-h 29, 1939

Hoiiorable

BaaoormGiles Ccumudmione~

of the GeneralLand Office Austin,Tom OpinionNo. O-523

Be: $ffect of section lo, ch. 

### 271 General~Laws

of 1931,

cm proedsting river bed oil and &as leaBe

Dear M?. Giles

This aoknowledges

receiptof and la in reply to your letter of Maroh 

### 17, 1939,~in which you requestthe opiuionof this Departmant upmi the~question

of irhether

or not .%&ion 10 of Chapter 271, General Iawa of 1931, repealedthe $2.00 par aore lease remtalprovisioncmtained inChapter lkO,GeneralLawa of 3gthLegialature; 

### 1925. Youfurther request 0115'opinion aa tovhether or not you ahm.l.d issuea renewal iease to Mrs. Ibnie O'Brien upon the erpiratlm of the presentoil. ai~d~
gas leasewhich she holda covering 398.229 aores in the Trinity River bed in Liberty

County,Texas.

As ve understand

your letter,

on October

### 5, 1928,

permit No. .?724 toprospect for oil and Sac W'iasued to Mre. Ronie W8rien covering the portionof the Trinity River bed in question; On April 

### 30, 1929, afterproperproof of the discovery of oil had beti made to your office, ollaud gas lease Iio. I2724vaa issuedto Mrs. IVouie OIBi%n, her heirs and asslgu~,sald,lease havingbeen issued

uuder the terms aud provisiona of Chapter 

### 83, Ads of lgl?,as amended by Ch. 140, Acts of 

### 195, 39th De&siature, which latterstatuteappears aa Artlole 

### 5344,

Verno~'d

Civil Anuotated

Statutes,

### 1925,

said artiole

read- as follows:

"Uponthe paymentof$2.00 (two dollars) per aore for eaoh acre in the permit a lease shallbe issued for a term of ten (10)years,or less,as may be desired by the applicant,

and with the optionof a renewalor renewalsfor au equal or shorter period,end imaedlately after the experaticm(expiration) of the ftiet year after the date of the leaae,the sum of (two) ($2.00) dollars !peracre shallbe paid duringths life of the lease,and in addition

thereto,

the owner of the $?a80 shallpay **a** sue of mcey equal to a royaltyof one-eighth of the value of the gross productlou of petroleum. The owner of a gas wellHonorable Baama 

### Gilas,

page 

### 2 (O-523)

shallpay a royaltyof oue-teuth of the value of the metre outputof all gas disposed of off the premises; provided, howevm'that the provieiom hereofas to the paymeutof two ($2.00)

dollara

per acre duriug the leaseperiod md the life of the said lease shallnot apply to leaseeof bays,marshes,reefs, saltwater lakes or other submerged lands containing

as much as 0110

hundred (100)**acres** but not in excess of five hundred (500)aoreaupon whioh 88 many 88 five wella have been drilled, and upon which BIG

expenditure

of as much aa one hundredthousand ($lOO,OOO.OO) dollare

haa bs6P.mada. The drilhlng of said wells and the expenditure

of said amount to be eatabliahed to the satisfaotion

of the commissioner:'of the land office."

You attached

to your lettera certified copy of the lease issuedto Mrs. O'Brien. Such lease ou page,1 thereof recites that

a permit to proepeot for oil and gas had bean previouel.y issuedto Mm. O'Brien

under the provieione of Chapter 

### 83~of aii Act of Meroh 16, 1917, and Acts subsequent thereto. Paragraphnumberedlonpage 2 of said oil and gas lease, in part, made aa follows:

"Ynadditlontothetwo dollars par acre already paid on each aore luoluded herein,the **owner** of the rights hereinconveyedshallpryalike aumannuallyhere&%er in advanoe

on the mea iutsluded herein,

whioh ehallbe paid

on orbeforethe expirstion of each year durlug the life of this contract,

and In addition

thereto,

the owner of the rightshereiuoonveyedehallpay to the State ofTezae at theGeneralLendOffice ofTexaa,atAuetiu,Texaa,asum of money equal to a royaltyof me-eighth of the value of the gross production of petxoleumaud ehallpay a eumof money equal to ten per cent of the value of all gae cold."

