Case Information
*1 OFFICEOFTHEATTORNEYGENERALOFTEXAS
AUSTIN
eaOVEll SCLLCRS ~lToa”cI emlsmu
loa. Oibb Ollohrlrt.
tmridant, Agrioultural and
~@ohwhi0al Oollrgr Texar
mllogo Station, Tour
mar sir:
Opinion PO. O-7088
RI: Method of mla
oil, gas, rulphur and loaror on land ownrd Text38 r0r the wo c 4he &lk spaces in - Id r~dgrapht, 2 and 3 and 5 of the at- led in ao-
tqehed.lelbje forn+hQuld bti4 in prior to edvertieezent of$d’r, decisions. In this oonneotlon, the maxl-
oordeno\a w&h the’.. erm,ie five years, but the Boerd is authorized
mm "expkd ory" $ \eh@ter,. ‘terr.. ?he rAnlmwz royalty 1s **1/8~ of the gross t0 select “on production of oil,, g&s, sclphur and other mlneralsvl, but tLe loard The ffilnlrmn
may place ads lease on t!!e mzrkat et e higher royalty. delay rental h’One Doller er aore, but a higher amount my be fixed
by the Board in advanoe of t he advertlse~~:rent.
The queetlons asked in your opinion request will be
quoted and answered below ‘order in whloh they appear in your
lqtter: ir !‘. Jolleee 2a:. t!ze 3oerd of llre2tors of the -. Pl. :.ent;er of the 20113t:s 2~thC~lty Zuslnsss
dslecate to advertise for sale (by tr;a &zrd; ht zubL?c auction, 011,
‘41.3 uoooorable Clbb Gllohrlat - iage I!
gas, aulptxr and other daerel loasea on land under
it. xolualrr oootrol ovnod by tbr .-tit0 or Taxa8 ror
fb0 us. OS toe Collegm sad itt dlrlalona?"
Tbo first parecrrph of reo. S of Art. 36X50-3 roads l t r ol;wr:
“900. 3. Khenever, in the opinion 0r thr merd, there shell ruch a demaz16 for the purohaar of 011, gas, l ulphur
or other mlorral lraroa 0r1 .eny tract or prt or any trrot or
lmd as will rra@oBably laeuro on araatsgrour sale Board shall laoo uoh oil+ gac, rulphur or other &ore1 d land on market in auoh treot or trtota,
lessor on ta nl part tt..rreof, ne tha Eoard mu deelgnatr. lt ahall oauaa br edrertlaed brler tloaorlpt on of the lend rrom rhloh I lo proporrd ba ~~~a~~l~, err rulphur or other mlnrrala 3uo& dtrrtleemeat shell be aede br insertlag two .or mori paparr or gonerel ~lr~uletloa~ln,f~lr ,3*ata ent.la:~ ddltlOn the Eoerd mey, la lt8~ dl66~~tlOn,: OrUa@,~ul.d.,rd~~rt~ar- moat to bo ptood In qIClJw,& OIr.cJoo~li~b~;irb'~a5~,-~iii'd':out'~.
or- 3trt0, ana 0149 m.IJ.. 85 #Irr .or.: qmD,,p*jboa&,~;: cicZ$@*~’ :i,: : OOunty jUdg@ Of tbr OOUxity whan ahld b*lda ir&l66itOi$~';i'~~d':
me11 aoplrr of suoh Froj;oralo to ruoh prisons es the,Board tight think would bo p&twFetad thoro,la.J,,
by body, do8l#mtod.,by~ lar.eadk tb~-t.y~ ttoy:.:+,tiot- bo~,daSogato~~to
’ othora. Thlt pertlouferly.~ t~um di .dtitlrr,whloh oeil i’ rot ~Mio: ox-
oro~ao roaaon or dlaorotlon. Bowever; 8 kbard may. deleeet4. mln- dalnlatretl+4 for th4' xorol~a4
latorlel funot%Ons,nOt os:lln~ ppolntlag roe80n or dlaorrtlon ego&r tO.pOrrOrm dutlea.bf oherector. 54 Tar. Jur. 439, ("iubllc Cffloorv, f40. 7Q):L'orne
Loologioel ,&ran4 Co. v. City of Dallas. 45 ':,.(ZdI 714, (Tcx. Clv.
