c 

E GENEIRAL 

WI& WILSON 

AT-X-ORNEYGENERAL 

Honorable H. D. Dodgen 

Executive Secretary 

Game and Fish Commission 

Austin, Texas 

Dear Mr. Do&en: 

Your letter reads: 

OF EXAS 

AUSTIN 1% TEXAS 

January 18, 1961 

Opinion No. ~~-984 

Re: Whether a permittee under a Game 

and Fish Commission permit authorizing removal of shell from Galveston Bay is liable to the State for 

an increase in the price to be paid 

for shell ordered by the Commission 

prior to the expiration of the permit. 

"Effective April 25, 1954, this office renewed a shell permit 

for W. D. Haden Company of Houston to remove shell from Galveston 

Bay for cormnercial purposes. The permit as originally written provided, among other things, that the permittee shall file monthly 

reports and remit to the Game and Fish Commission 7# per cubic yard 

for all shell removed from the public waters during the month for 

which the report is made. An endorsement to the permit effective 

January 1, 1955, was attached to the permit on December 6, 1954. The 

permit was issued for one year and expired on April 25, 1955. 

"On October 1, 1954, the Game and Fish Commission adopted a 

resolution increasing the price to be paid by all shell dredgers 

from 7# to lO#.per cubic yard effective January 1, 1955, and approved 

by the Governor on November 4, 1954. All shell dredgers were properly 

advised on December 6, 1954, of the increase in price and all paid it 

without question except W. D. Haden Company which continued to remit 

to the',Game and Fish Complission on the basis of 76 per cubic yard. 

When the Game and Fish Commission requested payment for the shell at 

the rate of lO$! per cubic yard and W. D. Haden Company refused to pay 

it, a suit was filed by W. D. Haden Company in the District Court of 

Galveston County when cancellation of the permit was threatened. By 

agreement between attxneys, W. D. Haden Company consented to pay Into 

the registry of the court the sum of 31 per cubic yard for all shell 

produced from January 1, 1955, until the expiration of the permit on 

April 25, 1955. The total sum deposited by W. D. Raden Company in 

the registry of the court was $21,053.87. 

"In this trial of the case, judgment was rendered In favor of 

the plaintiff by the trial court and was appealed by the state to the 

Court of Civil Appeals for the 2nd Supreme Judicial District of Texas 
Honorable H. D. Dodgen, Page 2 (~~-984) 

where the judgment of the trial court was reversed and the 

case remanded to the court below with a directive that the 

suit be dismissed. c303 S.W.2d 4431 An appeal to the Supreme 

Court of Texas was taken by the plaintiff where the court upheld the judgment of the Court of Civil Appeals, reversing 

the judgment of the trial court, and ordered the suit dismissed. 

The Supreme Court's final judgment ordered the money returned to 

W. D. Haden Company. [308 S.W.2d 8381 

"It appears that the paramount question before the court 

was whether W. D. Haden Company had legislative authority to sue 

the state.and judgment was rendered on that issue. The question 

of whether W. D. Haden Company owes the additional sum of 3&! per 

cubic yard forshell produced from the public waters from January 

1, 1955, to April 25, 1955, was not determined by the court. 

"Your opinion is respectfully requested as to whether the 

sum of $21,053.87 is due the state by W. D. Haden Company, representing the increase in price of shell from January 1, 1955, to 

April 25, 1955, and removed under authority of the above mentioned 

permit." 

The permit invqlved reads as follows: ' 

"GAME & FISH COMMISSION.OF TEXAS 

Austin, Texas 

SAND,SHEiLAIiDGRAVELPERMPI 

No. 243-A-6 

"STATE OF TEXAS 

County of Travis 1 TO WHOM THIS MAY CONCERN: 

"PERMISSION is hereby granted W. D. Haden Company of Houston, Texas, 

to remove mudshell placed under the management and control of the 

Game and Fish Commission, as provided in Art. 4051, R.C.S., 1925, as 

follows: 

"From an area three (3) miles north and'south and five 

(5) miles east and west, adjacent to the Galveston Bay 

Oil Field: 

"SUBJECT TO THE FOLLOWING PROVISIONS: 

"First. That the permittee herein shall make sworn report not later 

than the 10th day of each month on all materials removed from the 
Honorable H. D. Dodgen, Page 3 (~-98’+) 

public waters during the preceding month at the location 

described above, and shall maintain permanent records of 

all such materials produced so that such records may be 

inspected by a representative of the Game and Fish Commission 

at any time. A report each month is requested whether any 

materials are produced or not. 

