The Oil and Gas Addendum

In March 2026, a Texas appeals court looked at a 1956 deed that said "3/32" three times — with the math shown — and held that the parties did not actually mean that number. The case, Hoffman v. Thomson, No. 04-19-00771-CV (Tex. App. — San Antonio, March 18, 2026), applied a presumption established by the Texas Supreme Court in Van Dyke v. Navigator Group, 668 S.W.3d 353 (Tex. 2023): that when an old deed uses "1/8" in a double fraction, the fraction is presumed to be a historical placeholder for the standard royalty rather than a fixed arithmetic value. Under that presumption, a deed reserving "three-fourths of the usual one-eighth royalty" reserves a floating 3/4 interest — not the fixed 3/32 that the arithmetic produces. Neither the repetition of that fraction, a more recent execution date than many historical deeds, nor a bonus non-participation clause was enough to rebut this presumption.

Pennsylvania courts have not yet had occasion to address whether this strong presumption found in the Van Dyke case should apply in the Commonwealth. But, the historical conditions that produced the double-fraction problem in Texas existed in Pennsylvania too, and old Pennsylvania deeds carry the same ambiguities. If you hold an oil and gas or royalty interest under an old deed, the fraction on its face may not tell the whole story.

What Did the 1956 Deed Actually Say?

In 1956, Peter and Marion Hoffman conveyed a 1,070-acre tract in rural McMullen County, Texas, to Graves Peeler, but reserved a royalty interest for themselves. The reservation clause read, in relevant part:

"there is hereby expressly reserved...an undivided three thirty-second's (3/32's) interest (same being three-fourths (3/4's) of the usual one-eighth (1/8th) royalty) in and to all of the oil, gas and other minerals..."

A second paragraph stated twice more — without the explanatory parenthetical — that the Hoffmans would receive "three thirty-second's (3/32's)" of gross production. On its face, this looks unambiguous: the parties did the math (3/4 × 1/8 = 3/32), stated the result, and repeated it for clarity. The grantors in that 1956 deed retained a 3/32 nonparticipating royalty interest. The successors to the original grantee, Peeler, took exactly that position, and the trial court agreed, entering judgment that the Hoffmans held a fixed 3/32 nonparticipating royalty interest.

The Hoffman heirs appealed. The Texas Court of Appeals reversed.

What Is the Van Dyke Presumption, and Why Does It Matter?

To understand Hoffman, you need to understand Van Dyke v. Navigator Group, 668 S.W.3d 353 (Tex. 2023). In that Van Dyke, the Texas Supreme Court established the analytical framework the Hoffman court applied.

Van Dyke starts from a historical observation. For decades in the early to mid 20th century, the phrase "one-eighth" functioned as a term of art in oil and gas conveyancing. It was the standard landowner's royalty and was so common that people used "1/8" as shorthand for whatever royalty the landowner gets under a lease, rather than meaning 1/8 as a literal arithmetic value. This gave rise to the "double fraction" problem: when a deed language stipulated that, for instance, the grantor reserved "one-half of the usual 1/8 royalty," the drafter may have meant one-half of whatever the landowner's royalty turns out to be — a floating interest — rather than the fixed arithmetic product of 1/2 × 1/8 = 1/16.

The Texas Supreme Court in Van Dyke formalized this into a rebuttable presumption: when a deed contains a double fraction involving 1/8, courts must begin with the assumption that "1/8" was used as a placeholder for the standard royalty, not a literal number. The burden then shifts to the party seeking the fixed, arithmetic interpretation to rebut that presumption from the text of the deed itself. Extrinsic evidence is off the table; only the four corners of the instrument can be used to rebut the presumption.

Applied to the 1956 Hoffman deed, the Van Dyke presumption means that the reservation of "three-fourths (3/4's) of the usual one-eighth (1/8th) royalty" should be read as "three-fourths of the standard royalty" — a floating 3/4 interest in whatever royalty a future lease provides — rather than the arithmetic product of ¾ x ⅛ = 3/32.

Can the Van Dyke Presumption Be Rebutted?

Yes — the Van Dyke presumption can be rebutted, but Hoffman shows it is harder than it looks. The grantees' successors in Hoffman made three reasonable arguments, and the appeals court rejected all three.

First, they argued that Van Dyke involved a conveyance of the mineral estate, while the 1956 Hoffman deed reserved a royalty interest — and that the presumption should not cross that line. The Hoffman court rejected this, finding no support under Texas law for a material difference between a conveyance of a mineral interest and a conveyance of a royalty interest for purposes of deed construction.

Second, the grantees’ successors argued that the 1956 deed was too recent, with the historical misunderstanding about the meaning of "1/8" being a phenomenon of older instruments. The Hoffman court found nothing in Van Dyke limiting the presumption to instruments of a particular era, and pointed to Texas cases applying the same analysis to deeds from the 1940s and 1950s.

