## Facts

- Marshall Hobbs owned a 53-acre tract in Titus County, Texas, and conveyed it in 1956 by deed reserving a 1/16 non-participating royalty in “oil, gas and minerals” for 25 years and so long thereafter as production continued.
- The land passed by later conveyances to C.W. and Helen Hutson (1966), subject to the 1956 reservation.
- The Hutsons later conveyed the surface while reserving interests relating to coal; subsequent conveyances reserved and excepted “all of the coal and lignite.”
- Lignite on the tract was strip-mined within 200 feet of the surface, and royalties were paid into the court registry pending a determination of ownership.
- Hobbs claimed the 1956 reservation included lignite; the Hutsons claimed near-surface lignite belongs to the surface estate unless expressly reserved.
- Hobbs alternatively sought reformation of the 1956 deed, alleging the parties intended to reserve lignite but were mutually mistaken about the legal effect of the reservation language.
- Both sides moved for summary judgment; the trial court granted summary judgment for the Hutsons on both the ownership and reformation claims and denied Hobbs’s motion.

## Issues

1. Whether a deed reservation of “oil, gas and minerals,” without expressly mentioning lignite, includes lignite located within 200 feet of the surface.
2. Whether the Hutsons were entitled to summary judgment against Hobbs’s claim to reform the 1956 deed based on alleged mutual mistake regarding lignite.

## Decision

- The court affirmed summary judgment that the 1956 reservation, as written, did not include near-surface lignite.
- The court held lignite within 200 feet of the surface is “near surface” as a matter of law and is treated as part of the surface estate unless expressly included in the reservation.
- The court rejected the argument that this rule applies only in surface-versus-mineral-owner disputes; it applies equally in disputes among mineral or royalty claimants.
- The court reversed summary judgment against the reformation claim because the summary-judgment record did not conclusively negate the elements of reformation based on mutual mistake.
- The case was remanded for further proceedings on reformation.

## Legal Principles

- In Texas, a private reservation of “oil, gas and other minerals” does not include near-surface lignite unless lignite is specifically or expressly included.
- Lignite located within 200 feet of the surface is near-surface as a matter of law, reflecting a presumption that parties do not intend a mineral conveyance that requires destruction of the surface absent clear language.
- The near-surface lignite rule turns on the substance’s character and the effect of extraction, not on the identity of the parties asserting competing mineral or royalty claims.
- Summary judgment against a party seeking reformation is proper only if the evidence conclusively negates an essential element of reformation (including prior agreement and mutual mistake) or otherwise shows the claimant cannot recover as a matter of law.

## Conclusion

The court held that a general reservation of “oil, gas and minerals” did not, as a matter of law, reserve near-surface lignite, but it allowed the grantors to pursue reformation because the summary-judgment evidence did not conclusively defeat their claim that the deed failed to reflect the parties’ true agreement due to mutual mistake.


Hobbs v. Hutson, 733 S.W.2d 269 (Tex. App.—Texarkana 1987)