Gibson v. Turner

294 S.W.2d 781, 156 Tex. 289, 6 Oil & Gas Rep. 1212, 1956 Tex. LEXIS 584
CourtTexas Supreme Court
DecidedJuly 25, 1956
DocketNo. A-5165
StatusPublished
Cited by56 cases

This text of 294 S.W.2d 781 (Gibson v. Turner) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gibson v. Turner, 294 S.W.2d 781, 156 Tex. 289, 6 Oil & Gas Rep. 1212, 1956 Tex. LEXIS 584 (Tex. 1956).

Opinions

Mr. Justice Griffin

delivered the opinion of the Court.

All previous opinions of this Court are hereby withdrawn; the motion of petitioners for a rehearing is granted, and the following is the opinion of the Court.

This suit involves the construction of the royalty clause of an oil and gas lease. On February 18, 1947, petitioner, Margaret G. Gibson, her mother, and her two sisters and a brother were owners of an undivided 9/40ths fee interest in the minerals in, on, and under Survey 14, Cert. No. 3802, Blk. G.C. & S. F. Ry. Co. Survey, containing 922 acres of land in Upton County, Texas. Margaret Gibson owned an undivided l/40th interest in said 922 acres of land. On said date respondent Fred Turner, Jr., and other respondents owned the leasehold mineral interest in the remaining 31/40ths of said land. Respondents were also aware that the Gresham lessors (Mrs. Gibson being a daughter of Mrs. Gresham) only owned 9/40ths of the minerals. On February 17, 1947, the petitioner, Mrs. Gibson, and the other owners of the 9/40th mineral interest made, executed and delivered to Fred Turner, Jr., an oil, gas and other minerals lease on the whole of the oil, gas and other minerals under the whole of Survey 14, and upon a printed form in common use. The granting clause, among other things provided that “lessor in consideration of ten and No/100 dollars ($10.00), in hand paid, of the royalties herein provided, and of the agreements of the Lessee herein contained, hereby grants, leases, and lets exclusively unto the Lessee, * * Thereafter follows a provision for an oil payment of $5,186.25 (this figure being the exact equivalent of 9/40ths of 922 acres at $25.00 per acre) out of “the first oil and gas produced, saved and sold from said premises under this lease * * Paragraph 3 of the lease provided that “the royalties to be paid lessors are: (a) on oil, one-eighth of that produced and saved from said land, * * * (b) on gas * * * produced from said land * * * the market value * * * of one-éighth * * (Emphasis ours). The stipulated delay rental was $207.45 (this sum being the exact equivalent of 9/40ths of 922 acres at $1.00 per acre). Paragraph 9 states “lessor hereby warrants and agrees to defend the title to said land * * The original lease was introduced in evidence and following the above quoted provision of the [293]*293paragraph was printed a proportionate reduction of royalty clause, which was eliminated prior to signature by the lessors, by running typewritten “x” through it.

Margaret G. Gibson, joined by her husband, Ben D. Gibson, brought this suit against her co-lessors in said land and Fred Turner, Jr., lessee, and his assignees and co-owners of the total leasehold interest seeking a declaratory judgment construing the lease to provide and mean that Fred Turner, Jr., his assigns and co-owners of the working interest under the lease, are by its terms obligated to pay to Margaret G. Gibson as royalty l/72nd of the oil and gas or the value thereof produced and saved from the lands described in said lease, that is, that she should be paid that proportion of l/8th of the oil produced and saved from the land described in the lease, and that proportion of l/8th of the gas sold or used off said premises which the interest (l/40th) owned by Margaret G. Gibson in the mineral estate in the land bore to the total interest (9/40ths) owned by her and her co-lessors in such mineral estate.

