Reported / Citable
Background
Saddleback Exploration, LLC operates the Stonegate 6 No. 1H Well and owns the lease covering approximately 482.5 acres in Winkler County, Texas. Although Saddleback acknowledged owing royalties from the well’s production, it filed a statutory interpleader action because potentially conflicting claims left it uncertain which royalty owners should be paid and in what amounts.
Remnant Assets, LLC and Gary D. Pickens, as trustee for the Hart Revocable Trust, moved for summary judgment concerning six royalty deeds executed in 1929. Each deed used a “double fraction” formulation conveying a stated fraction of “the landowner’s one-eighth royalty interest.” The movants argued that, under Texas law, the deeds conveyed floating royalty interests tied to the landowner’s royalty rather than fixed interests calculated by multiplying the two fractions. No appearing interpleader defendant disputed that interpretation.
The Court’s Holding
In a memorandum and recommendation, Magistrate Judge Christina A. Bryan recommended granting the motions in part. Applying the Texas Supreme Court’s decisions in Hysaw v. Dawkins and Van Dyke v. Navigator Group, the court concluded that the deeds’ use of one-eighth within a double fraction created a rebuttable presumption that one-eighth referred to the entire mineral estate or landowner’s royalty, rather than a literal mathematical fraction.
Nothing in the text or structure of the six deeds rebutted that presumption. The court therefore interpreted each deed as conveying a floating royalty interest, not a fixed royalty obtained by multiplying the stated fractions. The court recommended denying all other requested relief because unresolved factual issues prevented it from determining the royalty percentage owned by each interpleader defendant at the summary-judgment stage.
Key Takeaways
- For mineral instruments of this vintage, a double fraction containing one-eighth presumptively uses one-eighth as a term referring to the entire mineral estate or landowner’s royalty.
- The presumption is rebuttable, but the six 1929 deeds contained no textual or structural indication that their fractions were intended to be multiplied.
- The recommended ruling resolves the deeds’ legal interpretation but not the parties’ respective royalty percentages, which remain subject to factual disputes.
Why It Matters
The recommendation applies modern Texas Supreme Court guidance to century-old royalty instruments whose wording reflects historical assumptions that a landowner’s royalty would invariably equal one-eighth. It reinforces that courts should not mechanically multiply double fractions in deeds from that era without examining the instrument as a whole.
The ruling, if adopted by the district judge, will narrow the interpleader dispute by establishing that the six deeds create floating royalties. Further proceedings will still be necessary to determine ownership and the precise shares payable from the well’s production.