Court Opinion

ID: 4138297
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:34:47.043311+00
Date Added: 2024-06-11T14:36:35.253636
License: Public Domain

Jnnuary 13, 1948

Hon. BamOIn OIL38 .~       Oplnlon no. v-475
Co,&mnlsaloner
             OS the.       .~ -
General Land Offlae.                        lea80 with
Austin, Texas                  a reseryar;lonof '7/48th
                               of the gross pmdrurtlon
                               of gas, or the valu@ of
                               same" reserve royalty ::'
                               from the gross prodlmtlon
                               of gas or royalty only,~
                               from that portion of the
                               gas prodmed and sold off
                               the lease? And a mlatdd
                               que+loa.
Dear Sir: .:
        '.Yo@reoent lette$ kquest$ng the oplaloa of.'
ttlisdepartma+ reads as foll6ws:~ i..
          *Phere Is attaohed hereto a photo-

    oated la Chambers and Oslveaton Cot&ion.
         ..~
                   loo. 3 of said lease reads
         ,?Prdvl8~~~a
    ss follovrr.
         “3. When prodmtlon of 011, gas br
    other mlnerala owered by thla lease Ia ee-
    cured the owner ~shallpar to the Coml8sloQ-
    er.of the Gener@ Land Offloe, at Awstla,.,;
    Texas,,for the use and benefit of the.State
    of Texas,m7/48the.of the.'gWs produotlon
    of.011, .orth6 value of mame;'~bs~ ~gf,be'
    produoed and #Wed, and 7/48ths..of the
                                the'Palu8 c$'
                       the gross productioa,of
                         of aanm, ,tbatBlay'be
                          the'area;:and 0ae.v~
                           of sll other lain-
    erals,'th&tmay bd’ rglwed.and~aa ad&i- *
    tlonal mymeat .ofs$$iOO.OO~ out of the
     /Yth, of 41148th a    the ccroas011 ore-
    &xed,and aimed from said traat.
                                                                             ._
    b
    .$   \J,
. . .

               Hon. Bascom Glles   - ',
                                      Page 2                  v-475

                         "Y&r .offlcla$&nlon   28 respeotfully
                   'requestedas to:
                        "1. Do thd ~irloas~ckllned above
                       entitle ttiaii tat, t$reoelve~royalty
                       from the gross ~prod&tion of gas, or
                       Is the State's royal3y dueto be oal-
                      .aulatedon that portion of the,gas pro-
                       'duaed,andsold ofFthe lease?,
                                          L&y
                        “2. 'Isthb ~operatiiIndebted to 'the
                       State'of Texas for royalty on,gas used
                       on the,premises,or In the development
                       of ttvslease?"
                         /
                           The mlderai lease referred to "w#~duly a&r-
               tlsed under pro~lsloti of Chapter -1, Aot apprwed May
               29, 1931." Thls.~Aatl:s'fI.
               lulature;Regular Sss8loa, p.
                                            ztg,g~;;3tl;~~=~uf;
                                            3.
               V.C;S.) and provides In Section 16'thkeof that;
                                                     .~
                           '"Sec.~
                                 10. Teinr of Leasa.--The ireas
                    Included hereln.shallbe leased ior a coasld-
                    eratfon~;$n addition to tiheease amount:bld
                    therefo%, bf not less.than on&-eighth (l/8) of
                    the gross prodw*io.a of oil,,oti.thevalus of
                    SW, that spay,   be   odwed and saved, and not
                    less than,oti-e$ghrW(l/e),of the gross p&v-
                    duotlon of pa, or the value of same, and not
                    less thdn 'one-elghth'(1/8), of the gross produs-
                    tlon of sulphur :or the value of sams that may
                    be prodwed and sold off the area, and aot less ,-
                    than one-slxte6nth (l/X6) of the value of.all
                    other~mlner@Xsthat rpy be produoed,.andan ad-.
                    dltlonal sumo$ ~ttienty-five  oents aa aare per
                    year for each year thereafter'UN1 production
                    Is scoured. o e..".
                          The mineral lease..yousubmit ,&bodles mineral
               reservationsldentloal in terms (eroept for,the amount)
               to those miaimrrmmlr?sralreservatioaskequlred by the
               Statute, sup-, We Shall eonstrue the mineral reserva-,
               tlons of this lease.,thereforei~bycoastruing those mia-
               fmuiPmineral reservatloas la the Statute. For 10 this
               ease ttm provisions of tb.lease.,. parallellng~thosemla- '.
               lmum mineral reservations,of~$heStatute, 8hould be gov-
               erned ,by the Statute,
                        Seotlon 10, suprF,,provldesdlstlnat and lnde-
               pendaat~mln&m~ royalty WsemFtions, for each type of
  .-,.           -
       -’   Y.
.,.I
                             .
                         .

