Court Opinion

ID: 9664456
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:19:18.920424+00
Date Added: 2024-06-11T18:15:06.463485
License: Public Domain

Mr. Justice Garwood
delivered the opinion of the Court.
Relator, Shell Oil Company, brings this original mandamus proceeding to require the respondent, J. Earl Rudder, Commissioner of the General Land Office, to file for record in his office certain oil and gas leases running to relator as lessee on lands in Hartley County, Texas, being part of the lands recovered in 1923 by the State from private parties in the “Capitol Syndicate Land Suit” (Findlay v. State, 113 Texas 30, 250 S.W. 651) and appropriated to the public school fund by Acts 1923, Ch. 106, p. 222, the leased premises having been thereafter sold in 1924, by authority of the mentioned Act, to the instant lessors or their predecessors in title. We conclude that the writ should issue.
The tendered leases stipulate a royalty to the State of 1/16, and the sole proposition underlying the refusal of the respondent Commissioner to file them, and presenting the essential question for our decision, is, in brief, that the 1923 Act operates to reserve a royalty of 1/8, or double the tendered figure. The relator, for its part, contends that the leases, including the 1/16 state royalty provisions, are — as the respondent, in fact, admits — in proper terms for leases made under the Relinquishment Acts ,Acts 1919, 2nd C.S., Ch. 81, p. 249; Arts. 5367-5382, Vernon’s Texas Civ. Stats.) and that the Relinquishment Act controls the leases, notwithstanding the sales of the lands were made under authority of the 1923 Act.
Stated in a different way, the opposing contentions are (a) for the respondent Commissioner, that by virtue of Sec. 3 of the 1923 Act, which is quoted in the footnote,1 the sale of the lands operated to dispose of the oil and gas to substantially the same effect as if a private owner of ordinary land had executed a deed thereof reserving a perpetual 1/8 royalty interest (although the word “royalty” does not occur in Sec. 3) in the oil and gas, and stipulating the leasing rights of said minerals to *620be in the grantee; and (b) for the relator, that, notwithstanding the sales were made under the 1923 Act, and notwithstanding the provision in Sec. 3 for a reservation of “one-eighth of all the oil and gas * * * and the value of same,” the sales were necessarily with full reservation of all minerals, and that accordingly the appropriate legal machinery for their leasing and development was and is that of the Relinquishment Act, which admittedly would apply if the full mineral interest were so reserved, and would give the purchaser the right to lease the latter as agent for the State, reserving for the State a royalty of as little as 1/16. Greene v. Robison, 117 Texas 516, 8 S.W, 2d 655.
At first blush, it does appear extreme to hold, as we do in effect, that the words “one-eighth of” in Sec. 3, supra, mean nothing, even though their ordinary significance would conduce to recognizing in the State only a 1/8 mineral ownership, as distinguished from a royalty, which ownership in turn would ordinarily correspond to a royalty of only 1/64, or 1/8 of the 1/8 owned. However, the State itself necessarily admits considerable peculiarity in the language as written, when it so contends for a royalty, despite the complete absence of that highly important and most familiar word or its equivalent. Moreover, in the controversy over Sec. 3 decided in Stallcup v. Robison, 1927, 117 Texas 189, 300 S.W. 24 the State apparently took the position that a mere 1/8 mineral interest, rather than a 1/8 royalty, was reserved. At that time conceivably the distinction between royalty and mineral interest was not as familiar as it is now,' and, indeed, was not directly in issue in the case; but, certainly, if the then attorney general regarded the purportedly reserved 1/8 interest as a royalty interest, much of what the court said against the State’s position and with regard to the absence of provision for the development of the reserved mineral interest would have been misleading or beside the point, as hereinafter explained.
The Stallcup case involved the question of whether Sec. 3, supra, applied to certain of the recovered Capitol Syndicate lands, which had not then been sold but were sought to be made the subject of an oil and gas exploration permit to Stallcup from the Land Office, the position of the attorney general being that disposition of the oil and gas could only be made by sale of the land, including 7/8 of the minerals according to Sec. 3. The court actually held that Sec. 3 had been superseded as to the particular land by a 1925 Act (39th Leg., Ch. 130, p. 332) but, at the same time, stated by way of rather elaborate dictum *621that sales made under the 1923 Act (apart from the 1925 Act) operated to reserve all of the minerals to the State, and did not transfer 7/8 of the oil and gas to the purchaser as the attorney general contended that they did.
