Texas Supreme Court Interprets Mineral Interest in Deed

The Texas Supreme Court interpreted yet another confused mineral reservation in a deed in the case of Van Dyke v. Navigator Grp., ___ S.W.3d ___, 2023 WL ___ (Tex. Feb. 17, 2023). The 1924 deed contained a reservation of “one-half of one-eighth” of the mineral estate. The question was: did the grantor reserve a one-half interest in the minerals or a 1/16 interest in the minerals?

The evidence in the case reflected that the grantor and the grantees and even third parties for decades had treated the deed as having reserved a one-half interest in the mineral estate to the grantor and conveyed one-half to the grantees. However, in 2013, the grantees filed suit claiming that the grantor had reserved only a 1/16 interest (multiplying 1/2 times 1/8). The trial court granted the grantees’ motion for summary judgment and held that the deed reserved only a 1/16 mineral interest to the grantor and that the grantees received 15/16 of the mineral estate. The Court of Appeals affirmed.

The Texas Supreme Court reversed the decision of the trial court and the Court of Appeals. The Court reasoned that the meaning of the reservation depended on whether the use of the “one-eighth” in the double fraction was meant in a mathematical sense or was due to an estate misconception. The estate misconception happens because people mistakenly used to use the 1/8 fraction as a stand-in for the entire mineral estate, rather than a fractional share of the mineral estate.

The Court noted that in deeds of this era, the 1/8 fraction was meant to stand for the entire mineral estate and was not used in a mathematical sense. Thus, the Court concluded that the grantor reserved half the mineral estate, and half the estate went to the grantees.

This case illustrates how important every word and even each punctuation mark in the deed are. Whenever you’re transferring minerals, it is critical to have an experienced oil and gas attorney prepare the deed for you so that you can be sure you’re conveying only what you intend to convey.