It was urged in the pleadings of the defendants, Fred Turner, Jr. and his assignees, that, although the lease executed by Margaret G. Gibson and her co-lessors purported to cover the entire mineral interest in the tract described and warranted the title thereto, the grantors in said lease actually owned only 9/40ths of the mineral therein and Margaret G. Gibson owned only 1/40th of such total mineral interest; that the lease provided as part of the consideration therefor, that lessors should receive l/8th of all the oil produced from the land covered by the lease; that since the title had failed except as to 9/40ths of the mineral interest purported to be conveyed, the consideration should be abated in proportion to the part of the title that had failed; that Margaret G. Gibson was therefore entitled to receive only l/40th of the l/8th royalty provided by the lease, or l/320th of the oil and gas so produced and saved.

The trial was had upon an agreed statement of facts before the court without a jury and judgment was entered in accordance with the defendants’ contention that Margaret G. Gibson was entitled to receive only l/40th of the full l/8th royalty interest in the land described. On appeal the Court of Civil Appeals affirmed the trial court’s judgment. 274 S.W. 2d 916.

All parties agree that the lease is unambiguous, and we also agree that there is no ambiguity in the lease; therefore, it is a question of the construction to be given to the lease. It must [294]*294be given the legal effect resulting from a construction of the language contained within the four corners of the instrument. Benge v. Scharbauer, 152 Texas 447 (2), 259 S.W. 2d 166 (1). All parties, both petitioners and respondents, agree that the royalty under this lease, like the oil payment to be made under it, was reserved by the lessors (one of whom is petitioner herein) from the rights granted by the lease. Sheffield v. Hogg, 124 Texas 290, 77 S.W. 2d 1021, 1028; Hager v. Stakes, 116 Texas 453, 294 S.W. 835; Waggoner Estate v. Sigler Oil Co., 118 Texas 509, 517, 19 S.W. 2d 27; Frost v. Standard Oil Co. of Kansas, Texas Civ. App., 107 S.W. 2d 1037, no writ history.

What royalty does the lease in question purport to reserve in the grantors? The language of the lease is: “3. The royalties to be paid lessor are: (a) on oil, one-eighth of that produced and saved from said land, * * *; (b) on gas, * * * produced from said land, * * * the market value at the well * * * of the gas so sold or used, provided that on gas sold at the wells the royalty shall be one-eighth of the amount realized from such sale.” (Emphases ours.) The provision is made for royalty on other minerals, etc., etc. This is clearly a provision for a royalty payment of l/8th of 40/40th of the production from the “said land” which is “all of Survey No. 14, Upton County, Texas, containing 922 acres more or less.” There are no words in the lease modifying or changing the above construction of the lease.

This case is controlled by the court’s reasoning and judgment in the following cases: King v. First Nat. Bank of Wichita Falls, 144 Texas 583, 192 S.W. 2d 260, 163 A.L.R. 1128; R. Lacy, Inc. v. Jarrett, et al, 1948, Texas Civ. App., 214 S.W. 2d 692, wr. ref.; Clemmens v. Kennedy, et al, 1934, Texas Civ. App., 68 S.W. 2d 321, wr. ref.; McElmurray v. McElmurray, 1954, Texas Civ. App., 270 S.W. 2d 880, wr. ref.

In the King case an owner of an undivided one-half interest in two tracts of land in Young County, Texas, conveyed by warranty deed such undivided one-half interest “ ‘in and to the following described land situated in Young County, Texas, to-wit :***’” and here follows a description of two tracts of land, aggregating 240 acres, more or less. The deed contained the following reservations:

“ * * The grantor hereby reserved unto himself, his heirs, successors and assigns for a period of ten (10) years only from this date an undivided one-eighth (l/8th) of the usual and customary one-eighth royalty interest reserved by the land-owners [295]*295in oil and gas and other minerals that may be produced from the hereinabove described land; * * *’ ”

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Bluebook (online)
294 S.W.2d 781, 156 Tex. 289, 6 Oil & Gas Rep. 1212, 1956 Tex. LEXIS 584, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gibson-v-turner-tex-1956.