Julia Wisenberg, Volume 50 Articles Editor
JUSTICE BROWN DELIVERED THE OPINION OF THE COURT.
The Supreme Court of Texas clearly stated in a recent decision that a deed must be read in its entirety and the language within the four corners of the document should be used to ascertain the parties’ intent. Although the Court limited their holding to the specific facts and language in the deed in this case, the Court also noted that drafters of deeds should plainly explain the parties’ intent within the deed.
In Wenske v. Ealy, the Court evaluated a mineral estate deed to determine whether the deed passed the burden of an outstanding non-participating royalty interest (NPRI) on to the grantees or if the grantor’s reserved interest was proportionally burdened by the NPRI. The trial court found that both parties in the case were burdened with the NPRI proportional to their fractional mineral interests. The Thirteenth Court of Appeals affirmed, citing the Court’s holding in Bass v. Harper, 441 S.W.2d 825 (Tex. 1969). The Supreme Court also affirmed, but clarified that no default rule or the holding in Bass determined the outcome of the case; instead, the parties’ intent controlled.
The Court distinguished Bass from the case at hand by again emphasizing that the language in the deed, including the location of the language, must be used to reflect the specific intent of the parties. Thus, the Court emphasized that other courts should limit their application of Bass to cases involving the same specific language. After analyzing the language of the deed, the Court concluded that there was only one reasonable interpretation of the parties’ intent and affirmed the appellate court’s holding.
The dissent agreed that the plain language of the deed must be used in order to determine the parties’ intent. However, the dissent also evaluated the inherent nature of the mineral interests as well as Texas Supreme Court precedent, including oil and gas cases. The four dissenting judges analyzed the language in detail to conclude that the deed granted an interest to the grantees subject to an excepted interest; no other interests bear the burden of an expected interest. Based on this analysis, the dissent decided that the grantor’s reserved interest should not be burdened proportionally as concluded by the majority of the Court.
Wenske v. Ealy, 2017 WL 2719330, No. 16-0353 (Tex. Mar. 22, 2017).