The later decision in Magnolia Petroleum Co. v. Walker, 1935, 125 Texas 430, 83 S.W. 2d 929, involved the effect, as to oil and gas reservations, of a resale of school lands under the so-called Relief Act of 1925, to wit, Art. 5326a, R.S. 1925, the pertinent provision of which2 was quite similar to that of the 1923 Act, except that the purportedly reserved fraction was only 1/16. The issue was whether Magnolia as lessee under the land repurchaser had to pay the State one-half of the lease bonus and delay rentals (as required in the Relinquishment Act) or might preserve the leases without so doing, Magnolia’s theory being that the land sale vested a 15/16 mineral estate in the repurchaser, who might lease it without regard to the requirements of the Relinquishment Act. The State took a contrary position concerning the quoted section of the 1925 Act to what it took in the Stalleup case and to what it now takes regarding the similar section of the 1923 Act, contending that the language was ineffective, that the effect of the land resale was actually to reserve all the minerals to the State, and that accordingly the matter of leases was governed by the Relinquishment Act. It relied heavily and at length on the dictum in the Stalleup case. The court held with the State. The emphasis on the lack of any provision in the 1925 Act concerning development of the purportedly reserved 1/16 interest of the State indicates that this interest was not regarded by the court as a purported royalty interest, althoug it appears from the briefs in the case that the alternative of so construing the purported reservation was before the court, Magnolia actually suggesting that such a construction would not be unreasonable.
The Magnolia decision is thus: (a) a holding that, notwithstanding language quite similar to that involved in the instant case, there was a full reservation of the minerals, with consequent applicability of the Relinquishment Act to leases executed by the land purchaser (repurchaser) ; (b) a fairly clearly implied rejection of what is now the State’s view — that language such as that of the 1923 and 1925 Acts contemplates a royalty; and (c) an illustration of the State having taken a somewhat *622contrary position to what it took earlier and what it now takes as to applicability of the Relinquishment Act.
A still later decision — and one which the State regards as favorable to its present view — is Wintermann v. McDonald, 1937, 129 Texas 275, 102 S.W. 2d 167, 104 S.W. 2d 4, involving an application by Wintermann to purchase a small tract of unsurveyed school land under Acts 1931, 42nd Leg., Ch. 271, also known as H. B. 358, [Article 5421c, Vernon’s Texas Civ. Stat.] a rather general public land sales enactment, including the provision that “All land shall be sold---with a reservation of one-sixteenth (1/16) of all minerals as a free royalty to the State---. Provided, that one-eighth (1/8) of all sulphur---shall be reserved as a free royalty to the State.” (Emphasis supplied.) In that instance, the State took a position similar to what it took in the Magnolia case, to wit, that notwithstanding the above-quoted provisions in the land sale statute, the sale could be made only with full reservation of all minerals. The court, however, rejected the contention and held Wintermann entitled to the surface and all the minerals subject to the royalties provided in the Act. The result was thus contrary, in a general sense, to that reached in the Stallcup and Magnolia cases, in both of which all of the minerals were held to be reserved in the sale.
Neither the Stallcup dictum nor the Magnolia decision was criticized in the Wintermann case; and, indeed, the statutory situation in the latter was quite different from that in the others. For one" thing, the 1931 Act expressly provided for royalties, and apparently the only reason advanced against the effectiveness of that provision was the absence of an express authorization for the land purchaser to make leases — a factor prominently mentioned in the Stallcup case in connection with the statute now before us and in the Magnolia case in connection with the 1925 Relief Act there involved. Now, the court did not expressly attach importance to the presence of the word “royalty,” and it did hold that the Relinquishment Act was not the governing statute for leases to be made by the purchaser. It stressed the point that, since the Relinquishment Act authorized leases by the purchaser as to oil and gas only, the purchaser under the 1931 Act before the court would get no interest in minerals other than oil and gas, if the 1931 Act should be held to reserve all minerals and the Relinquishment Act held to govern the leasing rights of the purchaser. However, it is difficult to escape the thought that the court had very much in mind the fact that this time it was dealing with *623a statute containing a clear-cut royalty reservation, which, of course, is vastly different in its benefits to the State from a mere mineral interest of the same fraction, which the earlier statutes in question seemed to reserve in the oil and gas. Ordinarily, where any grantor clearly reserves a royalty (and only that) the necessary implication would seem to be that, except to the extent of the royalty interest, the grantee gets all the minerals and has the right to make leases for their development. The further implication is that the grantor need do no developing of his or its reserved interest, since the reservation being a royalty, it contemplates that someone other than the grantor will provide the development. Thus, where the law clearly provides for a sale of State land with reservation of a mineral royalty, there is no need for any express provision of a mineral royalty, there is no need for any express provision authorizing the purchaser to lease or develop the minerals, nor any need for provision as to what the State shall do about developing its reserved interest. This is no doubt the real explanation of the Wintermann case, and the omission of the word “royalty” in the instant statute is thus a significant distinction between the Wintermann and instant cases.
