-h 29, 1939 

Hoiiorable BaaoormGiles 

Ccumudmione~ of the General Land Office 

Austin, Tom 

Opinion No. 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 receipt of and la in reply to your letter 

of Maroh 17, 1939,~in which you request the opiuion of this Departmant 

upmi the~question of irhether or not .%&ion 10 of Chapter 271, General 

Iawa of 1931, repealed the $2.00 par aore lease remtal provision cmtained inChapter lkO,GeneralLawa of 3gthLegialature; 1925. Youfurther request 0115'opinion aa tovhether or not you ahm.l.d issue a renewal 

iease to Mrs. Ibnie O'Brien upon the erpiratlm of the present oil. ai~d~ 

gas lease which 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 portion of the Trinity River bed in question; On April 30, 1929, 

after proper proof of the discovery of oil had beti made to your office, 

ollaud gas lease Iio. I2724 vaa issued to Mrs. IVouie OIBi%n, her heirs 

and asslgu~, sald,lease having been issued uuder the terms aud provisiona 

of Chapter 83, Ads of lgl?, as amended by Ch. 140, Acts of 195, 39th 

De&siature, which latter statute appears 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 shall be issued 

for a term of ten (10) years, or less, as may be desired 

by the applicant, and with the option of a renewal or 

renewals for 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 

!per acre shallbe paid duringths life of the lease, and 

in addition thereto, the owner of the $?a80 shallpay a sue 

of mcey equal to a royalty of one-eighth of the value of 

the gross productlou of petroleum. The owner of a gas well 
Honorable Baama Gilas, page 2 (O-523) 

shall pay a royalty of oue-teuth of the value of the metre 

output of all gas disposed of off the premises; provided, 

howevm'that the provieiom hereof as to the paymeut of 

two ($2.00) dollara per acre duriug the lease period md 

the life of the said lease shall not apply to leasee of 

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) aorea upon whioh 88 

many 88 five wella have been drilled, and upon which BIG expenditure of as much aa one hundred thousand ($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 letter a certified copy of the lease 

issued to Mrs. O'Brien. Such lease ou page,1 thereof recites that 

a permit to proepeot for oil and gas had bean previouel.y issued to 

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 

herein conveyed shallpryalike 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 

rights hereiuoonveyedehallpay to the State ofTezae at 

theGeneralLendOffice ofTexaa,atAuetiu,Texaa,asum 

of money equal to a royalty of 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 letter that the firat yerr lease 

rental of $2.00 per acm~was paid in 1929 andbike paymeutwaa made in 

1930; thatbeginniugwiththethMyearleam rentalthe paymentwas 

reduced to 25 cants per acre under provleicms of Section 10, Chapter 

271, Act of May 29, 1931, and that all. subsequent annual payments have 

been at the rate of 25 ceuts per acre; that the 10 year period for 

which the lease was 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 issued on April 30, 1929, when 

Chapter 83, Acts of 1917, as mended by Chapter'.lkO, Acts of 1925 was iu 

foroe, we are of the opinion that the payment of rentals on 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 require a 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 further annual rental payment of 
Hon. Basccm Glles, page 3 (O-523) 

$2.00 per acre during the life of the Lease, ami 2~ additim themt'., 

the oil aud gas royalty provided in said act shall be paid in case of 

production. The statute plainly says 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 payment of rental of $2.00 per acre during the iife of the lee-x, 

in our opinion, requires au annual payment or $2.00 per acre for each 

aud every year that the leaea remains In force, Including any renewal 

term. We do not believe that the 39th Legislature in euacting Chapter 

140, Acts of 1925, whioh chapter expressly ameorda subdlvisiou 2, section 

7 of Chapter 83, Aota of ~~17, .35th Legislature, iutended thereby to release the State% lesaee from the payment of: 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 1917 Act end to add a proviso to the 1917 Act which proviso is 

not relevant to your inquiry mder the facts presented by your letter. 

We cauuot esoape the ooncluaionttvrthadthe Legislature 

Intended to hbolleh the 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 strikiug fman the 

1917 Act the phrase O%hall~be paid during the life of ths Lease*. In 

the absence of 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 paymeut of the $2.00 per ame auuual rentals. The proper 

constructQm o?A.vticle 53J&, in our opfnion,. is that mch article requires the paymeut of annual reutsle of $2.00 per aore duriug the eut?ze 

1FPe of the leaao emu after produotiou is eszmed. 

The further questlou in ~eeeuted bye ym? request for eu 

opinion aa to the effect of Sectiuz 10, of Chapter 27~1, Acts of 1931, 

Regular Session of the k?nd Legislature, whfoh appears as 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 leaned for a 

comlderation, in addition to 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 aud 
Hou. 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 pigment of royalty begins and coutlnues to be paid, 

the owner shalibe ese.@?frmfurther4unualrentsl~nte 

orthe 4oreage. The provisl~ of this utiale inrespectto 

p4ymentm ofrent4laf'tergroduotimmdthe ceeart 

duotion eh4llapply to lemes heretofore issuedby 3!e 

of proSt&J 

onsnfarea exoept Linda belcmgiugtotha 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 

annu4lly thereafter in rdvanoe, p4y twenty-five oeuta per 

aore so lcmg aa auohownermydesire tomaintainthe righta 

acqutid under the lease, not to exceed five (5) yeun from 

the date of said le4ae." 

