Angela Staples
The Texas Supreme Court recently accepted and quickly disposed of a petition for review from the Fourth Court of Appeals in San Antonio, titled Thomson v. Hoffman, by vacating the appellate court’s order and remanding the case. The issue involved yet another older (specifically, 1956) deed. The main question centered on whether the language of the deed reserved a fixed versus floating interest. The language of the deed provided that it reserved:
an undivided three thirty-second’s (3/32’s) interest (same being three-fourths (3/4’s) of the usual one-eighth (1/8th) royalty) in and to all of the oil, gas and other minerals […]
The deed also referred to 3/32 without the double fraction in parentheses. The appellate court found that the term “3/32” was used in the place of the longer double fraction, and that when the term “1/8” was included in the longer double fraction, it was simply a stand-in for the term “royalty interest.”
Interestingly, this San Antonio Court came to this decision two years before the Supreme Court issued its opinion in the Van Dyke case.
As a reminder, Van Dyke v. Navigator Group[1] was a dispute involving this same “double-fraction dilemma.” In Van Dyke, the disputed deed, signed in 1924, contained a reservation which provided that “[i]t is understood and agreed that one-half of one-eighth of all minerals and mineral rights in said land are reserved in grantors […] and are not conveyed herein.” The Eastland Court of Appeals acknowledged that “the Texas Supreme Court has taken judicial notice that “the usual royalty provided in mineral leases [during that era] is one-eighth.” However, the Eastland Court determined that, because the reservation was clear and there were no contradictory fractions or terms in the deed, the use of “one-eighth” could not be read as a stand in for the “usual royalty.”
The Texas Supreme Court first concluded that “[a]ntiquated instruments that use 1/8 within a double fraction raise a presumption that 1/8 was used as a term of art to refer to the ‘mineral estate.’” The Court repeated “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.” Based upon this premise, the Court held that courts were required to “begin with a presumption that the mere use of such a double fraction was purposeful and their 1/8 reflects the entire mineral estate, not just 1/8 of it.” Something to note—in Van Dyke, the Court also found that inconsistent provisions were not required to be in the document to evidence that the use of 1/8 in a double fraction was meant to be a stand in for “royalty.”
Because the 2021 San Antonio Court did not have the benefit of the Texas Supreme’s Court’s 2023 Van Dyke opinion, the Supreme Court vacated the opinion and remanded the matter back to the court of appeals to reconsider in light of Van Dyke. This begs the question, though. Was the opinion vacated to ensure adherence to the principles and guidelines announced in Van Dyke, or is there some evidence that rebuts the presumption that was announced in Van Dyke (i.e., when 1/8 is used in a double-fraction, it is presumed, but may be rebutted, that the parties intended to mean the entire mineral estate)?
[1] Van Dyke, et al. v. Navigator Group, et al., 2023 WL 2053175 (Tex. 2023).