Hoffman v. Magnolia Petroleum Co.

273 S.W. 828, 1925 Tex. App. LEXIS 1245
CourtTexas Commission of Appeals
DecidedJune 27, 1925
DocketNo. 523-4202
StatusPublished
Cited by68 cases

This text of 273 S.W. 828 (Hoffman v. Magnolia Petroleum Co.) is published on Counsel Stack Legal Research, covering Texas Commission of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hoffman v. Magnolia Petroleum Co., 273 S.W. 828, 1925 Tex. App. LEXIS 1245 (Tex. Super. Ct. 1925).

Opinion

STATTON', J.

Peter L. Hoffman, as plaintiff, brought this suit for^the recovery of the proceeds' of royalties that accrued under an oil lease on a half section of land, basing his right of action upon a deed from lessors to himself. The district court sustained general demurrers to his petition, and the parties who demurred aver as the basis of the decision, and as correct law, the point that the deed only conveyed the royalty earned by wells drilled upon a tract of 90 acres out of the larger leased tract, whereas the petition did not allege that any wells had been brought in upon this particular 90 acres. The Court of Civil Appeals was of the same opinion, 260 S. W. 950. The defendants give assurance that this was and is the only question in the ease; and for that reason, without a critical examination of the petition in other respects, the disposition of the cause will be governed accordingly. The specific inquiry is whether the deed gave plaintiff a right to participate in any royalties under the lease, unless production were had from a well upon the 90 acres.

As is shown by the allegations of the petition, the lease was in ordinary form to one R. O. Harvey as lessee; covered and conveyed the oil and gas under 320 acres out of a section of land in Comanche county; provided for a one-eighth royalty on oil, 'money royalty on gas, and rentals of $330 every six months, as consideration for deferring the commencement' of a well, up to five years; made the rights under it perpetual during production; and negatived all obligation upon lessee to drill upon any particular part of the premises.

The deed to plaintiff is averred to have passed from lessors, Duke and wife, before the completion of any well on the half section, in consideration of $10,000 paid by him. It was delivered nine months after the date of the lease, and granted:

“The following, to wit: One-half (%) interest in and to all of the oil, gas and other minerals in and under and that may be produced from the following described lands situated in Comanche county, Texas, to wit: A certain 90 acres” (giving metes and bounds and describing the tract as out of the section already mentioned) “together with the rights of ingress and egress at all times for the purpose of mining, drilling and exploring said lands for oil, gas, and other minerals and removing the same therefrom.”

The instrument continued:

“Said above-described lands being now under an oil and gas lease originally executed in favor of R. O. Harvey and now held by -. It is understood and agreed that this sale 'is made subject to said lease but covers and includes one-half of all the oil royalty and gas rental or royalty due to be paid under the terms of said lease. It is agreed and understood that one-half of the money rental-which may be paid to extend the term within which a well may be begun under the terms of said lease is to be paid to the said Peter L. Hoffman and in the event that the said above-described lease for any reason becomes cancelled or forfeited then and in that event the lease interest and all further rentals on said land for gas and mineral privilege shall be owned jointly by Jas. N. Duke and wife, and-Ploffman, each owning one-half interest in all oil, gas and other minerals in and upon said land, together with one-half interest in all future rents. * * * To have and to hold the above-described property, together with all and singular the rights and appurtenances thereto in anywise belonging unto the said Peter L. Hoffman heirs and assigns, forever.”

The plaintiff contends that the conveyance to him of “one-half of all of the oil royalty * * * due to be paid under the terms of said lease” is not confined to wells upon the smaller tract. The defendants reply that, since the smaller tract is the subject-matter of the deed', the quoted language should be construed as having reference to it alone, and that any other interpretation would be unreasonable.

Before deciding the question, the court would call to mind that, if the deed is capable of the meaning contended for by plaintiff, there would be nothing unreasonable in holding under the circumstances alleged that, for so substantial a cash consideration, the lessors, having previously conveyed to lessee all of the oil, gas, and minerals under the whole half section, and retained the surface for their own consistent uses, consented to part, not only with their possibility of a reverter in the oil, etc., of the 90 acres, but also with a full one-half of their right to royalties under the lease as an entirety, especially in view of the fact that the reverter was uncertain and the control over the placing of wells impossible. They may not have done that; but it would not have been wrong or inane upon its face if they had. Gypsy Oil Go. v. Sehon-wald (Okl. Sup.) 231 P. 864. And then again it could have been reasonable from their standpoint, and not unreasonable from that of grantee, if they had restricted their assignment of royalties to those from wells on the 90.

