Griffith v. Taylor
| Decision Date | 20 June 1956 |
| Docket Number | No. A-5638,A-5638 |
| Citation | 291 S.W.2d 673,156 Tex. 1 |
| Parties | L. H. GRIFFITH et al., Petitioners, v. W. H. TAYLOR, Respondent. |
| Court | Texas Supreme Court |
Stone & Stone, Amarillo, Cochran, Dudley, Fowler, Rucks, Baker & Jopling, Embry, Crowe, Tolbert, Boxley & Johnson, Oklahoma City, Okl., Clifford Braly & Thomas C. Braly, Pampa, for petitioners.
Sanders, Scott, Saunders & Smith, Amarillo, for respndent.
As originally begun, this suit was by W. H. Taylor, as plaintiff, against some thirty-five defendants to determine and settle a number of title matters. As it reaches us the case involves only the question of whether the respondent is entitled to the whole of the returns from a reservation in a lease of 1/16th of the minerals produced from certain tracts out of the Backward Seven Ranch, as he contends, or whether, as petitioners contend, the respondent is entitled to only 1/2 of the 1/16th and they the other 1/2 of the 1/16th. This question was decided in favor of the respondent by the trial court and that judgment was affirmed by the Court of Civil Appeals by a divided court. 284 S.W.2d 768.
The petitioner, Griffith, acquired by transfer whatever rights were held by one P. G. Malone under an instrument of conveyance executed by respondent Taylor and copied in full in the opinion of the Court of Civil Appeals. 284 S.W.2d 769-771. We shall deal only with this interest as all others similar and stand or fall on the same basis. Petitioner denominates the interest acquired under the instrument a 'mineral interest', while respondent calls it a 'nonparticipating royalty interest.' In the view we take of the case this difference of opinion is unimportant.
The conveyance was executed in 1928, at a time when the land was under a mineral lease providing for the usual 1/8th royalty. It conveyed to Malone an undivided 1/2 interest in and to all of the minerals under a certain tract of land, subject to the terms of the lease then in existence, including 1/2 of the 1/8th oil royalties and gas rentals due and to be due under the existing lease. The instrument then provided that if the existing lease should terminate, 'then and in that event, the oil, gas and mineral privileges' under the land should 'thereupon be owned jointly by the said W. H. Taylor and the said P. G. Malone, the said W. H. Taylor onwing an undivided one-half (1/2) interest and the said P. G. Malone owning an undivided one-half (1/2) interest in all oil, gas and other minerals in and under and upon said land' subject to such exceptions, reservations, and conditions as were thereafter incorporated in the instrument and subject to such future oil and gas mining leases as were given on the land.
Subsequent provisions of the instrument reserved to the grantor exclusive future leasing privileges, 'provided and conditioned that a royalty of not less than the equal one-eighth (1/8) part of the oil, and a royalty of not less than one-eighth (1/8) of the market value of the gas and casinghead gas, or of one-eighth (1/8) of the net proceeds of the sale of such gas or casinghead gas, is reserved to the lessor' in any lease, it being understood that the grantee, his heirs and assigns should 'receive and be entitled to one-half (1/2) of the royalty upon the oil, gas and casinghead gas' paid under any future oil, gas and mining leases.
By other provisions the grantor excepted from the conveyance and reserved unto himself all delay rentals and bonus payments made under future leases. The bonus reservation was referred to several times in the instrument. Illustrative of these references and sufficient for our purpose is the following: 'And the grantor herein, the said W. H. Taylor, expressly excepts from this conveyance and reserves unto himself all bonus money or other consideration which may or shall be received by him as a bonus for such oil and gas mining lease or leases, * * *.'
The existing leases terminated in due course and in 1953 Taylor executed a new lease on the premises. In paragraph 3 of the lease a conventional 1/8th royalty was reserved. Paragraph 11 of the lease reads as follows:
It is this 1/16th 'bonus royalty' which is the subject of this controversy, and we must determine whether the 1/16th is 'bonus' or 'royalty'.
Undoubtedly the parties to a mineral conveyance may, as between themselves, designate what returns under a lease are to be regarded as royalty and what are to be regarded as bonus. This right follows the right of contract. Thus it is in this case that the grantee in the mineral deed could have assured himself of the interest his assignee now asserts by providing in the instrument that all reservations of a part of the production under any future lease, coterminous with the lease, should be regarded as royalty. Just so, also, the grantor could have assured himself of the interest he now asserts by providing that all returns from production under any future lease, over and above the usual 1/8th royalty, should be regarded as bonus. The fact is, however, that neither provision is in the instrument under consideration, and whether the extra 1/16th is to be held to be 'bonus', all of which goes to the grantor, or 'royalty', in which the grantee shares, must be determined from the instrument as it is written. We must seek the intention of the...
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...at 121;accord Anglo–Dutch Petrol. Int'l, Inc. v. Greenberg Peden, P.C., 352 S.W.3d 445, 451 (Tex.2011); see Griffith v. Taylor, 156 Tex. 1, 5, 291 S.W.2d 673, 675 (1956). We examine the plain language of the entire lease agreement, consider the interaction between each of its provisions, an......
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...the word may be given a broader meaning than that ordinarily and commonly used in the oil and gas industry in Texas. Griffith v. Taylor, 156 Tex. 1, 291 S.W.2d 673 (1956). It seems that the Texas courts go no further than to hold that the courts will take judicial notice that the usual roya......
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