Ohio Oil Co. v. Giles, A-2687

• Decision Date: 06 December 1950
• Docket Number: No. A-2687,A-2687
• Citation: 149 Tex. 532,235 S.W.2d 630
• Parties: OHIO OIL CO. et al. v. GILES, Com'r of General Land Office, et al.
• Court: Texas Supreme Court

Page 630

235 S.W.2d 630

149 Tex. 532

OHIO OIL CO. et al. v. GILES, Com'r of General Land Office, et al.

No. A-2687.

Supreme Court of Texas.

Dec. 6, 1950.

Rehearing Denied Feb. 7, 1951.

Black & Stayton and Ireland Graves, all of Austin, Clayton L. Orn, Houston, A. M. Gee, Findlay, Ohio, and Basil H. Lucas, Jr., Pittsburgh, Pa., for petitioners.

Price Daniel, Atty. Gen., Ben H. Rice, III, former Asst. Atty. Gen., Jesse P. Luton, Jr., Asst. Atty. Gen., for respondents.

SHARP, Justice.

The Ohio Oil Company and Melben Oil Company, relators, seek by this original mandamus proceeding to compel Bascom Giles, Jesse James, and R. S. Calvert, respondents, to refund to relators the sum of $123,360, paid by relators to Bascom Giles, and that he be ordered to recognize certain mineral leases as valid and subsisting, without the payment or necessity to pay any rentals for the period during which such leases may be held between the commencement of the litigation and ten months and sixteen days, or, in the alternative, five months and twenty-one days after the rendition of a final judgment by the Supreme Court of the United States in the case of United States v. Texas, and that respondents be ordered to recognize that the primary term of such leases will run for a period of three years, ten months, and sixteen days after the rendition of such final judgment, or, in the alternative, for three years, five months, and twenty-one days after the rendition of such judgment.

As a basis for this action, relators allege that Bascom Giles is the Commissioner of the General Land Office of the State of Texas, Jesse James is the State Treasurer of the State of Texas, and R. S. Calvert is the Comptroller of Public Accounts of the State of Texas; that Jesse James now has in his possession, in a suspense account, $123,360 belonging to relators, which he is obligated under the laws of Texas to refund to them, but which he has failed and refused to do; that such sum of money was delivered to Bascom Giles, who unlawfully required relators to pay it to him on November 7, 1949, for the annual rental on 123,360 acres of submerged lands in the Gulf of Mexico on which relators own the oil and gas leasehold estates; that at the time Giles required relators to pay the annual rentals in order to avoid a forfeiture of the oil and gas leasehold estates, no rental was actually due and owing under the laws of the State of Texas, because the obligation of relators to pay the rentals was under Article 5421i, Vernon's Ann.Civ.St., suspended and set at rest during the pendency of United States v. Texas, which was an action brought by the United States on December 21, 1948, against Texas in the Supreme Court of the United States to recover title to or paramount rights in and dominion over the submerged lands and minerals in the Gulf of Mexico within the boundaries of Texas, including the lands and minerals on which relators were required by Giles to pay the annual rentals.

That relators are now the owners, in equal shares, of the oil and gas leasehold estates on 85 tracts of submerged lands in the Gulf of Mexico, aggregating in all 112,830 acres, and the owners of undivided interests in the oil and gas leasehold estates on twelve additional tracts of submerged lands in the Gulf of Mexico, aggregating in all 10,530 acres; and a description of the oil and gas leases and the tracts included therein is attached to relators' petition filed in this cause and marked Exhibit 'A'; that each of the 89 leases described in Exhibit 'A' was sold and awarded to the lessee therein named at a regular meeting of the School Land Board held in the General Land Office on the 7th day of November, 1947, after the Board had finally determined that the lessee had offered the highest and best bid for such land; that there is attached to the petition, and market Exhibit 'B', a correct copy of one of the oil and gas leases described in Exhibit 'A', the remaining 88 oil and gas leases so described in Exhibit 'A' were executed on a printed form similar in all respects to the oil and gas lease attached to the petition marked Exhibit 'B' with some immaterial exceptions; that on August 2, 1948, relators agreed in writing with the Humble Oil & Refining Company, which owns an undivided one-half interest in four of the oil and gas leases, that they would pay on their own behalf and on behalf of Humble Oil & Refining Company all annual rentals that might become due on such four leases, and on February 3, 1949, agreed in writing with Stanolind Oil & Gas Company, which owns an undivided 56.9106 percent interest in eight of the tracts covered by the oil and gas leases thereon, that they would pay on their own behalf and on behalf of Stanolind Oil & Gas Company all annual rentals that might become due on such eight leases.

