Earlier this year, we reported the San Antonio Court of Appeals decision in Dragon v. Harrell, a fixed versus floating royalty case. Here, the court is again confronted with the same issue. Relying on its decision in Graham v. Prochaska, the court explains why the estate misconception theory does not apply and explains how the interest in dispute is a fixed nonparticipating royalty interest.
This is a deed interpretation case out ofthe San Antonio Court of Appeals, arisingfrom the 218th Judicial District Court of Karnes County, Texas.
In 1991, the Harrells executed a warranty deed (“1991 Deed”) that conveyed approximately 10 acres of land to the Dragons. The 1991 Deed was subject to prior reservations and it contained the following new reservation by the Harrells: