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OFFICE OF THE AlTORNEY GENERAL OF TEXAS
AUSTIN
RoWable Baeuam Gilea
ck~l3lener General Ianu Osrio.
Avatln, Texas
Honorable Besoom Cilea, Page &
of Seo. I!of Blook &E7, publlo aolmol land in r2wme Qosstf,
TeXMl. you stata that aooordw ts Information furaiehed
to you Is aortain letters, It has developed that Selfreonf
Oil Oaapany hae only a l/l6 umlIvIde& latere8t in the 160
aorea daaoribed in tha iaos of ths lease. In Joar letter
you enolosed a photostatlo oopy of 8uah loaae. Shah leasa
raoltaa a oonslderatlon of $4,~.00 oasb In haad paid and
further provides for an annual delayrenW of #M&00.
Suoh lease la exeautedbr Saltmount 0j.l0-q "aoting
for Itself and as agent for the State of Texas.*
Paragraph 9 of aala lease reads aa fsllous:
=If said lessor owns a Xe88 Interwit 3.8
tha leased premlaea thas the Sntlre and uuUI-~
rided iea almple estate, or ns interest thereIn,
then the ropltlas, rsntala and other weep
herein provided for &all bs pa14 lea8or only
Is the proportion uhioh 10886r*a int8mat, ii
may* bear8,tS tim whole amtlundIvIdea fsa,*
You 8tate that one-half oi.the $4 008,oO bsm
was paid luta your 0rii08 at the time thl8 ied8e ma 8Qpa.
and that the 188aeea have paid to the State In lMB U~.is
1959 only ,a $S.OO rental, whlsb PAtal Is at the iwtwof
SO cent8 per aare for IO mores.
The fIrs$ queatlon proaentetl br your lost-,&s
whether or not'undu ths provi8ion8.ot Artiabs JJN’r aad
M6t3,oommonlykaownaatbr8ollnqpl8hnnt Aot,amoun8r
of &inpndI~I4e13latereat in lsml ineludedwIthI+ oal& Aot
18 authorized t0 e%WOUte an Oil sad gas lease, 88 age&
Sor the State of Texas.
ArtiOle 536V prOtide 4t8 m&IW8t
Vh8 State hereby OOWtItUta8 the ownor of
t$e soil Its agent for thO+rpoaea hqeln ~aaaed,
and in imuaideratifm thUeiOT wiiapuirhu d
rests In the own&m oi~the so$i an undlvlhd
rsrtsan-sixteen of all eIl aa& gps rhiah &as
bean underelop~ an6 t&e value sf t&e mims t&Rat
maybe uposan#~wIbhintha stnmprd andwcsur-
rayed pub116 frsa ashci@$18lld,urdSrsWs landrr,
aed petrtIon8oa suok ssrveya-m+! **Thea m%amal
clasal?IoatIon or mImril, lCI86rVll$fQP, mbfeot
tothetems oitblalsw- %WlaraainiagMdi-~
vlded portlon~o~ 8aid ou a# .ms sod its Wajim
Honorable Basoom Gllea, Page ~3
is hereby reserved for the we of and benefit
of tha pub110 school fund and tha aeraral asylum
funda.a
Article 5988 provides aa'followar
*The owner of said lend Is herebJrauthori-
aed to sell or lease ta rn7 p818011,fim ar
oorporatlon the oil and gas that may be thereon
or thereIn upon suah tarma and oondltlozu as aueh
ownqr meiy d8en beat, aubjeot only to th8 provi-
sions hereof, and ha may have a aeoond llea
tharean to aeoure the paymant of 8ny aam We Mm.
All 18aSaS and 8ale8 80 wde 8hSll be 688igtUbiO.
1Booil or gas rights shall be sold or leanod
hereunder for laaa thsn tan oent8 per aore par
year plus royalty, and the feaaee or puraha8er
shall In every u8ae pay the atate tan SW88 per
more per year 0r sales and rental81 and fn oaae
of prodnotion 8-1 pay the State tha uuUWld0d
one-8ixteenth~of-thevalue ot the oil alld~(lar
n-
served here& and 1Ike awtmta to the owmr~a$ ~.
the Sal.*
These atatutoa war8 oonatrued In @raena vr RDbI-
aoa, 8 S. R. (ad) MS, as oonatftuting the awnor of %b*
and roll
lur fa o e a@ the agent of the Bta8e far tka pup000
of exaeutiog oil and gas lea8e upan 8wh.luLd, the agentc8
oomp8naation for hi8 aerrIosand fort&& of the 8FEfaOO
tim the right ta reoelve Ron th8 laas8e one-h8lf of
the bonw, omi-half of the rental8 abare 10 a8Bta per
aore, and one-half of tha royalty 8tlpulated In tha loa88.