APF. 19313
It wlll bi: noted from e res@?nc cf t>e st;t,it.a qaottd qbooe t?m t raacon or direration lr Involve6 1~ t>a bcarG*r Ceter-
mlnetlon that stick (I Ctznnd exist6 for tka ~urc~ese ;I le~fet on ety tract or land or pi;t of ar.y trpot ~5 ::I11 rcczcnnbl:: izszr.c sn >d- i.)?e bard c.cnnot ielc?erc thl~
Vent6Eecuc oole. In our oplnlon
discretion Ctterminlrt rkan a& treats should be ,-laced tract ~onerer , once the 3osrd has mtde thie de-
OII the murkat lrtain2.
tsminr.tlon and haar drtezmlned the nnnner of pJbllo~tlon in scoord- thoa tbe cclrrgln& aat sf theae decl4lona 6noe with the statute quoted, marely a mlalsttrlsl fxctlon, v;hioh m&y be delegated. Therefore, :knt :*.a bcerd 1s to exercise'lt~; OWI die- eubjcct r8~ulrcnent Cratlon In makIn 411 ~dec$eloz~s, '(t'r) rnswtr your ;centltx zzbcr cn4 in the affirzctlve.
gonorable CIbb Cll&rlot - roe..,3
Cuootloa No. 28
-can the BOrSd or Dlrootoro or th8 .i. & f:. cO1hgO 60196otr, to its Sroeldont or thr Errrldant or the
CO11060 ruthorltr to8
(0) roll l t pub110 8uotlon loerer on 011, ##a, oul- phur sod other mlrrrrlo on load rmdor lto roluolro oostrol omod by the Stota or TOXOO ror the POO or Collese WY -~
it. alli olono) ‘, (b) dotomlw that l ortlotaotory bid hor boon roooir.d make on rword to tin blddor OWrrlag hl&heot prior, ab rojoat rll other bide, md
(a) (a)--- rxrautr a loerr oa proved tora la favor of ip . ,; biddW+fOTbI~ th. biC+t Dt 080".
The ‘ihad ‘+a(riph’ ioi Eoo. t, Artldie ,q6158-S, ,,pro- ““~+lboi~:ln:‘puf’.*r ~o~~oujra, ;;,, $,,;~:, ;;; ; - . . . . . :, .‘, : ,..,; i !’ :;‘?Y., ;i~ i <-z 4 .~~ i.
“Tb. Board ma: 'eel1 tb. loarc or lrroro to tbo M&hoot blddar at publfo motion Agrioulturrl and :soohmlool ct Collrgr Toxao .Colloge Station, Torso at any hour botwoen
1O:OO a. sbaae ~;OO,p.m. Tha aoor4 old1 hare the right all %ldr;~:: ~: .:, ':
njoot Sro. 8 ih0 oa~co rtlolo protldii~‘ia part’*0 r0ii0w0: ‘Ii th8 opinion of fho Board any one of the bltldoro ohall her8 oirrrad a rwoonablo~proper prloa ror nay
traot and aot lerr than tho.prloo rlqd by board,
lundo aO+ertiaod may Ieased 011, ear, sulpbur add/or
other nlnoral purpoooa under the tern% or ttlc ,:.ot, and suck
rsgulrtlono. ea t$r 50~~6 may preeoribr, not lnooarlstant with prorlslona cf thir ;tct:
5e.o. 3 of the aam artlolo ?rovldos In >art as follo*s: "lf thr tioard ehall detormlnr ~atlafoctory bid hsc Non rroo~lor raid 011, as, Fulphur and/or other
mlnrral lrndo it ohs11 ~rocopt" the camo an6 rojbot all Other
bids en4 rllo orid aoo-ptod bid in tho Canoral Land Lfflco.*
subpare&raph (a) OS So. 7 of the oamo artlolr proTl6er ,a0 roiiowc: Chbll drtor-2lr.s thst a %6tisf%c?.cry Sld “il :ht~?o*rd
hcs beal; receiveFl.3r seld 011, nor, r;rl;Y.ur c3dlor tt'zer It ~111 rinks an msrd to ‘hb tidder Ofrsr!Ef tf?e
3lneralc, end CI loam ohell illad in the hlghoct price thororor,
Seaera Idnd -rrm.-
41.5 - i l go”‘4~ goaoroblo slbb Cllohrlrt ro(ord to dolraatlon O< duties
Tha gonoel n~lo~rlt~ tlkowloo QUbliO OfYI~er8 lo ototod uador quootlon 1 above. it is ma l loaoatory rulo oi tho law or l goaoy that, tbo l b-
l os08 oi l lthor oxprooo or Impllad wthorlty tho p owar o l ntru~toa oa ogoat rannot bo ~ologotod, aa& this do IO portloularly l ppllooblo whoa tbo oxoraloo of tho powor ooaforrod lnrolroo dla- orotlon. 2 Tax. Jw. 471 (*A6eary-, $00. 761
la the ‘oiro or Born. i~o1o~1o.1 ANU co. v. city or it was hold that tto Cltv Park Bowa oould not mlloo, l ugm,
dO1O~dO t0 filWtOt Of Frrkr QCWO?‘tO aoko ContraOto iOr
tbo wwohooo ot l almlo, oourt l toting la lto oplnlon l uoh
0 board oa-not do~ogoto other8 tbo dlrobwgo or duties whloh aall roaooa or dloorotlon, md uhlob are regard04 (8 a pert or t&o pub110 trurt ocumad by tbo umbrro board..
