Alford v. Krum

• Decision Date: 20 June 1984
• Docket Number: No. C-1905,C-1905
• Parties: James ALFORD et al., Petitioners, v. Minnie KRUM et al., Respondents.
• Court: Texas Supreme Court

Page 870

671 S.W.2d 870

James ALFORD et al., Petitioners, v. Minnie KRUM et al., Respondents.

No. C-1905.

Supreme Court of Texas.

June 20, 1984.

Rehearing Denied July 18, 1984.

Miller, Miller & Robinson, Thomas K. Robinson, Gonzales, for petitioners.

David F. Farris, Fort Worth, for respondents.

BARROW, Justice.

This is a suit to construe a mineral deed executed in 1929 by Mr. and Mrs. Frank Koncaba in favor of Walter A. Mang. The Alfords and others are successors of the Koncabas, the original grantors. Minnie Krum and others are the successors to Mang, the original grantee. After a non-jury trial, the trial court rendered judgment construing the deed to mean that the Koncabas conveyed only an undivided one-sixteenth mineral interest in an 85.9 acre tract. The court of appeals, with one justice dissenting, reversed the judgment, holding that the Koncabas conveyed a one-half interest in the permanent mineral estate. 653 S.W.2d 464 (1982). We reverse the judgment of the court of appeals and affirm the judgment of the trial court.

When the Koncabas executed their 1929 deed, there was an outstanding oil and gas lease on the tract of land. That lease terminated after the date of the deed. The deed that we must construe, with numbers added to the paragraphs, contains these words:

1. THAT Frank Koncaba and wife Josefa Koncaba of the County of Gonzales, State of Texas, has and by these presents do grant, bargain, sell, convey, set over and assign and deliver unto Walter A. Mang the following to-wit: one-half of the one-eighth interest in and to all of the oil, gas and other minerals in and under and that may be produced from the following described lands situated in Gonzales County, Texas, to wit:

Book 86, pages 540, 541, 542 Under date July 2, 1912.

Situated in Gonzales County State of Texas, on the waters of Peach Creek and being a sub-division of a 500 acre tract granted to the heirs of Robt. Davidson. [Followed by metes and bounds description of 85.9 acres.]

2. ... together with the right of ingress and egress at all times for the purpose of mining, drilling and exploring said lands for oil, gas and other minerals, and removing the same therefrom.

3. And said above described lands being now under an oil and gas lease originally executed in favor of Cranfill-Reynolds and now held by them, it is understood and agreed that this sale is made subject to said lease, but covers and includes 1/16 of all the oil royalty and gas rental or royalty due and to be paid under the terms of said lease.

4. It is agreed and understood that none of the money rentals which may be paid to extend the terms within which a well may be begun under the terms of said lease is to be paid to the said Walter A. Mang, and in the event that the said above described lease for any reason becomes cancelled or forfeited, then and in that event, the lease interests and all future rentals on said land, for oil, gas and mineral privileges shall be owned jointly by Walter A. Mang of Gonzales Texas and Frank Koncaba and wife, Josefa Koncaba each owning a one-half interest in all oil, gas and other minerals in and upon said land, together with one-half interest in all future rents.

Because the lease that was in effect at the time of this conveyance has since expired, the only question presented for resolution is the quantum of the permanent mineral estate intended to be conveyed by the terms of this deed.

Long-standing rules of interpretation and construction control the disposition of this cause. The primary duty of the courts in interpreting a deed is to ascertain the intent of the parties. Terrell v. Graham, 576 S.W.2d 610, 612 (Tex.1979); McMahon v. Christmann, 157 Tex. 403, 303 S.W.2d 341, 344 (1957). This rule of construction, however, must be modified with the restriction that it is not the intention that the parties may have had but failed to express in the instrument, but it is the intention that is expressed by said instrument. That is, the question is not what the parties meant to say, but the meaning of what they did say. Canter v. Lindsey, 575 S.W.2d 331, 334 (Tex.Civ.App.--El Paso 1978, writ ref'd n.r.e.); Davis v. Andrews, 361 S.W.2d 419, 423 (Tex.Civ.App.--Dallas 1962, writ ref'd n.r.e.). Finally, "[w]e must construe this language as it is written and we have no right to alter it by interpolation or substitution." Dahlberg v. Holden, 150 Tex. 179, 238 S.W.2d 699, 701 (1951).

In seeking to ascertain the intention of the parties, the court must attempt to harmonize all parts of a deed, since the parties to an instrument intend every clause to have some effect and in some measure to evidence their agreement. Woods v. Sims, 154 Tex. 59, 273 S.W.2d 617, 620 (1954). On the other hand, we realize that irreconcilable conflicts do exist; therefore, when it is impossible to harmonize internally inconsistent expressions of intent, the court must give effect to the "controlling language" of the deed and not allow ambiguities to "destroy the key expression of intent" included within the deed's terms. Texas Pacific Coal & Oil Co. v. Masterson, 160 Tex. 548, 334 S.W.2d 436, 439 (1960).

