TEEATTORNEY GENERAL
OFTEXAS
Honorable George I-i?
Sheppard
Comptroller of Fublfc Accounts
Austin, Texas
Dear Sir: OpfnIon No. O-3013 " '~
Re: Delay rental on oil and gas
leases on land purchased or
condemned by the State for
highway purposes.
This will acknowledge raeceiptof your letter of Jan;
uary 2, 1941,,and your supplemental letter of January 11, 1941,
in which you ask for an opinion of this department as to what
should be done with delay rentals tendered to the State by oil
companfes unoer the two following situations:
1. Where a landowner has executed an oil
ana gas lease for a term of years provfaing for
the payment of annual delay rentals and while
said lease is outstandfng the landowner conveys
to the Highway Department fee sfmple tftles to a
portfon of hfs land,
"2, Where the 'FLHSghwag
Department'condemns
a portfon of the land covered by the lease for
highway r4ght of way purposes.
It is the opfnfon of thfs department that under the
first ,situationabove, where the Highway Department secures an
outright deed in fee simple to a portIon of land covered by an
of1 and gau lease, that the delay rentals on the portion of the
land purchased should be paid to that department,
A:rticle66::jalSet, 1, Vernon's Annotated Texas
Statutes, provides as foilo'ws:
'Wherever the State Highway CommfssIon hasp
acqufred or shall hereafter acquire any land by pur-
chase, condemnatibn, or otherwise to be used as a
right of way for any State Highway~ana thereafter
the route of such Highway was or shall be changed
or abandoned, and any such right of way be no longer
needed for such HLghwag, ce needed for use of citi-
zens as a road, the State Hlghway CommfssFon may
Hon. Geo. H. Sheppard, page 2 O-303.3
recommend to the Governor that such land be
sold and that he execute a deeciconveying all the
State's right, tftle and Interest in such land so
acquired. Upon the recommendation of the Commis-
sion, the Governor may execute a proper deed con-
veying and/or excnanging'such land for different land
belonging to the same person OP peruons. It s'hall
be~the duty of the Commission to fix the fair and
reasonable value of all such land and advise the
Governor ,thereof,'ProvQied that where such land
is given to the State, the Governor may return the
same bv proper deed to the person or persons from
whom the-same Is received a ‘811 money-derived from
the sale of such land shall 'bedeposited with the
funds from which it was originally taken. The
Attorney General shall approve ali tranufers under
this Act."
Since the land inquired about was purchased with the
funds approprfnted to the Highway Department, even though the
delay rentals do not strictly constitute the sale prfce'of any
land~previouslg held by that department, t'hedelay rental grew
out of the tran.sac,tionof purchase made by the'Hlghwag Department
'insofarEi3 the State's in.tere3tis concerned, and in view of the
above statute, it logically should be paid to that department,
It is the oprnion of this department, in answcrto the
second Inquiry above wfth respect to delay rentals on land con-'-
demned by the Highway Department for highway right of way'purposes
under the rrght of eminent domain, tha,?neither the Highway De-
partment nor any other branch of the State is entitled to such
delay rental since the State would own no interest 'inthe minerals,
but only an easement with a c;'Lght
to u3e the surface for high-
way purposes.
In the case of Calvert, e'tal v. Harrfs County, 46
S.W, (2d) 375, decided by ,theCoup':: of Civil Appea'lsat Galveston,
whereIn the defer&ant ln a conc:emna~!;icnsuit by the county seek-
fng to cordarm certain of h1s 'landfo,:?
roao purposes contended
that he was enti~tlga,tothe value of ,?hemIneral under the land
taken. The CtT;ii:'tII?ovez%ling his ~~orcter~tlonu
used the follow-
ing language:
"The se'iM:led
role is t&t Ln condemn.atfon
proceedings only an easement is required and that
such easement is a'11tha,t,the1a;irequires to be
paid for."
This opinion is not to be cor:,strued
as holding that
under either of the two above situations that the 011 company
Hon. Geo. H. Sheppard, page 3 O-3013
would be authorized to develop the land taken by the Highway
Department for oil and gas purposes by operation on the prop-
erty taken.
Yours very truly
ATTORNEY GENERAL OF TEXAS
By s/3.0. Mahon
D.D. Mahon
Assistant
DDM:BT:wc
APPROVH) JAN 22, 1941
s/Grover Sellers
FIRST ASSISTANT
ATTORNEY GENERAL
Approved Opinion Committee By s/BWB Chairman