71 S.W.2d 365 | Tex. App. | 1934
A. S. Victory and others brought this suit against the county judge and county commissioners of Upshur county and others to restrain the collection of certain county and state taxes theretofore assessed against the royalty interest owned by the plaintiffs in certain land in said county. From the allegations contained in plaintiffs' petition and the exhibits attached thereto, it appears that *366
on January 1, 1932, the plaintiffs owned certain land in Upshur county, which land had theretofore been leased by them to third parties for oil and gas mining purposes. The plaintiffs rendered said land for taxes to the county tax assessor, but indorsed on said rendition the following notation: "This does not include the 1/8 royalty under oil lease. The royalty is not subject to taxation against these lessors, see: Ehlinger v. Clark,
Prior to January 1, 1932, the plaintiffs, as the owners in fee of the land in question, executed an oil and gas mining lease on a part of said land to Ralph A. Johnson, which lease provided, in part, as follows:
"Lessor in consideration of twenty two hundred and no/100 ($2200.00) in hand paid, of the royalties herein provided and of the agreement of lessee herein contained, hereby grants, leases and lets exclusively unto lessee for the purpose of investigating, exploring, prospecting, drilling and mining for and producing oil, gas, laying pipe lines, building tanks, power stations, telephone lines and other structures thereon to produce, save, take care of, treat, transport and own said products, and housing its employees, the following described land in Upshur County, Texas" (Here follows description of the land).
"Subject to the other provisions herein contained, this lease shall be for a term of ten years from this date (called `primary term') and as long thereafter as oil, gas is produced from said land hereunder."
"The royalty to be paid by lessee are: (a) on oil one-eighth of that produced and saved from said land, the same to be delivered at the wells or to the credit of lessor into the pipe line to which the wells may be connected; lessee may from time to time purchase any royalty oil in its possession paying the market price therefor prevailing for the field where produced on the date of purchase;" (the contract contains further provisions with reference to royalty to be paid on gas on other minerals).
About the same time said plaintiffs leased the remainder of said land to Oscar Kochtitzky and others under a lease contract which provided, in part, as follows:
"Witnesseth: That the said lessor, for and in consideration of ten and no/100 ($10.00) Dollars, cash in hand paid, receipt of which is hereby acknowledged; and of the covenants and agreements hereinafter contained on the part of lessee to be paid, kept and performed, has granted, demised, leased and let and by these presents does grant, demise, lease and let unto the said lessee, for the sole and only purpose of mining and operating for oil and gas, and laying pipe lines, and building tanks, power stations and structures, thereon to produce, save and take care of said products, all that certain tract of land situated in the county of Upshur, State of Texas, described as follows, to-wit: (Here follows description of the land.)
"In consideration of the premises the said lessee covenants and agrees:
"1st. To deliver to the credit of lessor, free of cost, in the pipe line to which lessee may connect his wells, the equal one-eighth part of all oil produced and saved from the leased premises.
"2nd. To pay to lessor, as royalty for gas from each well where gas only is found, while the same is being sold or used, off of the premises, one-eighth of the market price at the wells of the amount so sold or used, the lessor to have gas free of charge from any gas well on the leased premises for all stoves and inside lights in the principal dwelling *367 house on said land by making lessor's own connections with the well at lessor's own risk and expense."
"* * * Title to the mineral vested in grantee under this lease shall not end or revert to grantor until there is a complete, absolute abandonment by grantee of each and all of the purposes, expressed or implied, of this grant and every part and parcel of the premises described in this grant."
The material question to be determined is whether or not the plaintiffs, after the execution and delivery of the oil and gas mining leases in question, still owned such interest in the minerals in place in said land, or such royalty interest appertaining to said land, as was subject to taxation as real estate. In the case of Hager v. Stakes,
We recognize that the Supreme Court in the later case of Ehlinger v. Clark,
Plaintiffs' next contention is that the tax assessor had no right to assess their royalty interest in the property separately from their interest in the surface, but should have assessed all of their interest, whatever it may have been, as a unit. Ordinarily one's entire interest in a particular tract of land should be assessed for tax purposes as a unit. The assessor should not divide said interest into various portions and assess the same separately; but where the owner has himself separated his interest into various portions and thus invited a separate assessment thereof, we see no reason why the property cannot be so assessed. Slater v. Ellis County Levee Improvement Dist. (Tex.Civ.App.)
The judgment of the trial court is affirmed.