Youwlllobeerve th4ttha fiualaantenee of Seotiou a0 

aboveliiaits the time ftiwhtiha leasewbe keptinforce bywnt 

ello@ Minti-*oCiacWlto 4perWoffive yem3. In your letter 

yoti etate that th6 leseee of the pmtioular lease in questiou begrn tha 

wt of redaced rentals of 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 reduced rental proviaicms of Chapter 271. 

However, 48 the question 4a to the effeot of Section 10 of 

Article 9210 wil.Ldoubtiees often vise in the future witheepeot to 

riverbed Imae wherethefive ykr limit4tionperlodhrs notekpired,we 

believe the question of the applkaticm of Chapter 27ltaang moh leases-~ 

on river beda cau 4ud should be -redatthistimewlthoutrespwtto 

the expiration ornon-expintiou ofthefive year LimitationperIod~ In 

determining the effect of Section 10, Article 5b2lc on river bed larsea, 

two questiona me involved. Fir&, doea Section 10 by ita terma apply to 

or pnrpcgt to apply to river bed leases? Ebcond, Ff Section10 is construdd8as applyiug to 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 subject rekatlng 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 provide for the diepoaitiouandsale ofminerale oontained inall 

islands, salt w4tere, lakes, bay6, inlets, marshes aud nmfe owned by the 

State within the jurisdiction of Texae,, endilluueoldpublic free a&ml 
m. 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 lease and 

development of the,publio school lend&and ooastal areaa." Upcm exfaaining Section lof Chapter 271, whioh motion purports to exummate specifioally the lauda aud areaa which are subject to 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, except river beds, 

emdchnneltr,mB iaLradej lakes audbaye, and otherareas 

withintidewaterlhuits, EQ% aubjeotto aontrolaud sale 

uuder the provieiona of this Act." 

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 colsaid Uasee. 

We further find thatSe&iCp 109 the Aot embaly exoepts riverbeds 

md~~chanue~ flwn control orsale under the'Aut, It ie not until Section 

101P~ebOd9Ofth4Bill~re~hedthtwefipd~menti~mrdeai 

lauds other than those expreaaly designated iu Section a~of the Aat ahd 

even Section 10 of the Aot doea'not expresely refer to river beds or to 

le4sea thereon. In foot, Seotion 10 of the Act begins with 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 Isames bsreto~ issuedby the State cneny 

area except lands belonging to the State University aud al&emosyn4ry '3lmtitutic4ls.* 

In State v. Bradford, 50 S. W. (2),1065, the Suprane Court 

of Teuaa held tlmt Article 5k16, 1925 R. C. S., did not include nor have 

the effect of'setting apart river beda to the Permanent Free School E'und 

ofTexas,notwithstandingthe fa&tbatArticle 916 contained the followin6 Language: 

"AU lads heretofore set apart under the conatltution 

and lawa of Texas, and all of the unapprolniated public domain 

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 granted to 

thepermenentschoolfundofthe State." 
“In viev of the impo~e~of this atatter to the 

State an&thevhole people, the courts of this stat+ 

have consistently lsla that all grulte with rwpecrt to 

landa mdernavQablewatemi,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 othmr voraa, befo~atrtrta~w~bsacmst;Nadtoiaclude~d.lrnder 

navigablewdxr6,suchasrlverbedn anddmnnels, itvlll 

havu to be eqa~eed ia plain and poeitivu l@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 state eqort)l Wiel on water Rlghts im, the me-tern 

states~, sacticm 893." 

In VihiOf'the f-t tlendther the oaptlon ~ttlhe body 

ofeCha@6r 271, Acts 1931; at any pol.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 eubjeot tb 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 rentale on 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 held to be inoldea in Section 10 of Chapter 271, we, neverthlese, must con0hae that seation 10 80 0onstraed tronld. 

not be effeotlve to reduoe fmu $2.00 to 25 centa per acre the rantal~ 

payable on the river bed lease In 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 applies to river bed lessee would be anconet1tut1onal alla void. 
Ron. Besom Gllea, pege 7 (O-523) 

Although we entertain serious doubt 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 after production on auytract 

of State laud covered by an oil and gas lease executed prior to 1931, 

we make no deoiaion of such question in this opinion for the reason that 

such question is not directly $reaemted by your letter and Is uunecesaary 

to the opinion erprcssed above. 

The oonatruotionwe have given in this opinion to Article 5344 

is oontxa5y to the construction given to such Artlole by a former Attorney 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 other prior opinions whi6hoonstrueArtiole 

5344 or Section 10 of Article 54210, Venxmfia Annotated Statutes, in cmflictwith thie opinion me herewith expreaslywithdrawn and overruled. 

You are, accordingly, advised that in'the opinion of this De@- 

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 further advised-that it ie the opinion of thin Department that a renewal lease 

dmuld not be fsaued covering the area in question until all accrued rontale at 

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 General of Texas