Canter v. Lindsey

• Decision Date: 29 November 1978
• Docket Number: No. 6729,6729
• Citation: 575 S.W.2d 331
• Parties: Roger E. CANTER et al., Appellants, v. Weldon A. LINDSEY, Individually and as trustee, Appellee.
• Court: Texas Court of Appeals

Page 331

575 S.W.2d 331

Roger E. CANTER et al., Appellants, v. Weldon A. LINDSEY, Individually and as trustee, Appellee.

No. 6729.

Court of Civil Appeals of Texas, El Paso.

Nov. 29, 1978.

Rehearing Denied Dec. 20, 1978.

Sewell, Junell & Riggs, Gordon A. Holloway, Leighton E. Moss, Houston, Weaver & Ferguson, John T. Ferguson, Big Spring, Stubbeman, McRae, Sealy, Laughlin & Browder, W. B. Browder, Jr., Midland, for appellants.

Kerr, Fitz-Gerald & Kerr, Wm. Monroe Kerr, Michael T. Morgan, Harris E. Kerr, Freeman & Hyde, Robert F. Freeman, Midland, for appellee.

OPINION

WARD, Justice.

This is a suit for declaratory judgment to resolve a three-party dispute over the ownership of a 1/4Th royalty interest in certain lands in excess of 1/8Th royalty. The Plaintiff is the successor in interest of the grantee of a 1935 deed on certain lands in Martin County. He sued the Defendant, who is the successor in interest of the grantee of a 1941 conveyance. The Intervenors succeeded to the rights, if any, of the original grantor in the two deeds. Trial was to the Court upon stipulated facts, and judgment was entered in favor of the Plaintiff. The Defendant and Intervenors filed separate appeals. We reverse and render in favor of Intervenors.

The real parties in interest are all successors to the three principal actors involved in the two deeds, all of whom are now deceased. They were Mrs. Dora Roberts, M. C. Lindsey, and J. E. Mabee. Mrs. Dora Roberts was the owner of four leagues of land totalling 17,712 acres in Martin County, and is the common source of title. On January 19, 1935, Mrs. Roberts by deed sold to M. C. Lindsey an interest in the four leagues. This instrument is denominated "Royalty Deed," yet nowhere in the body of the instrument does there appear the word "royalty." As will be noted, it speaks in terms of a double fraction, 1/4Th of 1/8Th, and never the single fraction, 1/32Nd. The deed reserves to the grantor bonus, delay rentals, and all executive rights. Other provisions of this 1935 instrument from Dora Roberts to M. C. Lindsey are as follows:

" * * * do by these presents sell and convey unto M. C. Lindsey * * * ONE FOURTH OF ONE k EIGHTH (1/4 of 1/8) of all the oil, gas, and other minerals produced from the following described land * * *

" * * * the interest herein conveyed being an equal one fourth of one eighth (1/4 of 1/8) part of all of the oil, gas, and other minerals when same has been produced from said land, and to such extent, such part of any and all future productions of such is hereby conveyed."

On April 8, 1941, Dora Roberts executed and delivered to J. E. Mabee the deed conveying to Mabee a 3/4Ths interest in all the oil, gas, and other minerals in and under the four leagues of land, the provisions deserving the greatest attention being as follows:

"That I, Dora Roberts, * * * do GRANT, SELL, and CONVEY unto the said J. E. Mabee, of Tulsa, Oklahoma, a three-fourths (3/4) interest, undivided, in and to all of the oil, gas and other minerals, on, in, and under the certain tracts, parcels and pieces of land * * *

