Untitled Texas Attorney General Opinion

.. .-.
331

OFFICE OF THE AlTORNEY GENERAL OF TEXAS
AUSTIN
0-C.yucW
--

oiz18 of all
there any man-
, YoDwgald omlh
on this land
qui8bmsnt,rot a8

d the lollowlngSaab8 ia eonneatlon

anufmy2, 1QfB, Morgan Janes filed
hlu applloation to urchaes Beer 16, Blook 09,
Publia School.Land % IlallumOounty, nhlgoh&w
a part OS fhs Ca it01 Syndloate Laads.
traat ma awar& ii)to hl.na
on March 12, 1925.
The purahere *a8 under Chapter 106, Faga 8123
of the General Ima of thr 38th Leglsltiturr,
1923. l’bl@AOt reserved one-eighth o? all Oil
 -

332

Xoa~ Baroom Olloo, Cemm.losioner- page 8

aandgas to the State. This traot af land was
later roPfs1ted, w Jtulo14, 1933, and was re-
purohaoed on applloatlon by Jones filed in
this arilaa 05 Iiarah9, 1938, an6 was awarded
to him on Zlaroh14, 1938. Thlo rspurohase was
under thr Aot of the 45th L&mlature OS 1937,
bob cha.pter332, II.B. 875 of said .&oto,
Later, Joner sold this traot of land to A.
HoDougald who obtained a patont oworlng the
land, on ianuary le. 1940, BOOausO or oOr-
toin ambiguities in the law, mbloh rfll be
brou&t out later, the mineral rewmatloa in
the patent aomrlag this land was set out in .
tha following mnnrr:
wUinerala In the aborr deaaribed
land arm rersmd to the State as
prsaorlbed by law.'
VuDougald still later sold the land to
the United Ytates Oorernment for oonservatlon
uP~0000, Their intentfon was to retire thlo
pand from aultlratim to llfainats ex~ooolve
blowing. fn the doed from HoDougalcjto the
United States Government, the following resar-
ration wao lnaertedr
*"There lo hereby exoeptsd and reserved
Sran the foregoing 6ontayanoe, uato
the grantor, his ~UOQ~~~O~IB, hslro and
assigns, wh4tsfbr Interest, ii
the grantor may now hers ia allYo 1,
gas and other almrals, under and upon
*ho abort doorrlbed land for a period
of flity (50) ~aro, beginning Oetobor
24, 1938, a n6 lndlq~ Ootsbar 85 1988,
provided said grantor now has t&e powor
to rwmrve said interest aooordlng to
law, ho doer not hate ruoh power,
aad if
then this resemtloa shall bo null and
void, said reoervatlcm, IS any, to ba
lubjeot to the following rules and
rsgulstlona, to-wit:* (A oopy of the
whole instrument 1s attached hereto)
 333
Hon. Bao8om Oiler, Ca4mlooioa4r - page 3

The next derelomant in ohronologleal
order is that YoDou(rald am has an opportunity
to lease the land for 011 and gas developtmnt.
Attorneys for his proopeotirr lessee hare queo-
tloaed the status of the mineralo uader the
land aad IfaDougald~o power to leaoe it under
the reoenatloa puot@d above. I&, MoDougald,
through his agents, has requested that this
oifioe urdeavor to olarif~ the oltuatlon.W
Chapter 106 page X8t of the General Laws of the
-eighth Legialakire, 1985, under xl&oh the land in
was originally purshared fromth. stat. provided,
an follow81
‘900.
3, Thr sale of raid Ian& shall be
upon the express oondltlon that one-rlghth or
all the 011 and gas, whether known or unkaown,
an4 th. value of amno and all of all other
ainerals of whatsoever kind, whether kilownor
unkaowa, that may hereafter be louad on or
uader mid land sad the ralue of same shall
b. reeensb to the State and *a/d po&a of
oil and gas and the value of same, together
with all other mlneralo, and th. value or same,
are hereby donated to the sald Bohool Pond.
Yaid 011 and gas and other mineral8 shall br
oubjeot to be dem1op.A in the meaner that is
nw, or that may be hereafter, provided by law."
When the land wuo repurshased under Chapter
338, page 555 or the irot of the Torty-fifth Legi~~a;~e,
hpr Seamion, 1937, which provides, in part, -

