In 1924, George H. Mulkey and Frances E. Mulkey conveyed their ranch and its underlying mineral estate to G. R. White and G. W. Tom, reserving “1/2 of 1/8” of all minerals and mineral rights. At issue in this case – with the division of over $44 million in accumulated royalties at stake – is whether the grantors reserved a 1/16 mineral interest or 1/2 of the entire mineral estate. According to the trial court, and as affirmed by the court of appeals, the Mulkeys reserved an undivided 1/16 mineral interest; however, the Supreme Court of Texas disagreed, reversing the lower court decisions by determining the grantors reserved half of the entire mineral estate.
Despite conclusions from the trial court and court of appeals that “1/2 of 1/8” unambiguously reserved only 1/16 of the mineral estate due to simple math and that the deed contained no conflicting provisions that necessitated interpretation, the Supreme Court determined that the words of the deed should be interpreted according to the meaning of such words when drafted. At the time of the deed, “1/8” was commonly used to refer to the entire mineral estate. The Supreme Court also applied the presumed grant doctrine,
pointing out that all parties involved operated as though the grantors and the grantees each owned 1/2 of the mineral estate with no contest until this dispute began in 2013.