Case Information
*1 -- OFFICE OF THE ArrORNLEy BRNSRIL OF v AUSTIN
Konoeable A. IL Sqtton
county Awlitor
-roll Qounty
PaleitlIlb, Texan ~0. o-3938
opinion
Dear 'BiFt Raa Tanbillty of 011 andgae leaeo, leeeeo having execut- ed gae pizrahaee oontraot. This uill aaknovledge your letter of August 29, 1941, &al~eing the opinion oopy of gas pumhaee oontraot) pquerting of thie dagwtiaant a8 follovet
"Attached hereto ie a gae purohare oontraot . weouted br lh#k.Ul Oil COrpOPatlOn, Anao Oas Cor-
poration and l?. v. lseeling, et ux. You pill note from the oontente of thie aontrrcrt that Am0 @a8 Wrporation agree8 to purohaee a aertaln amount OS gre.froa Oarkill Oil Corporation and pay Oeakill Of1 Corporation 50 per sent ot the groee prooeeds derived from the eale oondensate 01r the pro- dust made by t@ prooeeeiag Oi. the gae. In eup- Wtveen Qagk%ll Oil corpora- plemntU agrweent tion and W. V. Keeling, et ox., H. 8. Keeling et ee to aeoept one-efghth or the net prooeeds Er eklll Oil Corporation receive6 from the leaee .
"ho0 C&s Corporation aontende that they own no mlnerale in plaoe under the lease and can be tax- ed only ior the reeyu1in.g plant. Oaekill Oil Cor- poration oontende that they own only l/2 of the eeven-e&bthe oontraoted for the terms of the lease withU.V. Keeling etux. and that Anco C&e Corporation owns the mother l//a OS the eeven- e%ghthe .OP eeven-sixteenthe. The Coem.le8ionere1 court deeice to knov to whoa the l/2 of the value of tihir, leeee should be charged, elnee no one ad- tit.8 Uabilitp for the l/2 that it i8 costing to
3r- -.
Eonorable A, .E. Sutton, page. 2
get the gae procreased, and no doubt under the term cl of Um l ttaahed oontraot the Auoo Oar Corporation attempted to drav it in eu$a a manner that it vould not be ohargeable to them.
Ue underetand that the faote are eubetantially an iol- lovet ‘ihe Oeekili Oil Corporation, an leaeee, hae a valid an4 ubeietiug oil a.gae leaee to traot oi lend in Andereon Cqunty,
elope, Y. V. Keeling and Vito, ban retained #A@ mineral intereat end leeeee haa a ?/8the intereat. 11 Oil Cobporatlon, ha8 v vell on the land vhioh produaee gae-dibtillete. This leeeee hae ente?ed into a oontraot vith a ~~yoling plant, &a0 Oar Corporation,. to sell to the lent
i gae prodwed, @ayment to be made from 9 a OS derived from eale by the plqt ,oS the oonden- c produ6te~of the gee. .The eeller-leasee ban reeerv- to be paid in kind..
> Uhile you do not no etate,~ ve preeuw eat you deeire to knov~~vhether or not intereate in realty haves been created by this
oontraat upon vhioh ad valorem taxea my be qolleot- of the gae, the Am0 Ctae Corporation. of the Revieed Oiril~gtatutea of 1925, pro-
’ Veal property for the purpoee of taxation, eh6ll be oonetpued to include the land itrelf, vheth- em laid out iu tovn lota or othervine, aud all build- iugr; truoturee ‘and lmprovemente, qr other fixtures ‘.’ vhateoever kind .thereon, +nd all the right8 and privilegie belonging or ip any vine appertaining themeto, and a mlnee, mineral*, quarries and foa- vile in and the mme.”
e nov firmly settled in Texan that either the n of vhat 18 coauwnly referr.ed an “oil erect in realty eubjeot to ad valorem taxation. l24,Tex. 290, 77 8. U. (ad) 1021, 80 S.W. (2d)
uuant v. Duuu, 130 Tex. 110 9. Y. (26) 53; State v.
Petroleum Co., (Sup. Ct. 133 S.W. (26) 112.
We have been able to find no aasee paeaing upon the pm- 8 oi gae-diet&llate. 18 suah rale similar to a re- Servation aeeigonmnt of au “oil payment”?
.
Ewarable &. E. Sutton, page 3
The proper 0oantNbtioa of mineral lnrtruwntr ati with any other oqntraot OP deed 4epende upon the intent of the putiee to be gathered by lookiq at the inmtruwnt fmm it8 four oornwe. Thuee, Texan Iav of Oil aa&Oaa (2nd Ed.), page 9. ‘The ln~Wr in all eaeee in, 18 there a grant reeervation of .the adnerale in queetion ve do mt believe in planet Leokin at the lnrtmetent it to be the intent of the Oaekill Oil Ooqmation convey any intmet’ln the gae la plaae under thm leue. Title ,to the gae doe8 not pee until reaelved by the buyer at the d#liveFy plme. goMtere in the oontpmt aan ve dieaover an intent to oomrey ga8 or Indeed, if now 8uoh intent oould be dieoovw- mineral8 in p&we. in+&uipy vould be, how muoh? fop oontwot ed the moat pertinent oxpreeely mada ubjeat to a pries gu purahaee oontmwt * and betvean the.~Oeeklll ml Oovporatiau and the Iat* Star Oar Oompany.’
lt 18 therefore our opinion and you are ad~leed that thi .-a purahaee oontr88t JOU have ubmitted areatee no ceti p.vopePty intePeete, and inrorar malt ad valoreei taxation 18 eowerned, rho UI d be determlned &nd tree the value of the leiabtild levied Just an before the inatruwnt was exeauted - the Qaekill Oil COP- poration owning ?/&he intemet and the leeeoM. l/&h int?reet. We do not i;mderitand y&a inquiry to relate .to ph8ona.l ppopmty taxation ahd expwee no oplnlon thereon.
Your8 very truly