In cases involving the construction of mineral deeds, the "controlling language" and the "key expression of intent" is to be found in the granting clause, as it defines the nature of the permanent mineral estate conveyed. Kokernot v. Caldwell, 231 S.W.2d 528, 531-32 (Tex.Civ.App.--Dallas 1950, writ ref'd). It logically follows that when there is an irreconcilable conflict between clauses of a deed, the granting clause prevails over all other provisions. Lott v. Lott, 370 S.W.2d 463, 465 (Tex.1963); Waters v. Ellis, 158 Tex. 342, 312 S.W.2d 231, 234 (1958).

In the case here, the Koncabas, the Alfords' predecessors in title, clearly conveyed to Mang, the Krums' predecessor in title, "one-half of the one-eighth interest," or an undivided one-sixteenth interest, in and to all of the oil, gas, and other minerals in and under the described tract of land. A grant such as this is a fee estate in the minerals in place. Two incidents of this estate are the right to participate in lease benefits and the right to a fractional interest in the possibility of reverter accompanying an outstanding lease. R. Hemingway, The Law of Oil and Gas § 9.1, at 456 (2d ed. 1983); 3A W. Summers, The Law of Oil and Gas § 601 (2d ed. 1958).

Since this is not a suit for rescission or reformation of a deed, we may not indulge in the assumption that the drafter of the deed mistakenly inserted the fraction "one-half of the one-eighth" rather than "one-half." We are bound by the intent of the parties as expressed by the language in the deed. Therefore, we must determine whether we may legitimately expand or increase the permanent mineral interest specifically conveyed in the granting clause.

The court of appeals held that the phrase, "each owning a one-half interest in all oil, gas and other minerals in and upon said land, together with one-half interest in all future rents," which is contained in the fourth paragraph of the deed, defines the nature and extent of the permanent mineral estate in the subject premises. We disagree. The decision of the court of appeals not only disregards the express intent of the parties in the controlling part of the deed to limit the grant to a one-sixteenth mineral interest, but it also circumvents the well-established purpose of "future lease" clauses.

The purpose of the future lease clause is to explain or restate the operative effect of the grant in the granting clause in the event that any present lease terminated and that future leases were executed. R. Hemingway, The Law of Oil and Gas § 9.1, at 457; 3A W. Summers, The Law of Oil and Gas § 606, at 375-82; cf. 2 H. Williams & C. Myers, Oil and Gas Law § 340.2, at 238, 242 (1981). Consequently, Texas courts generally have treated the fractional interests in the last phrase of the future lease clause as nothing more than a restatement or confirmation of the interest deeded in the previous portions of the instrument. See Delta Drilling Co. v. Simmons, 161 Tex. 122, 338 S.W.2d 143, 145 (1960); Woods v. Sims, 154 Tex. 59, 273 S.W.2d at 619; Humble Oil & Refining Co. v. Harrison, 146 Tex. 216, 205 S.W.2d at 355, 357-60 (1947); Richardson v. Hart, 143 Tex. 392, 185 S.W.2d 563, 565 (1945); see also Fleming v. Ashcroft, 142 Tex. 41, 175 S.W.2d 401, 405 (1943); Kokernot v. Caldwell, 231 S.W.2d at 531-32; Cannon v. Wingard, 355 S.W.2d 776 (Tex.Civ.App.--Dallas 1962, writ ref'd n.r.e.). Furthermore, commentators have noted that these clauses are "redundant," "unnecessary," and useful only when the meaning of the granting clause is not clearly apparent. R. Hemingway, The Law of Oil and Gas § 9.1, at 457, 463; 3A W. Summers, The Law of Oil and Gas § 606, at 382.

This Court has consistently held that "[i]t is not permissible to give controlling effect to that which creates an ambiguity, and destroys the certainty which is expressed by other language, and thus overthrow the clear and explicit intention of the parties." Cartwright v. Trueblood, 90 Tex. 535, 39 S.W. 930, 932 (1897); see also R. Hemingway, The Law of Oil and Gas § 9.1, at 461. We have, therefore, given effect to the "controlling language" in the mineral deed--the granting clause. See, e.g., Waters v. Ellis, 158 Tex. 342, 312 S.W.2d 231; Kokernot v. Caldwell, 231 S.W.2d 528; Allen v. Creighton, 131 S.W.2d 47 (Tex.Civ.App.--Beaumont 1939, writ ref'd); Farmers Canal Co. v. Potthast, 587 S.W.2d 805 (Tex.Civ.App.--Corpus Christi 1979, writ ref'd n.r.e.).

The present mineral deed falls within the parameters of the foregoing rule because an irreconcilable conflict exists between the granting clause and the future lease clause; the former should control. Moreover, the future lease clause, as a whole, is unclear, and it is improper to give effect to it, especially at the expense of the granting clause. We must resolve the conflict and lack of clarity in...