You'further

state in your letterthat the firat yerr lease rental of $2.00 per acm~was paid in 1929 andbike paymeutwaa made in 1930; thatbeginniugwiththethMyearleam rentalthe paymentwas reducedto 25 cants per acre under provleicms of Section 10, Chapter 271, Act of May 29, 1931, and that all. subsequent

annualpayments

have been at the rate of 25 ceuts per acre; that the 10 year periodfor which the leasewas iaaued will expire

April 30, 1939, aud that the lessee has writ&u to you making the request that a rem@ be issued.

As the lease in question wan issuedon April 30, 1929,when Chapter 

### 83,Acts of 1917, as mended by Chapter'.lkO, Acts of 1925 was iu foroe,we are of the opinionthat the paymentof rentalson such lease is governed

and controlled

by Umpter 140, Acts of 1925. The affect**of** Chapter 140,Acts of 1925, iu our opinion,is to requirea cash payment at the time of the issuance of the lease of $2.00 per acre for each 8Cm included

in the original

permit,and a furtherannualrentalpaymentofHon. BasccmGlles,page 

### 3 (O-523)

$2.00 per acre during the life of the Lease,ami 2~ additim themt'., the oil aud gas royalty providedin said act shall be paid in case of production. The statute plainlysays that *the 8um of $2.00.per acre shell be paid during the life of the lease.' It IS kaiaputabh that the life of the lease in question to Mrs. O'Brien is flared both by the terms of Chapter 140,Acts of 1925, aud by the provlsioue in the lease Itself,

at a,period

of 10 years frm April 

### 30, 1929, with a right to
reuew the same as provided ia Chapter lk0. Therefore, a requirement of the paymentof rental of $2.00 per acre during the iife of the lee-x, in our opinion,

requires

au annualpayment or $2.00 per acre for each aud every year that the leaearemains In force, Including any renewal term. We do not believe that the 39th Legislature in euacting

Chapter 140,Acts of 

### 1925,

whioh chapterexpressly ameorda subdlvisiou

2, section 

### 7 of Chapter 

### 83,Aota of ~~17, .35th Legislature,

iutended

therebyto release the State% lesaeefrom the paymentof: mmal~rentals~stlpulated by the A& iu case production was secured.'

The only ohange

which Chapter.140,

Acts of 

### 1925,

made in Chapter 

### 83,Acts of 1917,was to insert the word "immediately" in place of the word “ annually ” which appeared in the 1917Act end to add a provisoto the 1917 Act which proviso is not relevantto your inquiry mder the facts presented by your letter.

We cauuot esoape the ooncluaionttvrthadthe Legislature Intended

to hbollehthe requinrment of the 1917 Act for the payment of annualrentals in case of produatlou, itwouldhave used lmguege ~hWly iadiaatbg .suoh~an inteutdbn. Such inteMiou 8lfi0 ~0ul.d have been olearly Indicated by the Legialatum by simply strikiugfman the 

### 1917 Act the phrase O%hall~be paid during the life of ths Lease*. In the absenceof any such aut%ou ou the part of the Legislature, we must, of necessity,

hold that the Legislature did not intend to release leassee8 frm the paymeutof the $2.00 per ame auuualrentals. The proper constructQm o?A.vticle 

### 53J&,in our opfnion,. is that mch articlerequiresthe paymeutof annual reutsleof $2.00 per aore duriug the eut?ze 1FPe of the leaao emu after produotiou is eszmed.

The furtherquestlouin ~eeeuted bye ym? request for eu opinionaa to the effect of Sectiuz 10, of Chapter 27~1, Acts of 1931, RegularSession of the k?nd Legislature, whfoh appearsas Sectiou 10 GE Article 5421a,

Vernon'8

Aumtated Civil Statutes$ 

### 1925.

section 10 of Chapter 271 read8 as followa:

"The a?eas inoludsd herein shall be leanedfor a comlderation, in additionto the oath mouut bid tier+ for,, of not lese than one-eighth

### (l/8) of the gross produdson of bil, or thr value of 88100, that my be ~pmduced and saved,'and

not lasa than one eighth 

### (l/8) of the gross product:ou

of gas, or the value of same, aud not Iem than one-eighth

### (l/8)

of the gmae produc,tim of sulphur,

### or the value of mme that may be pmdumd, that may be prodmed audHou. Baecaa'3llee, p4ga 

### 4 (O-523)

sold.off

the area and not less thsn one-sirtdenth 

### (l/16) of the value q allothern&wrals thatnmybe pmduoed, aud m additimul mua of twenty-five cents an acre per year for eaohyerrthereafteruutilprdcldctiou is scoured. When pmiuot&n ham beeu mmured In ocmaero i4l quautitiee

4nd the pigmentof royalty begins and coutlnues to be paid, the owner shalibe ese.@?frmfurther4unualrentsl~nte orthe 4oreage. The provisl~ of this utiale inrespectto p4ymentmofrent4laf'tergroduotimmdthe ceeart duotioneh4llapply to lemes heretofore issuedby3!e of proSt&J onsnfarea exoept Lindabelcmgiugtotha Stata lJuiveraity4nd el.e~aynu.y institutions. Lp productlon 8bxd.d aease and royalty

not be paid, the owner of ths lease sh4ll, at the end of the lease year inwhiohthe myaltyaoraedto be paid4ud annu4llythereafter in rdvanoe,

p4y twenty-five

oeuta 

### per aore so lcmg aa auohownermydesire tomaintainthe righta acqutid under the lease, not to exceedfive 

### (5) yeun 

### from the date of said le4ae."

Youwlllobeerve th4ttha fiualaanteneeof Seotiou a0 aboveliiaits

the time ftiwhtiha leasewbe keptinforce bywnt 

### ello@ Minti-*oCiacWlto 4perWoffive yem3. In your letter yoti etate that th6 leseeeof the pmtioular lease in questiou begrn tha wt of redacedrentalsof 25 mute per aore in 1931, or eight yeti
ago. Ue think olelrrly tht If Beetlou 10 of"Oh4pter ~looaldbe held to 4pply to the river bed levee-Jn questionwhich

MS iseued in 1929, neverthelese,

such learn after the yeu 1936 wae not entitUddto thebenefit of the reducedrentalproviaicms of Chapter271.

However,48 the question 4a to the effeotof Section 10 of Article 9210 wil.Ldoubtiees often vise in the futurewitheepeot to riverbed Imae wherethefive ykr limit4tionperlodhrs notekpired,we believethe question of the applkaticm of Chapter

### 27ltaang moh leases-~

on riverbeda cau 4ud should be -redatthistimewlthoutrespwtto the expiration

ornon-expintiou ofthefive year LimitationperIod~ In determining

the effectof Section 10, Article 5b2lc on river bed larsea, two questiona

me involved. Fir&, doea Section10 by ita terma apply to
or pnrpcgt to apply to river bed leases? Ebcond, Ff Section10 is construdd8as

applyiugto or purportfng to apply to river bed leasea, theu d.6 suah statute,

so donstrued,

conetitutionali'

Upon ekaiu3ng the caption of Chapter 

### 271,Acts of 1931 (Vernou's Annotated

Civil Statutes;

Artisle .9&2lc), we do not find in 4uy pm% thereof anymenticmccdW4

subjectrekatlng to tha lame, srls or development of river bed arem. The o4ptim ie c&tied to aetrtementthrtthe aotia one to "ragul4te the s4leand leue of lende setapartforthebenefit of the public free aolmolfmd, and to providefor the diepoaitiouandsale ofminerale oontained inall islands,

salt w4tere, lakes, bay6, inlets,

marshesaud nmfe owned by the State within the jurisdiction of Texae,,

endilluueoldpublic free a&mlm. Basoaar Gilee, page 

### 5 (O-523)

landa both mrveyed aud uumrveyed".

