 ,




Mr. T. E. Allday
Audito+ of Oil
l!heUniversity of Texas"          Re:   Interpretationand
Austin, Texai                           Constltutloiiallty
                                        0f'Sectlon 4, Chapter
                                        6, A&s of 1921, and
                                        Section 14 of Chapter
                                        1, Acts of 1925, as
                                        amended by Chabter
                                        145, Acts of 1925,
                                        said Acts dealing with
                                        the payment of rentals
                                        ana royalties on 011
                                        and&as_ leases upon
                                        land appropriatedto
                                        the Unlverslty of
dear Mr. Allday:                        Texas.
          This opinion Is glven.ln reply to the written
request contained In your letter of Aprll.29, 1939, and the
additional request contained In your letter of June 15, 1939.
In your letter of April 29, 1939, you prop'oundthe following
-questions:
          1. "Was It the Intention of the I&Is-
     lature,.whenIt passed Cahpter 6 of the',Acts
     of 1921, to repeal or nulllf~~.?ltheror both
     of the $2 an acre considerationsdue to be
     paid by the'permltteesunder subdivisions1
     and 2 of Section 7 of Chapter 83 of the Acts
     of 1917, for, and on, the leases that were
     executed as a result of permits having.been
     Issued on the University lands?"
          2. "Is It your opinion that el&erSec-
     tlon 14 of Chapter 71, or Section 14 as'ainended
     ln Chapter 143 (both Chapters being Acts of
     1925), had the effect of repealing or nulli-
     fying the same considerationsshown ln ques-
     tion 1, due.to be paid by the permittees under
     the same s~bdlvlslon,section, and Chapter
     mentioned in the preGediIIg paragraph, for,
     and on, the leases that were executed resulting
                                                          -      .




Mr. T. E. Allday, page 2 (o-730)


     from permits Issued on the Unlversltx
     lands?"
          In your letter of June 15, 193gc,you propound
the followingadditional questlofi'!.~-
          3. "In the event you hold :hat It was
     the Intention of the Legislature to repeal
     the $2 considerations,which considerations
     are mentioned ln Subdivisions1 and 2,0f
     Section 7 of Qlapter 83 of the Acts qf 1917,
     with (hapter 6 of the Acts of 1921, or o.lth
     Chapter 71 of the Acts of 1925, or wi.$hboth
     of these Acts, would such ACt or Acts, ln
     your opinion, be unconstitutional?"
          In your letter   you divide the leases of University
lands to which your inquiries are directed into two groups,
.thefirst group comprising   leases Issued under and by
~vlrtueof the provisions of Chapter 83 of the Acts of 19X-7
.and Chapter 6, Section 4, Acts~of 1921; the SeGOnd grouti.
~comprls%ngleases thatwere Issued under Chapter 83.of the
Acts of 1917 and Chapter 71 of the Acts of 1925 (Section 14)
.asamended by Chapter 143, Acts of 1925.
           You state that the Commlssloner,p~the General
Land Oiflce has construed Section 4 of Chaptkr .6of the
 Acts of 1921 as rqeallng and abolishing.the"r@qulrements
,contalnedlnicha@er‘83, Section 7, of the Acts of 1917,
 for the payment df $2.00 per acre at the t$me the lease
 Is Issued and $2.00 per aore annually thereafterduring
 the life of the lease wlth'respectto leases falling In
.the first group described In your letter.'.You further
.state that the Commlssldnerhas construed.Sectlon14 of Chap-
 ter 71 of the Acts,of 1925, as amended by Chapter 143, of the
 Acts of 1921, so as to repeal and abolish .therequirements
 of Chapter 83.with respect to the $2.00 pe3'_acrecase pay-
 ment and the $2.00 per acre annual payment:on.l.easesfalling
 In the second group described ln your letter'.'
         A consdleratlonop the questlons~&u have asked
necessarily requires a careful review of the relevant statutes.
          On March 16, 1917, Qlapter 83 of the Acts of 1917
was approved. Such Act was a comprehenslxeamendment to the
.1913Act, and provided that all Unlirerslty,public school
and other lands deslgnat~edIn the Act, should be open to the
prospectingfor and developingof~mlnerals,,  includingpetro-
leum and natural gas "upon the terms and cgr)clltlons
                                                    prdvlded
In this Act."
&.   T. E. Allday, page 3 (o-730)


