Perryman v. Spartan Texas Six Capital Partners, Ltd.

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At issue was the function of a clause in a real property deed that “saves and excepts” one-half of “all royalties from the production of oil, gas and/or other minerals that may be produced from the above described premises which are now owned by Grantor” when the deed does not disclose that the grantor does not own all of the royalty interests and does not except any other royalty interests from the conveyance.The trial court held that the deeds did not create a Duhig problem - where the grantor owns less than he purports to convey - by construing the clause as reserving for the grantor one-half of all royalties “which [were then] owned by Grantor.” The court of appeals determined that the clause created a Duhig problem, interpreting the clause as reserving for the grantor one-half of all royalties produced from the “above described premises which [were then] owned by Grantor.” The Supreme Court affirmed as modified, holding (1) instead of reserving a one-half royalty interest for the grantors, the clause merely excepted that interest from the grant, and therefore, the deeds did not create a Duhig problem; and (2) each party with an interest in the tracts owned a one-quarter interest in the royalties produced. View "Perryman v. Spartan Texas Six Capital Partners, Ltd." on Justia Law