. . and "providiug generally

the method end meaua for the sale of public, school lauda and the leaseand development

of the,publio

school lend&and ooastalareaa." Upcm exfaaining Section lof Chapter 271, whioh motion purportsto exummate specifioally the lauda aud areaa which are subjectto ooutroland sale uoder the proviaio~ of Chapter 

### 271, we find this significant lauguager

"All landsheretofore eet **apart** to the public free schoolfunda under the Constitutionand 3.&a of Texas,and allofthe uuappropriatedandmmoldpublic daaainrunaining in this State of whatevercharacter, exceptriver beds, emdchnneltr,mB iaLradej lakes audbaye, and otherareas withintidewaterlhuits, EQ% aubjeotto aontrolaud sale uuder the provieiona of thisAct."

Thw we find t&t the caption of the statute in question fails tonention atanypointthatone of the subjects cf theAotis riverbed8 or leases therecnorthe paynents ofrentala colsaidUasee. We further find thatSe&iCp 109 the Aot embaly exoepts riverbeds md~~chanue~ flwn controlorsale under the'Aut, It ie not until Section 101P~ebOd9Ofth4Bill~re~hedthtwefipd~menti~mrdeai lauds other than those expreaaly designated

iu Sectiona~of the Aat ahd

even Section 10 of the Aot doea'not expresely

refer to river beds or to le4seathereon. In foot, Seotion 10 of the Act beginswith the language, cths~ueaa inoluded herein-shall

be leased* * 

### l

", thereby indioating thatSeotionlOvillderl~wit;hthe ueaa apeoifieallyenmaerated in Sectlonlof the Act. The only- in Section 10 which la susceptible atthecons~tlonfhrtrivsrbedarreino~dinSeotiorr10isfoundin that sentence

of Section10read5ng aa followw:

"The proviaion~

of this artiole inrespecttopaymenta of rental after produotion and the cessation

of prodw3ticn shallapplyto Isamesbsreto~ issuedby the State cneny
area except landsbelonging to the StateUniversity aud al&emosyn4ry '3lmtitutic4ls.*

In State v. Bradford,

### 50 S. W. (2),1065, the SupraneCourt of Teuaa held tlmt Article 5k16, 

### 1925 R. C. S., did not include nor have the effectof'setting apart river beda to the Permanent Free School E'und ofTexas,notwithstandingthefa&tbatArticle 

### 916 contained the followin6 Language:

"AU lads heretofore set apartunder the conatltution and lawa of Texas, and all of the unapprolniated publicdomain radning iu this State ofwhateverobaracter, andwheresoever located,inoludlngeny land&hereafterrecoveredby th? State, except that inaluded in lakes,brys andislende alongthe@ulf of Mexico within tidewater limits, is set apart and grantedto thepermenentschoolfundofthe State."

### “Inviev of the impo~e~of thisatatter to the State an&thevhole people,the courts**of** this stat+ have consistently

lsla that all grultewith rwpecrt to landamdernavQablewatemi,suohaa riverbeda a' ohuule~, are t3trtatly oonqtrued agalnnt the grrntse; that, if there IE any alblguity’ ip the rot, it will be 0cmBtnled In favar of the 6trta3 ma, tml#ls the act 0oIltaine

plainmdunlnietakable lmguage expmsslycouveying the land under **river** bade aud ohmnels, it~~vi.Ll not be croMtrued-to 3ncd.uae

them. Ih othmrvoraa, befo~atrtrta~w~bsacmst;Nadtoiaclude~d.lrnder navigablewdxr6,suchasrlverbedn anddmnnels, itvlll havu to **be** eqa~eed ia plain and poeitivul@ua@ rrd' notingeneral l&uage.~ Ian&ryP.Robiscap, llOT0r.2~~ 

### 219 S. 

### W..819;

8203 Robe&% V. T-U., 1OlTex. !Yri-, ~0 S. 

### Ii.-7333

City 6f Galveston

v. Menu%, 23 Tex. 349; Ro&orough v. Pi&on, 12 Tex. Civ. App. 113, 9 5. W. 