* l * *, sad that notion oi the reap-
pralsmmnt shall be given to the lornkerowner
or own.ro who shall hare a preiorence of
ninety (96) days after the &ate o? notl.. to
repurrsheoetho omne upon the terms and eoa-
bltlo58 provided in Chrptu 94, Fag. Zb(r, Aoto
or 1925, a8 amended by the Aeto of 1936
Thirty-ninth L8((lolature,. tlrrt Called $ooolo5,
Chapter 85, Page 43. * * * *
Th9 repurohaaer oroure6 the oar. interest and
title ia the alnerals that was OOOUP~~ by the orl&al
 Eon. B65oom Oiler, Coomio~iano~ - pogo 4

pUrOh68er un&er the 1928 Aat and the state reoer-ved the
mme iAtersnt and title in the mineral8 whioh it reserved
in the original sale under tho 1923 Aot. This quoobion
wa8 deoldrd by tho Suprome Court in thr oar8 oi NAONOLIA
FZTROLECN COWANY vs. W&KZX 83 S.W. (2d) 929 in whfah
the oonatruotlon of Chapter OI, Fwa 267, not8 of the
Regular Seooton of the Thirty-ninth Le@olature, 19:5,
and the amendment thereto by Chapter 25,
of the lirst Gilled Soorion of the Thirt th Legiolaturr,
1926, were involved. hotiaa Sharp lpoa
uoed the rouowiw languagrr
“OA the oontrary, it io 01-z iru the
hot, taken a8 a whole, that the tsgirlaturo
had no intention of granting or ooafrrring
u 011the repurohsoer w reater lntoreot ar
rPght in the oil and gas fIIthe land than ho
haa6at the time of forfelturr of the arig~nal
.I
The Aot of 1937, above referred to, lnoofa~ as
the question8 inrolred In your re$usst cue oonoerns4, added
nothing to the Aets or 1925 and 1926, ubcne mrerred to,
other than to make those Aots applioabls to ths land in
question.
The real question then left to IM dsoided la aa
to what lo the statue of the mineral0 in land purohased
tron the state under the Act of 1983, above reterred to,
/
It is the opinion @i thio De artmsnt that the
i
urohaoer of the land ln qwotion reoePred fee rim le title
I e o the ourfaae and seven-rightho (7/6tho) of the o4 I and
t gao and that the stats rossned for the SOkOo~ Lund one-
e&h (1/8t&) of all of the 011 and gao in the nature
oi a free royalty and all ot all other mineralsI that
the purohaser may oell or leaso all or an
fnteraot in the oil and gao or he may as1
and resbrv‘c) all or any part or his intereat in the 011
and gao but the ommr or owners of the ravan-rl$htho
(7/8thsl of the oil and $a8 in thr went of prOduOtfoA
from the lard in quadion, muat turn over to the ltate iOr
the use of the F WIEM ~A~ free lohool fund onr-ri&hth (l/bth)
of all Of the oil &Ad gas prodused or the Talu- of Sam0
tree and clear of any cost or &e~slopmsnt and &WduOti.on.
In oese OS a lease by the land owner or his ass1 of the
mineralll,it shall be subjeot to the One-eighth ‘t”’1/8th)
free royalty in favor of the otate iOr the ua* and beAMi of thr