There are a number of rules of construction that will be noticed.

This deed, if its intention be ambiguous, is to be construed against grantors rather than against grantee; and ’ yet, if what it purports to convey is distinctly [830]*830pointed out in a manner and under circumstances showing that royalty as to wells located outside of the 90 acres was not in contemplation, although the contrary could be construed as within other language when considered separately, the specific and restricted intent would control. Regan v. Hatch, 91 Tex. 616, 45 S. W. 616. But the instrument must, if possible, be considered and made to speak consistently, as a whole, without the rejection of any words, and so as to declare the evident intention of the parties, and the latter is the principal rule to apply. Cartwright v. Trueblood, 90 Tex. 535, 39 S. W. 930; Regan v. Hatch, 91 Tex. 616, 45 S. W. 616; Cullers v. Platt, 81 Tex. 258, 16 S. W. 1003.

The deed, in the first part, conveys an undivided one-half interest in the possibility of a reverter of the oil in place under the 90 acres. Stephens County v. Mid-Kansas Oil & Gas Co., 113 Tex. 160, 254 S. W. 290, 29 A. L. R. 566; Humphreys, etc., Co. v. Gammon, 113 Tex. 247, 254 S. W. 296, 29 A. L. R. 607. For, “subject” to the lease, the one-half interest in the oil under that particular tract is conveyed to Hoffman. In the last part of the instrument it is provided that, if the lease shall be forfeited or canceled, the grantor and grantee shall share equally in all mineral interests and rights in “said land”; that is, the 90 acres. Gas and other minerals take the same course, but are not here involved.

Those passages have regard to minerals, the title to which has passed to the lessee, but which may revert to lessor and his assigns if the lease should terminate. But they are not the sole subjeeNmatter of the conveyance. There follow other words regarding not the reverter but rents and royalties prior to the time the lease terminates, and while it is still in force, both before any well at all is drilled and after the drilling of a productive well.

The deed, after conveying the interest in oil, gas, and minerals, and referring, as the description and the allegations show, to the particular “lease” now under consideration, reads:

“It is understood and agreed that this sale is made subject to said lease, but covers and includes one-half of all the oil royalty and gas rental or royalty due to be paid under the terms of said lease.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Netahla v. Netahla
346 P.3d 1079 (Supreme Court of Kansas, 2015)
Concord Oil Co. v. Pennzoil Exploration and Production Co.
966 S.W.2d 451 (Texas Supreme Court, 1998)
Hawkins v. Texas Oil and Gas Corp.
724 S.W.2d 878 (Court of Appeals of Texas, 1987)
First National Bank in Dallas v. Kinabrew
589 S.W.2d 137 (Court of Appeals of Texas, 1979)
Ottis v. Haas
569 S.W.2d 508 (Court of Appeals of Texas, 1978)
Ralph F. Howell v. Union Producing Company
392 F.2d 95 (Fifth Circuit, 1968)
TE Moor & Company v. Hardcastle
421 S.W.2d 126 (Court of Appeals of Texas, 1967)
Andretta v. West
415 S.W.2d 638 (Texas Supreme Court, 1967)
McGlothing v. Cactus Petroleum, Inc.
394 S.W.2d 955 (Court of Appeals of Texas, 1965)
Investors Royalty Co. v. Childrens Hospital Medical Center
364 S.W.2d 779 (Court of Appeals of Texas, 1963)
Taylor v. Kerlin
327 S.W.2d 793 (Court of Appeals of Texas, 1959)
McGuire v. Bruce
332 S.W.2d 110 (Court of Appeals of Texas, 1959)
Polk v. Rice
326 S.W.2d 932 (Court of Appeals of Texas, 1959)
Frost v. Stanolind Oil & Gas Co.
307 S.W.2d 136 (Court of Appeals of Texas, 1957)
Robinson v. Humble Oil & Refining Company
301 S.W.2d 938 (Court of Appeals of Texas, 1957)
Southland Royalty Company v. O'Daniel
287 S.W.2d 182 (Court of Appeals of Texas, 1956)
Alfrey v. Ellington
285 S.W.2d 383 (Court of Appeals of Texas, 1955)
Woods v. Sims
273 S.W.2d 617 (Texas Supreme Court, 1954)

Cite This Page — Counsel Stack

Bluebook (online)
273 S.W. 828, 1925 Tex. App. LEXIS 1245, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hoffman-v-magnolia-petroleum-co-texcommnapp-1925.