Mineral Interests
Mineral Conveyances
1924 Deed’s Mineral Reservation of “One-Half of One-Eighth”
Interpretation of Contracts and Deeds
Estate-Misconception Theory
Oil-and-Gas Lease
Fee Simple Determinable with the Possibility of Reverter of the Entire Estate
Presumed-Grant Doctrine (= Title by Circumstantial Evidence = Common Law Form of Adverse Possession)
Oil & Gas Law
Property Law
Texas Law
Only in a legal text could the formula “one-half of one-eighth” mean anything other than one-sixteenth. But in the law, “one-half of one-eighth” sometimes equals one-half—in the context of reservations of mineral interests.
This case involves the first seeming oddity mentioned above: the so-called “double-fraction” dilemma from antique mineral conveyances in which the parties insisted on using two fractions. We must stretch back nearly a century to determine the meaning of a 1924 deed’s mineral reservation of “one-half of one-eighth.” This is not our first case involving double fractions, and it is likely not our last. But building on our precedents, and focused on our duty to faithfully interpret any legal text, we anticipate at least substantially reducing the frequency of disputes about double fractions. We conclude that an accurate construction of the 1924 text requires us to accept that the equation “one-half of one-eighth” equals one-half of the mineral estate. Even if this were not so, nearly a century of the parties’ unbroken understandings and representations would require us to recognize that allocation of present-day ownership by applying the presumed-grant doctrine. We accordingly reverse the judgment of the court of appeals and remand the case to the trial court for further proceedings.
In 1924, George H. Mulkey and Frances E. Mulkey conveyed their ranch and the underlying minerals to G.R. White and G.W. Tom (who had a general partnership called “White and Tom”) with the following reservation: It is understood and agreed that one-half of one-eighth of all minerals and mineral rights in said land are reserved in grantors, Geo. H. Mulkey and Frances E. Mulkey, and are not conveyed herein.
After the deed’s execution, both parties, their assignees, and various third parties engaged in numerous transactions and filings reflecting that each side of the original conveyance had an equal 1/2 interest in the minerals. This included further conveyances, leases, ratifications, division orders, contracts, probate inventories, stipulations, and various other recorded documents.
(…) For nearly ninety years after the original deed’s execution, the parties (including new owners who received various interests) continued without exception to engage in transactions and to make representations about their ownership interests that were consistent with the understanding that each original side had always had a 1/2 interest in the minerals.
(…) A text retains the same meaning today that it had when it was drafted. 1Thus, the ordinary meaning at the time of drafting remains the meaning to which courts must later adhere. We have made this basic point repeatedly, even in the very double-fraction context that we confront today: “Words must be given the meaning they had when the text was adopted.” Hysaw v. Dawkins, 483 S.W.3d 1, 13 (Tex. 2016) (quoting Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 78 (2012)).
1While there are minor differences between statutory interpretation and the interpretation of private instruments like contracts and deeds, the fundamental principle at issue here—that words keep meaning what they originally meant—is equally applicable to both.
