Court Opinion

ID: 9666163
Source: CourtListenerOpinion
Date Created: 2023-08-24 01:06:53.010214+00
Date Added: 2024-06-11T18:15:24.298273
License: Public Domain

PHILLIPS, Chief Justice,
dissenting.
I respectfully dissent. I agree with both the trial court and the court of appeals that the provisions of the deed may be best harmonized by interpreting the deed to convey a fixed V32nd royalty interest.
The court’s preoccupation with giving literal effect to the language of the future-lease clause is akin to a Ptolemaic insistence on placing the earth at the center of the universe. In focusing solely on the words of this one clause, the court has tortured the plain terms of at least three other clauses, which must be fully considered to ascertain the actual intent of the parties. See, e.g., Altman v. Blake, 712 S.W.2d 117, 118 (Tex.1986); Benge v. Scharbauer, 152 Tex. 447, 451, 259 S.W.2d 166, 167 (Tex.1953). A fair examination of the four comers of the deed, in my opinion, compels a different result.
On its face, the future-lease clause appears to grant a one-fourth interest in all royalties under future leases, regardless of the size of the royalty. But the granting, warranty, and habendum clauses of the deed all unambiguously convey and warrant a Vknd royalty interest forever. As the court acknowledges, when the Mayes-Luckel deed was executed in 1935, most private oil and gas leases provided for a ⅛⅛ royalty. See State Nat’l Bank v. Morgan, 135 Tex. 509, 516, 143 S.W.2d 757, 761 (1940). If we take judicial notice of this fact, as we have before, we may assume that the parties were aware of this standard royalty when they drafted the deed. See Sun Oil Co. (Delaware) v. Madeley, 626 S.W.2d 726, 731 (Tex.1981); Garret v. Dils Co., 157 Tex. 92, 96, 299 S.W.2d 904, 907 (1957). I believe the parties failed to contemplate that a one-fourth share of future royalties might not always equal V32nd of production, and carelessly referred to the interest under future leases as one-fourth of all royalties rather than one fourth of a Vsth royalty.
This interpretation allows us to harmonize the apparently contradictory language of the future-lease clause with the granting clause’s permanent grant of a Vfend royalty interest. Construing the deed as a whole, I would conclude that the parties intended the future-lease clause merely to extend the effect of the grant of a permanent Vtand royalty interest to future leases.
*466The court argues that it is just as reasonable to suppose that the parties really intended to grant a one-fourth interest in all future royalties and that their mistake came in using language appropriate to a permanent V32nd royalty interest because they thought that the two interests would always be the same. Under this interpretation, the deed conveyed to Luckel (1) a present interest in one fourth of the royalties payable under the Coe lease, or a V32nd royalty, and (2) a separate present interest in a fraction of Mayes’s possibility of re-verter upon termination of the Coe lease. To avoid a breach of warranty, the court holds that Luckel’s fractional interest in the possibility of reverter is now equal to one fourth of all royalties reserved under all leases, or a V32nd royalty, whichever is greater.
Indeed, this interpretation is one possible way of reconciling all the provisions. However, I do not believe that it truly harmonizes the provisions or that it comports with what common sense tells us was probably the intent of the parties. Although possible, it is unlikely that the grantor intended the future-lease clause to grant a separate interest in addition to that granted by the other clauses of the deed. “The oft-repeated expression that a grantor has the power to convey by one instrument different interests in the possibility of reverter and under the subsisting lease should not obscure the fact that very few grantors really intend to convey interests of different magnitude.” 2 H. Williams & C. Meyers, Oil and Gas Law § 340.2, at 242-43 (1990). Rather than interpreting the future-lease clause as an additional grant, I would give effect to the clear and unambiguous language of the granting, habendum, and warranty clauses, all of which express the intent to grant a permanent V32nd interest.
Finally, despite holding that no irreconcilable conflicts exist between the provisions of the deed, the court deems it necessary to overrule Alford v. Krum, 671 S.W.2d 870 (Tex.1984). In that case, when confronted by what we believed to be an irreconcilable conflict between the granting clause and the future-lease clause of a deed, we gave effect to the language of the granting clause, following the “repugnant to the grant” rule. In the present case, no party has urged, nor does the court find, a conflict between the granting clause and any other clause of the deed. I therefore would reserve the question of the continued viability of Alford for a case that presents an actual conflict between the provisions of a deed.
GONZALEZ, COOK and HIGHTOWER, JJ., join in this dissent.