I
 335
Eon. B4ooomQllos, Commlsoloner - page 5

Fe-ant ire. oohool fund, but the state will not be OA-
titled to partioipet6 in the ossh bonus or rentelo which
night be proridad for
in 0416 loaoe.
IO 10 true that IA 4~ ordinary traluebtion
whore 0 ono-alghth (1/8th) of the 011 and gas or othar
d.Aoralo is raaonod iA Q ~10 am dioti ulohod trar l
la400 the 0~6 rarerring the one-eighth 2( /Bth) lntor6at,
tioao otharwioo provided, all1 be 4 Aaoaoo~y pprty to
the lXbOUtiOA Of a loeso of the ll&A.F4104nd will be *A-
titled to raoalra him share of tha bonus aad rontel, and
if the i4Ad 1.0 leebbd ream the ordinary one-•lghth
(l/Sth) royalty ouoh 11 only aotwll rooelva
the reluo OS 01 1llrty-fourth
0 Of all Of the OI I aad gas .~
llnoa oaran-elghtho (7/8the) will be tUFAed over to the
lasoaa for dbVOiOQEWAt and produotion purposes. at in
120Inotanob ham tha Lagiolatura, where a rsaarntOion of the
oil 4Ad gas ham baen made, rboervad laoo than OAO-OiXtObAth
(l/Mth) Of the total roduotloa to the state. The Aot of
19X5, WXder which thb PMU iA QUOStiOA was Ol'igiAdly mold,
4rtar providing for a rasarv4tIoA 0s oAe4i&th (l/eth) or
all of thb oil and gas used the phrasa *end the veluo or
OOIUO” ilIdiO4tiw 4A iAtOAtiOA, We think, that the pbFiB4AOAt
fro. oehool fund ohould raoaira one-eighth (1/8th) of the
gross talus 0s all the oil snd gas produsbd rroa.tha lend
in question. It IO true that the resermtlon is not a8
olaar 40 that sat out in the Sales Act 0s 1931 being Sootion
4 of Artiolo W410, Vernon’s ,umotatad Civil Statutes, where
~~l$aoarv4tloA rsaoreferred to *am A rrao royalty to the
". fr '*a OOAOOde that it is AOt elaar that tha Aat
of lQe3 Intsndod to rawrva to the state one-oI(ghth(l/Bth)
0s the oil and gas to bo~dslivsrad to the state tree and
OhSr df all aXQOASb8 and iA the MtWr Or 4 fFO0 FO 4lty,
than 6exb muot be aOAStFU66 to have that abeming (10f6 is
the laostfevoreble onb to the #t&O. ;a;uT'IRB
O&3 IrFUEL CO. vs.
STATP 47 3.W. (2d) 268, Suprbmo Court 31 Taxer, ia 4A OplAiOA
by f&a Sharp, the court meld!
*Thm ru1.r lo wall settled that l4gislatIva
gents of pro arty rlgbta and privlla~oa muot be
ooartruad ltrPot3.y in favor 0s the otata on
grounds oi public ~0110~ ana whatever is not
unoqulrooally .wantad i0 $l!i olaar 4Ad oxplIoit
term wlthhald. AA~ ambiguity or otwourlty la
the term0 0s the Statutes mot operate In faror
of the Ot6ta."
Wa are of the OpiAiOA that the rtetuo of tha pur-
ohaser’o rights under the Aats of 1923, sbova FOfOFFd to, era
HOA,Baseon Qllao, CgmaIooIonar - pegs 6

tha ema 60 the rights of a purchaoer under the Aot of 1931
whlah 10 AQI saotlon 4 oi .irtlola SUS, VatDoA~o UiAotatad
3tatut88 with raopaat to the 011 end gas axae t that in the
first Inotanoe tho state raoarvaa a one-sightK 1/8th) and
under the 1931..iotit reoervwo a one-rixtaanth If/Mth),
Tha ease of WR4Ti%U&i8vs. XCDCNALD, lee 8.w. (24)
167 by the 3uprama Court of Texso dOtOrmiAO6 thr status of the
nrinerala under thr 1931 AOt a8 batweaA thb otatr ma the pur-
ahesu OAdLAdoiag 80 used the r0u0lriag language;

