It was only at the very end that we were allowed a glimpse of the remaining lease provisions. This approach is now embraced by the Court, although it does violence to the most fundamental of all rules for ascertaining the intention of parties to a written instrument. “It is axiomatic that, ‘An agreement should be interpreted as a whole and the meaning gathered from the entire context and not from particular words, phrases, or clauses. In fact the entire agreement is to be considered to determine the meaning of each part. All provisions should, if possible, be so interpreted as to harmonize with each other.’ 12 Am.Jur. 112, Contracts, § 241.” Aiderman v. Alderman, Tex.Civ.App., 296 S.W. 2d 312 (writ ref.). See also Moody v. Moody, 154 Tex. 114, 274 S.W.2d 535.
One is tempted to join in the majority opinion solely because of what, for want of a better term, we sometimes call the equities of the case. The idea that respondents could produce gas worth millions of dollars and pay as royalty only $100.00 per well per year is as shocking to my sense of fairness as it is to the other members of the Court. A judge would perhaps be less than human if • he never experienced the desire to patch up, within what he conceives to be the limits imposed by law, deficiencies in an agreement which later turns out to be a bad bargain for one of the parties. On the other hand, petitioners are oil companies and have been engaged in the oil and gas business for many years. Presumably they had competent legal advice and knew the risks they were taking in acquiring the interests they now hold under the original lessors. In any event their position under the holding of the Court of Civil Appeals is no worse, and indeed is considerably better, than that of any landowner who sold and conveyed his minerals for a song forty years ago. Instead of setting out to reach a particular result in the present case, therefore, I have attempted to ascertain, in accordance with settled rules of construction, the intention of the parties to the lease at the time it was executed.
I begin with the lease as it was signed by the parties. A reading of the entire instrument discloses that there are two separate royalty provisions, each of which, when considered alone, clearly covers the gas production involved in this case. The first royalty clause reserves to the lessors “the equal one-eighth part of all oil produced and saved from the leased premises and Ys of the net proceeds of potash and other minerals at the mine.” Gas is undoubtedly a mineral and certainly is covered by the term “other minerals” in the first royalty clause when the same is suspended in a vacuum and viewed apart from the remainder of the lease.
There are, however, other provisions which deal specifically with the royalty payable on gas produced from the leased premises. The second royalty clause obligates the lessee to “pay the lessor One Hundred Dollars, each year in advance, for the gas from each well where gas only is found, while the same is being used off the premises.” This clearly, plainly, unequivocally, and even more definitely and certainly than the first royalty clause, applies to the gas production now in issue. It spells out in simple words the rights of the lessors and *71the obligations of the lessee under the facts of this case. In view of the positions taken in the majority and concurring opinions, it perhaps should be pointed out that the second royalty clause does not purport to deal only with gas used by the lessee off of the leased premises. According to its own terms, the royalty therein provided must be paid whenever gas produced from a gas well is used off the premises. The gas here in question was produced from wells where gas only was found. It was used off the leased premises. Each condition, requirement and word of the second royalty clause is thus satisfied. How can it be said then that such clause is ambiguous within itself, or that there is any doubt or uncertainty as to the meaning and effect of its provisions standing alone? In my opinion there is no basis whatsoever for questioning its import unless one wishes to erect a straw man for the purpose of striking it down.
We thus have two separate and inconsistent royalty clauses either of which, according to their respective terms, might have been intended by the original lessors and lessee to govern the rights of the parties to this case. In these circumstances, my natural inclination is to say that the specific controls over the general. Since the parties dealt in plain and unmistakable language with the royalty to be paid on gas, it seems reasonable to suppose that the term “other minerals” was not used by them'in the broad sense now attributed to it by the Court. When the remaining provisions of the lease and the circumstances surrounding its execution are considered, my natural inclination becomes a conviction.
The parties began with a printed form which covered oil and gas but no other mineral. This form contained provisions authorizing the lessee to operate for and produce oil and gas, stipulating that the lease would remain in force for a primary term of years and as long thereafter as oil or gas is produced from the land by the lessee, and spelling out in plain and specific terms the royalties which the lessors would be entitled to receive on oil and gas produced from the leased premises. Throughout the instrument only the word “well” was used in referring to the shaft or hole which would be sunk by the lessee in his search for and production of oil and gas. That word appears in the lease at least eleven times in either its singular or plural form.
By means of handwritten interlineations, the parties amended this printed form to make the same cover not only oil and gas but also potash and other minerals. They changed the granting clause to authorize the lessee to operate “for oil and gas, potash and other minerals.” Obviously they did not mean for the term “other minerals” as used in that clause to include gas. They amended the habendum clause to provide that the lease would- remain in- force as long after the primary term “as oil or gas, potash or other minerals or either of them, is produced from said- land by the lessee.” In making this interlineation, the parties, clearly did not think that the words “other, minerals” included gas. Finally, they changed the first royalty clause to-require the lessee to pay as royalty “the equal one-eighth part of all oil produced and saved from the leased premises and % of the net-proceeds of potash and other minerals at the mine.” What did they mean by the words “other minerals” when this - inter-lineation was made ? They had already used the term twice, and in neither instance could they have intended for the same to include gas. They also knew that the lease already contained printed provisions specifically dealing with the royalties to be paid by the lessee on gas. They further knew that throughout the lease any shaft or pit through which oil or gas might be produced was referred to as a well. With this knowledge they amended the first royalty clause to make the same cover, in addition to oil, potash and other minerals at the mine. In these circumstances, it seems clear to me that they intended for such clause to apply only to: (1) oil; (2) potash, and (3) other *72minerals that might he extracted from a mine as distinguished from an oil or gas well and which were not covered by the remaining royalty provisions of the lease.
It is no answer to say that the word “minerals” has been construed to include gas as a matter of law, or that an oil or gas well can be called a mine. Nor is it within our province to rewrite the lease so it will read as we might believe the parties would have made it read if they had envisioned subsequent developments in the oil and gas industry. Our problem and our responsibility are to ascertain the sense in which the words of the instrument were used by the lessors and lessee, and then enforce their agreement accordingly. The words of a legal document should never be given a fixed and unalterable matter-of-law meaning where it affirmatively appears from the instrument itself and the circumstances surrounding its execution that they were used by the parties in an entirely different sense. “An imaginary communism might conceivably bring men to such a level of intellectual uniformity that their thoughts would be expressed in invariably identical symbols. But until such a day comes, the varieties of individual expression and sense must be unquenchable. So long as men are allowed to grant and contract freely, and so long as the law undertakes to carry out those acts by enforcement, just so long must the standard of interpretation continue to be mobile, subjective, and individual.” Wigmore on Evidence, 3rd ed. 1940, § 2462. From a reading of the entire lease in this case and after considering the circumstances surrounding its execution, I am persuaded that if the lessors and lessee had been asked, either immediately before or immediately after or at the time it was signed, whether they meant for the first royalty clause to cover and include gas, they would have replied with an emphatic negative. I would affirm the judgment of the Court of Civil Appeals.
NORVELL, J., joins in this dissent.