“Thi’ 8bOd'quot.d ~~o~l~Iono oi 8tatute 18 quortloa olurl ooatrnploto 'that the (llrorotlon,lavol~trd la orlllng 1000~0,
4rto rd al- what As aotiolooto~,~ gnpd roj~oofing othor bl&o
.‘-* itill. b~exo?olrrd. br thc’Zom4;‘.ia&“Wogr oplnloa tho Board ‘bar utborlty ddO&NtO tho xoroloo ot’that -dloorotIoa tbo Prooldoat . So thorororo mowor hour question Ro. e la tbo aogotlve.
;;uretlo.n Ho. 8: *:t tbo aowor tothi above ~watl&o lr tho aogative, oa a tho uotloa bo hold without the Ward of Z!lrootoro bring 08010a7 ,. fr 00, oui uotioaoor ray ‘aold* oaa bids bo oo-
ooptod oalr oubjoot pprotal tbe Board of Dlrootoro
on6 tho sale doolwrd *oloaed' rubjoot to ouoh pproral?”
Saotlon 1 of Art. 2613a-3 roads part a8 follows: -:oc. 1. Thst thr 30&d of ?lreotors or the kgrloult3rel and Eeohmloal Collebq of Zexac 1s hereby autkorlzoC an4 en-
Fowerod to leeec for 011 end/s EF and/or 5ul>tmr sa:!/cr otktr nlneral devaloymnt bidder at public euotioE all to t:@ hl@rat
lnnda ueed lor errerlmntsl et*.tlono mC 811 other lends undsr cxolueive control or any part tkoreof now ownod by the
itr ror :.tato of Iexao and oqvlrad the uee or the +.rloultu~sl lLeo~ealoa1 Collo~o of Fsu8 and ltr dlrlslonr th:.t may hera- after br aoqdrod for the use of the ;~~rloulturrl end Uecheni-
oal Colla.gr of Ieras and its dlvl8lons.”
The aocond prapra+ of 7.00. . of the fmme ~rtlcls rsaCs f5 fcllo:~s:
nonoreblr GIbb Ollobrlrt - Sage 8 _. . ,.
-‘Sea. 3. The Eoerd may eel1 the lease leeeee to the hlqheet bidder et pub110 l uatlon et the Aerioulturel
end 2eahealaal Colbge of Toxee, Collage .~tetloa, Texee,
et 607 hour botrrra 1O:OO ea. cob b:OO pa. The Poerd rejrot l ll bidr. Kowerer, the
ehelf bate the right
hl~hoet bid&r l hell pet to the Board on the day of the
eel6 twrnty-flrb pm oent (&!a:) of the bonue bid ead the belenoe of the bid ah611 be mid to the Poerd rltbla tnonty- (E4) hour6 ftrr bring aotlfled that the bid be boon four
l OO6Dt.d. Fwmaats ehell ba paid la 666h. eertlP.~d awok
or 066hhr'6 oheok, e the 30erd aa dimOS8 DrmidOd; tha
feiluro to Da7 tha belenoo of the amount bib will totfelt
tha Boer4 the Twentpflre per oat (ES{) *id.*
Soo. 5 the 8elcIe rtlole reede In pnrt e follow@: “Se.0. 5. If the opinloa thr 3oerd an7 one ot bidder8 ‘ihall Iwo off4rrd e roaronablr proper prloo
any troot aa4 .aot leer then the prior fixed the Boerd,
the lend6-6d+artir6b..ory.ba lo6erb for.oIl, ~68 6UlDhUr end/ 'other mlnorrl. .$argoeee arbor the teN .of ~ thfe Aot, end t~ooh .ro&uletioae ‘aa board. may, proeorIba;~i sot ?InooaeIetoat
with the protlelone of t%le Aot. In the @tent nq bid 18 eo-
oegted by the Bocrd et pub110 uotion ny eubee~~uent grooodure tee nd/or.solphur for the eels of oil end/or end/or other
rlnerel leeeee ehell be In the mconor above J;rovIGeQ.”
