Oil and Gas Lawyer Blog
Today the Texas Supreme Court agreed to decide another dispute over whether a conveyance is of a fixed or floating royalty. No. 23-0671, Clifton v. Johnson. The El Paso Court of Appeals held that the instrument in question conveyed a floating royalty – a fraction of the royalty. 2023 WL 444316. The Petitioners argue, among other things, that the Van Dyke presumption (Van Dyke v. Navigator Group, 668 S.W.3d 353 (Tex 2023)) should not apply to conveyances and reservations of royalty interests. The deed in Clifton refers to the interest being conveyed as “1/128 (1/16 of the usual 1/8 royalty).” The Supreme Court said in Van Dyke:
When courts confront a double fraction involving 1/8 in an instrument, the logic of our analysis in Hysaw [v. Dawkins, 483 S.W.3d 1 (Tex. 2016)] requires that we begin with a presumption that the mere use of such a double fraction was purposeful and that 1/8 reflects the entire mineral estate, not just 1/8 of it. … Our analysis in Hysaw thus warrants the use of a rebuttable presumption that the term 1/8 in a double fraction in mineral instruments of this era refers to the entire mineral estate. Because there is “little explanation” for using a double fraction for any other purpose, this presumption reflects historical usage and common sense.
Note that the devise construed as a floating royalty in Hysaw v. Dawkins was a devise of a royalty interest, not a mineral interest.
So, the Supreme Court now has to apply its new presumption to another conveyance.