The El Paso Court of Appeals recently published an opinion that provides what might be characterized as 26-step step system for analyzing a deed that (perhaps inadvertently) highlights a growing irony in Texas jurisprudence. While dutifully reciting the Texas Supreme Court’s mantra that courts should avoid “arbitrary or mechanical default rules” and reject “bright-line” approaches, the court proceeds to outline what might best be described as a highly mechanical, multi-tiered framework with more than 26 distinct analytical rules or steps.
The case Bush v. Yarborough Oil & Gas, LP, 705 S.W.3d 451 (Tex. App.‚ El Paso 2024, pet. filed).This dispute arose from competing claims to mineral interests stemming from a 1948 tax foreclosure judgment. The central question: Did that judgment foreclose only on the delinquent taxpayer’s interest, or did it also sweep up a 1/2 mineral interest that had been conveyed to someone else eleven years earlier? Id. at 456.
In 1937, M.A. Piercy conveyed an undivided 1/2 mineral interest to Thomas Vaughn. Id. When Piercy later defaulted on her taxes, the taxing authorities foreclosed in 1948‚ but they only named and served Piercy, not Vaughn or his successors. Id. at 457. Decades later, when oil companies began drilling, the successors of both the tax sale purchaser and the mineral interest owner claimed title, leading to this litigation.
The Court’s “Non-Mechanical” Three-Tiered Framework
What makes this case particularly instructive (and perhaps amusing) is how the court meticulously sets forth what it characterizes as not being a mechanical framework for interpretation. The court begins by dutifully citing recent Texas Supreme Court authority emphasizing that courts should “resolve any conflicts by harmonizing the agreement’s provisions, rather than by applying arbitrary or mechanical default rules.” Id. at 459 (quoting Piranha Partners v. Neuhoff, 596 S.W.3d 740, 744 (Tex. 2020)).
But then, in the very next breath, the court proceeds to outline what could reasonably be characterized as a highly structured approach organized into three distinct tiers, plus a potential additional tier with overriding doctrines, where each tier has its own sub-rules and analytical steps:
First Tier: Literal Text Analysis
The court begins with the principle that interpretation starts “with the ‘literal’ text within the four corners of the judgment.” Id. at 459. The court describes this tier as focusing on extracting meaning from the text itself without reference to external sources. According to the court, if the language is “clear and unambiguous,” the analysis typically stops here. Id. The court’s framework in this tier includes:
- Begin with the “literal” text within the four corners of the document (Id.)
- If language is “clear and unambiguous,” the court “looks no further” (Id.)
- Apply the “plain, ordinary, and generally accepted meaning” of words and rules of grammar (Id.)
- Consider whether terms are “defined or used in a ‘technical or specialized way’“ (Id.)
- “Do not read provisions of the [instrument] in isolation” (Id.)
- Look at the instrument “as a whole” (Id.)
- When portions “appear contradictory or inconsistent,” courts “strive to harmonize all of the parts” (Id.)
- Construe the instrument to “give effect to all of its provisions” (Id.)
- Do not give conclusive meaning to the presence or absence of formal or magic words (the court specifically refers to “commonly employed decretal words” from judgments, but this is in line with the oft-repeated reference to not requiring “magic words” or formulaic formalities) (Id.)
- Determine intent from “a fair reading of all the provisions of the [instrument]” (Id.)
- Goal is to determine not what the parties meant to do but did not, but instead what they actually said (the court specifically referred to judgments, saying “determine not what the trial court should have done but, if possible, what the court actually did”) (Id.)
- Courts have “increasingly discounted” canons of construction and application of arbitrary or mechanical default rules, “particularly in our decisions addressing mineral-interest conveyances” (Id.)
Second Tier: Objective Facts and Circumstances
When the text is “inconclusive,” then the Bush court says courts should move to the next tier, which considers the “surrounding facts and circumstances” such as historical and contextual meaning to “shed light on the objective meaning conveyed by the text.” Id. at 459-60. According to the court, one purpose of this tier is to recognize that language evolves over time whereas what matters is the meaning at the time of drafting. The court describes this tier as encompassing the following rules or steps:
- Consider facts and circumstances to “shed light on the objective meaning” (Id. at 459-60)
- “To determine historical meaning, we generally begin with ‘contemporary legal and lay dictionaries’” (Id. at 460)
- Consider “historical cases” in effect at the time (Id.)