Precisely because we are addressing the ordinary process of ascertaining a text’s meaning, we emphasize that the initial analysis remains confined to the four corners of the document as usual. We said that, too, in a case involving the double-fraction problem. See Garrett v. Dils Co., 299 S.W.2d 904, 906 (Tex. 1957). Our interpretation of any contract or deed primarily concerns the parties’ intended meaning. See, e.g., Myers v. Gulf Coast Mins. Mgmt. Corp., 361 S.W.2d 193, 197 (Tex. 1962). But as always, we determine intent objectively by giving words their fair meaning. Matagorda Cnty. Hosp. Dist. v. Burwell, 189 S.W.3d 738, 740 (Tex. 2006). We do not start with extrinsic evidence, nor do we credit claims made in litigation of a secret or bespoke meaning that no one not privy to the code reasonably would have understood. True, “parties may freely define an ordinary word to have an unusual meaning; when they do, they rebut the presumption of ordinary usage. Without any textually expressed bespoke meaning, however, courts will adopt the ordinary usage as a matter of law.” Perthuis v. Baylor Miraca Genetics Lab’ys, LLC, 645 S.W.3d 228, 236 (Tex. 2022) (footnote omitted). The question, then, is what the ordinary usage of the textually undefined term “one-half of one-eighth” actually was. In other words, we do not begin by asking what the original White and Mulkey parties secretly or unusually might have meant by it. Merely indulging that question at this stage of the analysis would invite a flood of unreliable and destabilizing extrinsic evidence, which would be contrary to our precedents and hostile to the rights of parties to have their documents’ meaning measured objectively without being undermined by a later (perhaps much later) subjective inquiry. Deeds provide a good example of why we insist on language bearing its ordinary meaning. Recording deeds and similar instruments is purposefully a public enterprise designed to elicit public reliance. “The reliability of record title contributes mightily to the predictability of property ownership that is so indispensable to our legal and economic systems.” Cosgrove v. Cade, 468 S.W.3d 32, 34 (Tex. 2015). A properly recorded deed, like the one at issue here, “provides all persons, including the grantor, with notice of the deed’s contents,” id., which would be far less valuable without a consistent and stable judicial construction of terms used in deeds. The meaning of a deed, in other words, matters to the public writ large, not merely to those who wrote it. So important is it that these records are public and permanent that we recently overturned a decades-old default judgment foreclosing a tax lien largely because of the failure “to consult public deed and tax records,” which would have revealed information necessary to achieve proper service on a defendant. Mitchell v. MAPRes., Inc., 649 S.W.3d 180, 191 (Tex. 2022).
We therefore ask, as the Court in New Prime did, whether there is some objective reason that the double fraction in the deed at issue meant something other than its arithmetical result. URI, 543 S.W.3d at 765. Said differently, using extrinsic evidence of subjective intent to inform the language that the specific parties used would impermissibly trespass beyond the document’s four corners. Courts frequently consult contemporary dictionaries because they convey objective and generally available—not subjective or bespoke—guides to meaning. Specialized or technical dictionaries can provide the same assistance for texts that arise in specialized or technical contexts. Indeed, the types of generally available sources that the Court used in New Prime to confirm that the meaning of “contracts of employment” has changed over time can benefit textual analyses of all kinds. The goal of such an inquiry is always to determine what a text could reasonably have meant to an informed but disinterested speaker at the time the text was written.
Determining what a text would have meant to a disinterested audience is an inquiry that is designed to confine courts to the four corners of the document and is a proper part of interpretation. See, e.g., U.S. Shale Energy II, LLC v. Laborde Props., L.P., 551 S.W.3d 148, 152 (Tex. 2018) (“We may consider such circumstances to the extent they ‘inform, rather than vary from or contradict, the instrument’s text.’” (quoting URI, 543 S.W.3d at 767)). As we discuss below, only if the text remains incapable of a clear meaning—and thus is unavoidably ambiguous—would we then move beyond the traditional, neutral, and objective tools of textual analysis.
This brings us to the now-familiar observation that, at the time the parties executed this deed, “1/8” was widely used as a term of art to refer to the total mineral estate. Notably, it is that fraction—not 1/3, 2/7, 6/241, or any other—that is so repeatedly deployed. Happily, we need not speculate as to why. Hysaw recently undertook the core analysis on which we rely today. The Court there examined what it called the “Double-Fraction Dilemma” in the context of a 1947 will-construction dispute where a provision of the will bequeathed each child a “one-third of one-eighth royalty.” Hysaw, 483 S.W.3d at 4. While recognizing that “discerning the nature of a particular royalty interest may be a simple matter when an instrument consistently uses single fractions to describe the interest,” double fractions can present serious complications. Id. at 9. The Court looked to the objective circumstances as a necessary part of defining the terms in their context. Id. at 9–15. The Court identified two related circumstances that explain why 1/8 in such instruments did not typically bear its arithmetical meaning: the historical use of 1/8 as the standard royalty and the estate-misconception theory. Id. at 8.
