Van Dyke v. The Navigator Group – Double Fractions and the Presumed Grant Doctrine
Texas
On February 17, 2023, the Texas Supreme Court handed down its opinion in Van Dyke v. The Navigator Group , resolving a ten-year dispute over the ownership of royalty interests and $44 million in royalties. In reversing the court of appeals, the court concluded “that the Mulkey parties hold title to ½ of the mineral estate because the original deed so requires and because the presumed-grant doctrine would remove any remaining doubts” and remanded to the trial court for further proceedings to produce a final judgment. The opinion delivered by Justice Young begins with the following: “Only in a legal text could the formula “one- half of one-eighth” mean anything other than one-sixteenth. But in the law, “one-half of one-eighth” sometimes equals one-half–in the context of reservations of mineral interests. Likewise, the law sometimes calculates one-half of 1,000 to be 600, not 500–in the context of contracts for rabbits. [Dwyer v. City of Brenham , 7 S.W. 598, 599 (Tex. 1888)] Those results may seem bizarre, unsatisfying, and literally fuzzy math. They can also be inefficient; resolutely adhering to the rules of arithmetic would more rapidly end litigation. The rules that courts must apply, however, are not primarily those of arithmetic but of textual construction. The rules of construction, in turn, reflect the principle that legal texts–including private-law documents like contracts, deeds, and wills–still bear the meaning that their words had when they were drafted, even if the use of some words today might generate a different meaning.” In 1924, the Mulkeys conveyed their ranch to White and Tom, with the following reservation:
“It is understood and agreed that one-half of one- eighth of all minerals and mineral rights in said land are reserved in grantors, Geo. H. Mulkey and Frances E. Mulkey, and are not conveyed herein.” The successors of White and Tom contended that this double fraction was simple arithmetic and reserved a 1/16 mineral interest. The successors of the Mulkeys contend that the reservation reserved a ½ mineral interest. The trial court and the court of appeals agreed with Whit and Tom; the Supreme Court reversed, holding that each side owns ½ of the minerals in the Ranch. The Supreme Court ruled for the Mulkeys on two grounds: the “estate misconception theory,” and the presumed-grant doctrine. The Court noted that, at the time of the 1924 deed, 1/8 was “a term of art that references the entire mineral estate,” and that “the estate- misconception theory reflects the prevalent (but, as it turns out, mistaken) belief that, in entering into an oil-and-gas lease, a lessor retained only a 1/8 interest in the minerals rather than the entire mineral estate in fee simple determinable with the possibility of reverter of the entire estate. Therefore, for many years, lessors would refer to what they thought reflected their entire interest in the “mineral estate” with a simple term they understood to convey the same message: “1/8.” (1) This widespread and mistaken belief ran rampant in instruments of this time involving the reservation or conveyance of a mineral interest—so much so that courts _____________________ (1) Laura H. Burney, The Regrettable Rebirth of the Two-Grant Doctrine in Texas Deed Construction, 34 S. Tex. L. Rev. 73, 88 (1993).
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N at i onal A ssociation of D i v i s i on O rder A nalys t s
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