Hysaw v. Dawkins, 483 S.W.3d 1 (Tex. 2016).
Testatrix devised surface rights to tracts of land
of different acreage to each of her three children. The children also
received the mineral rights but Testatrix subjected them to royalty
interests. After all the children died, the grandchildren fought over
one of the children’s royalty interest described as “an undivided
one-third (1/3) of an undivided one-eighth (1/8) of all oil, gas or
other minerals in or under or that may be produced from any [of the
tracts].” One group of descendants argued that the will granted a
fractional royalty to each child (1/24 fixed royalty each) and another
group argued that the will required the children to share all royalties
equally (1/3 floating royalty each). In other words, should “double
fractions [] be multiplied and the royalty interest fixed without regard
to the royalty negotiated in a future mineral lease (fractional royalty)
or whether 1/8 was intended as a synonym for the landowner’s royalty,
meaning the interest conveyed varies depending on the royalty actually
obtained in a future mineral lease (fraction of royalty).” Was Testatrix
trying to determine whether the fraction of 1/8th really meant 1/8th, or
if it meant whatever royalty had been negotiated? The trial court held
that the royalties were to be shared equally.
In Dawkins v. Hysaw, 450 S.W.3d 147 (Tex.
App.—San Antonio 2014), the San Antonio appellate court reversed holding
that the will was unambiguous in giving one child a surface and mineral
estate subject to a fixed fraction royalty to each of the other two
children. The court engaged in an extensive discussion of the difference
between fractional royalties (constant or fixed fraction of production)
and fraction of royalty interests (floating fraction of whatever royalty
interest is reserved in the lease). The court determined that different
children received different types of interests thus rejecting the
argument that Testatrix actually intended for all children to share all
royalties equally. The court explained that even if she may have
intended the children to share equally, the court is bound by the
unambiguous words of her devises. An appeal to the Supreme Court of
Texas followed.
The Supreme Court of Texas reversed. The court
focused on ascertaining Testatrix’s intent from the four corners of the
instrument “by a careful and detailed examination of the document in its
entirety, rather than by application of mechanical rules of construction
that offer certainty at the expense of effectuating intent.” Using this
holistic approach, the court then determined that Testatrix’s will
demonstrated her intent for each of her children to receive equal
royalty interests.
Moral: Wills granting interests in oil and
gas properties need to be carefully drafted to assure that the interests
being conveyed comport with the testator’s intent. Prudent practice is
to consult with an oil and gas expert when phrasing the terms of the
grant. And, when describing a specific gift, make sure the drafter
describes what the testator really means, and not what is assumed will
exist in the future.