- Consider “historical statutes” in effect at the time (Id.)
- “Determine what a text could reasonably have meant to an informed but disinterested speaker at the time the text was written’“ (Id.)
- “The ‘text does not evolve with the broader language’“ (Id.)
- “Avoid strictly construing an instrument’s language if it would lead to absurd results” (Id.)
- Oil and gas experts “have a proper (if confined) role” (Id.)
- However, “expert opinions as to the meaning of common oil and gas terms is not necessary” (Id.)
Although the Bush court’s discussion of surrounding circumstances was largely limited to interpretation of judgments, practitioners should note that the Texas Supreme Court has established a comprehensive framework for when and how surrounding circumstances evidence may be considered in interpreting written agreements. In URI, Inc. v. Kleberg County, the Court explained that surrounding circumstances encompass “objectively determinable facts and circumstances that contextualize the parties’ transaction,” including “the commercial or other setting in which the contract was negotiated.” 543 S.W.3d 755, 757-58 (Tex. 2018). Importantly, surrounding circumstances evidence is distinct from extrinsic evidence of subjective intent—the former may be considered even when construing unambiguous contracts, while the latter is only admissible when ambiguity exists. Id. at 764-65.
The Supreme Court has placed significant limitations on the use of surrounding circumstances evidence, repeatedly emphasizing that it “cannot be used to augment, alter, or contradict the terms of an unambiguous contract.” Id. at 758. In Endeavor Energy Resources, L.P. v. Energen Resources Corporation, the Court clarified that surrounding circumstances may be considered “when contractual text alone is inconclusive,” but even then, such evidence can only “inform the meaning of the language the parties chose to effectuate their accord.” 615 S.W.3d 144, 148 (Tex. 2020). The Court stressed that surrounding circumstances “cannot be used to show that the parties probably meant, or could have meant, something other than what their agreement stated.” Id.
The challenge for practitioners lies in determining when contractual text is sufficiently “inconclusive” to warrant consideration of surrounding circumstances. The Supreme Court has not provided bright-line guidance on this threshold question, creating uncertainty about when courts may properly look beyond the four corners of the document. In Barrow-Shaver Resources Co. v. Carrizo Oil & Gas, Inc., the Court noted that surrounding circumstances include “the fact that negotiations took place between sophisticated parties in this commercial oil and gas context,” but emphasized that courts cannot consider “the parties’ intent beyond what their agreement plainly yields.” 590 S.W.3d 471, 483-84 (Tex. 2019). This leaves practitioners to navigate a narrow path between using objective context to illuminate textual meaning and impermissibly seeking subjective intent that contradicts the written terms.
Third Tier: Extrinsic Evidence of Intent
According to the Bush court, only in cases of “inescapable ambiguity” do courts reach this final tier, which allows consideration of “extrinsic evidence of subjective intent.” Id. at 460. The court’s discussion of the approach in this tier is again largely fixed on interpretation of judgments, and encompasses the following rules or steps:
- Consider “extrinsic evidence of subjective intent” (Id.)
- For judgments specifically, determine “the legally correct meaning” (Id.)
- “Only when a judgment is subject to more than one reasonable interpretation do we adopt the construction that correctly applies the law” (Id.)
- “Consider the law in force at the time of the judgment” (Id.)
- Consider “the entire record” (Id.)
Although the Bush court’s discussion of extrinsic evidence focused primarily on judgments, practitioners should understand that the Texas Supreme Court has established strict rules governing when extrinsic evidence of subjective intent may be considered in interpreting written agreements. Unlike surrounding circumstances evidence, which may inform the meaning of unambiguous contract language, extrinsic evidence of the parties’ subjective intent is only admissible when a contract is truly ambiguous. URI, Inc. v. Kleberg County, 543 S.W.3d 755, 764 (Tex. 2018). The Court has emphasized that “no issue regarding the parties’ intentions is raised unless the [contract] is ambiguous—and evidence of those intentions cannot be used to create an ambiguity.” Id. at 765 (emphasis in original).