It was there further held that t&e owwr of the 6011 did
not by the terms of the RelIaqulabmeat Aot, baame th8
owner of any portion of the mInen18 ta auah lurd.
The Ralinqui8klant Aat nakea IIQ eapra88 pro-.
tIaIea for h situation auoh as tha or&epreaen8od 3.~yet~
letter. me statute 8hply provides t&it "the CBWnerQt
the 8oll* is oonatituted the Btetala agentr for th8 ppr-
Although the In8entIooof tha LagIalaturq
%Pr~~i to the mituatlon In question &clnot elearXy
expressed upon the faoe of tha 8t8tutet that intentlOX%
aan be asaertaiaed, wa believe by a oon&tdaratiolPof tha
history preoedlng thi l&alat~a and l&a g*~saralpwpOaea
and reataltawhloh the legla1atlan was istanded to aaaanplIah.
In Greene i. Roblsen, ClUprcl, 8he ~Upl?UN dam
summed UD tho faots ahlah brfmghtaba&t t&a ezkaotmm~ Of Qhe
Honorable Baanom Oilea, Page 4
Rsllnqulahmant Aot and the purposes vrhjohIt was lntonded
to aooompllah In the following worda:
WTherefora tha very fir8t WOti8 Of thi8
Ylneral Aat of 1919 dlscloaad that one of tha
p~oaea of the Aot Wa8 !to prowte the aotlre
ao-oparation of.tha owner OS the aoIl.* Thi8
aall ettantlon to the aoadItIona that wde It
dealrable to aaoura th6 aooperatlon of the aw-
ner of the 80% The State had sold tha lend,
tha soil with all that goes wlth It, to the ptu-
ahmer thereof, and wau under obligation to
proteot him in the uao and 8njoymant of what it
had sold him; and thI8 the state had failed to
do.
*T.h8rama a dual or double owner8hIp
of the laad, the aurfaoe estate and th8 alner@
estate, eaoh antagonIstSa to an4 aonfllotiry
with the other. Th@XO -8 110 pXOVi8iOll Or
law for the prat8otlon of th8 owner ~of the
soil In his paaoaable anjoyaent and posaesaloa~,
of his property. The derelopmnt of an oil ?Iild~
on it would begaIaastraua to him and utterly
desfruotireof hi8 property. Thkafora the
attitude of owner8 of the 8ohool an4 aaylua
lands Ohrmqhout the state was praatloally oaa
of anwd resUNuxn0e. The OOEiditiOn8 were I@u-
Soal to any effort at de+alopoPmt, end the stata
was not realSsing on its mineral estate ia the8e
lands. The purpose of the aat was to wet thla
praotlaal situation. Indeed, tha rights of
poaaeaelon and user of tha land as a whole by
both the owner of the 8011 and the ovmer of tha
mlnerala, thay baing joint eunera of the land, am
mutual and ~blended. As in ather joint Owgus$pS,
neoeasarlly there must be oooparatlon.
joint owners do sot oaoperete, oonfuatin is b@oBd
to arise, tha purpoaas and efforta of~aaah a%%
j0opardieod 8nd destroy& and the state supfwa
loss, not 0nl.yta Its mlaara~ ant&a, but lflca-
wise a8 a sovarelga In tha adninistratlon at
just&e. The Legfslature haa brou&t- about this
dealred result In a,lawtul mnnar by raqtlrIn@
Honorable BasooniQilea, Page 5
the purohaaer of the oil and gas to oompen-
eat* the owner or the soil ror the use ha
rakes of the eurfaoe, Independent of the
price he prays r0r the minerale. % oompen-
sate8 said ovmer for ths lnetltable dama&sn
or 0ii erpl0mti05 ati 0p0miion. The land-
owner aoqubes PO set&e In the oil and gas.
