Untitled Texas Attorney General Opinion ( 1939 )

OFFICE OF THE ATTORNEY GENERALOF TEXAS
AUSTIN
Eonora::le Baacan Cllee, ikge 3
provlaiona of such statute woul& expire upon th4 expiration
of thras ycwrr after ite dete, wlaoe~ 011 and gas had been
prodaced 1U pt%yhg C$6+Btiti48 prior t0 thb 4XpirOtiOn Or
the three year primarytomb
As we have haretdf'qre steted to you, the et-
Sect-wf Gaaat.4 Bill Xoo. 53 OS the 46th Le&lsture, Aatt
19m, WW XiOtVOBls~&W&? Or di8UWWd ill fOZ%U<~~ OUX
op%nlon Hw. C-QCO, Zor the roeaona oet forth In that
~iAiCUh
hrtar rurther 4oasld4ration 0r a&don 01010,
ant? hold thet
we BOWmuffina thrr ~lso~e in nuoh opinion
Chapter 13, Aots 1930 Uat ~irlaturs, Vernoa*o Anndated
Statutw , Art&l* @?0!5aue.8 prop6rly conartrued a8 authorin-
Lag the Bond ror I.aaeo of Prleon Leads to lmvw oil a&
ga8 le6608 for ptiPrksp:;tsmui or three pears oaly rather
thaa for primiry t442rasar fire y4erur
v.ay l4450 proda%* for A rim y4ar
prlmry tam and hatetafora sotero8 Into by
the Board ornate6 by 3:enat.e Bill ITa. 'I?Q
Chapter13, Acts ldourthCa,Lled Bumlon &arty-
fir& I.a&iislatire (Art.BeOSB), ahall not be
aowldbr4d teminated by rallurc to produce
oil cm (;as WtthiA three pkaro from the dets
ot such lease, and any auah loaoe Is horaby
f30tiimt3a an6 valldntea ln 80 rar and on&
in PO fsr a0 trllurs'to produce 011 Or g44
xlthla thr44 yslsrs rr4aaht.4 thereof iIs 00x+
o~rnad~ aad any such l~oe shall be in tQPQ6
ant34ff4vt Sor five ysara Ix0m it6 dste ti
otherdse ln &eod ets~ad%w ikAhall- othtw terau
end ccnr;ltlone of ouch Xa~neas and %h4 lew a~
glLaebl~'thereto here boco heretofore artd are
hereafter a& ad terrl445 out**
..
4
"It 18 ageod that tNa lwi:ia shnll
rcrmln in tull fame and &foot Sor a tow
or"five (5) yearo, from the date hereof,
and R8 loa& thereafter us oil gcs or GaBhh&-
hoe6 gm3, or slthar of thcfd,is prodwed irap
eaid land in aomerolal puantlt%oo, by chb
LlW3(98."
It thus appeara that Senate EtU. 55 clear4
has applloation to the oil end &as lease In quaetion,
stid lease hati been exsoutedprSor to the sffeetlre
date of 8wate B xl 8s Mb arkid 16~'0 hnvw 8ZQlW694
sqovfdfid for 83 iiV8 gear priaary tsnn.
The queetion 1s thus presantod as to whether
or no% &n&lb Ezi3.l 5% Ia oonntitutlonal~ In this sob
xlectioa, it 18 asterial to poLrrt out thtt the %mo* on
ita ftkaeparports ta be for e five yoor primary term
a&l that. the delay rentals as prsvlded HOELn the laese
have bwn palU by ,the lesme and eackgtc6 by the elate
iar 8 perlad or ill+8 yearsg hoQm+t, the lavs au it
exbted on the data of the iwceoutlon of thlin &am et%-
thorlzed the Board for Leans of Texas ~lsan Lrrndrto
exetmts a lease far a prlawy tea of three ymra 02&y.
csasc the Is~~elslttlrm thercaitor oonetltu$onaUy TatirJI
5ml co5firl3 the Boata'* act La emxllt an 011 and gas
l0aee ior an orl&ially ununtharlzeQ pr
% ry t*rm or
five yea-87
A ooreful er&tloa of the stithtmltled 0~3
this guestlrrn ha8 bqtelled us to the conolturlti that the
Le~lalature has aot sx$wmkodoanstitutloneil ll&te Ln
aaEctlA~3sprpteBfllss.
