Hoffman v. Magnolia Petroleum Co.

Duke leased his 320-acre tract's oil and gas rights to Harvey, reserving a one-eighth royalty, and later sold Hoffman (plaintiff) a one-half interest in minerals on just 90 of those acres; the deed stated the sale was subject to Harvey's lease but also that it "covers and includes one-half of all the oil royalty and gas rental or royalty due to be paid under the terms of said lease," referring to the lease covering the full 320 acres. Hoffman sued Magnolia Petroleum (defendant) seeking half the royalties on the entire 320 acres rather than just the 90 he purchased; the trial court and court of civil appeals both ruled the royalty applied only to the 90 acres, and Hoffman appealed further.