Garrett v. Dils Company

• Decision Date: 27 February 1957
• Docket Number: No. A-6129,A-6129
• Parties: Mattie GARRETT et al., Petitioners, v. DILS COMPANY, Respondent.
• Court: Texas Supreme Court

Page 904

299 S.W.2d 904

157 Tex. 92

Mattie GARRETT et al., Petitioners, v. DILS COMPANY, Respondent.

No. A-6129.

Supreme Court of Texas.

Feb. 27, 1957.

Rehearing Denied April 3, 1957.

Dawson & Dawson, Corsicana, for petitioner.

Bracewell, Tunks, Reynolds & Patterson, Houston, for respondent.

HICKMAN, Chief Justice.

This is an action in trespass to try title to a tract of land in Navarro County in which the sole controversy centers around the construction of a deed under which respondent holds an interest in the minerals in and under the land. The suit is by Mrs. Mattie Garrett and Mrs. Bee Lively, widow and surviving daughter, respectively, and sole heirs of C. S. Garrett, who died intestate before this suit was filed. The relevant provisions of the deed are as follows:

'That C. S. Garrett and wife, Mattie Garrett, both of Navarro County, Texas, for and in consideration of the sum of Fifteen Thousand Dollars cash in hand paid by J. Mentor Caldwell, hereinafter called Grantee, receipt of which is hereby acknowledged, have granted, sold, conveyed, assigned and delivered and by these presents do grant, sell, convey, assign and deliver unto the said Grantee an undivided one sixty-fourth interest in and to all of the oil, gas and other minerals in and under, and that may be produced from the following described land: (Description follows)

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

'Said land being now under an oil and gas lease executed in favor of I. B. Humphreys or his assigns, it is understood and agreed that this sale is made subject to the terms of said lease, but covers and includes one-eighth of all of the oil royalty, and gas rental or royalty due and to be paid under the terms of said lease.

'It is understood and agreed that one-eighth of the money rentals which may be paid to extend the term within which a well may be begun under the terms of said lease is to be paid to the said Grantee and in event that the above described lease for any reason becomes cancelled or forfeited, then and in that event an undivided one-eighth of the lease interest and all future rentals on said land for oil, gas and other mineral privileges shall be owned by said Grantee, he owning one-eighth of one-eighth of all oil, gas, and other minerals in and under said lands, together with one-eighth interest in all future rents.'

Respondent owns the interest which was conveyed to Caldwell by that deed.

As disclosed by that instrument, at the date of its execution, December 7, 1921, the land was under an oil and gas lease to I. B. Humphreys. That lease provided for a one-eighth royalty. No production was obtained thereunder, and it expired by its own terms. Subsequently another lease was executed, which likewise provided for a one-eighth royalty. That lease is still in existence and oil is being produced thereunder.

The trial court held that respondent is entitled to one sixty-fourth of the royalty payable under the lease now in existence, while the Court of Civil Appeals held that respondent is entitled to one-eighth of the royalty payable thereunder. 294 S.W.2d 730.

Upon the trial petitioners introduced in evidence a division order signed by respondent which defined its interest in the royalty as one sixty-fourth of the one-eighth. However, it was shown that when the division order was received by respondent it retained same and wrote to the company which was purchasing the oil from the lessee that it believed that a mistake had been made, and that it was entitled to one sixty-fourth of the entire production and not one sixty-fourth of one-eighth. In reply the purchaser wrote respondent that it had been advised by two attorneys who examined the deed that respondent's interest was one sixty-fourth of the one-eighth royalty. Thereafter the division order was signed. That evidence did not disclose that the parties construed the deed to convey only one sixty-fourth of the one-eighth royalty, and the parties do not here contend that it does. On the contrary, it is the view of all parties that the instrument is not ambiguous, and our decision will rest upon that theory.

(1) In construing the deed we shall be guided by the well-established rule which we recently reaffirmed in Harris v. Windsor, Tex., 294 S.W.2d 798, 799, 800, in this language:

'We have long since relaxed the strictness of the ancient rules for the construction of deeds, and have established the rule for the construction of deeds as for the construction of all contracts,-that the intention of the parties, when it can be ascertained from a consideration of all parts of the instrument, will be given effect when possible. That intention, when ascertained, prevails over arbitrary rules. Benskin v. Barksdale, Tex.Com.App., 246 S.W. 360; Sun Oil Co. v. Burns, 125 Tex. 549, 84 S.W.2d 442.'