The Supreme Court has set a high bar for finding ambiguity. In Endeavor Energy Resources, L.P. v. Energen Resources Corporation, the Court explained that a contract is ambiguous only when it is “susceptible to two or more reasonable interpretations” after applying all “pertinent construction principles.” 615 S.W.3d 144, 148 (Tex. 2020). The Court cautioned that “the term ‘ambiguity’ in Texas contract law connotes a greater degree of linguistic indeterminacy than it does in common parlance.” Id. at 152. Furthermore, “the mere fact that the parties disagree about the meaning of a provision does not make it ambiguous.” Barrow-Shaver Resources Co. v. Carrizo Oil & Gas, Inc., 590 S.W.3d 471, 479 (Tex. 2019).
When a court determines that true ambiguity exists, it may then consider extrinsic evidence to resolve the parties’ subjective intent, including evidence of prior negotiations, course of performance, and the parties’ subsequent conduct. URI, 543 S.W.3d at 760 n.5. Examples of such evidence might include testimony about what the parties discussed during negotiations, draft agreements showing how provisions evolved, or evidence of how the parties actually performed under the agreement. However, the Court has repeatedly warned that even when ambiguity exists, extrinsic evidence cannot be used to “make the language say what it unambiguously does not say” or to “show that the parties probably meant, or could have meant, something other than what their agreement stated.” Id. at 757. This creates a careful balance: extrinsic evidence may resolve genuine ambiguity, but it cannot rewrite clear contractual terms under the guise of interpretation.
Fourth Tier: Overriding Doctrines
Finally, the Bush court cited to Van Dyke as presenting an alternative fourth tier, noting that certain situations there may be “recognized doctrine[s]” that may “dispense with the deed-construction analysis” entirely and “require courts to fix present-day ownership regardless of what the original text provided.” Id. (citing Van Dyke, 668 S.W.3d at 365 n.4). Where such an overriding legal doctrine applies, the Bush court suggested that “the original instrument would at most provide an alternative holding.” Id. While the court did not thoroughly discuss those doctrines, as examples it mentioned:
- The “presumed-grant doctrine,” with citation to Van Dyke. (Id.) Readers will note that, in Van Dyke, the Texas Supreme Court described this doctrine as “a common law form of adverse possession,” which can apply if three elements are established: (1) a long-asserted and open claim, adverse to that of the apparent owner; (2) nonclaim by the apparent owner; and (3) acquiescence by the apparent owner in the adverse claim. Van Dyke v. Navigator Group, 668 S.W.3d 353, 366 (Tex. 2023), reh’g denied (June 16, 2023).
- The Bush court also noted that “statutes” may at times override textual analysis, though the court did not provide any examples (Id.). However, in context, this would presumably include statutory adverse possession.
The Court’s Application: A Case Study in Exhaustive Analysis
After establishing this arguably-not-mechanical 28-step framework, the Bush court proceeds to apply it with impressive thoroughness. The court’s analysis included:
- The express language of the 1948 judgment, focusing on phrases like “against the rights, titles, liens and claims of each and all of the said defendants herein” Id. at 461
- The sheriff’s deed language limiting conveyance to “all the right, title and interest of the said Mrs. M.A. Piercy, Defendant” Id.
- Contemporary statutory provisions from the 1890s through 1940s Id. at 462-64
- A comprehensive survey of case law from 1898 through 1956 interpreting the Delinquent Tax Act Id. at 464-65
- Extrinsic evidence including quitclaim deeds executed after the tax sale Id. at 465-66
The court’s analysis spans nearly ten pages of detailed examination, parsing everything from the purpose of the 1895 Delinquent Tax Act (to remedy “the evils” of summary tax sales) to whether “liens of defendants” in the decretal language negates other textual limitations. Id. at 464.
The Irony: Mechanical Rules in Sophisticated Clothing
What emerges from Bush v. Yarborough arguably illustrates potential tension between the Texas Supreme Court’s aspirational guidance and the practical reality of appellate decision-making. While the Supreme Court continues to insist that deed interpretation involves no “fixed” or “bright-line rules,” what has developed through decades of appellate court precedent emerges in Bush in a form that looks suspiciously like a 28-step rigid checklist.
The court in Bush even acknowledges this tension obliquely, noting that “older cases have occasionally applied canons of construction” but that “the Texas Supreme Court has increasingly discounted these approaches.” Id. at 459. Yet one might reasonably ask: isn’t this appellate court’s three-tiered, 28-step framework a remarkably complex series of rigid analytical steps?
