Untitled Texas Attorney General Opinion

November 17, 1958 Honorable Bill Allcorn, Commissioner General Land Office Austin 14, Texas Opinion No. WW 540 Re: Whether the primary terms of oil and gas leases covering tracts in the Gulf of Mexico beyond three geographic miles are suspended because of pending litigation under the provisions of Art. 54211, VCS (Acts 1941, 47th Leg., p. 1405, ch. 637, sec. 1, as amended Acts 1951 52nd Leg., p. 750, ch. 406, sec. 1) and related questions. Dear Mr. Commissioner: You have requested an official opinion regarding the questions, mentioned in the above caption, which are set out in full in the body of this opinion. In your request vou ” . mentioned ~~~ the nendencv of lltina- tion in the Supreme Cc)urt of the United States 1n;olving - ownership "beyond three geographical miles" in the Gulf of Mexico. The case to which you refer is styled United States of America, Plaintiff v. States of Louisiana, Texas, Mississippi, Alabama and Florida, Defendants, No. 11 Original, ‘C)ctober Term, 1957 (now No. 10 Original, October Term, 1958.) Prior to June 24, 1957 the State of Texas filed an amicus curiae brief in a case brought by the United States again&Louisiana involving ownership of submerged lands off the Louisiana coast. The reason for the filing of the amicus brief by Texas was that it appeared from assertions made in the briefs of Louisiana and the United States concerning Texas' submerged lands that the rights of Texas might be adversely affected in a case to which Texas was not a party. The United States Supreme Court by its order of June 24, 1957 (as amended by order October 22, 1957) declared that the issues involved in the Louisiana case were so related to Hon. Bill Allcorn, page 2 (w 540) the interests of Texas that the court allowed Texas sixty days within which to intervene, and, if it failed to do so, the order permitted the United States sixty days thereafter within which to add Texas as a party. Texas did not intervene. The United States filed an amended complaint November 7, 7~957by which Texas, Mississippi, Alabama and Florida were added as parties defendant. (This date has been confirmed by letter of the Clerk of the Supreme Court dated November 6, 1958.) We deem it of importance to advise you of some of the relevant portions contained in the Amended Complaint against Texas, Despite the wording of the Congressional Submerged Lands Act, 67 Statutes atlarge 29, (1953) the United States in its Amended Complaint averred that when Texas became a mem- ber of the Union its,boundaries did not extend into the Gulf "more than three geographic miles from the ordinary low-water mark or from the outer limits of the inland waters, and the Congress...has never approved a boun- dary for said State extending into the Gulf...more than three geographic'miles from the ordinary low- water mark or from the outer limits of inland waters." The United States alleged that Texas claims some right, title and interest in the "lands, minerals and other things' seaward of that line. The complaint averred that the United States "is now entitled to exclusive possession of and full dominion and power over the lands,.mLnerals and other things underlying the Gulf of Mexico, lying more than three geographic miles seaward from the ordinary low-water mark and from the outer limit of inland waters on the coast of Texas, extending seaward to the edge of the con- tinental shelf, and is entitled to an accounting forall sums of money derived therefrom by the State of Texas after June 5, 1950, which are pro- perly owing to the United States under the decree entered by this Court on December 11, 1950, in the case of United States v. Texas, 340 U.S. 900." We feel that the rather detailed recitalsabove given is essential to an understanding of our answers to your ques- tions. In your opinfon request you quote Article 54211, V.C.S., but only in part. Article 542li wasenacted in 1941, but it was amended in 1951. We will quote the entire act, the under- scored portion representing the language of the amendment incorporated into the actiin 1951. Ron. Bill Allcorn, page 3 (ww-540) "The running of the primary term of any oil, gas or mineral lease heretofore or hereafter issued by the Commissioner of the General Land Office, which lease has been, is, or which may hereafter become involved in litigation relating to the validity of such lease or to the authority of the Commissioner of the General Land Office to lease the land covered thereby, shall be suspended, and all obligations Imposed by such leases shall be set at rest during the period of such litigation. After the rendition of final judgment in any such litigation, the running of the primary term of such leases shall commence again and continue for the remainder of the period specified in such leases, and all obligations and duties im- posed thereby shall again be operative provided such litigation has been instituted at least six (6) months prior to the expiration of the primary term of any such Your questions will be answered in the sequence in which you propound them: (1) ' Are leases beyond the three'geographical mile line suspended under the provisions of the above statute?" After the enactment of the 1941 act original mandamus proceedings were brought in the Texas Supreme Court prior to December, 1950 by Ohio Oil Co., et al v. Giles, Commissioner of the General Land Office, and others, (235 S W.2d 630) t comae1 refund to the relator oil companies of the amounts iaid as delay rentals under mineral leases covering submerged lands in the Gulf issued by the State to Relators on the basis that there was then pending in the United States Supreme Court an action by the United States against Texas to recover the sub- merged lands, and that by the terms of Art. 54211 of 1941 all obligations were suspended. (see 239 U.S. 707; 340 U.S. 900) The Supreme Court of Texas held that the annual delay rentals under such m~ineralleases were "obligations" within the meaning of Article 5421i (of 1941) and that the requirement iion.Bill Allcorn, page :I. (l,,:;'-$c ; t:ogay delay rentals was suspended du~ringthe lft~lgation Iietweenthe United States and the State of Texas. The Texas Attorney General urged the !,ropositionthat If the annual r:?ntalswere "obligations!',and if Article 542li (of 1941) !:a6interpreted as releasln;;or suspending them, that Article 542li fir 19417 was in vioiation 0; Article 3, Section 55 of the Texas Con?