(2) Another applicable rule is that should there be any doubt as to the proper construction of the deed, that doubt should be resolved against the grantors, whose language it is, and be held to convey the greatest estate permissible under its language. Curdy v. Stafford, 88 Tex. 120, 30 S.W. 551; Allen v. Creighton, Tex.Civ.App., 131 S.W.2d 47, er. ref.

The question of immediate concern to the parties is the royalty to which the respondent is entitled under the existing lease. We shall approach the solution of that question by considering first the royalty to which it would have been entitled had there been production under the lease in existence when the deed was executed, and then determining from the language of the deed whether it was the intention of the parties that the royalty was to be the same under subsequent leases.

(3) Should the granting clause be considered alone there would be no doubt as to the interest conveyed. It states in certain terms that the interest conveyed was 'an undivided one sixty-fourth interest in and to all of the oil * * *.' Had other language in the deed not disclosed what the parties understood 'one sixty-fourth' to mean, it would be our duty to give those words their usual meaning and construe the deed as a mineral deed to an undivided one sixty-fourth of the minerals in place. But there follows the granting clause language which clearly defines what the parties understood 'one sixty-fourth' of the minerals to mean. After reciting that the land was under an oil and gas lease, the deed provided that 'it is understood and agreed that this sale * * * covers and includes one-eighth of all of the oil royalty, and gas rental or royalty due and to be paid under the terms of said lease.' Construing all of these provisions together it is made certain that what the parties intended to convey, had there been production under the then existing lease, was a royalty of one sixty-fourth or one-eighth of the one-eighth royalty retained in the lease. The rights conveyed by the deed under the then existing lease were one-eighth of the money rentals which might be paid to extend the term within which a well might be begun and one-eighth of the one-eighth royalty.

(4, 5) Turning now to the rights acquired by Caldwell under that deed in the event the then existing lease should terminate, it is provided that 'then and in that event an undivided one-eighth of the lease interest and all future rentals on said land for oil, gas and other mineral privileges shall be owned by said Grantee, he owning one-eighth of one-eighth of all oil, gas, and other minerals in and under said lands, together with one-eighth interest in all future rentals.' We can discover in that language no intent to grant a less interest under a subsequent lease than that granted under the then existing lease. As pointed out above, there was granted one sixty-fourth of the minerals which the parties construed to mean one-eighth of the one-eighth royalty under the then existing lease. The provision for ownership of the minerals under future leases is that the grantee shall own 'one-eighth of one-eighth' of the minerals. Had that fraction been expressed as one sixty-fourth, it should be given the same meaning as in the granting clause which the parties understood and agreed to be a one sixty-fourth royalty or one-eighth of the one-eighth royalty. Instead of employing the fraction one sixty-fourth in defining the ownership under a shbsequent lease, the provision is for one-eighth of one-eighth. Clearly, that does not denote a less interest than a one sixty-fourth, but on the contrary it emphasizes the fact that the intention was to convey one-eighth of the royalty under future leases the same as under the original lease. The court takes judicial knowledge of the fact that the usual royalty provided in mineral leases is one-eighth. The parties doubtless assumed that the royalty under future leases would be one-eighth, as it was under the lease in existence when the deed was executed.

Considering further the rights acquired by the vendee in that deed in the event the lease in existence when the deed was executed should terminate, it is provided that the vendee should acquire 'one-eighth of the lease interest and all future rentals.' That can have no other meaning than that the grantee shall have the right to lease an undivided one-eighth interest in the minerals and to receive one-eighth of all future rentals, or, at any rate, to receive one-eighth of the bonus paid for future leases and one-eighth of the rentals. The right to one-eighth of the bonus and rentals and one-eighth of the royalty left no right in the vendors in the one-eighth interest. Having all the rights incident to ownership of one-eighth of the minerals, the conclusion follows that the deed conveyed to Caldwell an undivided one-eighth of the minerals.

Construing this deed as a whole and giving effect to each and every provision thereof, we are led to the conclusion that the royalty...