Luckel v. White

• Decision Date: 24 May 1990
• Docket Number: No. A14-89-00580-CV,A14-89-00580-CV
• Parties: Eb F. LUCKEL et al., Appellants, v. Furl WHITE et al., Appellees. (14th Dist.)
• Court: Texas Court of Appeals

Page 485

792 S.W.2d 485

Eb F. LUCKEL et al., Appellants, v. Furl WHITE et al., Appellees.

No. A14-89-00580-CV.

Court of Appeals of Texas Houston (14th Dist.).

May 24, 1990.

J.M. Slator, III, Houston, for appellants.

Claude C. Roberts, Houston, E.R. Norwood, Liberty, Thomas A. Zabel, Houston, Rex G. Fortenberry, Beaumont, Bradford Pickett, Liberty, Christie Condara, Houston, for appellees.

Before J. CURTISS BROWN, C.J., and JUNELL and MURPHY, JJ.

OPINION ON REHEARING

J. CURTISS BROWN, Chief Justice.

This is an appeal from final judgment in a severed cause in which appellants' motion for partial summary judgment was overruled and appellees' motion for partial summary judgment was granted after construction by the trial court of a royalty deed which was agreed by the parties, and expressly found by the court below, to be unambiguous.

On April 26, 1990, this court issued an opinion in which it affirmed the judgment of the court below. On May 11, 1990, appellants filed a motion for rehearing. We overrule the motion for rehearing, withdraw our opinion of April 26, 1990, and substitute the following opinion.

Appellants bring three points of error alleging trial court error: (1) in granting motion and entering final judgment for appellees; (2) in declaring the deed at issue grants and conveys a permanent 1/32 non-participating royalty interest in a certain 448 acres of land in Chambers County; and (3) failing to declare that the deed at issue granted and conveyed a 1/4th interest in any and all royalties reserved or payable under any oil, gas and/or other mineral leases on any part of the 448 acres. We affirm.

We are asked to review the construction by the court below of the unambiguous "Mayes-Luckel deed", which reads as follows:

No. 672

STATE OF TEXAS

COUNTY OF HARRIS

KNOW ALL MEN BY THESE PRESENTS: That I, Mary Etta Mayes, a feme sole, of Chambers County, Texas, for a valuable consideration to me in hand paid by L.C. Luckel, Jr. of $3,360.00 receipt whereof is hereby acknowledged, have granted, bargained, sold and conveyed and by these presents do hereby grant, bargain, sell and convey unto the said L.C. Luckel, Jr. an undivided one-thirty-second ( 1/32nd) royalty interest in and to the following described property, to wit

[metes and bounds of the 448 acres omitted]

TO HAVE AND TO HOLD the above described 1/32nd royalty interest in and to the above described property, together with all and singular the rights and appurtenances thereto unto the said L.C. Luckel, Jr. his heirs and assigns forever, and I do hereby bind myself, my heirs, executors and administrators, to WARRANT AND FOREVER DEFEND, all and singular the said 1/32nd royalty interest unto the said L.C. Luckel, Jr. his heirs and assigns against every person whomsoever lawfully claiming or to claim the same or any part thereof.

It is understood that said premises are now under lease originally executed to one Coe ¹ and that the grantee herein shall receive no part of the rentals as provided for under said lease, but shall receive one-fourth of any and all royalties paid under the terms of said lease.

It is expressly understood and agreed that the grantor herein reserved [sic] the right upon expiration of the present term of the lease on said premises to make other and additional leases without the necessity of the joinder of the grantee herein and the grantee shall be bound by the terms of any such leases so made but shall not be entitled to receive any part of the bonuses paid for said lease or any part of the cash rentals that may be paid thereunder, but shall be entitled to one-fourth of any and all royalties reserved under said leases.

It is understood and agreed that Mary Etta Mayes is the owner of one-half of the royalties to be paid under the terms of the present existing lease, the other one-half having been transferred by her to her children and by the execution of this instrument, Mary Etta Mayes conveyed one-half of the one-sixteenth ( 1/16th) royalty now reserved by her.

WITNESS my hand this 19 day February, A.D. 1935.

Her

Mary Etta X Mayes

Mark

Mrs. M.A. Hankamer

Witness

STATE OF TEXAS

[notary acknowledgement omitted]

COUNTY OF CHAMBERS

The functional parts of the Mayes-Luckel deed are:

A. The granting clause, conveying an undivided 1/32nd interest.

B. The habendum clause, confirming the 1/32nd grant as "forever".

C. The warranty provision as to the 1/32nd interest granted.

D. The "subject to" clause, identifying the Coe lease then in existence.

E. The "future lease" clause (which reserves to the grantor executive leasing rights and rights to certain payments), granting 1/4th of any royalties due under any future leases.

F. The "last clause" which merely reaffirms and clarifies participation under the Coe lease.

The controversy before us arises from the fact that the future lease clause can be read to entitle the grantee to a different royalty interest than that which is conveyed to him by the granting clause.