"For the same consideration, I have GRANTED, SOLD and CONVEYED, and by these presents do GRANT, SELL and CONVEY unto the said J. E. Mabee the right, privilege and authority to execute Oil and Gas Leases on the remaining one-fourth (1/4) interest in the oil, gas and other minerals in the above described land, and the right to receive all bonus monies and annual delay rentals accruing under any such lease covering such remaining 1/4Th interest, as well as all other benefits accruing thereunder, save and except the royalty payable under any such lease covering such 1/4Th interest, all royalty accruing under any such lease on such 1/4Th interest being payable to M. C. Lindsey, his heirs and assigns, who owns an undivided one-fourth (1/4) non-participating royalty interest in the oil, gas and other minerals in said land, but who has no right to execute an Oil and Gas Lease, or leases, thereon, or to receive any bonus monies or rentals payable thereunder, all of which rights were retained by grantor herein, and are herein assigned to J. E. Mabee, his heirs and assigns, to the end that from and after the execution hereof, J. E. Mabee shall own the sole right, privilege and authority to execute an Oil and Gas Lease, or leases, on all of the oil, gas and other minerals in and under the above described land and the right to receive all bonus monies and delay rentals accruing under any such lease, or leases, covering said land, but with the right to receive only three-fourths (3/4) of the royalty accruing under any such lease, or leases, the remaining one-fourth (1/4) interest in such royalty being owned by M. C. Lindsey, his heirs and assigns."

No other conveyances of any interest in or on the subject tract were thereafter made by Dora Roberts. On or about November 7, 1973, an oil and gas lease covering a portion of the subject tract was executed. It is this lease which provided for a royalty greater than 1/8Th, namely 3/16Ths, and it is this portion of this royalty whose ownership is disputed in the present suit. Production under that lease was obtained in 1974.

The position of each of the parties may be summarized as follows. First, the Plaintiff contends that under the 1935 deed and the 1941 deed he is entitled to a 1/4Th of any royalty reserved under any lease on the subject tract, with the remaining 3/4Ths of any such royalty being owned by the Defendant. In particular, he is claiming 1/4Th of the 3/16Ths royalty reserved in the lease, or in effect a 3/64Ths royalty interest.

Second, the Defendant contends that it is entitled to all royalty reserved under any lease on the subject tract in excess of 1/4Th of 1/8Th (1/32Nd) of all oil or gas produced, which 1/32Nd would be owned by the Plaintiff. In particular, the Defendant claims all of the 3/16Ths royalty reserved in the lease which is in excess of 1/4Th of 1/8Th (1/32Nd) of the oil and gas produced, or in effect a 10/64Ths royalty interest.

Third, the Intervenors contend that they are entitled to 1/4Th of any royalty in excess of 1/8Th which may be reserved in any lease covering the subject tracts. In particular, they are claiming 1/4Th of 1/16Th (or 1/64Th) of all oil or gas produced under the lease.

The positions of the parties are set forth graphically in the following table. The Plaintiff claims 1/4Th of any royalty reserved under any lease with the remaining 3/4Ths of any royalty owned by the Defendant.

Plaintiff - 1/4 of 3/16 = 3/64

Defendant - 3/4 of 3/16 = 9/64

Intervenors - 0 = 0

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3/16

The Defendant claims it is entitled to all royalty reserved under any lease in excess of 1/4Th of 1/8Th (1/32Nd), with the ownership of the royalty under the lease being as follows:

Plaintiff - 1/4 of 1/8 = 1/32

Defendant

all royalty in excess of 1/32

3/16 - 1/32 = 10/64

Intervenors - 0 = 0

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3/16

The Intervenors claim they are entitled to 1/4Th of any royalty in excess of 1/8Th reserved on any lease (1/4Th of 1/16Th, or 1/64Th).

Plaintiff - 1/4 of 1/8 = 1/32

Defendant - 3/4 of 3/16 = 9/64

Intervenors

1/4 all royalty in excess of 1/8

1/4 of (3/16-1/8) = 1/64

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3/16

The trial Court found both the 1935 and the 1941 deeds to be unambiguous and we agree with that conclusion, although we do not agree with the subsequent construction. All of the parties agree that the 1935 deed from Mrs. Dora Roberts to M. C. Lindsey is unambiguous. The interest conveyed to Lindsey by that 1935 deed is set forth twice in that instrument:

" * * * ONE FOURTH of ONE k EIGHTH (1/4 of 1/8) of all of the oil, gas, and other minerals produced from the (subject land.) * * *

" * * * the interest herein conveyed being an equal one fourth of one eighth (1/4 of 1/8) part of all of the oil, gas, and other minerals when same has been produced from (the subject land) * * *."

From this starting point, we note the first rule of construction of a deed, and that is that the intention of the parties be ascertained and given effect. However, this primary rule of construction must be modified with the restriction that it is not the intention which the parties may have...