Theisen v. Robison

• Decision Date: 25 June 1928
• Docket Number: (No. 4635.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 8 S.W.2d 646
• Parties: THEISEN v. ROBISON, Commissioner of General Land Office.
• Court: Texas Supreme Court

8 S.W.2d 646

THEISEN v. ROBISON, Commissioner of General Land Office.

(No. 4635.)^*

Supreme Court of Texas.

June 25, 1928.

Original proceeding by George W. Theisen for writ of mandamus to require J. T. Robison, Commissioner of the General Land Office, to issue an oil and gas permit on State University lands. Writ denied.

Ward & Ward, of Houston, for relator.

Smith & Gibson, E. F. Smith, and J. T. Robison, all of Austin, for respondent.

C. R. Wharton and H. M. Garwood, both of Houston, for co-respondents Texon Oil & Land Co. and others.

Dan Moody, R. J. Randolph, L. C. Sutton, all of Austin, Goree, Odell & Allen, of Fort Worth, and Cockrell, McBride, O'Donnell & Hamilton, of Dallas, for interveners Regents of University of Texas.

Claude Pollard, Atty. Gen., C. W. Truehart, Asst. Atty. Gen., Nelson Phillips, of Dallas, Chas. L. Black, of Austin, Thompson, Knight, Baker & Harris, T. R. Freeman, S. W. Marshall and John L. Young, all of Dallas, and S. C. Padelford, of Fort Worth, amici curiæ.

GREENWOOD, J.

Relator, George W. Theisen, invokes the original jurisdiction of the Supreme Court to secure a mandamus requiring the commissioner of the general land office to issue to him a permit conferring on him the exclusive right to prospect for and develop the petroleum and natural gas upon and within 2,560 acres of University land in Crane county.

The facts, pleaded and admitted, disclose that relator has complied with the requirements of the act of 1917 (chapter 83), authorizing the issuance of oil and gas permits on University and other public lands, under an application filed on the 29th day of March, 1926. The land commissioner refused relator's application on the ground that the act of 1917 had been repealed by chapter 71 of the Acts of the 39th Legislature, approved March 10, 1925.

The relator, joined by former Attorney General Moody, contests the validity of the act of 1925, while the University of Texas, by its board of regents, as intervener, urges the refusal of relator's application, on the ground that neither the act of 1917 nor the act of 1925 authorizes a sale of University land as required by the Constitution, and on the further ground that each act undertakes an unconstitutional diversion of portions of the permanent University fund. The present Attorney General files an argument in support of the validity of the 1917 act.

Relator also urges his right to the mandamus because the act of 1925, if valid, does not repeal the terms of the 1917 act, which are relied on as entitling relator to his permit.

The principal question in the case is whether the acts of 1917 and 1925 violate section 12 of article 7 of the Constitution, which reads as follows:

"The land herein set apart to the University fund shall be sold under such regulations, at such times, and on such terms as may be provided by law; and the Legislature shall provide for the prompt collection, at maturity, of all debts due on account of University lands heretofore sold, or that may hereafter be sold, and shall in neither event have the power to grant relief to the purchasers."

In order to get the full significance of section 12, it must be considered in the light of related sections of article 7.

Section 10 of article 7 commanded the Legislature to organize a University of the first class, as soon as practicable, and to provide for its support, maintenance, and direction.

Section 11 of article 7 provided:

"In order to enable the Legislature to perform the duties set forth in the foregoing section, it is hereby declared that all lands and other property heretofore set apart and appropriated for the establishment and maintenance of the University of Texas, together with all the proceeds of sales of the same, heretofore made or hereafter to be made, and all grants, donations and appropriations that may hereafter be made by the state of Texas, or from any other source, shall constitute and become a permanent University fund. And the same as realized and received into the treasury of the state (together with such sum belonging to the fund, as may now be in the treasury), shall be invested in bonds of the state of Texas, if the same can be obtained; if not, then in United States bonds; and the interest accruing thereon shall be subject to appropriation by the Legislature to accomplish the purpose declared in the foregoing section; provided, that the one-tenth of the alternate sections of the lands granted to railroads, reserved by the state, which were set apart and appropriated to the establishment of the University of Texas, by an act of the Legislature of February 11, 1858, entitled, `An act to establish "the University of Texas,"' shall not be included in, or constitute a part of, the permanent University fund."

