Portwood v. Buckalew

In Portwood v. Buckalew, 521 S.W.2d 904 (Tex.Civ.App.--Tyler 1975, writ ref'd n.r.e.), landowners were parties to a partition agreement dividing the surface estate of the ranch and giving the grantee of each respective tract executive leasing rights for minerals in the tract for the benefit of all the parties. Id. at 911. By virtue of this agreement, the non-executives were granted a right to participate in all royalties and bonuses. Id. at 909. One surface landowner executed an oil and gas lease on behalf of the non-executives, but she also entered into a separate agreement for a 25 percent overriding royalty for herself. Id. at 911. She did not inform the other parties of the 25 percent overriding royalty. Id. The non-executive sued the landowner for breach of her duty to use utmost fair dealing in executing the oil and gas leases on behalf of the non-executive. Id. at 909. At trial, the landowner testified that she acquired the 25 percent royalty in lieu of surface damages. Id. The jury found that the 25 percent overriding royalty was not part of the bonus paid by the lessee, but the trial court disregarded the finding and entered judgment in favor of the non-executive. Id. at 912. The court of civil appeals rejected the landowner's argument that the 25 percent royalty was in lieu of surface damages and held that an instrument must be construed for what it is, regardless of the interpretation placed on it by the parties. Id. at 913.