The estate-misconception theory reflects the prevalent (but, as it turns out, mistaken) belief that, in entering into an oil-and-gas lease, a lessor retained only a 1/8 interest in the minerals rather than the entire mineral estate in fee simple determinable with the possibility of reverter of the entire estate. Id. at 10; Concord Oil Co. v. Pennzoil Expl. & Prod. Co., 966 S.W.2d 451, 460 (Tex. 1998). Therefore, for many years, lessors would refer to what they thought reflected their entire interest in the “mineral estate” with a simple term they understood to convey the same message: “1/8.”
(…) Nor do we foreclose the possibility that an instrument may have enough textual evidence to drain confidence in the presumption yet insufficient evidence for a court to conclude that a reasonable reader at the time would have understood the instrument to require mere multiplication. In such a case, and if our ordinary rules of construction are incapable of generating a single answer, then our case law involving inescapable ambiguity—including the authorized but reluctant recourse to extrinsic evidence—provides the next step. When that happens, a factfinder may be needed to finally resolve the text’s meaning. Courts should endeavor to give meaning to the text without too hastily finding ambiguity, but there may be times in which no other choice remains.
(…) The use of a double fraction in this deed, combined with the lack of anything that could rebut the presumption, is precisely why we can conclude as a matter of law that this deed did not use 1/8 in its arithmetical sense but instead reserved to the Mulkey grantors a 1/2 interest in the mineral estate.
Presumed-grant doctrine:
Even if we were less persuaded by the double-fraction analysis, however, the Mulkey parties argue that we still would have to recognize their present-day ownership of one-half of the mineral estate. That is, even if the “one-half of one-eighth” reservation meant only a 1/16 mineral interest in 1924, they argue that the record conclusively establishes that they acquired the other 7/16 interest through the presumed-grant doctrine. The court of appeals disagreed, concluding that the presumed-grant doctrine played no role. 647 S.W.3d at 908–10. We agree with the Mulkey parties. The presumed-grant doctrine, “also referred to as title by circumstantial evidence, has been described as a common law form of adverse possession.” Fair v. Arp Club Lake, Inc., 437 S.W.3d 619, 626 (Tex. App.—Tyler 2014, no pet.). The doctrine requires its proponent to establish three elements: (1) a long-asserted and open claim, adverse to that of the apparent owner; (2) nonclaim by the apparent owner; and (3) acquiescence by the apparent owner in the adverse claim. Magee v. Paul, 221 S.W. 254, 257 (Tex. 1920).
We think that the parties’ history of repeatedly acting in reliance on each having a 1/2 mineral interest conclusively satisfies the presumed-grant doctrine’s requirements. This ninety-year history includes conveyances, leases, ratifications, division orders, contracts, probate inventories, and a myriad of other recorded instruments that provided notice. There was a long and asserted open claim—for nearly a century, both parties acted in accordance with each side owning a 1/2 interest. And until this litigation began in 2013, the White parties never said anything to the contrary.
For example, in 1926—just two years after the deed’s execution—the White parties acknowledged in a Purchase and Escrow Agreement with an oil company that they owned only half of the minerals and that the other half belonged to the Mulkey parties. The corresponding documents provide further support by indicating that after both parties leased their respective mineral interests, each side was to receive an equal share of the royalties.
(In cases where the presumed-grant doctrine is clearly implicated, a court could dispense with the deed-construction analysis. Fn. 11).
We conclude that the Mulkey parties hold title to 1/2 of the mineral estate because the original deed so requires and because the presumed-grant doctrine would remove any remaining doubts. Because the court of appeals held otherwise, we reverse its judgment and remand to the trial court for further proceedings.
(Supreme Court of Texas, Feb. 17, 2023, Van Dyke v. The Navigator Group, Docket No. 21-0146)