Be simply has a rl&ht to teooiva the om-
penaation rr0a the 1444eeout 0r the leasee*
prodaotlon as the 8tate provides.*
Keeptn& in mind tb’puqmm or the Lsgfr$atue
in enaotin(( the Relinqniabmeat Aot a$ stated ia Greey 1.
Boblaon, lupra, we feel no hesitation fn aonstralng soeh
Aot as authorlzfng an6 mpowerfng each omer or an..un-
dir&led interest in%he surfaoe or.the land lnoludod W
the Act to,aot a4 agent ror the State Sn exeeutlng *
lease upon thut proportion 0r the nlnerals that the OpaiL'
*idea ownet*sinterest bear4 to th4 eatita traot. To
hold otherwbe waald mault In bringing aboat a ait&a$$&
wImra%n the owaer cria mall fraotlonal ondirlded.ln~t,
la a large traot of land ooul4 d4ieat t&e eontmll' @?=?
pose snd lntent)on 0r the RelrOquWhment Aot by fu
or reruaing to join in .an oif. -a g46 laa8e~ oorsrlq %k
amtire tract.
Buoh Tallare or relbal BII the purt of omo
or the awnera or UL undirided fnkreat mi@t noult'f!cen
a legal diaabbllltyto 80%. or berraame oi abseaas fmm tb
utate oroountry,orbeo4nae 0r raihmto agr8erifhtb
othsr mmom of umllvided interests or rfth,tho pmqwwl
lseaw~upoh the uwouat of bemw; mntalu, or royal$r
to be paid for the leacre,or kauuse or 8ny one er a num-
ber.of other mason8 which 'it%s ?tnnw$eesuryhero'ta
emumrate.
rr a heldiaq ooatrary to this opiaioa wars ma&a,
it oola rollorthat ii any 0560r snub ~me333 rclxea aiz
reraeed ror'sny mamu to join the oil and gas lsade rdtlt
ethsr cmwm or podltided flttamsta, thg reoulb nesessar%ly
ad be that the mberals mmed by the State wmiid -in
anleased and undeveloped untir,by paxtition, or Otbmtirre,
the non-oonseitl~ mer*e interest eau.LQbe segregated from
the rezW.nderof ttm traot, Ue ure unable to .egreethut ruoh
a remalt war tnteaded br ear shag 69 permlttad ta Walt
IiOnOr8bleBasoom Giles, Page 6
rram the Relinquishment Act. On tbs contrary, ws believe
that 4 rcas4uable 8hd iair oonstruotion Of the Aot i8 that
eaah ouner Is authorized to lease, on behalf of the State,
that proportion of the 011 and gas which bears the sam
ratio to all of the oil end gas 48 suoh cwner*s undivided
intesest in the surfacreand soil beers to the whole surfaoe
and soil.
In the-reoent oase of Bumble Oil k Refining,
Oompany v. Lloyd, 108 S. W. (Zd) 2lS. o@lkion by .the Court,
or 0ivIl Appeals, at Beaumont, with wrItiat error refuaea
by the Supreme Gourt, there was Involved the Validity of
sn 011 and gas lease exeaated by 4 8urvirIug husband on
sohool lands In whloh the minerals haa been rewrrkd to
the State, the aurraoe of whIoh lands oonetituted oollllPmlty
property or one Vela end his first riie. Vela*s rIr#t rife
died leaving survlviag ohlldren 4s her heira at lm. Upon
the death OS Vel.a*sfirst wife, her one-half Interest In
the aurfaoe of the land passed by desoent and dlatr,rtbatioa
to bar ohlldren;and they. theraupm, beoame tenanti’ia
ooeaon with Vela, the surviving husband, in She owqrah% and
paamessIon of the aurfaoe. The oil and $garslease 0x13e&d
by V&a, after the death of hi6 first rife, WAS not ~oxaaut@
by the surviving ohildren.
The Gourt upheld the oontan%ion of the aurvIrIn~
husband's lessee, Eumble Oil t Rerinlng company* ana adju+ed
that woh lease4 held a valid lease u on the full 14aseholil
Interest in the entire traot oi laad % question, by rlrtuo
or its lease from the surviring hueband. Although the
oplnlon or the o4urt.i~ ohletly b48sQ upon the power og 4
osmunity survivor to stilland dispose or 00mity pr%-
perty, however, the reasoning of the opln1on of the Cdurt
is suoh 48 to olearly lndioate that In the absenoe,ot suoh
speoial power as ia vested In a emunIty su.r*lvor,the
agenay to lease qould be rested In the various owner8 of
undivided interest in proportion to their r@speative inter-
ests.