-1t la t34ttlBd aa the law of ttia 9tCte *
In feet, it la the qalmrsrrel rule - thnt what
Honorable Beeoom Glleer, Pege S
the Legialsture oould hare authorized
_._ _-
In the firet lnataw36, it 08x3ratiry, xr
at the time of retiilaation, It hats tha
initial authority to authorize.* Andor-
aOILCOUtr Road Dl6trlot HO. 8 v. Pollard,
116 Tex. 547, 296 S.W. 1062, 1065 and
authorities thare cltad.
Other dsoialona whioh amounoe aml marrim
the above quoted rule are:
Andamon County Road Dlstilot No. 8 v.
POlh?d, 116 Tax. 547, 296 8. W. 1.0628 Tern
Green County v. Yoody (sup. at.) 259 8. w. 661;
Nolan County v. Stat.- 8Zl Tax. l82, l? 8. 1.
8381 State v. Bradtori, so s. w. (2) 1065;
Charlotte Harbor C HOEthSmRy. Co. vs. Wallea,
260 U. 8. 0, 4a 3up. Ct. 3, 67 L. La. 100;
Kanaaa city Southarn Ry. Co. v. Road Y&prays-
mant Dlatrlot No. 3, 866 U. 8. 579,.45 8. 0%.
13@, 69 L. Ed. 33%; Aaderaoa County v. Santa
Anna, 116 D. S. 356, 6 8. at. U5, 29 L. Ed.
693; Belles ‘I. Brlmfleld, I.20 U. 8. 762, 7
5. Ct. 736, SO L. Ed. 786.
In Anderson Uounty Road Dlatrlot !?o. 8 to.
Pollard, aupra, the Suprcma Court of Tome, in dater-
minim7 whsthar or not tha LegZalatura’ uoold. oonati-
tutlonally ratify and validate an lllagaX bond iaaua, stated:
*The general and eatabllahed rula in,
what the Legislature oould here authorized
in the fir8t lnatanoe it can ratify, if at
the tlma of rrtiiioation it has the initial
authority to authoriea.” Citing oeaaa.
All of the authorities In this Stata %re thus
in aocord in holding that tha above quota4 JXl;tlhzmlY
established as pf rule or dsolalon in Taxiis.
tby,va are other daolslon8 by tha Texes’CotWie whloh wk.
exoeptlona to the above 8tatsdml.6 In osrtaia aituatlona,
po auoh situation la preaanted in the matter6 in@.Te~
about by you. It remains for ua to determine whethar Or
not auoh tile has applioatlon to the oiroumatanoea under
a
Honorable besaom Glles, Page 6
OxamimtIgtl 80 66 to valtdata 8nd aaka~#aatItutioaal
Sannta 811193.
%a belIava no 8er1a8 qUe8tiOn can be ralsad
a0 the 0218kIW~ 0r the ~@i8~ttrrcr'8
to ower nad au-
thority on the date or tamexeoutloa 0r tL laa8. in
pusstion, to provide, if it had 80 doaired, tbnt aa?
lease areoutad by tha Beard ior Laue oi %ZB8 Prl8on
Lands should ba ror a primmy tam 0r ma yoar8 ratlmr
thalp three year8. Ho &UW181OB18 tOLUldill the COMti-
tution now, ~nor W68 them any prowlSha in the Oon8tl-
tutlorr. upon the date oi the lxmautioa of th8 lasso
whioh would pwhlblt n iho year loa86.
The Beard, purporting to aot under the autbarity
oonhrrad by Chapter 13, Aot8 1930, 18aluQ a lanaa rhleh
provided ror a fir0 year primary term rat&or thaa, 8 three
rear priparf term, and rental* w6re padA th8rwzder r0r
a period of ii l years. The Ia(Zi8lrtruu. in lP50, br peas-
age 0r hatate 3 llr 5s. ol*arly irrtea6od and 8tteapted to
telidata the motion of the Bard 188&4g a rho per
rather than a three Jeer leaso. E",
hirr,umlortha above
quota4autharitla8, we Wllava, tha La6l8lattPM hart W
Ipower to do. somta Bill 6% 8-1r eMS1~ aa ratl?lu
69 origiaallj unaatborlaad sot oi a
board 80 as to ralldata that
initiallyhers autborixe&
rentals provided ior under the lea80 euautedl by *ho
Board hawe bean paid by the 108a43eaad CreOept~ by the
Stst.8 In the oxaot manner provldad for by the loaaa.
Thua, no ,qmatloa arises aa to an unoanatltatleaal Qut
or disp08al of State 1~4 by the.k6lslature. %e muat,
th8raiore, oopoluti thet asnate btll w ia B aoautittl-
tiOMl eMrOi80 Of the ~~i8ht~'cl 0al.M t0 SOaiirrp
and ratMy an aat 0r the Board r0r Lease Oi .Tezlla Pria~n
LamIs in 18aohg tha original 011 and $88.:lears here
irtrolted, end that auoh rtatute oparate8 to aOtapd t&o
&il%Ur tOl%i oi the lMB0 ti Qka8tiOA Mtti ti&l&$Lt,
QrIl 16, 1960.
