OFFICE OFTHE ArrORNLEyBRNSRIL OF v **AUSTIN** -- 

## 631

Konoeable A. IL Sqtton 

### county

Awlitor -roll Qounty PaleitlIlb, Texan

Dear 'BiFt opinion ~0. 

### o-3938 Raa Tanbillty of 011 andgae leaeo, leeeeo having executed 

### gaepizrahaee oontraot. This uill aaknovledge your letter of August 29, 1941, &al~eing oopy of gas pumhaee oontraot) pquerting the opinion of thie dagwtiaant a8 follovet

"Attached hereto ie a gae purohare oontraot

. weouted br lh#k.Ul Oil COrpOPatlOn,AnaoOas Corporation andl?.v. lseeling, et ux. Youpill note from the oontente of thie aontrrcrt that Am0 @a8 Wrporation agree8 to purohaee a aertaln amountOS gre.froa Oarkill Oil Corporation andpay Oeakill Of1 Corporation 50 per sent ot the groee prooeeds derived from the eale of the oondensate 01rthe produst madeby t@ prooeeeiag Oi.the gae. In a eupplemntU agrweent Wtveen Qagk%ll Oil 

### corporation andW. V. Keeling, et ox., H. 8. Keeling et Er ee to aeoept one-efghth or the net prooeeds

eklll Oil Corporation receive6 from the leaee

. "ho0 C&sCorporation aontende that they own no mlnerale in plaoe under the lease and can be taxed only ior the reeyu1in.g plant. Oaekill Oil Corporation oontende that they ownonly l/2 of the eeven-e&bthe oontraoted for under the terms of the lease withU.V. Keeling etux. and that Anco C&eCorporation ownsthe **mother**l//aOSthe eevene%ghthe**.OP**eeven-sixteenthe. The Coem.le8ionere1

court deeice to knov to whoa the l/2 of the value of tihir, leeee should be charged, elnee no one adtit.8 Uabilitp for the l/2 that it **i8 costing**  to

3r- -.**Eonorable** A, .E. Sutton, page.2

get the gae procreased, and no doubt under the term of Um l

ttaahed oontraot the AuooOar Corporation attempted to drav it in eu$a a mannerthat it vould not be ohargeable to them. cl

Ue underetand that the faote are eubetantially an iollovet ‘ihe Oeekili Oil Corporation, an leaeee, hae a valid an4 

### l ubeietiug oil a.gae leaee to a traot oi lend in Andereon Cqunty,

elope, Y. V. Keeling andVito, ban retained #A@ mineral intereat end leeeee haa a ?/8the intereat. 11 Oil Cobporatlon, ha8 v vell on the land vhioh produaee gae-dibtillete. This leeeee hae ente?ed into a oontraot vith a ~~yoling plant, &a0 Oar Corporation,. to sell to the lent i gae prodwed, @aymentto be madefrom 9 a OS derived from eale by the plqt ,oSthe oondenc produ6te~of the gee. .The eeller-leasee banreeervto be paid in kind.. > Uhile you do not no etate,~ ve preeuw eat you deeire to knov~~vhether

or not intereate 

### in realtyhavesbeen created by this oontraat uponvhioh ad valorem taxea my be qolleotof the gae, the Am0 CtaeCorporation. 

### 146 of the Revieed Oiril~gtatutea of 1925, pro-
’Veal property for the purpoee of taxation, eh6ll be oonetpued to include the land itrelf, vhethemlaid out iu tovn lota or othervine, aud all buildiugr; l

truoturee ‘and lmprovemente, qr other fixtures ‘

.’ of vhateoever kind .thereon, +nd all the right8 and privilegie belonging or ip any vine appertaining themeto, and a mlnee, mineral*, quarries and foavile in and under the mme.”

e nov firmly settled in Texan that either the n of vhat 18 coauwnly referr.ed to anan “oil erect in realty eubjeot to ad valorem taxation. l24,Tex. **290, 77**  **8. U.**  **(ad) 1021,**  **80 S.W.**  (2d) uuant v. Duuu, 130Tex. Petroleum Co., (Sup. Ct. 1109. Y. (26) 53; State v. 133 S.W. (26) 112. Wehave been able to find no **aasee**paeaing upon the pm8 oi gae-diet&llate. 18 suah **a** rale similar to a reServation OP aeeigonmnt of au “oil payment”?

.

### 633

Ewarable **&. E.**  **Sutton, page**  **3**

The proper 0oantNbtioa of mineral lnrtruwntr 

### atiwith any **other** oqntraot OPdeed 4epende uponthe intent of the putiee to be gathered by lookiq at the inmtruwnt fmm it8 four oornwe. Thuee, Texan Iav of Oil aa&Oaa (2nd Ed.), page 9. ‘The ln~Wr in all eaeee in, 18 there 

### a grant **OP** reeervation of .the adnerale in planet Leokin 

### at the lnrtmetent in queetion ve do

## mt believe it to be the intent of the Oaekill Oil Ooqmation to convey any intmet’ln the gae la plaae **under** thmleue. Title ,to the gae doe8 

### not pee 

### untilreaelvedby the buyer 

### at the d#liveFy plme. goMtere in the oontpmt aan ve dieaover an intent to oomrey ga8 or mineral8 in p&we. Indeed, if now 8uohintent oould be dieoovwed the moat pertinent in+&uipyvould be, howmuoh?**fop** the 

### oontwot 18oxpreeely mada

### l ubjeat to 

### a pries gu purahaee oontmwt * and **betvean**the.~Oeeklll ml Oovporatiau and the Iat* Star Oar Oompany.’

lt 18 therefore our opinion andyou are ad~leed that thi .-a purahaee oontr88t JOUhave l ubmitted areatee no ceti p.vopePty intePeete, and inrorar 

### an malt ad valoreei taxation 18 eowerned, the value of the leiabtild rhoUId be determlned &ndtree levied Just an before the inatruwnt was exeauted - the 

### Qaekill Oil COPporation owning

### a ?/&he intemet and the leeeoM. 

### a l/&h int?reet.

Wedo not i;mderitand y&a inquiry to relate .to ph8ona.l ppopmty 

## taxationahdexpwee no oplnlon thereon. Your8very **truly**