Does this Matter to Practitioners
For oil and gas practitioners, this theoretical disconnect between theory and practice has several potentially critical implications:
- Briefing Strategy: While practitioners should certainly consider quoting the Supreme Court’s language about holistic interpretation and avoiding mechanical rules, they might also want to be prepared to methodically address each potential step in what could be characterized as the “non-mechanical” framework. Advocates might consider anticipating which tier their strongest arguments fall within and potentially structuring their briefs accordingly.
- The Predictability Paradox: Despite the Supreme Court’s apparent resistance to mechanical rules, the three-tiered framework arguably provides some measure of predictability for title examination. Most deeds will likely be resolved in Tier One through textual analysis. Complex or older instruments may require Tier Two historical research. Only the most ambiguous documents would seem to reach Tier Three’s subjective intent analysis.
- Historical Research Requirements: The emphasis on contemporary meaning in Tier Two can apparently require extensive historical research. In Bush, the court examined statutes from 1895 and 1897, plus case law spanning six decades. This arguably echoes the Texas Supreme Court’s approach in Van Dyke v. Navigator Group, where “1/8” was held to mean the entire mineral estate based on exhaustive historical analysis of the “estate misconception” and “legacy of the 1/8.”
- The Expert Testimony Consideration: While the framework suggests expert testimony on common terms isn’t necessary, Van Dyke demonstrates that even seemingly simple fractions can require, or even hinge on, expert historical context. The challenge may be predicting when a seemingly common term might suddenly become uncommonly complex in the eyes of the court.
What does it In Defense of Structured Analysis
To be fair, one could argue there’s a meaningful distinction between the mechanical rules the Texas Supreme Court condemns and the structured analytical approach in Bush. The Supreme Court’s criticism arguably targets rigid canons that predetermine outcomes‚ rules like “always construe against the grantor” or “mineral deeds always receive maximum effect.” These bright-line rules can produce absurd results when mechanically applied.
The Bush framework, by contrast, arguably applies a methodology for applying that intent-based holistic analysis, and its complexity arguably ensures thoroughness while preserving contextual judgment. Each “step” arguably requires nuanced analysis, not rote application. One could view it less as a mechanical checklist than as a comprehensive methodology for determining intent through text, context, and history.
Moreover, one could argue that what I’ve characterized as a “mechanical framework” is simply a systematized approach to good lawyering/analysis. One could contend that any competent attorney or thorough judge would naturally weigh these various factors, and would naturally progress from text to context to circumstances to extrinsic evidence when appropriate. In other words, the Bush court arguably isn’t creating arbitrary mechanical rules; it’s just codifying the logical progression that is required for a thorough application of the intent-based inquiry.
The Practical Reality
Bush v. Yarborough ultimately demonstrates the complex reality of deed interpretation in Texas. The case involved analysis of:
- Multiple written instruments (judgment, sheriff’s deed, quitclaim deeds)
- Statutory provisions spanning over 50 years
- Case law from 1898 to present
- Historical context and legislative purpose
- Extrinsic evidence and corroborating documents
- Policy considerations and equitable defenses
- Standing, limitations, and jurisdictional issues
Through this rather structured approach, the court held that the 1948 foreclosure judgment only divested Piercy of her interest, not the previously severed mineral interests. Id. at 469. To reach this seemingly straightforward conclusion, the Bush court navigated a rather detailed and methodical analytical process.
The Bottom Line
Perhaps the real lesson isn’t whether Texas has 26 rigid rules for deed interpretation (or 29, or however you count it), but rather that although the Texas Supreme Court has championed a flexible intent-based approach, that doesn’t necessarily mean every deed interpretation case is a chaotic wild-wild-west reenactment. Indeed, the Texas Supreme Court has recognized the value in achieving stability and predictability in land titles, and perhaps a methodical approach like the Bush court describes can help in that endeavor. In other words, perhaps the intent-based inquiry helps maximize the freedom of contract and helps prevent absurd results, while the structured methodology from Bush potentially provides support to the stability and predictability of land titles amidst that process.
For practitioners, one practical takeaway remains clear: master the framework (mechanical or otherwise), anticipate which tier(s) will likely control your case, and prepare accordingly. Remember that while the entire analysis is theoretically governed by a search for holistic intent, courts may be drawn to methodical approaches that to ensure no stone is left unturned.
Whether we call it mechanical or structured, one thing is certain: Texas deed interpretation rewards the thoroughly prepared, punishes the casually briefed, and keeps oil and gas lawyers gainfully employed analyzing instruments drafted when our great-grandparents walked the earth.