That neither oil nor gas has ever been produced from the submerged lands described in the 89 oil and gas leases, but relators paid to the Commissioner of the General Land Office, on or before the 7th day of November, 1948, the annual rentals therein provided for, in the aggregate sum of $123,360; that after relators had paid such annual rentals due on November 7, 1948, the United States filed in the Supreme Court of the United States on December 21, 1948, a motion for leave to file a complaint against the State of Texas; that the United States in the complaint set out in detail its claim to the lands involved in that suit, and it was alleged that the State of Texas claimed some right, title, or interest in the lands, minerals and other things adverse to the United States, and had negotiated and executed oil and gas leases with various persons and corporations in violation of the rights of the United States; that the lessees had paid to the State substantial sums of money in rents, royalties, and bonuses reserved under the leases, but that neither the State nor its lessees had recognized the rights of the United States, nor had they paid to the United States either the value of the petroleum and other things taken from the area or the royalties therefrom; that in that suit the United States prayed that a decree be entered declaring the rights of the United States as against the State of Texas, and enjoining the State of Texas and all persons claiming under it from continuing to trespass upon the area in violation of the rights of the United States, and requiring the State of Texas to account to the United States for all sums of money derived by it from the area involved subsequent to June 23, 1947.

That the State of Texas filed in the Supreme Court of the United States its objections to the motion of the United States for leave to file its complaint, but the Supreme Court on May 16, 1949, granted leave to file the complaint; and the issue involved in that suit is whether the United States or the State of Texas is the owner in fee simple of the submerged areas in the Gulf of Mexico involved therein, and whether the United States is possessed of title, paramount rights in, and full dominion and power over such areas.

That the lands and minerals which the United States seeks to recover from the State of Texas in that suit include the tracts and the oil and gas covered by and included in the leases described in Exhibit 'A'; and while relators are not disputing or questioning the right, title, or interest of the State of Texas in and to the portion of the Gulf of Mexico within its boundaries, and are not questioning the power and authority of the Commissioner of the General Land Office to execute the oil and gas leases described in Exhibit 'A', nevertheless, by virtue of the filing of the above-described complaint there is now pending in the Supreme Court of the United States a suit wherein the United States is disputing the power and authority of the State of Texas to execute the oil and gas leases described above, and is seeking to recover title to or paramount rights in and over the submerged areas included in such oil and gas leases; and that relators allege that by virtue of such suit the oil and gas leases described herein have become and still are involved in litigation, and involve the power and authority of the Commissioner of the General Land Office to execute them, and that under the provisions of Article 5421i, the running of the primary terms of such oil and gas leases have been suspended, and all obligations imposed upon relators, including the payment of the annual rentals, have been set at rest during the period of the pendency of such litigation.

Relators allege that on or about November 3, 1949, they were informed by Bascom Giles that the Attorney General of Texas had advised him that Article 5421i did not apply to the annual rentals which were due and payable on November 7, 1949, under the above-described 89 oil and gas leases, and that the rentals would be due on November 7, 1949, and should be paid in accordance with the terms and provisions of the leases, if relators desired to maintain the leases in force after November 7, 1949; and that Giles further informed relators that under and by virtue of the opinion given him by the Attorney General he was compelled to demand that relators pay the annual rentals on or before November 7, 1949, if they desired to avoid a forfeiture of the oil and gas leasehold estates; and that relators, desiring to maintain the oil and gas leases, and avoid a forfeiture, paid under protest to Giles on November 7, 1949, the annual rentals on the 89 oil and gas leases, in the sum of $123,360, and simultaneously filed a protest wherein they informed Giles that it was their contention that the payment of the annual rentals had been suspended and set at rest during the pendency of the case of United States v. Texas, and that they were paying the rentals in order to avoid a forfeiture of the leases; that they requested Giles to take such action as might be necessary for him to refund the money in the event it was ultimately...