Court Opinion

ID: 3918126
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:45:37.294908+00
Date Added: 2024-06-11T07:42:49.057303
License: Public Domain

On Petition for Rehearing.
Rehearing denied.
I desire on the motion for a rehearing to take advantage of my opportunity to give expression to my views of this case and to fully concur in the decision of the one simple issue presented in the case, on the record made. The taxing authorities erroneously, under the provisions of art. 7173, sought to impose a tax on a leasehold. Notwithstanding the fact these instruments are generally referred to and described as leases everywhere, they are not. As is noted in the original opinion, it is firmly established by the decisions of the Supreme Court, as it had to be, that these so-called leases are conveyances and vest the title in the grantees as to the whole of the oil and gas and not merely to the seven-eighths thereof as is usual in oil and gas leases made by private individuals. The authorities are cited. The relationship is that of grantor and grantee and not lessor and lessee, and art. 7173 can have no application, and the levy and collection sought to be made should have been enjoined. The whole of the oil and gas is sold for a determinable consideration. As is further noted, the payments made to the State, or University, is purchase money and not royalty payments.
In ordinary oil and gas leases the lessees get what is described as a working interest, usually a seven-eighths. The land owner, the lessor, retains an interest, usually a one-eighth described as a royalty. He can split that interest up and sell to others as he sees fit. In these conveyances the State retains no interest; it has no interest left in the oil and gas to sell to another. The grantees get it all and may produce it and store it or use it themselves as they see fit. It is thought there is no such thing as a royalty interest in the State. To say under these conveyances only seven-eighths of the oil and gas is subject to taxation is but to say one may own something in toto but is only liable for taxes on a part thereof because he paid too much for it or for some cause. It is perfectly clear to me the whole eight-eighths of this mineral interest is subject to taxation, because the taxes must follow the ownership, so long as the equal and uniform provisions of the law are not violated.
Insofar as what may be construed in the opinion and the judgment to be contrary to these views briefly stated, then to that extent I disagree. *Page 176