"Second. That the permittees shall remit to the Game and Fish 

Commission 7#. per cubic yard on all sand and shell and 8# per 

cubic yard on all gravel removed as above provided during the 

month for which each report is made. 

"Third. That the permittee shall not interfere with any State 

or Federal inprovements, navigation, fish life, riparian rights 

or landowners in or along any stream or violate any law or regulation of the Game and Fish Commission pertaining to the taking 

of sand, shell and/or gravel. If any shell is to be produced 

under this permit, it is especially agreed and understood that 

the permittee shall not operate within 1500 feet of a live oyster 

reef. 

"Fourth. Nor shall permittee dredge any shell not covered with 

at least two feet of soil silt or mud. Nothing herein shall be 

construed to allow dredging in such place or manner so as to 

damage the property of any riparian owner. 

"Fifth. That the bond of $5,000.00 now on file inthe office of 

the Game and Fish Commission with American General Insurance Company 

as surety and the permittee herein as principal, conditioned upon 

the faithful compliance of said permittee with the terms and conditions of this permit, shall be used to recover any sum or sums of 

money to the extent of $5,000.00 that may be due the State by virtue 

of this permit. 

"Sixth. That should the permittee herein violate any condition of 

this permit or violate any law or regulation pertaining to the taking 

of sand, shell and/or gravel, the Game and Fish Commission may cancel 

this permit; otherwise,-it shall expire on the 25th day of April, A.D., 

1955. 

"THIS PERMIT IS NOT EXCLUSIVE - NOT TRANSFERABLE. 

"Given under my hand and seal of office at Austin, Texas, this the 15th 

day of April, A.D., 1954. 

GAME AND FISH COMMISSION 

BY: H. D. Dodgen 

Executive Secretary" 
Honorable A. D. Do&en, Page 4 bw?8'+) 

Article 4051, Vernon's Annotated Texas Civil Statutes reads in part as 

follows: 

"All 1 . . bays within the tidewater limits . . . together 

with the marl and sand of commercial value, and all the shells, 

mudshell or gravel of whatsoever kind that may be a . . In or 

upon the bottoms of any . . 0 bay . a . are hereby placed under 

the management, control and protection of the Commissioner. None 

of the marl, gravel, shells, mudshells or sand'included.herein 

shall be purchased, taken away or disturbed, except as provided 

herein, . . . ." 

Article 4052, V.A.T.C.S., reads in part as follows: 

"The Commissioner is hereby invested with all the power 

and authority necessary to carry into effect the provisions of 

this chapter, and shall have full charge and discretion over all 

matters pertaining to the sale, the taking, carrying away or 

disturbing of all marl, sand, or gravel of commercial value, and 

all gravel and shells or mudshell . . . and their protection from 

free use and unlawful disturbing or appropriation of same, with 

such exceptions as may be provided herein." 

Article 4053, V.A.T.C.S., reads in part as follows: 

"Anyone desiring to purchase any of the marl and sand of 

commercial value and any of the gravel, shells or mudshell 0 . . 

or otherwise operate in any of the waters or upon any I . . bay 

. . . shall first make written application therefor to the Commissioner designating the limits of the territory in which such person 

desires to operate. If the Commissioner is satisfied that the 

taking, carrying away or disturbing of the marl, gravel, sand, 

shells or mudshell in the designated territory would not damage or 

injuriously affect any oysters, oyster beds, fish inhabiting waters 

thereof~. . . and that such operation would not damage or injuriously 

affect any island, reef, bar, channel, . . . used for . 0 . navigation . . . he may issue such permit to such person after such applicant shall have complied with all requirements prescribed by said 

Commissioner. The permit shall authorize the applicant to take, 

carry away or otherwise operate within the limits of such territory 

as may be designated therein, and for such substance or purpose only 

as may be named in the permit and upon the terms and conditions of 

the permit. No permit shall be assignable, and a failure or refusal 

of the holder to comply with the terms and conditions of such uermit 

shall operate as an immediate termination and revocation of all rights 

conferred therein or claimed thereunder. No special privilege or exclusive right shall be granted to any person, association of persons. corporate or otherwise, to take or carry away any of such products from 
Honorable H. D. Dodgen, Page 5 W- 984) 

any territory or to otherwise operate in or upon any Island, reef, 

‘bay, lake, river, creek, or bayou included in this chapter." 

