Japhet v. McRae
Texas Commission of Appeals
276 S.W. 669 (Tex. Com. App. 1925)
Fisher leased his 15-acre tract to Producers' Oil Company, retaining a one-eighth royalty. Before any oil was produced, Fisher sold five acres to Keeble (plaintiff), who conveyed three of those to McRae (plaintiff), and Fisher's remaining ten acres eventually passed to Japhet (defendant), with Fisher's royalty interest passing along with each conveyance. Producers later developed and produced oil only on Japhet's ten acres. McRae and Keeble sued Japhet for a share of the royalties proportional to their remaining five-fifteenths interest in the original 15-acre tract, but the trial court ruled for Japhet; the Texas Court of Civil Appeals reversed, and Japhet sought further review.
Whether, when an oil-and-gas lessor sells part of his land after leasing it but before production begins, and oil is later produced under the lease from only part of the leased premises, the royalties belong solely to the owner of the specific tract where the well is located.