### 791,43 8. w. 10333 Rynes V. Paakkra'p2 Tear. 

### 49, 45 S.W. 5Q;aolln~.wuser,49 s. w. (26)69y(notyetrqajeea (in stateeqort)l Wiel on water Rlghtsim,

the me-tern states~, sacticm 893."

In VihiOf'the

f-t tlendther the oaptlon ~ttlhe body ofeCha@6r 271, **Acts** 

### 1931; at anypol.n~mentlosu~ speoifioally

river b&k, ipd ilso ia viev ~of the ~fact

thit Secti- lof eal(L Aot+lprpressly exoeptn

river beds frcm the Luada eubjeottb cc&r61 or sale under Said hat, we 'fed canpelled to hold, in harmony with Stat. v. Bradford,snpra, thatrlverb4W or leasee~thereon, Ortho pqmentof rentaleon snob lerrres,

are not affeoted

by Section

10, chrpter

### 271,ma that leaass on f snchrraasmmtbe ocmiaered inthe seurtenumnerm~ if mid Acthadnever been prsaed.

.

33 vv are in error in the conalueion jnst ezpreesea,

ena if **river beda**  **qlpld** properly 

### be heldto be inoldea in Section 

### 10 **of** 

### Chapter 

### 271,we, neverthlese, 

### must con0hae 

### thatseation 10 80 

### 0onstraed

tronld. not be effeotlve 

### to reduoe 

### fmu $2.00to 25 centa per acre the rantal~ 

### payable on the river bed 

### leaseIn question..Thla conclusion

la expressed beccke oftheprovieicum of Article 3,Seotion 

### 35 oftheConetitutionof Texss,which, inpart,provides M follows:

* *%o billeroeptgemerrla~~ationbilla ehsll oontdnmore thafi

me subject

which sImll be expressed In ita title",and that as to any subject which is not expressed in the title of the bill, such act shall be void.

To ocnetrue

the body of Se&ion 10, Chapter 271, aa inclndlng and apply- to river beds and river bed leases would bring the bod$ of the bill in oonfliotwith the captionthereof adwiththe oonstitutirmal proviaim above quoted, and the necessary

ree Gould be that such portia of Seoticm 10 u1 appliesto river bed lessee would be anconet1tut1onal

alla void.Ron. Besom Gllea, pege 

### 7 (O-523)

Although

we entertain

seriousdoubt aa to the oonatitutiouality of the pr~~iaion~ in Sectim 10 of Chapter 271, with respect to reduction

of rentals to 

### 25 cents per a6re afterproduction on auytract of State laud covered by an oil and gas lease executed prior to 1931,

we make no deoiaionof such questionin this opinionfor the reason that such questionis not directly $reaemted

by your letterand Is uunecesaary to the opinionerprcssed above.

The oonatruotionwe have given in this opinion to Article 

### 5344 is oontxa5y

to the construction given to such Artlole by **a** formerAttorney General in an Opinion written

by George T. Wll&ong,Asaistant Attonxy General,dated October 2'7, 1931,addressed

to Ron. J. Ii.

Walker. Acoordinglysuchopinionand amy otherprior opinions whi6hoonstrueArtiole 

### 5344 or Section 10 of Article54210, Venxmfia

Annotated

Statutes,in cmflictwith thie opinion me herewith

expreaslywithdrawn and overruled.

You are, accordingly, advisedthat in'theopinionof thisDe@- ment,~Sectlon

10 of Chapter 271, Acts of 1931,did not repeal the $2.00 per acre lease annualrentalpro~ed in the **lease** in question, and such act did not reduce such rental to 25 centa per acre. You are furtheradvised-that

it ie the opinionof thin Department that a renewal **lease** dmuld not be fsauedcoveringthe area in question until all accrued

rontaleat the rata of $2.00 per aore per year are paid in full..

By: Robert E. Kepke /s Robert E. Kepke AEisintant

This opinion

haa been considered in conference,

approved

and ordered

recorded.

Gerald C. Manu /a G&ald C. Mann Attorney

Generalof Texas