OFFICE OF THE ArrORNLEy BRNSRIL 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 gae pizrahaee 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, Anao Oas Corporation and l?. v. lseeling, et ux. You pill note 

from the oontente of thie aontrrcrt that Am0 @a8 

Wrporation agree8 to purohaee a aertaln amount OS 

gre.froa Oarkill Oil Corporation and pay Oeakill 

Of1 Corporation 50 per sent ot the groee prooeeds 

derived from the eale of the oondensate 01r the produst made by t@ prooeeeiag Oi. the gae. In a eupplemntU agrweent Wtveen Qagk%ll Oil corporation and W. 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&s Corporation 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 own only l/2 of the 

eeven-e&bthe oontraoted for under the terms of 

the lease withU.V. Keeling etux. and that Anco 

C&e Corporation owns the mother l//a OS the 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 Auoo Oar Corporation 

attempted to drav it in eu$a a manner that 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 and Vito, 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, @ayment to be made from 9 a OS 

derived from eale by the plqt ,oS the oondenc produ6te~of the gee. .The eeller-leasee ban reeervto be paid in kind.. 

> 

Uhile you do not no etate,~ ve preeuw eat you deeire to 

knov~~vhether or not intereate in realty haves been created by this 

oontraat upon vhioh ad valorem taxea my be qolleotof the gae, the Am0 Ctae Corporation. 

146 of the Revieed Oiril~gtatutea of 1925, pro- 

’ Veal property for the purpoee of taxation, 

eh6ll be oonetpued to include the land itrelf, vhethem laid 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 an an “oil 

erect in realty eubjeot to ad valorem taxation. 

l24,Tex. 290, 77 8. U. (ad) 1021, 80 S.W. (2d) 

uuant v. Duuu, 130 Tex. 

Petroleum Co., (Sup. Ct. 

110 9. Y. (26) 53; State v. 

133 S.W. (26) 112. 

We have 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 ati with 

any other oqntraot OP deed 4epende upon the 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 thm leue. Title ,to the gae 

doe8 not pee until reaelved by 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 8uoh intent oould be dieoovwed the moat pertinent in+&uipy vould be, how muoh? fop the oontwot 

18 oxpreeely 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 and you are ad~leed that thi 

.-a purahaee oontr88t JOU have l ubmitted areatee no ceti p.vopePty 

intePeete, and inrorar an malt ad valoreei taxation 18 eowerned, 

the value of the leiabtild rho UI d be determlned &nd tree levied 

Just an before the inatruwnt was exeauted - the Qaekill Oil COPporation owning a ?/&he intemet and the leeeoM. a l/&h int?reet. 

We do not i;mderitand y&a inquiry to relate .to ph8ona.l 

ppopmty taxation ahd expwee no oplnlon thereon. 

Your8 very truly