You further request our oplnlon a8 to the pro-
sent 8tatua of a lea60 *where oil and
qUS&%ti~8 18 diMO#FOd Within th0 Fl'
lease,bat thereafter pzwdaotiop eMa iOr E p~iO6 OS
Honorable besoomGIlerr,Peprcl0
90 daya or more b4OWl88 or the 4oll4pee Or easing or
for other r4daon8 bqond th4 ooatrol of the opuetor.*
kaoording; to the atrtwnto me4e b tb 1au.e
to the Boocrr4, the crl1.l~ oi 8 wall on the ilem in qoer-
tioa 148 bqmn on %8roh 6, l@SS, an4 tJontlmie4 until hpzll
10, 1.939, nhen, at II depth o? 881M tit, a nn4 we8 die-
oovwob whloh flowed an letlwte4 Tut ailllor, oublo f-t
or gae r day au4 a sukmtantl8l rolumm~of # degroo gFat%ty
oil. x wall flowed oontlJiuousl~ ror 0 to 8 hourr aftor
whioh about 40 feet of the 088M in tlm bottom oi th4 well
ool%apsed. Lb88M &ate4 that ha b8MbdietdJ thW48~F
wm eratloaato reaontlitiontho wmll,tryIng to roam
UB4U Tt e oeslng’~ whloh otiort oontln~ad for ea~~~tr~
miing in thi8 er0ti th4 ie8808 rtmtad that
~rp?$ti beak to a man4 et a d&h or qgrexinllte~ (woo
feet, wh lo hland had pvlou81~ been oarad, an4 ~~8488
ooslg;l@tion in thl8 81%n4 et 8 4epth O? -S Wt. 'fhie Oop-
pi0tion 000tur4a QLL816~13, 1939. The WOU, hb en imitiel
flow or approxiwtely e4 barrel@ pr horn: Q#A8 l/P 4hek4
an4 royalty on euah oLl wee paid to end mooopUd by a
a4n4mi ~4 cjifi00. T h 4 1 ~8~ a te4 4that lftmrUI h e u r m
0llrbbw, the flow wlta Stopped by water mnorO8OhWS 8ti(t
thet efforts wem:anOe to stop tha rater ?Mw wlth @emat.
Mtor oewnt weeapplied, tha au- we8 reporrormted four
88V8rOt4
tlmea but that thm lO88m -8 orUbl8 t4 N8tOF8
the flow o? oti from thlmmand. The lem~e ateted that ho
t&M oonolubd to s&detrtiok th4 484lw ia 8n SffWt t0 484UF4
pFodu4tlon from the 8889 f44t lsrrlg that thuuatter tha
888vioOt 4mdU48 MOOCUtt4~d at6d*pthOf fb,o~a%~t;
that the well warnaerried 900 or.800 feet ln the Vlakebatrg
mand;thet 8nm-4 4owapooraiiralE, b4ginnlJwJonJoly
10, 1939, 44~843 the hole to ml- BF 88~ ia ruiaing 4l.l
of tha &lB~dFl~~~d @z&meking it irud&bl* to at-
fams~ mtahd that an Zeal
wti44 ?rci the Boar4 thet it w&A ho a wethg op JUlr
ZO, 1939, at whioh tSw the 8tatmm et tha tieme rrQoZd $8
ooneld4re4 and that further dstelopmeat bad been 4~lwe4
arP8itw the outooar of thl8 M~X'$.I&& f%ba* Pent to rwh
wMd.ng of the ROUd, the Board nqWmt~,b #i 18 0QuoO 88 ta
th4 gm8tmt 8tatu8 0r thi.8 ~WIU.