St. 16 pperont i&e thi. ib&. +oridloa~ pt. tbe etetute th. method Ol.&lO ie~by’publlo Ntlon but t&t Board
.tlWt ohall ha+6 thr rlfht to rajaot all bid6 6ad IO not rogulrrd to ec- 6 bla not l etideotory to Board.
oept fn our opinion, trots lenguege quoted,the Legieleture wleotlrlg thle
homvor,
etetate did not oontoei~lete that l a uotloneer should &etermlne eooepteblllty of the hl@est end oloee the ecle. ‘In06 tl-te
rtrtote ~.?oes tc the Fosrt t!m dleoratlon of detcrr-,lnlny ðer
any one of the bidderr. ht.6 offered B *reoeon:tlc and ;ro;cr ;.r?cr.-
6nd wbetker it lr a 'eat!sfsctory bid“, and since turt!ssr gives it the ?or;rC the right to reiect all bids, t.k:s ;wial?ture Lust %vc :.c::t t’:o -c..:r? wx:C c:r,5ltier the tlCc snC within II
conts~;~lstnd
re-.FomSls ti-e meiie 5te ~ec?elonr tliere&n. ‘rot 1k.e ;usliZic:itiont
rtgfed, it 1~ r.:F’.rer.t tht ::.flslsture 6!d cGt. intene 83 ':Uk-
lit auction” in the ordjnsry eeone of :kst tern. ?te ra;nlrekent the hi@mr;t bidder a!xll ?a? to
state0 la .eo. 2 quota! above t!xt the I;oard on the dsv of eale .?5’ of th bonus bld cat2 the bslanoa ts the FosrC *ltkln ?C Scum sfter beln the bid ahall be-;e?C -----Id notified t!-.at the bld !?*e tern aooe .tsd 1nCloata ttxt em8 5--
of tlze wee oontezplated .betreen tak oc fhe bids an6 t?.e %erC’e
dec,l~ion PE to whether t”.r tj$.ke?t bid ~t.0~16 5:r? -cceF,ied.
Honoreble FJibb Gilohriet - Face a
the bl6e without teklou at17 notion thereon would be 6 mere mini-
gtertel sot not lnvolrlng 4leoretlon, we see DO objeotion
Board’s 4elegetlog thie funotlon. in l oewer your queetioa No. S,
Theroforr, It la oar opinion the suetion ban be he14 without tbr Board or Dlr-
l eto re being In eeeion; but that the uotloaoer oennot say weol4*
gad that bide oen bo iooepted only ubleot tbo approval of the
mar4 Dlnotors. fn this oonwotlon it IWther our oplnlon
?&et the person deel~nsted by the Boer6 to reoel~e ,blee shell per-
form the aInleterlel funotion of deternialng the hlgheet bonus bid
end 60 InfOrarine the biddora in order that the highest bidder may
pa7 the Boer4 25$ of thr bonus bid on the day of the ele In
eooordenoe with the statute.
queotlon No. 4: . . .,; .,,, _~ ~~ ;::i *Can thorr,br more than on0 trrlrble In-the (1) bonus, (8) royelt7 an4 (5) 4ele~e4 ranta> paymonte or.muet all but the .Eocird of ‘~Dlreotore {In ~4ienoe or thm
one flsed~ b drertleeaent / WI thy a ~-midmum $ixee .bt 6614: Boasqror the E
m.*
Sec. 4 of the statute ln~queetlon reeds es followa: . ..z _.