%itution. The court held: "Since the part of the act relating to leases eg&d& rior to the enactment of Article 5421i 1 is not Involved in this case, it is not necessary to consider and construe that part of the act. When we consider th::part of the act involved ir?this case and constrv;:'It!.nthe light OF the many decisions in this Stati:iiipoint, we find that ;.tis constitutional..,..<, :,,I-, further hold that the provi- &ions of t'hcact involved hiirodo not violate Article I Section 55, of the Constitution of Texas. Art i- z.I cle'5421i relieves the lesseos of the obifgation to pay delay rentals during the suspended period..." The Texas Suprer.:~c Court ::znt,toned that the Relators ::zL'L' not partj.esto the Un-',tzdStatzs Supreme Court case, and stated that after leave to fil.2zandamus had been granted, and before the Supreme Court of Texas handed down its opinion, a had b can ren(j.r?p& ?j.naljud:,?r.ent by the Uni.tedStates Supreme 'our% adverse to Texas. The Texas ::l!preme Court stated: '-T;>e eff.zctof that jud~~.:~it's that the Comrris- si.onerof the Genera!.il:ar:d C!X 7~cehad no authori.ty 3as;es in question." to exmxte the oi;.and ;;;a:: The Texas Su:,rc~~s::ourt r;;used to decide the question as to when the suit in t!l.,r;(j m;;i') After the advers,:ti.::: :~s:on in the Texas case the Con- ;;i-eSsenacted tile;j,;l'orr,eiv;;~ ;.3il;J,s Act , supra, the purpose of :{'fl ii: h , as to the Gulf Coactcr!~Xates, was to restore to such s.tatesproprietary rights .i~: ~3 u'cj*rj e~2;; $2 d lands in the Gulf out to setihiardboundaries of ti?crespect:ve states as they existed prior to or at the time such statc.cbecame members of the Ur! n , 01,as tllejyetofo;y: i.c a~l;:);yj.;~:d 3y f:ong:ress.Tncidentally, ',;I,? ;I?;2lublj.c of Texas r'ij;~.!~.:. its ciaritimeboundaries at three :.i~,:yi.n:? JLcx3.gues seaward I';,: ,- ,t December 19, 1835, (I Laws Rep. .;, y;;, 'i$:;:. :;tJnningof the pri.maryterms of those leases suspended as to all cf the land coy.-ercd by that lease or only as to that part of tho land covered by the lease which is seaward of the three geographical mila line?" An over-literal or "yper-technical construction of the act might cause one on :?i.rst impression to think either (a) "'hat,except as to ?o::al.ty %d rental obligations, since :. P:?Ttj.l:?> <>iY the IEa:i~!j:;zf !‘::(:%ed :"ylitig+t%on, the remaining r>bligationsas 'cc, 'c!:ls , and a portion of the lease lies landward of that line, the oh1igatj.on.z of the I.esseesunder,Article 321i are not suspended as to that portion of the submerged lands lying landward of that l-inebecause the United States has not sued for recovery of lands within that area, and there is no "liti- gation pending which affects that portion of the leases executed by the Statz. To hold that all or none of the obli- gations of the entire lease are suspended would be an unreason- able construction of Article $211. The Courts, in construing statutes, WI11 nat impute to the legislature an intention to create an unreasonable result. See 39 Tex. Jur. (Statutes) Sections 118, 119, and cases there cited. Under / ArtI~cle$21;, WY::, (Acts 1941, 47th Leg., p. 14crj5,c‘n.97, sec. 1, as amended Acts 1951, 52nd Leg., p. sec. 1 ) 1eS )::? 750, c:1.I!!,.>, S from the state holding oil, gas :j and ml~leralleases underlying the Gulf of Mexico lying more than t'hre2ge0graph~i.c miles seaward from the ordinary low- v;a';eymarl:and from the outer limit of inland waters on the Coast of Texas must continlieto pay all annual delay rentals and any royalties which accrue during the period of litiga- tion involved in United States v. Louisiana, Texas, et al, No . 13 OrigInal, October Term, 195?.. The primary terms of such leases are suspended during such litigation. After rendition of final JucQgmdnt,if the judgment is favorable to Texas, the running of the primary terms shall commence and coritinuzfor the remainder of the period specified in the respective leases, and the other obligations and duties im- posed thereby shall again be operative provided the litigation, above mzntloned, was instituted at least six (6) months prior to the expiration of the primary term. Because of the holding of th:?Te;:asSuprer~ii Court in OhLo Oil Co. v. Giles, supra, ';;lestat;:torysuspension under Article 54211 as amended is constitutional as against the contention that theAct violates ,cact',on;;,Article 55, Texas Constitution, but the lessees . . Hon. Bill Allcorn, page 8 ('m-540) must continue to pay rentals and royalties. The date the period of suspension commences is November 7, 1957. If a portion of a lease lies more than three geographic miles seaward from the ordinary low-water mark or from outer limits of inland waters, and a portion lies landward of that line, the obligations of lessee, under Article 54211, are not suspended as to the portion lying landward of the line, but are suspended as to the portion lying seaward of the line, except, that the lessee must continue to pay annual delay rentals and royalties on the seaward portion. Very truly yours, WILL WILSON Attor@y General of Texas N. Ludlum First Assistant Attorney General JNL/grb APPROVED: ~~I'N'ONCOMMITTEE - . ?. Blackburn, Chairman L. P. Lollar J. C. Davis, Jr, John Reeves .'John Webster James Rogers RWIEWED FOR THE ATTORNEY GENERAL BY: W. V. Geppert