## Facts

- The Cade family owned thousands of acres in Galveston, Chambers, and Jefferson Counties, Texas (the “Cade lands”).
- Prior litigation established that Margaret Cade Sweet and her sister each owned an undivided 3/10 interest in the Cade lands.
- Adrian F. Levy, a Texas attorney, represented Sweet in that litigation and continued advising her about her Cade lands interest.
- In 1930, Levy proposed compensation for future services through an interest tied to potential oil production.
- On July 21, 1930, Sweet executed a deed granting Levy a “1/160th part of all the oil, gas and other minerals that may be produced and saved” from the Cade lands.
- Sweet died intestate in 1933; her heirs (including Barker) succeeded to her interest.
- After production began, Levy and successors received payments consistent with a 1/160 royalty interest.
- In 1971, Sweet’s heirs sued seeking (a) reformation of the 1930 deed to reflect a 1/160 mineral interest, or (b) recovery of alleged overpayments if the deed conveyed only a mineral interest.
- The trial court ruled for Levy, construing the deed as a royalty conveyance and holding reformation barred by limitations.

## Issues

1. Whether the 1930 deed conveyed a 1/160 mineral interest in place or a 1/160 royalty interest in production.
2. Whether the heirs’ 1971 action to reform the 1930 deed was barred by the four-year statute of limitations.

## Decision

- The court affirmed the judgment for Levy.
- The deed unambiguously conveyed a 1/160 royalty interest, not a mineral interest in place.
- The reformation claim was barred by limitations because accrual began during Sweet’s lifetime and more than four years elapsed before suit.
- Because the deed was unambiguous, extrinsic evidence to alter its meaning was not permitted.

## Legal Principles

- In construing Texas oil-and-gas conveyances, language granting a fractional share of minerals “produced and saved,” coupled with the absence of “in and under” language, supports construction as a royalty interest rather than a mineral estate interest.
- A royalty interest is a share of production free of production expenses; deed language reflecting that structure supports a royalty construction.
- Reformation of an instrument based on mistake is governed by a four-year statute of limitations that begins when the claimant knew, or through reasonable diligence should have known, the facts supporting reformation.
- Heirs and successors in interest generally take subject to their predecessor’s limitations accrual; if the claim accrued in the ancestor’s lifetime and became time-barred, successors are likewise barred.

## Conclusion

The court construed the 1930 deed as an unambiguous grant of a 1/160 royalty interest and held that any effort to reform the deed was time-barred because the alleged discrepancy could have been discovered, and limitations began to run, during the original grantor’s lifetime.


Barker v. Levy, 507 S.W.2d 613 (Tex. Civ. App.—Houston [14th Dist.] 1974)