[mphasis added] 

Article 4053d, V.A.T.C.S., reads in part as follows: 

"The Game, Fish and Oyster Commissioner . . . may sell the 

marl, gravel, sand, shell or mudshell . . . upon such terms and 

conditions as he may deem proper, but for not less than four ($4) 

cents per ton, and payment therefor shall be made to said Commissioner. . . .II 

In 1929 the 41st Legislature abolished the office of Game, Fish and Oyster 

Commission, and created the Game, Fish and~.0ys~br.Commis;sian, and conferred the 

powers,fo,rmerly~vested in the single Commissioner upon such six-memberCommission, 

which act became~ Article g78f of Vernon's Annotated Penal Code of,Texas.: ,I~' 

In 1951 the 52nd Legislature abolished the six-member Game, Fish and Oyster 

Commission, and created the nine-member Game and Fish Commission, and conferred 

the powers formerly vested in the six-member Commission upon the new nine-member 

Commission, which act became Article 978f-3 of Vernon's Annotated Penal Code of 

Texas. 

A license affecting real property amounts to a mere privilege and imports 

no estate or interest'in the property. 27 Tex.Jur, page 856. The statutes plainly 

refer to the authorization to remove the shell as a "permit", and the form of such 

authorization complies with the statute in this regard. The courts in Texas frequently refer to the agreement under which the permit is granted as a contract, 

subject to the special rules governing licenses. 

As a rule a license is revocable at the will of the grantor, 27 Tex.Jur. 

page 860. A license which is of a revocable nature may be modified by the licenser 

giving timely notice thereof. 53 C.J.'S. page 813. Formerly the rule allowing 

revocation was applied virtually without qualification, but the courts of Texas 

now recognize four situations in which they will refuse to sanction a revocation 

of a license by the licenser: (1) where a parole easement, which otherwise 

would amount to no more than a bare license, has been taken out of the statute 

of frauds by part performance; (2) where some consideration has been given to 

keep the license alive; (3) where the license is directly connected with the 

grant of an interest in land, the enjoyment of which depends upon the continued 

existence of t,he license; and (4) where the licensee has been induced to expand 

a considerable amount of money or labor in reliance on the subsistence of his 

license. 27 Tex.Jur. pages 860-861. 

A state has a right to contract the same as a corporation or individual, 

so long as authority is granted by the Legislature. 38 Tex.Jur. pages 635-636. 
Honorable H. D. Dodgen, Page 6 (~-984) 

It is not for judicial consideration whether a contract regular on its face, 

is beneficial to the state or whether it should have been made. 

cage 637. 

38 Tex.Jur. 

The question presented is whether the Permit granted by the Came and 

Fish Commission may be modified by the licenser, the Came and Fish Commission, 

by raising the price of shell an additional 3# per yard, contrary to the 

original terms of the Permit, prior to its expiration date of April 25, 1955. 

And this in turn depends upon whether or not the permit or license is revocable. 

As we have seen, ordinarily a license may be revoked at the will of the licenser, 

unless it falls within one of the exceptions listed above. 

In the case of Hall v. Willmering 209 S.W. 226 (Tex.Civ.App. 1919 writ of 

error refused), Hall and Willmering had dntered into a contract. wherebv Hall 

granted to Willmering the exclusive right to enter on Hall's land, and io remove 

therefrom gravel and sand for a period of three years, Willmering to pay Hall 

1Of per yard for sand and gravel taken, to be paid every thirty days. The contract also provided that if Hall should fall to give notice of termination of the 

contract thirty days before expiration of the three years, then at Wlllmering's 

option the contract would exist for another three years. After the contract was 

executed, Willmering entered upon the premises, and stripped off the surface soil 

in order to be able to take the sand and gravel. When the three-year period 

expired, Hall failed to give notice, and Willmering continued to take gravel and 

sand and tendered his monthly payments for the sand taken. Hall brought suit to 

enjoin Willmering from further hauling sand and gravel from the pit. The trial 

court gave judgment for the defendant, and plaintiff Hall appealed. 

