Court Opinion

ID: 4136631
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:15:50.621627+00
Date Added: 2024-06-11T14:35:11.362746
License: Public Domain

Honorable Earl Rudder               Opinion W-348
Commissioner, General Land Office
Austin, Texas                       Rez Under Article 54211,
                                        V.C.S., have the
                                        primary terms of two
                 I                      leases been suspended
                                        In view of the fact
                                        that Humble 011 & Re-
                                        fining Company had a
                                        lease not only from
                                        the State but also
                                        from the City of Tyler
                                        and Smith County? And
Dear Commissioner Rudder:               related questions.
            In your recent opinion request of this office
you state the following facts:
            "On October 10, 1951, the Commissioner
       executed an oil and gas lease to Humble 011
       & Refining Company covering Tract 3, Tyler
       State Park, Smith County, and on April 1, 1952,
       the Commissioner executed an oil and gas lease
       to Humble covering Tract 1 of the park. Roth
       of these leases were issued under the pro-
       visions of Article 5382d, V.C.S., and were
       for a primary term of five years. All rentals
       due under the leases have been paid.
            "On April 12, 1955, during the primary
       term of these leases the City of Tyler and
       Smith County filed a suit against the State
       of Texas, HumbleiOll& Refining Company, and
       other parties In which they sought to recover
       title to and poseesslon of the land described
Honorable Earl Rudder, Page 2 (~~-348)

       In the above   leases, as well aa other lands.
       This suit Is   styled The Citg of Tyler, Texas,
       et al v. The   State omexas,   x al, No.-!&A,
       mh-&dlcm       mix      i%iii%ofsiiirthCounty,
       and la still   pending. Your department has a-
       file on this   suit.
            "On June 22, 1956, Humble Oil & Refining
       Company secured an oil, gas,and mineral lease
       from the City of Tyler, and on June 25, 1956,
       Humble secured an oil, gas, and mineral lease
       from Smith County, both of these leases covering
       the land here involved. Each lease was for a
       primary term of one year and both have terml-
       nated. During the primary terms of all of the
       leases; i.e., from the State, County, and City
       Humble drilled a well which was completed as
       a dry hole and abandoned on September 11, 1956.”
            You then ask If the primary terms of the two
leases In question have been suspended by virtue of Article
54211, V.C.S., in view of the fact that the lessee had leases
not only from the State but also subsequently acquired leases
from the City of Tyler and Smith County.
            Article 54211 reads as follows~
            "Art. 54211. Suspension of running of pri-
       mary term of 011 and gas lease pending litigation.
            "The running of the primary term of any
       oil, gas, or mineral lease heretofore or hereafter
       iesued by the Commfssioner of the General Land
       Office, which lease haa been, is, or which may
       hereafter become Involved in litigation relating
       to the validity of such lease or to the authority
       of the Commissioner of the General Land Office
       to lease the land aovered thereby, shall be sus-
       pended, and all obligations imposed by such
       leases shall be set at rest during the period
       of such lltigatlon. After the rendftion of final
       Judgment in any such litigation, the running of
       the primary term of such leases shall commence
       again and continue for the remainder of the
       period specified in suoh leases, and all obllga-
       tions and duties Imposed thereby shall again be
       operative provided such litigation has been in-
       stituted at least six (6) months prior to the
       expiration of the primary term of any such leases.
Honorable Earl Rudder, Page 3 (W-348)

      Provided, further, that the lesrreeshall pay
      all annual delay rentals and any royalties
      which accrue during the period of litigation
      the same as during any other period of the
      extended primary term. Such rentals paid
      during the litigation period shall be held
      In suspense and returned to the lessee in the
      event the State is unsuccessful In any such
      litigation. As amended Acts 1951, 52nd Leg.,
      p* 750, ch. 406, See, 1." (Emphasis added.)
            The provisions of th9B statute are for the bene-
fit of the State's lessee and such provisions are as much a
part of'any lease authorized by Article 9382d, V.C.S., as
though embodied in the lease form itself. The statute clearly
and unequivocally provides that "the running of the primary
term of any oil, gas, or mineral lease heretofore or here-
after issued by the Commissioner of the General Land Office
      which may hereafter become involved in litigation re-
la&g   to the validity of such lease Q e   shall be suspended
and all obligations imposed by such leases shall be set at
rest during the period of such litlgatfon".
            The leases in question were issued by the Com-
missioner of the General Land Office. The valfdftv of such
leases were put In question by the suit styled The City of
Tyler, et al v, The State of Texas, et al, No. 22599-A, 7th
Judicial District Court, Smith County. Under such circumstances
the statute unequivocally provides for the suspension of the
running of the primary term of such lease.
            However, your oplnlon request inferentially
raises the question of whether Humble's t king a protection
lease from the Cfty of Tyler and Smith County and its drilling
a dry hole amounted to a waiver of the rights conferred by
Article 542lf.
            We do not believe the two protection leases
taken by Humble from the City of Tyler and Smith County oon-
stitute a waiver by Humble of the rights conferred to Humble
under Articles 5382d and 54211. This aotfon by Humble fs
not inconsfstent with Article 54211. In fact Humble has con-
tinued to pay delay rentals up to the present time fndicating
an intent to accept the provfsfons of A~tfcle 54211, not an
intent to waPve the rights conferred by said article,
            Humble's drilling of a well is not inconsistent
with Article 54211. This article provides that royalties
shall be paid during the period of the extended primary term
Honorable Earl Rudder, Page 4 (WW-348)

of such a lease, thus aontemplating development on the part
of the leeeee during the primary term or extended primary
term of a state lease. We do not believe Humble’s taking
of the two protection leasea and attempted development of
the area evldenaes an Intent to waive the rights oonferred
by Article 54211.

            Therefore we inform gottthat the primary terms
of the two leaeea in question have been and are suapended
by the provisiona of Article 54211, V.C.S., pending liti-
gation in the City of Tyler case.

                          SUMUARY
       The primary term8 of the oil and gas lease
       executed by the Commissioner of the General
       Land Office on October 10, 1951, In favor
       of Humble Oil & Refining Company, covering
       Trrrct3, Tyler State Park, Smith County, and
       the lease executed by the Commissioner of the
       Ueneral Land Office on April 1, 1952, in favor
       of Humble Oil & Refining Company, covering
       Tract 1 of the Tyler State Park, Smith County,
       are suspended during the period of litigation
       of the suit styled The City of Tyler, et al
       v. The State   ol Texas, et al, Cause No. 22!Z@+A,
       ‘7th J tfi i 1 Di t   tc       t of Smith County,
       by v&u:     Ef Ar~l%~   5’rzr,   V.C.S.
                                Very truly yours,
                                WILL WILSON
                                Attorney aeneral of Texas

                                BY
                                      Mllton Richardson
                                          Assistant

APPROVRD8
OPINION COMMITTBEr            REVIEWED FOR THE ATTORNEY
(3eo.P. Blackburn, Chairman   CIENERALBY8
Wayland River8                       W .V. Oeppert
Morgan Nesbitt
Nary K. Wall