497 Dawkins v. Hysaw

Richard F. Brown

The following is not a legal opinion. You should consult your attorney if the case may be of significance to you.

Dawkins v. Hysaw held that a will devised a fractional royalty of 1/24, not a fraction of royalty. The parties aligned as descendants of three sibling-beneficiaries, Inez, Dorothy, and Howard, under the 1947 will of their mother, Ethel. Ethel’s will divided her land into three tracts, and to each child, she devised the surface estate in one of the tracts. The will further provided as follows:

I will and bequeath to each of the above named children fee simple title to the lands designated to go to them, subject, however, to the following:

That each of my children shall have and hold an undivided one-third (1/3) of an undivided one-eighth (1/8) of all oil, gas or other minerals in or under or that may be produced from any of said lands, the same being a non-participating royalty interest; that is to say, that [Dorothy and Howard shall not participate as to the land devised to Inez], but that [Inez] shall receive one-third of one-eighth royalty, provided there is no royalty sold or conveyed by me covering the lands so willed to her, and should there be any royalty sold during my lifetime then [Inez, Dorothy, and Howard] shall each receive one-third of the remainder of the unsold royalty.

There were subsequent mirror-image provisions as to the tracts devised to Dorothy and Howard. Prior to and after executing her will, Ethel conveyed away all of the surface of Howard’s tract and certain royalty interests, which therefore did not pass under Ethel’s will. Inez’s descendants executed a lease that provided for a royalty of 1/5.

Inez’s descendants contended the will devised to Dorothy and Howard a fractional royalty on Inez’s land (1/3 of 1/8 = 1/24 to each). Dorothy’s and Howard’s descendants contended the will devised to Dorothy and Howard a one-third fraction of royalty on Inez’s land (1/3 of 1/5 = 1/15 to each).

The court distinguished between a “fractional royalty conveyance,” which “transfers a fixed fraction of production of the minerals produced from the land irrespective of the percentage royalty in any subsequent lease,” and a “fraction of royalty conveyance,” which “transfers a fraction of whatever royalty interest is reserved in the lease.” To construe Ethel’s will, the court separately considered each of the three royalty provisions applicable to Inez’s tract, citing to precedents established in the construction of deeds. The court held that the first and second royalty provisions—“an undivided one-third (1/3) of an undivided one-eighth (1/8) of all oil, gas or other minerals in or under or that may be produced from any of said lands” and “one-third of one-eighth royalty”—clearly described fractional royalty interests. In contrast, the court held that the third royalty provision, “should there be any royalty sold during my lifetime then [each of my children] shall receive one-third of the remainder of the unsold royalty,” clearly and unambiguously devised a fraction of royalty interest conditioned on the sale, during Ethel’s lifetime, of any royalty “covering the lands so willed to [her child].” According to the court, “[t]his conveyance language expressly contemplates that the unsold royalty will be something other than 1/8, and it equally divides whatever royalty remainder may exist among her three children.”

The court then read the three royalty provisions together along with the remainder of the will “to determine whether any provision’s plain language contradicts or is inconsistent with the others.” The court concluded that its construction of the three royalty provisions, when considered together, “does not create any contradictions or inconsistencies, or leave any portion of the estate unassigned.” The court rejected the argument that the second royalty provision limits the surface estate owner’s royalty to a maximum of 1/24 of production, holding that the second royalty provision is merely “an individualized restatement that affirms both the first royalty provision and the fee simple title devise.” That is, Inez got the fee in her tract and then a 1/24 NPRI in all of the tracts, which was not a limitation on the devise of the fee in her tract.

Dorothy’s and Howard’s descendants also argued that the will shows Ethel intended for each of her children to share equally in all royalties under all circumstances and relied on the first provision’s sharing of royalty by each child in the royalties from all the lands, the equal sharing required under the third provision’s fraction of royalty devise, and the understanding that 1/8 was the usual royalty at the time Ethel’s will was drafted. The court also rejected this argument by applying the rule of construction that the actual intent of the testator must be drawn from the terms of the will. According to the court, “whatever subjective intent for distributing royalties one might discern from Ethel’s will cannot overcome the clear and unambiguous language of the first and second provisions that describe a fractional royalty.” Furthermore, the third royalty provision is expressly conditional and nothing in its language applies it to any other provision.

The court concluded by holding that the “plain language [of Ethel’s will] devised all her rights in the specified surface estate—and its corresponding mineral estate—to each surface estate devisee subject to the two fractional royalty interests—fixed fractions of 1/24 of production—reserved for the devisee’s siblings.” The court also concluded that, because the condition in the third royalty provision was satisfied for Howard’s tract by Ethel’s inter vivos transfers, each of Ethel’s children share equally in any and all royalty remaining in Ethel and earned from Howard’s tract.

The case continues the four corner approach to will construction. This case is also significant because the court construed the will as if it were a conveyance and relied on precedents established in the construction of deeds to determine the intent of the testator. This approach results in consistency in the construction of deeds and wills with respect to the passage of mineral title.

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