the time of the reservation was one-eighth. The other side claimed that “one-half of one- eighth” was a simple double-fraction that needed only to be multiplied across, reserv- ing a one-sixteenth mineral interest (1/2 × 1/8 = 1/16). This is akin to the arithmetic in a fixed royalty case. The trial court and the Court of Ap- peals, relying on fixed vs. floating jurispru- dence, found in favor of the one-sixteenth “fixed” interest. If affirmed by the Supreme Court, this will remain a pro-operator/pro- payor holding. As an initial matter, courts are gener- ally confined to interpret deeds based on the language contained in them (the “four cor- ners rule”). Courts examine the entirety of the instrument, harmonizing any inconsistent clauses to determine the true intent of the parties. Here, the Court of Appeals looked at the whole deed and found no inconsistent or conflicting terms—only the reference to “one-half of one-eighth.” As such, there was nothing to harmonize, and the double-frac- tion was multiplied straight across to reach one-sixteenth. The Court of Appeals disagreed with the application of two alternative theories from the side advocating for the full one-half interest: (1) the estate misconception theory; and (2) the presumed grant doctrine. The estate misconception theory states that, long ago, people did not know exactly what they owned; instead, they believed that once they leased their minerals for a one- eighth lease royalty, they then owned just a
one-eighth mineral interest. This is, of course, wrong—thus the moniker of “misconcep- tion.” It is not a firm rule of interpretation, but instead a theory championed by some law professors and a few courts. Recall Van Dyke deals with a mineral, not royalty, reservation—and there was no lease at the time of the conveyance. Since the grantors owned the full mineral estate at the time of the reservation, they could not “mis- conceive” of their interest based on a lease that hadn’t ever been executed. The presumed grant doctrine is com- pletely different, and applies to cure a gap in title based on the history of treatment of the interest (to “presume” the “grant”). In this case, there was no gap in title, only a disagreement over the effect of the mineral reservation. Thus, there was nothing to “pre- sume”; the presumed grant doctrine does not operate to cure mistakes, but only to bridge gaps in title. The court refused to apply it.
Thomson v. Hoffman No. 21-0711
Thomson is procedurally behind Van Dyke on the Supreme Court’s conveyor belt of cases. While it presents a somewhat sim- pler case on review, it also produced a truly draconian result for operators and other pay- ors. Thomson is a royalty case. The side ad- vocating for a fixed royalty claimed that mul- tiple references to a “3/32’s,” alongside the phrase “three-fourths of the usual one-eighth,” created a fixed royalty interest whether con- sidering the single- or double-fraction. The other side, and the Court of Appeals, stated
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G r o w t h T h r o u g h E d u c a t i o n - J a n u a r y / F e b r u a r y / M a r c h 2 0 2 2
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