WI think that thb Le~al5tura int0Aa0d
that the purohaoer of land oubjaot te ma10 uadu
this Aot shall aoqulrr ouoh land end the PinorAls
tharaln, but that there shall be raouva6 to the
otatr one-sixteenth (l/Uth) of all mlnoralo am
a freb royelty to the 8trt.q bxoept am to oulphur
4Ad other 23lners1,rubotaAOsr holo whioh aulphur
may be.darlred or produced and to these a oris-
eighth (1/8th) thereof shall be xas6rv66 a8 a treb
royalty to the stats.
“The royalties raoarrsd by the state under
tha provieiona or, this law oonatltute a rba~i~ $ha
mIAara18 In plaoa end ~111 Sollaw the land
the term tfraa royalty8 lntroduobd fnto thlo dat
must mesn that the interest reserved to the stats
in the ninerals produaad 011oohool lend sold under
the terms Of the A06 mUO6 Aot boar any part Of the
expense of the produotlon, sale or delivery thereof.
The 4yllexof the land aoto 60 the agent of the state
in astir43the nlnual laasao. This oallo for the
mxaralsa of a duty by the land ounar to the atata.
The land owner owas to the atata good faith in the
parformonea of a duty whnhioh ha ham aooum6d and hb
rhould discharge that duty with prudaA00 6fId good
faith and with ordinary aara mad dSllganoa.~
The lest portion of the aboTa quoted portion of the
opinion would seem t o lndioate that the owner sf the land oould
not meter the tiaralo frcna the ltUf4 eab Ot4 t0, but whan m
aonslaar the ;\ot along with all of the 0pInIorl of the oourt,
It asems lnaeoapab~a that oino~ the purOhasar aOquirao foe
title to the surface and 6 portion or the minarals that tbara
10 AO reotriotion OAhlo right to aueAat0 either the siid600
or the minerals or e art thermal and oraatb a r)evaraAOe of
t& &a~rals granted Pram the sudaoa so long so tha owar of
 .. .-
337
Hon. Rasoora~iloa,Comnlaalona~- pago I

tha lntaroat in tho 011 and baa granted in good ralth proteota
tha right ot the atate in it8 interoat in the royalty and
mlnoral3 whloh It rbaorvea. In the opinion whore the ownor or
the land la referred to it aastmoa that the purchaser atill
holds all of the interest which ho seourod ircm the atato
under the purohaao, We do not think suoh lsngwgo Oould be
aonstrued aa holdlng that tho pureb~aer could not sever hi8
minerals irom the surr600 estate. our opinion la not in
oomi.r~wit& aomo of tho laquago uood in the oaao af Stalloup
v. RobL%vk SO0 3.W. f3b but tho ooart oonoludoa it8 opinion
with the iallow- stat-ant!
*We dboido but one thing, and that ia that
al5oo the .aotor 1925 suprd, boomm erf00tiw,
the oapitol syndlaato'loadaare to ba aold with
a roaommatlonvof 011 8nd gsa to the state,
and thut the ospf syndloato lands will fare
lust a8 all other publlo aohaol lands hrr. Shoe
this la true, lta 011 and gaa are to br dowalopod
under the general permit statute (ROY. St. 1925,
art. 5338 et sop.). This partit was lsauod in 1926,
artor the sot or 1923 beoamo 8rfe0tivb, and tho
general parraltlaw was ooneedodlyiollwed by
relator.
Vhorororb we roooamend that the mmdamus
issue (18prayed for by relator.*

The land inquired about in your roquoat was sold
prior to the OfisOtire date of the dot of 1923 and we bo-
1lor0 as to it, the Supreme C.mirt would not foila the dlotua
in the Stal.Lou,p ease sines its opinion in the WINTRRUR VI.
MCD0N;rI.Dease, but would apply the reasoning in the latter
0880,
we trust that thla auirioiontly aaawora rour
request.
Your8 vepy truly
A-“EDAUG la’ lg4’
AT%%IfkllG=EtAL OI TXA3

D, D. Ifohm
A8818tant