*Sea. 4. A reperete bid ahall be me&e ieoh treot ub4lrldon thereof. ~1:~ ~.,No bide’ shell’ be;~‘eooepted whloh offer e Myelty OS leee’~tben one-righth (1/8th) of thc&oee produotlon oil ear, ulphur minerals in la!14 upon
end tbje minimum ro7eltv me7 be iaoreeerd et the dleoret~ion of Board. Every bld shell oerr the obllgetlon pay en
amount not leer then One Dollar T 31.00) per sore ior delay in derelopment; euoh amount to be fixed by the Roar&
drilling
in advanoe.of the advertisement and shall be paid every year
ror five (5) years unloae in the meantlme production In pay-
lng quantities Is had upon the land or aald land la re-leased
by the Ies:ee.*
It ail1 be noted that the above provision speclflce?ly requires that the delay rental be rlred 3oerd sdvance Or
the edvertlalng. AZ to the royalty, statute rlres a minimum of but provides that thie wmlnlmJ~
one-eighth of the grosa prcduotlon,
royalty may Increased at the dlsoretlon of the Eoard.*
In Texas an 011 and &as lea66 amounts to e grant Of a ‘determinable fee estate In the 011 and cae In plaoe. That la, If
the 1ea:e provides for a one-elgbth royalty, it Is a conveyance of in the 311 end. -s& in T~SCC, p:b-
en UndfpiCed seven-eii?te ‘interest
jsct to reversion. :!3refore, if tie royalty z.ere left lndefinito iid on r;yaities, the estate 2 interest so tF.c;t bidders cxld
the mlieralr oTtered ror sale xould be lndefinlte, an& the bidders
Honorrble Clbb Cllotrl#t - iaea 7
mould not bo orfrrlae to buy the aa~o Interest. xomplo, fr 8a4 8aothrr bid Oar-rourth royal-
oa# pereon oao-•lubtb royrlty, ty, than uador our theory of ownership or 011 sad ear, th8 form-r
mu14 ba Otiorlnq. c the to buy on ua4l+lUod reT*n-sights intorrat, where-
latter would bc. offsring to buy aa ua4irldod thr88-fourtha fo our ogfaioa bldr or thin 6horootrr nrr not aoatm- laterrat. In ddltion, br thr Laglrloture. tbr pblrcor ‘MC of the plated bonur bid” 8~4 *a rroronobla sad prover prison ~~14 4~81 contern-
plats oooh bonus bldo oalf. Tberlfofb, in oa8war your queotloa It $8 our No. 4, thrt both the dOlay raatal Fav@lit 8a4 the rOyoltJ muot bo O$dliOll
tired by tbr so&r4 oi Mreetoto l dtoaoe of tho l 5wrtlola a. l d bonus blQ fr tho oall varirbla prmitted under the rtrtuta.
that
~.ueotlon h’o. 8: -%a~ un7 doyr ia rdtanaa 0S tk o l aotloa rrlr rhould aotlae of the rrlr be wbl$rhrb?”
The #tatUte dOOi nOLOt ptoT$d@ hoti uay dayi ik 4TOaeO OS motion rllr tha notloo of ralr shout4 be pubtlrhod. COO. 3 of the 84. U’?dW yOUr QWOtiOl3 NO. 1 FrOTid.0 th AytiOl@,~ Qu0t.d tht rertlrezmtn oboll bo nm4e inorrtin& aon8 1 n two or more pwrr gooar the Poord*o dlroretloa, olroulatlon la. thir teto 8~4, far. journal, 8nb b7 molllag.ooploo oountp judge, lo. n 011 aa 8tvl uah prrono tkiti wouL6 bo laterootrd. :.c :te Eorrd sl4ht *or ipporoatly Legislature not eonrldor tlw es- la our oplaloa io m8t when thr eaoe”, md tatutory r~gulrm~at &TO broa iarrrtrd in two or non wpora gwi- dtertirmaoatr rhell mea this re~Arrmont 16 met, r81 olrOuletiOn tblo itotr. length ot tiao at! well OS ciy 844ltloaol publfaitf to br sirea th8 ths d!soretioa of t! 8 3oora Llreators.
ado ore matter6 slthin InletlnF t?l*t the state witlsf?ctcrlly snsrer~ y-ur quettlonb, ~8 are,
Yours Wry tmly, .
\A-. 9.. . -I* ;+- - > G$i&&:c& ----- ----, . . / ,,srfstaat --.._ I . ..,.i. :a$lI ;.: . .*T-