With respeot to the partloular lease which yuu
enolosed In your letter, you are advised that, in cmr
opinloti,the provls~ionsof pangrapE (1i3r da leasa do nc+t
operate 00 es to reduos the bonru, rentals and royalty pa -
able to the Stats. Paragraph 9 o$ the lease skmply provix48
Honorable Baaoom Giles, Page I
that iI tha lessor ovinae less iaterest in the leased
prembes thm~elrtire and roe d.m,pleestate, then the
payments t8na6r the lease 4hall b4 r4au4ed aooordlngly,
?JnAw,all of the deoI8Ions in thl.8Bt8te, it IS settled
that the State of Tows PSRR~REtha cawaerof all or the
oil aml.gas underlying the land aorered by the BelinquI8h-
ment Aot until the exeoutlon oi 4 valid oil and gas luse
themoa. The reel lessor or the oil ana &as 144se exeeu-
ted by SaNaonnt 011 Camps4 is the State or Taxa+ a&ix&
throughone or itr egents,~theSaltmount Oil Company. 8ee
Cmeae v. Roblson, 0 S. H. (ed) 665; Qolqultt 1. 0uI.i
035t Lesmrv. Garner, SO
Proauotion uQmpRn.y,se s. w. (tit%)
s. x. (2) 709. The lessor, the Stats of Texas, doee not
own a *L*as interest irrthe leuaed premfsee than the sntks
aad a3 8i+ple 8statea in8efm.a~ ths iub#eet a4ttwFor
the lease, tha oil and @a, is eano~ed,,%W. being tr+a,
no erwnds exlletrar the epplfo4iXok Or pa+graph D ef
the lease, and the obliitetionor tb lessee to pay ths $ull
bow, urnpal rental and royelty is not lessened OP 4ffoetod
by mas~a oi the iaot timt the 8tzte*8 a&cant,Saltu~unN
Oil Gmpany, ems only an aadirfdad iaterest in th&Iwmf@qa
ana wil.
We will rartm state t&&i S.4the ,aventat 80~
futun tbs wners or the mhinlng
tlmw, unaiviaea iatqr-
lBk in the traot or land rhoald eonfinn or ratifyl QT
@thermlao uiter inte or bind themnel+aa by the lea66 exe-
dated by Saltmmmt Oil Company. tban.the ‘Stats of Texas
will be entitled to one-Bali or the bon#w paid to mob
Other ourutrfs
es oonsiaeratlonror their exeautian,rstiti-
aation or oonrinmtion of 44iB 14486. Ii n~0h -r~
exeoute new and separate leases, l&s State of Texas rflZ
be entitled tc one-beli of the benua, rentals andtimz;,Y.
ptsidunder those leaeea. These oonaDmlaeu a
with the prlns$ples annoonsed ia Low Aore 0IF cmapa4 *.
Wayne, 78 Y. 3. 300, and ti barnham vr ES* Oil CO., 147
6. W. 3:0, Za both of whioh oases It was held that one tenant
&I oomon.oould l4wro-llyaseoute aa oil 48x8gas leaee ripon
land la whioh ouoh tsnant in uommfimowned otiy 8flundittpti.
%nteretlt.
Tcqare aooordl5&y 4d~issB that yda 4333autlloal~
ts rile aad eecept an 0U aad gas leaae esesatea trsil@ tha
Honorable B&soon Gilee, Page 8
Relinqulehment Aot by a eurfaoe owner who owns only
an undivided Interest.
However, with respeot to the partioular
lease fn.quee&lon(desoribed ln paragraph S of this
opinion) it la 0111:
opinfon that auoh lease ie now sub-
ject to forfeiture and termination beoause of the
lessee's failrue either to drill or to pay tha rental
provided for in paragraph 5 of the lease. See Arti-
ale 5292, Revlaed Civil Statutea,JO28.
Youra very truly
A!WORREY ORRERAL OF TEXAS
n APPROVED
OPlNlON
COMMlTTEE