Third, and most interesting, they argued that the presence of the repeated fraction “3/32” in the 1956 deed, including it being stated separately from and prior to the double fraction — took the deed outside the Van Dyke double-fraction presumption entirely. The Hoffman court held otherwise. If a double fraction involving 1/8 is present anywhere in the instrument, the presumption applies, and the 3/32 fraction becomes a textual challenge to the presumption rather than a reason to bypass the analysis altogether. The two additional instances of “3/32” in the second paragraph, without the explanatory parenthetical, were not sufficiently clear to rebut the presumption as a matter of law.

The grantees also pointed to deed language providing that the Hoffmans "shall not participate in the bonus paid for any future oil, gas and/or mineral lease," arguing this showed the parties understood the royalty to be capped. The Hoffman court held that "bonus" in Texas oil and gas usage means the upfront cash consideration paid to execute a lease — not a share of production — and so the non-participation clause said nothing about royalty rates.

Does This Problem Exist Outside of Texas?

It does. In November 2021, we wrote about JJK Mineral Co. v. Morris, a federal district court decision involving an 1897 deed conveying interests in a 236-acre parcel in Greene County, Pennsylvania. The deed language — "all of his oil and gas rite [sic] being the full half of his eighth interest, one sixteenth royalty" — reflects the same historical confusion at work in Hoffman. The grantor in the JJK Mineral Co. case, Miles Meek, had leased his oil and gas to South Penn Oil Company on a standard 1/8 royalty. After signing that lease, Meek apparently believed he only retained a 1/8 interest in the oil and gas — when in fact he still owned the entire oil and gas estate, subject to the lease. That misunderstanding was so common in that era that courts gave it a name: the Estate Misconception Theory.

The Van Dyke presumption that drives Hoffman has its roots in the Estate Misconception Theory, but it is broader. Texas courts recognized a second, related phenomenon: that 1/8 was so universally the standard landowner's royalty for so long that drafters used it as a placeholder for "whatever the royalty turns out to be" rather than as a fixed arithmetic value — even when the grantor had no confusion about what he actually owned.

What Van Dyke did was step back from both of these specific theories and establish a presumption that operates at a higher level of generality: when a double fraction involving 1/8 appears in an old deed, the court presumes the 1/8 was not meant arithmetically, without requiring proof of which specific historical confusion caused the drafter to use it that way. The Texas Supreme Court was explicit in Van Dyke that "it matters less why the term was used in a particular way than that it was so widely used."

The Hoffman court applied that presumption without independently analyzing whether the 1956 deed reflects the Estate Misconception specifically or the royalty-standardization phenomenon or both. The JJK Mineral Co. deed in Greene County, Pennsylvania, by contrast, was a more direct Estate Misconception case — Meek had an existing lease and apparently believed his retained interest was defined by its 1/8 royalty. As we observed in the post on JJK Mineral Co., the federal district court disappointingly declined to seriously engage with that theory.

Is the Texas Approach a Good One — And Could Pennsylvania Follow It?

The Van Dyke presumption has an appeal. It reads old instruments against the historical backdrop under which they were drafted, rather than applying modern arithmetic to language that was never meant to be purely arithmetic. And it is a rebuttable presumption. Other language in a deed can overcome its effect. But there is genuine tension on the other side. A presumption that a fraction in a deed actually means something else creates real uncertainty in chains of title. The grantees in Hoffman had a reasonable argument: the 1956 deed said 3/32 three times and they relied on it. Why shouldn’t they be able to rely on the plain text of what the deed says? Perhaps because the purpose of deed interpretation is to effectuate the parties’ intent, which is implicit within the language that was used.

At its core, Hoffman reflects a collision between two well-established principles of contract construction that Pennsylvania courts also recognize. The first is the plain meaning rule: when the language of a written instrument is clear and unambiguous, the intent of the parties is gleaned from the express language of the agreement without resort to extrinsic evidence. Steuart v. McChesney, 444 A.2d 659, 661 (Pa. 1982). A deed that says 3/32 three times, with the mathematical calculation shown, would seem to satisfy that standard.

The second standard is the equally well-settled principle that a contract is to be understood in light of the circumstances surrounding its execution — that words carry the meaning they had when the instrument was drafted, and that courts may look to the context in which an agreement was made to understand what its language actually conveyed. U.S. Steel Corp. v. Hoge, 468 A.2d 1380, 1384 (Pa. 1983).

The Texas Supreme Court’s decision in Van Dyke essentially holds that when the specific historical conditions giving rise to double-fraction language are present, the second principle controls — the deed cannot be read in isolation from the world in which it was written. That is not a foreign proposition in Pennsylvania. Likewise, the underlying problem exists here just as it does in Texas. Old Pennsylvania deeds — particularly in the southwestern counties where oil and gas development dates to the nineteenth century — were drafted under the same circumstances as those in Texas where “⅛” was the common royalty. Whether an overarching presumption is the right approach to these deeds is not entirely clear, but Texas can offer Pennsylvania an opportunity to examine how that plays out in real life. If you hold an oil and gas or royalty interest under an old deed, the fraction on its face may not tell the whole story. If you have questions about ownership interests, contact Brendan A. O'Donnell at 412-288-2226 or odonnellba@hh-law.com.