In eondde~ t&4 qwatian *i to wh4tihr 01: not
?ih4 1~38~ qUft8afeQt &48 taekb
in ip th0 x&&t Of the
8teStePaZit8
eet rorth above, We mud fir& tbtete thet it l*
not within cur pravlnoe to deolde ðer or not such
stetr.zxmt.6 rcc rdiqc the alelaW d.isoovtrp of 011 and the
aubrcqusnt 01uimA 6:li@a1cs In drllllne and atteaqtlog
to ciec*elop the lease in ~tles~~on, mtatb tbb aorraet
r84L8 48 they eOtUslly CO::Urled. IXl OUTOF:lniOn the
E~oald for &ase cif '&rsil kriacn Lands 1s tba proper au-
tbwlty to make B primary determination m to tbe'aotuel
r84tS .b:ch eriat with rererenae t6 tb* tine or bi84OVbry
Or oil Or @.a%, sad ths dill&em5 thereafter 4Xer4i84d by
th4 148Se4 ia 0ttbi6ptiap tic prOdUo% the ~?a%. *Or th8
PUZPOSSS Or thi5 OtidCYJ COlJ, wb a88~4~4 that 4 oorr44t
mtet4raint of the r44t8 h48 bean a*ba by the 14884t. Muklrrg
4u4h 488U.EptiOn, it BpgenHl that tb4 i48846, Witbln the
rim year piwary t4rz 0r the 104se, di8OOV4XV3d
and pro-
duO4d oil and e48 Ln &'cyl~. quantitleai thet rOUorlp0
6 Or 8 hoUZ-8Or 8UOh produotlan, the Oib8iIl& in the ho&
4Olls~SOd~ tb8t thb hOl4 W&8 plU&&ed iOr B dimt.aBM ot
epprorlar,t;sly 447 feet and ths ~~11 w41 then 44aplet44,
On %8y le, 1%?#9, UQ a PrOdUOCr Or Oil and ga8 ia pying
quantltles~et e dspth or 8300 rout;
aam484hwnt w4ts:-
aade it impomaible to aontinue this 15tter production for
pore than 18 houra, the hole bein ruined by u~npraaedented
riOOd8r
~mrualn~; t&et 011 WC) dieoovored ad aodwed
In papln4 quantities on April lb, 1999, War the term8
or thb 14884, 1e8444 beoemoOntitled t0 hold muah 14448
r0r am lone theraatt4r a8 oil and/or gre wua p06u44a in
pap- qucantltl44. '&he qu48tlon EQu0 pre0ontsd 18 as to
the brr40t 4r 4 tbmporery oesaatlon 4r produotlon 04~844 by
oollaped 0581ne, iioOd8 and Othbr laatt4r8 be)and the QOu-
tr0i 0r th4 mi~bb.
The law in Tsxss 18 app6raatlX -11 Settled to
the 4rf44t that. S t4mporary csseetloa or ;rrodwtlon 44use4
by olrotmstsncerr oYer xhioh 'l48544 beta no aontrol do48
wt temlnute or f0rrbit the 14644 ii the 148844 In (3ood
relth u84m neaonable dl.ll~enoe to r48UMJyro6uOtiOci. Thb
Furration under 4cmeideretlon me de4ld46 i.n ?;~4fb@r4ugh
V. Hew Domain Oil &, Gas Comply, Ecl6 6. '8. 391 (Writ die-
ml88ad) w&era th0 court 86114:
". . . The qusatfoa pr4abnte4i8: Did th4
tempormy 4~8sntloa 0r pro4wCfan in paying
qaentlty of both lgas arad ail, us44r tllar04t8
dlaclOe%d by tBe r44Qfd, t4IWkiuata t&4 phinrl-Ix
leeue? Tba raotc. dfs41484d bf thm reooa-4 4~4
the orforte mede by app4114er, ia @wG tdth,
Eorroreble Bascom Gilsa, P%ge 0
to reaume qa:asproduction,and the expsndi$ur~
af large ammats of money In their sf~ort to
roaw gas pro&atioa Smmediataly after the
oanlae aollapasd, and oontlauad suah offort
uatll tha 011 well wee brought la on July 24
and then ~rownecYtheir effort It B&Iproduotion
by #tartlog another well and cant t nulq work
thereon until gsia was produoed In the aeaoad
wall. . ."
" .iw have oonoiuaidea
*bat, untbr
the t&6*6Pd pr0~1~i~6 or th6 tiOrei i0400
68 r0oad la tha reooril wbara oil waa probwba
ln payllh& quaatfbi6s within the riv+p3m
pericd, ana the aims6 or 0ourafAon 0r pro-
au0tm we8 themafter rreoasearflp unfon~a and
UnaVOfdebla, ana *hare tha leesee IA sad raith
w4a reasoaable aLz*n00 to remme produotloa,
ana at grwi out169 0r 1lran09, ana aid, +ithio.