The Court of Civil Appeals in the Hall case, 209 S.W. 226, said at page 

227: 

"The contract contained no absolute agreement on the part of 

Willmering to do anything; the agreement to pay for the gravel which 

he might take and to perform the labor necessary to its taking coming 

into operation only as he might see fit from time to time to exercise 

the privilege of taking gravel, and being an incident thereto. It is 

clear, therefore, that prior to the time that he stripped the ground 

preparatory to exercising the privilege the contract was unilateral, 

and might have been terminated by either party, . . . But the contract 

under consideration is more in the nature of a lease or license to mine 

or to do similar acts on the premises of the grantor, which may result Y 

in mutual benefit to both the grantor and the grantee of the right, and 

there are authorities in this branch of the law which we think are more 

directly in point, and which will control the decision in this case. A 

mere license under earlier decisions might be revoked at the will of tEe 

grantor, so that the licensee was analogous to that of Will.mering in 

this case in that' it was subject to termination at the will of the grantor 

of the right or privilege. In many jurisdictions, however, courts of 
Honorable H. D. Dodgen, Page 7 (w-984) 

eauity 

exercise of this right of revocation, where on the faith of its 

grant the grantee thereof had made expenditures on the land for 

the purpose' of exercising the privilege. . . . The tendency of the 

decisions' of this' state' is' evidently to follow this general principle of protecting the'licensee under such circumstances. . . ." 

The Court in the Hall case went on to quote with approval the Supreme Court 

of Pennsylvania in Rerick v* Kern, 14 Serg. & R. 271, in which the latter court 

said: 

"A license may become an agreement on valuable consideration; 

as, where the enjoyment of it must necessarily be preceded by the 

expenditure of money; and when the grantee has made improvements or 

invested capital in consequence of it, he has become a purchaser for 

a valuable consideration. Such grant is direct encouragement to expend 

money, and it would be against all conscience to annul it as soon as 

the benefit expected from the expenditure is beginning to be perceived." 

We have no facts submitted to us which would show what expenditures of money, 

if any, the licensee, W. D. Haden Company, has made upon the consideration tbat it 

had this permit or any annual renewal thereof. But it is inconceivable that an 

operation of this type could be undertaken without a substantial expenditure of 

money for barges, dredging equipment, ownership or rental of docks, trucks, etc. 

It is true that the original permit was only for one year, and each renewalthereafter was for a like period time, and that the licensee undertook this operation 

fully understanding that the Commission might raise the prices at the time of each 

renewal, or refuse to renew the permit at all. But at least the licensee was able 

to measure each expenditure of its money against a definite term and a set price 

for the duration of that term, in making its business calculations. In all good 

conscience, it would not be equitable and fair for the State of Texas to raise the 

price of shell, making it applicable to a licensee prior to the end of the term of 

the permit granted. See also Risien v. Brown, 73 Tex.' 135, 10 S.W. 661 (1889); 

Markley et al v. Christen et al, 226 S.W. 150 (Tex.Civ.App., 192C, dism.) 

We hold, therefore, that the permit granted to W. D. Haden Company in April 

1954, to expire on April 25, 1955, became irrevocable by the Came and Fish Commisk-ion when the licensee entered upon the operation of dredging for shell, expending 

its money in so doing. When the license or permit became irrevocable, it was not 

subject to modification of its provisions during the period of time for which it 

was granted, such as a raise in prices, to the detriment of the licensee. The 

permit obviously can be revoked for cause, a number of such causes being enumerated 

in the permit itself, but this is a different matter altogether. 
Honorable H. D. Dodgen, Page 8 W-984) 

SUMMARY 

Where a licensee obtained apermit from the Game and Fish 

Commission to take sand, gravel and shell from the bottom of a 

bay, which permit had a definite expiration date and a fixed price 

per cubic yard for all sand, gravel, or shell taken, and thereafter 

the licensee entered upon the operation of dredging and taking such 

materials and expending its money in such operation, such permit 

became irrevocable for the duration of its term, except for cause. 

Where a license to take sand, gravel and shell becomes irrevocable, excpet for cause, the Game and Fish Commission cannot raise 

the price of sand, gravel and shell, and make such increase in price 

applicable to such licensee contrary to the terms of the permit when 

granted, until after expir,ation of the current permit. 

APPROVED: 

OPINION COMMITTEE 

W. V. Geppert 

W. Ray Scruggs 

Linward Shivers 

Joe M&asters 

Leon Pesek 

REVIEWEDFORTHEA!Fl'ORNEYGENEiUL 

BY: Leonard Passmore 

Yours very truly, 

WILL WILSON 

Attorney General of Texas 

By; )4LG1 ++- 

RILEYEUGENEFLEl'CREB 

Assistant