Background

Fasken Oil and Ranch, Ltd. holds a royalty interest under a 1933 deed reserving an "undivided one-fourth (1/4th) of the usual one eighth (1/8th) royalty in and to all oil, gas and other minerals" in certain lands. For approximately 85 years, Fasken and its predecessors consistently treated this reservation as a fixed 1/32 royalty interest, paid taxes on that basis, and never described the interest as anything other than 1/32 in their records. Fasken's representative admitted that "for 85 years, the Faskens treated the royalty on the Mabee Ranch as a 1/32nd," that the royalty "did not float" for 85 years, and that Fasken "has paid taxes on a .03125 [1/32] royalty interest."

The Dispute

In 2019, Fasken reversed course and filed suit claiming the 1933 deed actually reserved a floating 1/4 royalty interest—a significantly more valuable property right. The Boren descendants and other royalty owners, including the Mabee Ranch Royalty Partnership, defended on multiple grounds including the presumed-grant doctrine, which would establish that decades of consistent treatment as a fixed 1/32 interest had created a granted property right. The trial court granted Fasken partial summary judgment on deed construction, finding the reservation created a floating 1/4 interest, and also found "that the defendants had produced no evidence that the presumed-grant doctrine applies." The trial court certified two controlling questions for permissive interlocutory appeal: whether the deed reserved a floating 1/4 or fixed 1/32 interest, and whether Fasken was barred from claiming anything other than 1/32 by affirmative defenses including waiver, estoppel, and limitations.

Appellate Jurisdiction Issue

The Eastland Court of Appeals affirmed that the deed reserved a floating 1/4 royalty interest but declined to address the presumed-grant doctrine, concluding it lacked jurisdiction because "[t]he issue of the presumed-grant defense is not included within the list of issues that the trial court identified in its order permitting an interlocutory appeal." This jurisdictional holding became the focus of the Supreme Court's review.

The Supreme Court's Analysis

The Texas Supreme Court reversed the court of appeals' jurisdictional determination, holding that appellate courts reviewing permissive appeals must "resolve the appeal according to the same principles as any other appeal, including addressing all fairly included subsidiary issues and ancillary issues pertinent to resolving the controlling legal issue." The Court emphasized that "it is the order that is reviewed on appeal, and the rules of appellate procedure preclude a strict construction of issues presented on appeal." Because one certified controlling issue asked whether affirmative defenses barred Fasken from claiming anything other than a fixed 1/32 interest, and because "[t]he presumed-grant doctrine, if it applies, would establish that Fasken holds a fixed 1/32 royalty interest," the doctrine was properly within the appeal's scope.

The Court further emphasized the unique context of double-fraction deed cases, reiterating its recent holding in Clifton v. Johnson that "the double-fraction presumption sits alongside the presumed-grant doctrine" and that "[b]oth prongs, albeit in entirely distinct ways, ask the same question: who owns this property today?" The Court observed:

It is hard to imagine how a properly lodged presumed-grant-doctrine issue could be severed from an appeal involving the textual analysis of a deed.

Implications for Practitioners

This decision provides critical guidance on the scope of appellate jurisdiction in permissive interlocutory appeals involving mineral interests. Practitioners should note that courts of appeals have broader authority than the literal language of certification orders might suggest, particularly when subsidiary issues are logically intertwined with certified controlling questions. The Court's emphasis that deed construction and the presumed-grant doctrine represent "two distinct paths" to establishing ownership in double-fraction cases signals that both analyses should be briefed and preserved whenever a party seeks to establish royalty interests based on historical treatment. The case also highlights the substantial risk of reversing long-established property characterizations: Fasken's 85-year course of dealing treating the interest as fixed 1/32 may ultimately defeat its claim to a floating 1/4 interest worth potentially millions more in royalty payments. The Supreme Court vacated the court of appeals' merits determination and remanded for reconsideration in light of Clifton, ensuring both the deed-construction and presumed-grant analyses will receive full appellate review.