## Facts

- Vicente Saenz and Inocencia de Saenz owned land in Starr County, Texas, subject to an existing oil and gas lease reserving a 1/8 lessor’s royalty.
- In 1938, they executed two conveyances affecting the property’s minerals.
- The first instrument, labeled “Royalty Contract,” granted J.B. Claypool an undivided 1/2 interest in the oil, gas, and other minerals in and under the land, together with rights of ingress and egress to take the minerals.
- The Claypool instrument stated that, under the existing lease, Claypool would receive 1/2 of the royalty, and under future leases would receive 1/16 of production “out of the royalty” provided in such leases.
- The second instrument, a “Mineral Deed,” granted Homer P. Lee a 15/32 mineral interest, subject to the same existing lease, and stated Lee’s entitlement to 15/32 of royalty and rentals under that lease.
- The Lee deed also included a future-lease clause stating Lee would receive 15/32 of 1/8 of production under future leases, “out of the royalty” provided in such leases.
- After the original lease ended, the Saenz family later executed a new oil and gas lease reserving a 1/5 royalty.
- Successors to Claypool and Lee claimed their royalty under the new lease should be proportional to the lessor’s reserved royalty (i.e., based on their mineral fractions applied to the 1/5 royalty).
- The Saenz successors contended the future-lease clauses fixed the grantees’ royalty at stated fractions (1/16 for Claypool; 15/32 of 1/8 for Lee) regardless of the new 1/5 royalty.
- Operators interpleaded disputed royalties and sought judicial construction of the 1938 instruments.

## Issues

1. Whether the 1938 instruments, construed under the four-corners rule, unambiguously conveyed mineral interests whose royalty participation under future leases varied with the lessor’s reserved royalty, or instead conveyed only fixed fractional royalties under future leases.
2. Whether the trial court improperly applied the Duhig rule to allocate mineral and royalty interests.
3. Whether admitting expert title opinions on construction of the instruments was reversible error.

## Decision

- The court of appeals affirmed summary judgment for the Claypool/Lee successors.
- Reading each instrument as a whole, the court held the operative granting clauses unambiguously conveyed mineral interests (not merely nonparticipating royalty interests).
- The court construed the present-lease and future-lease provisions consistently with continuing mineral ownership and royalty participation that was not capped at the smaller fixed fractions urged by the Saenz successors.
- The court rejected the argument that the judgment depended on an improper extension of the Duhig rule.
- Any error in admitting expert title opinions was harmless because deed construction was decided as a matter of law from the instruments’ text.

## Legal Principles

- Deeds and mineral instruments are construed under the four-corners rule to ascertain intent from the entire writing and to give effect to all provisions where possible.
- The legal character of an instrument is determined by its operative granting language, not by its caption.
- When an instrument unambiguously grants a mineral interest and also addresses royalty under existing and future leases, the provisions should be reconciled to reflect the mineral estate attributes conveyed, including the corresponding share of lease benefits.
- Construction of an unambiguous deed is a question of law for the court; expert opinions on legal construction do not control and ordinarily do not create a fact issue.

## Conclusion

The court held the 1938 conveyances unambiguously transferred mineral interests to Claypool and Lee, and it construed the future-lease language in a manner consistent with those mineral grants, entitling the grantees’ successors to royalty participation under later leases that reflected their mineral ownership rather than a reduced fixed royalty fraction.


Garza v. Prolithic Energy Co., L.P., 195 S.W.3d 137 (Tex. App.—San Antonio 2006, pet. denied)