Concord Oil Co. v. Pennzoil Exploration and Production Co.

A.B. Crosby's deed conveyed "one-ninety sixth" of a mineral interest to Southland, while also stating the conveyance "covers and includes one-twelfth" of royalties payable under any then-subsisting lease and specifying the conveyance would survive termination of leases; an oil and gas lease existed on the land at the time of conveyance. After that original lease expired, successors on both sides of the chain of title executed competing new leases to Concord (plaintiff) and Pennzoil (defendant); Concord sued, claiming the deed conveyed a one-twelfth mineral interest, while Pennzoil argued it conveyed a one-ninety-sixth mineral interest plus a separate one-twelfth royalty interest limited to the now-expired original lease. The trial court and court of appeals ruled for Pennzoil based on the "two-grant" theory, and Concord appealed.