                                 1.

                                      Hon. Bascom Olle,s -       Page 3                 v-475

                                      mineral reserved. These mialmum mlae*l reserYatloas
                                      are 6s rollowsI'
                                                ,l. -"Oae-elghth(l/8) of the gross pro-
                                           duatloa of dll, or the value of SW, that
                                           may be ~proqmed aad saved, aad not less thsn              .:.

                                                    "Oti-elghth'(1/8)of t-@igross pro-
                                           duotlk of sulphur,-or the valu&of 88me thsit         ~_
                                           m8y bq predw6d: and sold -offthe area,.:and
                                           aot less.~th8n~
                                                4k ~"Oae~slxteeath'
                                                                  (l/16) of the value
                     .                     of al+ otbsF4Maerals thst ms$~be produced
                                           .   .   l   o m++*   -ea        ‘..

                                                The pi?tiouiai pts&u8tlo~.aad wordlag of this
                                      provlslon of t&s St;stgte0,learlyiudloates tbst the ooa-.
                                      dltloa "aad sold eH.the area” embOdIed la the royalty
                                      re8sr4atloa of "nulphur" is not lntdaded,~aSa like qoa-
                                      dltloa oa t,heroyalty rese~atlon~of "gas." Thp royalty
                                      reservatloa8:arelad@eadeat aad dlstlaat. This oon-
                                      stru&+oa 18 empb8818ed bp the dlffereatlatlngcoadl-
                                      tloas proHde& ia each miners1 rbse,rvatlon.
                                                 8% $Bb pEovl8loa of the express ooadltloctla
                                       the reservatioa of "oil," that It ls'to be a royslty w-
                                       servatloa of "oll"'prodr~~edsad "savedd";Sad similarly
                                      by the provisloa of the express~oopditloainthe reser-
                                      vation of '8tiphur~"thpt it Is to be-a realty rese;-
                                      vatloa of "8ulphur produced "and sold off the area, we
                                      m&y Infer that it was the la$eatloa of th8 LeglSlature
                                      to reserve tomthe State:ia ths oa8e of "pa" a mlnlmua A.
                                      'of "(l/8) of the gros8',productloaof gas without coa-
                                      dltlon that it be of'th8t gas "sold d f the area or of
                                       that gas 'kved. " The expn,s8ed:ooaditloala the "sul-
                                       phur" sad !oii" re8ervatlonspreolrds'thelmplioatloa OS
                                       like ooadltioa8 .lnthe ."gas"i98WY@tioa. See City of.
                                       co us airlstl Y. MoMurrey.'(clY.,npp. .X936),go s. If.
                                      (2&68,.870.,,                   .,

                                                Furthqmoro; worbs used Id a'dtatutory &mot-
                                      meat should be given their ordinary meaalag, as the Leg-
                                      islature must’be presumed to have used them In thnt sense
                                      la whloh-thby are ordln8rlly,uad~rstood.Turner v. Cross
Eon; Bascom Olles       - Page 4.          .~        v-475

                                                ‘.
 (Sup. Cf. 18$?), 18 S. W.          579; Oreenwqod Y. city
.of El Paso'(Civ,App.                S. W. (26)~1015, 1017.
          Debate as.to,the intentlon.~oithe Leglslatur&
Is concluded by the @e.and meaning of the word ~gross."
In t@ royalty reservationof ngas." Uebs.$erlsHew-In-
ternationalDi+$onaq;.Second BdltlOn, Unabridged
(19~8)'deflnqk. "grq88..a8the:"whole; entire; total
    . opposed ko nb$i,'~
                       The.grorjsearnings. ~cklpt.8 or
the like . e .o'withoutany~deductlons." Thbre oan be
no amblgult7 thqtiefoewith respect to the meaning of
the phrase ‘gross prodtitlon." The State I? to re-
ceive "7/48$hs"of the,-"entire!'production of gas, '?e:
gardless of'what.$b aold !'Offthe,.are.a,";+nd
                                             "wlthou$
any deductions",forgs$ v6d'oaonthoptinlses.or la the '
development.ofthe,-le+se.~:: :~    .~     .~       .'
                        -mJMMARY
                               .
          Where 'aStat'elease reberves '7/48thsof
     the (gross~~odu+lon of gas, or the value of             :.
     same as roy+lty,~the State 18 to receive
     "7/48thsn.,ofth6 entire pro.du+lon of.gas,
     regardless of Lha~.ls s,oldoSf the area, and            .
     wlthout.any deductlons~.
                            toti,gasved~~on the
     .premlsesor In the.developmeatoi~the leasei
                       .,     YOUr;q.ve~~trhly
                             i&ORREY. GHRHRAL OF.TEXAS..

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