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631
OFFICE OF THE ArrORNLEy BRNSRIL OF v
AUSTIN
Konoeable A. IL Sqtton
countyAwlitor
-roll Qounty
PaleitlIlb, Texan
Dear 'BiFt opinion ~0. o-3938
Raa Tanbillty of 011 andgae
leaeo, leeeeo having execut-
ed gae pizrahaee oontraot.
This uill aaknovledge your letter of August 29, 1941,
&al~eing oopy of gas pumhaee oontraot) pquerting the opinion
of thie dagwtiaant a8 follovet
"Attached hereto ie a gae purohare oontraot
. weouted br lh#k.Ul Oil COrpOPatlOn, Anao Oas Cor-
poration and l?. v. lseeling, et ux. You pill note
from the oontente of thie aontrrcrt that Am0 @a8
Wrporation agree8 to purohaee a aertaln amount OS
gre.froa Oarkill Oil Corporation and pay Oeakill
Of1 Corporation 50 per sent ot the groee prooeeds
derived from the eale of the oondensate 01r the pro-
dust made by t@ prooeeeiag Oi. the gae. In a eup-
plemntU agrweent Wtveen Qagk%ll Oil corpora-
tion and W. V. Keeling, et ox., H. 8. Keeling et
ee to aeoept one-efghth or the net prooeeds
Er eklll Oil Corporation receive6 from the
leaee .
"ho0 C&s Corporation aontende that they own
no mlnerale in plaoe under the lease and can be tax-
ed only ior the reeyu1in.g plant. Oaekill Oil Cor-
poration oontende that they own only l/2 of the
eeven-e&bthe oontraoted for under the terms of
the lease withU.V. Keeling etux. and that Anco
C&e Corporation owns the motherl//a OS the eeven-
e%ghthe .OP eeven-sixteenthe. The Coem.le8ionere1
court deeice to knov to whoa the l/2 of the value
of tihir, leeee should be charged, elnee no one ad-
tit.8 Uabilitp for the l/2 that it i8 costing to
3r- -.
Eonorable A, .E. Sutton, page. 2
get the gae procreased, and no doubt under the term cl
of Um lttaahed oontraot the Auoo Oar Corporation
attempted to drav it in eu$a a manner that it vould
not be ohargeable to them.
Ue underetand that the faote are eubetantially an iol-
lovet ‘ihe Oeekili Oil Corporation, an leaeee, hae a valid an4
lubeietiug oil a.gae leaee to a traot oi lend in Andereon Cqunty,
elope, Y. V. Keeling and Vito, ban retained #A@
mineral intereat end leeeee haa a ?/8the intereat.
11 Oil Cobporatlon, ha8 v vell on the land vhioh
produaee gae-dibtillete. This leeeee hae ente?ed into a oontraot
vith a ~~yoling plant, &a0 Oar Corporation,. to sell to the lent
i gae prodwed, @ayment to be made from 9 a OS
derived from eale by the plqt ,oS the oonden-
c produ6te~of the gee. .The eeller-leasee ban reeerv-
to be paid in kind..
>
Uhile you do not no etate,~ ve preeuw eat you deeire to
knov~~vhetheror not intereate in realty haves been created by this
oontraat upon vhioh ad valorem taxea my be qolleot-
of the gae, the Am0 Ctae Corporation.
146 of the Revieed Oiril~gtatutea of 1925, pro-
’Veal property for the purpoee of taxation,
eh6ll be oonetpued to include the land itrelf, vheth-
em laid out iu tovn lota or othervine, aud all build-
iugr; ltruoturee ‘and lmprovemente, qr other fixtures ‘.’
of vhateoever kind .thereon, +nd all the right8 and
privilegie belonging or ip any vine appertaining
themeto, and a mlnee, mineral*, quarries and foa-
vile in and under the mme.”
e nov firmly settled in Texan that either the
n of vhat 18 coauwnly referr.ed to an an “oil
erect in realty eubjeot to ad valorem taxation.
l24,Tex. 290, 77 8. U. (ad) 1021, 80 S.W. (2d)
uuant v. Duuu, 130 Tex. 110 9. Y. (26) 53; State v.
Petroleum Co., (Sup. Ct. 133 S.W. (26) 112.
We have been able to find no aasee paeaing upon the pm-
8 oi gae-diet&llate. 18 suah a rale similar to a re-
Servation OP aeeigonmnt of au “oil payment”?
.
633
Ewarable &. E. Sutton, page 3
The proper 0oantNbtioa of mineral lnrtruwntr ati with
any other oqntraot OP deed 4epende upon the intent of the putiee
to be gathered by lookiq at the inmtruwnt fmm it8 four oornwe.
Thuee, Texan Iav of Oil aa&Oaa (2nd Ed.), page 9. ‘The ln~Wr
in all eaeee in, 18 there a grant OP reeervation of .the adnerale
in planet Leokin at the lnrtmetent in queetion ve do mt believe
it to be the intent of the Oaekill Oil Ooqmation to convey any
intmet’ln the gae la plaae under thm leue. Title ,to the gae
doe8 not pee until reaelved by the buyer at the d#liveFy plme.
goMtere in the oontpmt aan ve dieaover an intent to oomrey ga8 or
mineral8 in p&we. Indeed, if now 8uoh intent oould be dieoovw-
ed the moat pertinent in+&uipy vould be, how muoh? fop the oontwot
18 oxpreeely mada lubjeat to a pries gu purahaee oontmwt * and
betvean the.~Oeeklll ml Oovporatiau and the Iat* Star Oar Oompany.’
lt 18 therefore our opinion and you are ad~leed that thi
.-a purahaee oontr88t JOU have lubmitted areatee no ceti p.vopePty
intePeete, and inrorar an malt ad valoreei taxation 18 eowerned,
the value of the leiabtild rhoUId be determlned &nd tree levied
Just an before the inatruwnt was exeauted - the Qaekill Oil COP-
poration owning a ?/&he intemet and the leeeoM. a l/&h int?reet.
We do not i;mderitand y&a inquiry to relate .to ph8ona.l
ppopmty taxation ahd expwee no oplnlon thereon.
Your8 very truly