Appellants ask that we reverse and render upon finding the intention of Mary Etta Mayes was to grant to L.C. Luckel, Jr. a 1/4th interest in royalties accruing under the Coe lease until its expiration, and 1/4th of the royalty due under any other leases entered into after termination of the Coe lease. The significance of appellants' requested deed construction is that, whereas the Coe lease provided for a 1/8th royalty, some future leases were entered into reserving a 1/6th royalty. Appellants would have us hold that the heirs and assigns of L.C. Luckel have certain rights to oil and gas (and other minerals) recovered from the land equal to 1/24th of the total production or its value, such fraction being larger, and different, than the 1/32nd conveyed by the granting clause of the deed.

The rules in Texas for the construction of an unambiguous deed are clear.

When possible, the intention of the parties will prevail over arbitrary rules of construction, if that intention can be ascertained from consideration of all parts of the instrument. Harris v. Windsor, 156 Tex. 324, 294 S.W.2d 798 (1956).

A rule of strict construction against the grantor is not applicable in the absence of ambiguity. Arnold v. Ashbel Smith Land Co., 307 S.W.2d 818, 824 (Tex.Civ.App.--Houston 1957, writ ref'd n.r.e.), [citing, inter alia, Citizens Nat'l Bank in Abilene v. Texas & P. Ry. Co., 136 Tex. 333, 150 S.W.2d 1003, 1006 (1941), for the additional proposition that an agreement, as a whole, must be harmonized wherever possible].

Each deed must be construed from the language used in that particular deed. Gibson v. Watson, 315 S.W.2d 48, 56 (Tex.Civ.App.--Texarkana 1958, writ ref'd n.r.e.). The question becomes not what the parties meant to say, but the meaning of what they did say. Alford v. Krum, 671 S.W.2d 870, 872 (Tex.1984), citing Canter v. Lindsey, 575 S.W.2d 331, 334 (Tex.Civ.App.--El Paso 1978, writ ref'd n.r.e.); and Davis v. Andrews, 361 S.W.2d 419, 423 (Tex.Civ.App.--Dallas 1962, writ ref'd n.r.e.).

If possible, all parts of the instrument must be given effect by harmonizing and not striking down any part of the deed unless there is irreconcilable conflict with one part of the instrument having the effect of destroying another part. Benge v. Scharbauer, 152 Tex. 447, 259 S.W.2d 166, 167 (1953).

The Texas lodestar case for construing a deed where the granting clause and the future lease clause are in conflict with each other is Alford v. Krum, 671 S.W.2d 870 (Tex.1984), which was followed in Hawkins v. Texas Oil & Gas Corp., 724 S.W.2d 878 (Tex.App.--Waco 1987, writ ref'd n.r.e.), and Stag Sales Co. v. Flores, 697 S.W.2d 493 (Tex.App.--San Antonio 1985, writ ref'd n.r.e.).

In Alford the Texas Supreme Court construed a mineral deed in which:

1. the granting clause conveyed a 1/2 of a 1/8th mineral interest.

2. a "subject to" clause conveyed a 1/16th of royalty due under an existing lease.

3. a "future lease" clause provided for an equal (one-half) mineral ownership by the grantor and grantee at the end of the term of the existing lease.

Noting the obvious construction problem where a 1/16th mineral interest is conveyed by the granting clause and a 1/2 reversionary mineral interest is provided for in a future lease clause, the supreme court determined the granting clause defined the permanent interest which was intended to be conveyed. The "controlling language" and the "key expression of intent" defining the permanent mineral estate conveyed is found in the granting clause. Id. 671 S.W.2d at 872. "[W]hen there is an irreconcilable conflict between clauses of a deed, the granting clause prevails over all other provisions." ² Id., citing Lott v. Lott, 370 S.W.2d 463, 465 (Tex.1963); Waters v. Ellis, 158 Tex. 342, 312 S.W.2d 231, 234 (1958).

The royalty interest conveyed in the Mayes-Luckel deed is not the same as the "mineral interest" found in Alford. An interest in minerals in place and an interest in royalty are separate and distinct estates in land. Pich v. Lankford, 157 Tex. 335, 302 S.W.2d 645 (1957). However, the two are not strangers to each other. A royalty interest is derived from the grantor's mineral interest and becomes a nonpossessory interest in minerals, recordable and alienable, and taxable to its owner as real property. See Sheffield v. Hogg, 124 Tex. 290, 77 S.W.2d 1021 (1934).

There are no less than five usual incidents of ownership in the severed fee estate of minerals in place (the so-called "bundle of rights"): (1) ingress and egress [for exploration]; (2) executive rights [to assign the right of entry]; (3) bonus payments; (4) delay rentals; and (5) royalties. With the exception of executive rights ³, each of the incidents of ownership can be conveyed separately and become estates apart from the others. L.G. Mossburg, Jr., Handbook on Petroleum Land Titles, § 3.01, at 58, 59 (1976). Accord, Altman v. Blake, 712 S.W.2d 117, 118 (Tex.1986); Elick v. Champlin Petroleum Co., 697 S.W.2d 1, 4 ...