Even discounting the pertinent language of the Stallcup case as dictum (although the State itself has not always so discounted it), we feel that it and the Magnolia case require us to hold as we do. If it be true, as the State contends, that the latter case was rightly decided, but upon wrong grounds, those “wrong” grounds were yet the very ones the State then advanced, to wit, that despite the language of the 1925 Relief Act under which the sale was made and which is almost identical with that now in question, the sale reserved all the minerals, the latter to be developed by the purchaser leasing, under the Relinquishment Act, as agent for the State and under the other terms specified in the latter Act. It may well be that if the statute now in question and the 1925 Relief Act had contained language like that of the 1931 Act dealt with in Wintermann v. McDonald, the Magnolia case would have been differently decided, and the dictum of the Stallcup case would never have been written; but that does not authorize us now to rewrite the statutory language, however “free” may have been some of our past statutory interpretations in the often confusing domain of the Texas public land laws.
Actually the most positive argument of the State seems to be, not that the Wintermann casé controls, but simply that the construction for which the State now contends is an established *624departmental construction. The length and breadth of this departmental construction are not altogether clear. As above indicated, the State, as late as the Wintermann case (1937), contended that even sales under the 1931 Act, which clearly stipulated a substantial state royalty, were yet with reservation of all the minerals and, prior to that time, had apparently never taken the position that Sec. 3 of the 1923 Act, here involved, established a royalty. Nor do we have a clear idea of when, how often or how publicly the present construction has been asserted, aside from the hereinafter mentioned Opinion No. 0-3675 of the Attorney General, evidently written about the middle of 1941. We do not know, for example, what was stated in the patents consequent upon the sales, although no doubt a large number of sales were converted into repurchases under the 1925 and subsequent relief acts, and the corresponding patents issued without incorporating purported royalty reservations such as now contended for.
Opinion No. 0-3675, supra, written some 18 years after passage of the 1923 Act, does, indeed, assert the construction now contended for. It also discloses that the present construction was adopted in the face of the construction made in the once state approved dictum in the 1927 Stallcup case, supra. Incidentally, Opinion No. 0-3675 agrees with our own above comment on the 1937 Wintermann case, to the effect that the express reservation of a royalty, as made in the 1931 Act, implies a transfer to the grantee of the minerals from which the royalty arises, with the right of the grantee to make mineral leases accordingly.
If it be true, as the Attorney General suggests, that many people have acted on the strength of the departmental construction state, this would, so far as we can tell, be true largely in the sense that they may have relied on Opinion No. 0-3675. As to that possibility, we believe that the opinion itself discloses enough doubt on the subject to put the reader on notice that the Relinquishment Act rather than Sec. 3, supra, might be held to govern, as we hold it does.
Under the circumstances, we think our own decision in the Magnolia case, plus our statement obiter in the Stallcup case, outweighs the departmental construction.
The relator corporation is entitled to the writ of mandamus as prayed for, but, in accordance with our practice in such cases, actual issuance of the writ will be withheld pending vol*625untary compliance of the respondent Commissioner of the General Land Office with the law as hereinabove declared.
Opinion delivered March 6, 1957.

“Sec. 3. The sale of said land shall be upon the express condition that one-eighth of all the oil and gas, whether known or unknown, and the value of same and of all other minerals of whatsoever kind, whether known or unknown, that may hereafter be found on or under said land and the value of same, shall be reserved to the State and said portion of oil and gas and the value of same, together with all other minerals, and the value of same, are hereby donated to the said School Fund. Said oil and gas and other minerals shall be subject to be developed in the manner that is now, or that may be hereafter, provided by law.”

“Sec. 3.---One-sixteenth of the oil and gas, and all other minerals, in the land included herein, whether known or unknown, are expressly reserved to the public free school fund, in the event the former sale was with mineral reservation.”