Untitled Texas Attorney General Opinion ( 1962 )

Honorable Jerry Sadler Opinion No. W-1467
Commissioner
General Land Office Re: Whether the Commissioner
Austin, Texas of the General Land Office
should collect certain
annual rentals on oil and
gas leases as provided in
such leases, which provi-
sions are in conflict with
Dear Mr. Sadler: Article 5344, V.C.S.
The 1917 predecessor of Article 5344, Vernon's Civil
Statutes, provided for the paymenitof $2.00 per acre annual
rental on certain State mineral leases. In 1925, the act was
amended so as to provide, as interpreted by the Texas Supreme
Court In State v. J. M. Huber Corporation, 145 Tex. 517, 199
S.W.2d 501 (1947) that only the down payment of $2.CO an
acre and one rent:1 payment of $2.00 an acre at the beginning
of the second year of the lease would be due. Under the said
decision, no further rental was due for the remaining years
of the lease.
You state that a number of leases Issued under Ar-
ticle 5344, as amended In 1925, are still in effect. The
leases, however, call for annual rentals as authorized under
the 1917 law. Thus, the provision In the leases appears to
be In conflict with the statute, as such statute was inter-
preted by the Supreme Court In the Huber case.
You request an answer to the following question:
"Should I, as Commissioner of the
General Land Office, require the holder
of such a lease to pay an annual rental
of $2.00 per acre in conformance with
the .termsof the lease on the theory
that the contract controls in spite of
the 1925 statute?"
. \
Honorable Jerry Sadler, page 2 (ww-1467)
The Huber case was a suit by the State to collect
the claimed an-rentals. The Court of Civil Appeals In
its opinion In the case, 193 s.w.2d 882, 883, stated:
11
It is conceded by all parties,
however,'that the language of the statute
in force at the time, authorizing execu-
tion of such lease and prescribing Its
terms, is to be read into and deemed to
be a part of the lease."
The State contended that the amended statute provided for
annual rentals. Roth high courts accepted the admission of
the parties as stated above and, after interpreting the stat-
ute as not authorizing annual rentals, ruled against the
State. Raising the question for the first time in ,the Supreme
Court, the State sought recovery on the lease contract provi-
sion for annual rentals, even though same was in conflict with
the statute. The Supreme Court held that as a reviewing court,
it "would not be authorized to consider the question," since
the lower courts had not had an opportunity to consider it.
In Empire Gas and Fuel Company v. State, 121 Tex.
138, 47 S.W.2d 2bb, 266 (1932), the Court said:
"It is a rule in this State that,
where contract is made, like the one under
consideration, with reference to the
performance of certain acts prescribed by
statute, the contract and statute will be
considered together. . . ."
The rule Is thus stated In Langever v. Miller, 124
Tex. 80, 76 S.W.2d 1025, 1026 (1934):
"The laws, at least as to substantial
rights and remedies, existing at the time
a contract is made, become a part of the
contract."
To the same effect see Stanolind Oil and Gas Company
v. Terrell, 183 S.W.2d 743, 744 (Civ.App. 1944, error ref.);
Farmer's State Rank v. Brasoria County, 275 S.W. 1103 (Clv.App.
1925, error ref. in 278 S.W. 177).
. -
Honorable Jerry Sadler,~pa&3 (WW-1467)
Since the statute is deemed a part of the contract
Itself, the result is that we have conflicting provisions
within the contract. At least, there is a conflict to the
extent that, the statute having fixed the rental at a set
amount, there Is, in our opinion, an implied prohibition
against charging a greater (or smaller) amount. Otherwise,
the fixing of the amount by statute would be meaningless.
We regard as very ersuasive the case of Gulf C.
& S.F. Railway Co. v. Hume, 87 Tex. 211, 27 S.W. Ilo*),
wherein the court says that It is
"settled by the authorities that
an officer cannot contract to receive
compensation ,for services in addition
to those prescribed by law. . . . This
is placed upon the ground that, the
compensation being prescribed by law,
It is against public policy that it
should be the subject of ctntract between
the officer and litigants.
In Gorman v. Gause, 56 S.W.2d 855 (Comm.App. 1933),
It is said to be "uniformly held by the decisions~of our
courts that a contract cannot impair the validity of any law."
Citing numerous authorities.
And see Laird v. Brown, 210 S.W.2d 276, 279 (Civ.
App. 1948); King v. Matney, 259 S.W.~2d606, 609 (Clv.App.
1953, error ref., n.r.e.). .,,
We are of the opinion that the annual rentals pro-
vided for in the leases under consideration over and above
those authorized by Article 5344 may not be collected. We
accordingly answer your question In the negative.
SUMMARY
Where State oil and gas leases
issued under Article 5344, V.C.S., pro-
vide for additional rentals over and
- .
Honorable Jerry Sadler, page 4 (W-1467)
above those authorized by the statute,
the Commissioner of the General Land
Office 1s not authorized to collect
such additional rentals.
Yours very truly,
WILL WILSON
Attorney General of Texas
JAS:afg
APPROVED:
OPINION 'COMMITTEE
W. V. Geppert, Chairman
Ben Harrison
Morgan Nesbitt
Pat Bailey
Cecil Rotsch
REVIEWED FOR THE ATTORNEY GENERAL
BY: Leonard Passmore