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Thomas Gilcrease Foundation v. Stanolind Oil & Gas Co.

Supreme Court of Texas

266 S.W.2d 850 (Tex. 1954)

Relevant factsFree

First National Bank of Fort Worth owned the entire mineral estate under the northeast quarter of a tract and half the estate under the northwest quarter; Thomas Gilcrease Foundation (plaintiff) separately acquired a three-fourths mineral interest in the northeast quarter and a one-fourth interest in the northwest quarter. The Bank and, a month later, Gilcrease each separately leased their interests to Stanolind Oil & Gas Co. (defendant), but only the Gilcrease lease contained an entirety clause requiring royalties to be divided among separate owners in proportion to each owner's overall acreage share of the entire leased tract, rather than by tract. The northwest quarter turned out far more productive than the northeast, meaning Gilcrease -- who owned more in the less productive quarter -- stood to gain from entirety-clause apportionment; Gilcrease sued for royalties based on its one-half overall ownership share, Stanolind argued for tract-by-tract apportionment instead, and the trial court granted Gilcrease summary judgment before the court of appeals reversed.

IssueFree

Whether an entirety clause allows for royalty payments under an oil and gas lease covering a subdivided tract of land to be apportioned to lessors based on their proportion of ownership as compared to the entire leasehold, even if such apportionment is to the benefit of a lessor.

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