Section 15 of article 7 provided:

"In addition to the lands heretofore granted to the University of Texas, there is hereby set apart, and appropriated, for the endowment, maintenance, and support of said University and its branches, one million acres of the unappropriated public domain of the state, to be designated and surveyed as may be provided by law; and said lands shall be sold under the same regulations, and the proceeds invested in the same manner, as is provided for the sale and investment of the permanent University fund, and the Legislature shall not have power to grant any relief to the purchasers of said lands."

A brief summary will suffice to give an understanding of the terms of the acts.

The Commissioner of the general land office is authorized, by the 1917 act, to issue to the applicant or his assignee a permit conferring upon him an exclusive right, for a term not to exceed two years, to prospect for and develop petroleum and natural gas within the designated area of "all public school, University and asylum land and other public lands, fresh water lakes, river beds and channels, islands, bays, marshes, reefs and salt water lakes, belonging to the state and all lands which may hereafter be so owned and all of said lands which have heretofore been sold or disposed of by the state or by its authority with a reservation of minerals or mineral rights therein as well as all lands which may hereafter be sold with the reservation of minerals." The permit is to be issued by the commissioner on receipt of an application filed with the county clerk if the land is in any surveyed area, or with the county surveyor if the land is in any unsurveyed area, together with a filing fee of $1 and 10 cents per acre and a certain affidavit. Actual work of development must begin within six months from the date of the permit; and upon petroleum or natural gas being developed in commercial quantities before the permit expires, the permittee is required to file a statement showing the development within 30 days, whereupon he becomes entitled to a lease on specified conditions, to be issued by the commissioner, on application and payment of $2 per acre. The lease is "for a term of ten years or less, as may be desired by the applicant, and with the option of renewal or renewals for an equal or shorter period, and annually after the first year after the date of the lease the sum of two dollars per acre shall be paid during the life of the lease, and in addition thereto the owner of the lease shall pay a sum of money equal to a royalty of one-eighth the value of the gross production of petroleum." For a gas well the royalty is one-tenth the value of the meter output of the gas disposed of from the premises. The royalties are paid monthly and all proceeds of permits and leases are to be credited to the permanent fund to which the land belongs. The land commissioner is given general supervision of the administration of the act, with authority to adopt, amend, and change such rules and regulations as he may consider necessary, provided the same are not inconsistent with the provisions of the act. It is expressly provided that the issuance of permit or lease shall not prevent the sale of the surface without the minerals. The act. was amended in 1919, but the amendment relates to other public land than University lands.

The act of 1925 requires that all unsold University land and the minerals in all of said land previously sold or thereafter to be sold with reservation of the minerals shall be subject to sale by the land commissioner in accordance with the act's provisions and under such rules and regulations as may be adopted by the commissioner in the proper execution of the purposes of the act, provided that outstanding oil and gas permits and leases shall be unaffected and rights, obligations, and penalties attaching thereto shall remain in full force. The commissioner is authorized to sell oil and gas leases "not less than once each month, when there is land in demand, and at 10 o'clock a. m. on the day fixed therefor." The price for the leases is "ten cents per acre in advance for the first year, and twenty-five cents per acre in advance for the second year, and fifty cents per acre in advance each year thereafter until production is secured in paying quantities, but not to exceed five years, and a royalty of one-eighth of the gross production of the oil, or the value thereof, produced and saved from the leased premises," delivered into such pipe lines as the lessee may have connected with his well or wells, and a like portion of the gas, and "in addition thereto such sum, if any, that one may pay therefor." After the commissioner has advertised when the leases will be subject to sale, and has opened the sealed, separate, applications for each tract, the highest price offered secures the lease. A down payment is required of 10 cents per acre, together with such additional sum as may be offered. When production in paying quantities is secured, the payment of further rental ceases, and "the payment of royalty begins." On securing paying production of oil or gas, the owner becomes "entitled to an absolute lease which shall run...