a masorzaable tfme, in +lmv of the oaaaltfaru
df~Oloaed b9 the reoord, X-06tWiO proauotiom,
a rorraiture rot teffiporary amsatloa d pmuuetlon
withoutraplt 0r leawer rrhoula not be allowed
a6 a matter 0r law. Suoh w6 belier0 to be a
nesoaable oomtruatlon of the laese. . .*
Xi-iText+%faollio Coal & all Co. 18. Bratton,
eao 52. tc. 688, the Coart, in spmnking 0r a teqWr*ly
ae*rsttia or prodaotionor oil, ssys~
aiitng
a,i800nroa it in suoh qwati-
tiaa, raecloaabl8 proapooto oi rur-
and with
ther tmaoeasruldereloparsrrt, the lam3et4, ia
00-a ra%rmas and jor:tioo, wm satitled. te
a resaonable len@& ot tm* wlthik wh%eh to
oontlaue the acevalcrpamt work in arrberto
reap aam rrrward ror the lsbor aad exp6nass
ia0urrOa,whbh w0dla also be attanbea ritb
proritto the plaintfrr. m m0h w0b~~leve
tcb b8 a roramm8bla ooamtruotloa of the tan118
or tha leese. The &W&m* euthorltlim,
aitad by appellant, a~@cordwith these V%O%FS,
snd e02w or th8i+ fit ma, fnvolvea tha
Honorable Basoom Oiler, Pega 10
oonstruotlon of leases or 6imllar tenarr to
those of the leaea in oontroreray In t,ha
present suit; Eaatera Oil Co. v Ooulehan,
63 W. Va. 531, 64 S. H. 836; So&h POM.
Oil Co. t. 91106ram) 71 W. Va. 438, 76 s. E. 961, 43
L. R. A. (I. S. P 848i Ohio Fuel 011 Co. 0. Graealsef,
84 w. vr. 67, 99 e. . 874; Roeab v . funatloa 011
k Can 0th (Okla. Sup.) 179 Pea. 990."
Ia Wlroon%ia-Tex%%ill Go. v%. Clutter, &x389. w.
981, the ckmaiasi~ 0r Appeal8 or TO=% %%iar
“The law 1% wall uttlea thet a temparmr~
oersatlon or drtslopmeata or oprstloa under en
011 an& gas leas* doe6 not, a* a matter 0r law,
oonstltutoan abandomaaa8. Flaher V. Creroaat
011 Co. (Tex. Civ, AQQ.) 178 8. W. 906; Ball
v'. MoClraky (Tsx. Cit. A~Q. )ES8 5. W. lOOIt
Marnett Oil & 088 Co. *. Munaey et al (Tax.
CLv. A 0.) 833 8. W. 847; feaobs v. Robinson
et al vTex. Clr. App.) Ml S. W. etlf mna~y at
al v. Yarn& 011 E Oaa Co., 113 Tex. Rl.&,284
8. w* 3ll.a
The ahore olted authorltle6 together with other8
whlah mod not be alted In thla oplnloa, rstabliah thm
rule In Toxaa that an oil and gas lease ror l aerinlte
prlmery term and *aa long therealter au oil and gaa ia
produo4a iqpayfng quantltf*rW., is not ipso raoto term&
natea bf a teaporarp oe%aatlan 0r proauotion 0006rrl6g
through oirounutanoer or r6a%ona be,yoad the oontrol of
the leseea art&r oil or gas ixt payi- quantitiar, ia dla-
ooversd aa proauoed aumg the prlnmry tera or th%
lease, providedthe iest3ee thercsrrter Lo goodr418bwe6
reasormble allf.~noe to re-ertabllrh prOau0tIo6, anb
auooeeda In re-e%tabl$.rhing proauQtlQn within a r*a%on%ble
time.
Acoordlngly, you am edrirsa th%t, in our eplnloa,
the oil ati @aa lease reremea to In your raqueet aid not
terminate by virtue 0r aalb aeseaelon0r praduotion mm
said lasso, pr0vIa0a, howwer,.that auah orasatloa 0r
proauotlon ir temporary anawas oaunea by ror08r or dr-
wmatanoea beyond the 0oabroL oi the lwaee, and prsdad
Iionoreble Basoom (llle4, Pago 11
the lessee, in good ralth, mea reesoneblo diligOnOe to
ro-srtebllah produotlon frc#n said laaae, and within a
r%a%on%ble time thersartor doe8 rs-establlmh probuotlon.
The exlatmoo or all or these raota, togrthm
with the question of whether or not oil or gas la faot
was proauaed Irom the land In question prior to the
explratlon or the rive-year primary tmu, are mafUr
whldh maat be aetamiad by the Board r0r Lea80 or
Taxes Prlaoa Lend8 from thir oridenoe presented to tbm
Ma rm4 their knowledge or the raota.
Yours iory truly
AlWRBETO~RALlWTEXB