          Section 2 of Chapter 83 provided Gnat any person
"desiring to obtain the right to pmaect for and develop
the minerals. . .that may be in any of the.areas included
herein may do so under the provisions of I&Is Act, to.gether
with such rules and regulationsas may be &dopted by the
Commissionerof the General Land Office relative thereto. . ."
          Section 3 provided for the filing ielththe Courity
Clerk of applicationsto obtain the rlght,.toprospect for
and develop petroleumand natural gas in surveyed areas
covered by the Act.
          Section4 provided for the flllng with the'~'County
Surveyor of applicationsto obtain the right to prospect for
and develop petroleumand natural gas ln WJ$ of. the unsur-
veyed areas Includedln the Act.
          Sectloti5 prescribed the duty of th%'~'Commlssloner
of the Genekal Land Office upon receipt by him of an appll-
,catlonafter same had been filed with the$ounty Clerk or the
Surveyor, and such section also provided that such a fll$s-
tlon should be accompaniedby field notes.and plat, s
flllng fee and 10 cents per acre for each acre applled'for,
also a sworn statementby the applicant shpwlng certain facts.
Section 5 then provides as follows:
           "And If upon examinationthe ap&catlon
      or the applicationand field notes are'found
      correct and the area applied for Is wltti.the
      provisionsof this Act the Commission shall
      Issue to the applicant or his assignee a'permlt
      conferringupon him an exclusive right to pro-
      spect for and develop petroleum and natural gas
      within the designatedarea for a term not to
      exceed two years."
           Section 6 prescribed the time ln.,Whlch
                                                 the owner of
a permit should begin In good faith the ac$ual work necessary
.to the physical developmentof said area;ijSkev@edfor the
filing of an affidavit stating that such work had been begun
and the extent of.such work and the expendituresincurred
therein and a statementof whether or ~not.petroleum or natura
gas had been discovered In commercial quantl~les. The Sri@1
sentence of Section 6 reads as follows:
           "The owner of a permit shall not 'take,carry
      dwaiyor sell any petroleum or natural gas before
      obtaininga lease therefor; provided, puch quantity
      as may be necessary for the continued development
Iir.T. E. Allday, page 4 (o-730)


    of the area before ;dblM.nlnga lease may,be
    used without accountingtherefor.” .
             Section 7 of Chapter 83 providesas followsz
         “If at any time within the 1lfe;of a permit
    one should develop petroleum'ornatural  gas In
    commercial quantitiesthe owner or manager
    shall file ln the Qeneral Land Office a state-
    ment of such developmentwithin thirty days
    thereafter, and thereupon the owner of~@e per-
    mit shall,have the rlght to lease the.abea ln-
    eluded ln the permlt upon the’followlngconditions:
         '1. An applicationand a flrst,$a&nt of
    two dollars per acre for a lease of the-area
    ticluded ln the permit shall be made &o th
    Commissionerof th a          1LadO iTFce til:hln
    tKlrty days’after ~he’%%M?r~        of .gatrol&m
    o,rnaturaLgasZ.3.n
         d .~C         c;ol;ilitirclal
                                    qr;iult-$@s,
                                     -.
         ‘2. Upon the payment of two dolJ.arsper
    acre for each acre ln the permit a lease shall
    be Issued -fora term of ten years or .less,as
    may be'desired by the applicant,andalth the
    option of a renewal or renewals for ti iiciiial
                                                - _--
    or shorter period, and'annually af$#&:thaj.expi-
    ration of th,efirst Year after the date.or ~the.
    lease.the sum of two dollars    per acre  .shall
                                            -....- --
         Id during the llfe of the lease,;.and        In'
         Ion thereto the owner of the lease &iiTl
    pay a sum of money equal to a royalty~ofone-


     meter    optput   of all gas disposed of MS the
     premises.                .

          ‘3. The ro~lties shall be pa2't.o he
     State through the Gommlsslonerof the.Qeneral
     Land Office. at Austin, monthly durlng.t@e.,,llfe
     of the lease. All payments shall bepc~uapanled
     by the sworn statementof the owner or m@qer
     or other authorized agent showing thq(amount
     pqduced since the last report and th,emarket
     value of the output and a copy of all plpe.llne
     recelptxi>tankreceipts, guage of
     which petroleum may have been,run,
     checks and memoranda of.amount put out
Mr. T. E. Allday, page 5 (o-730)


     g'lpelines or tanks or pools. The books and
     accounts, the receipts and dlscharges.ofall
     pipe lines, tanks and pools and gas &lnes and
    .gas pipes and all other matters pertainingto
     the production,transportationand mafketlng
     .ofth,eoutput shall be.open to the ex,am+atlon
     and lntipectlonat all times by the C+ssloner
     of the General Land Office or his rey(re+,enta-
     tlve or any other person authorized lw me
     Governor or Attorney General to repraaent the
     State. The value of any unpaid rp3lty and any
     sum due the State under this Act upon.any lease
     &all become as prior lien upon all production
     produced upon the leases areas and t&e lmpyove-
     ments situated thereon to secure the.papen$
     of any royalty and any sum due the $t,ate,aris-
    -1ng under the operation of any portion qf this
     Act
          4.  The permit or lease shall o&au 'the
     terms upon.whlch It Is issued lnclu1In&the
     authority of the Commissionerto require the
    .drllllngof wells necessary to offset wells
     drilled upon adjacent private land, and 'such
     other matters as the Commissionermay dee@~
     lmportantto the rights of the appllcent,or
     the State."
            Section 16 of Chapter 83, in pant,;provldesas
'follows:
          "The payment per acre required t6 be
     made before the Issuance of a permlt.shall
     be paid annually thereafterduring tb life
     of the permit or lease. A separate urlt$F
     applicationshall be made for the area de-,
     sired ln a permit. No permit, lease&r.,,
     patent shall embrace the area ln two ,ormore
     applications. No applications,permit, lease
     or patent shall embrace a divided area Whole
     tracts of surveyed land may be appllad.$oras
     a whole or In eighty acre tracts or multiples
     thereof without furnishing field noteg-therefor.
     A duplicate of every permit and lease++hallbe
     kept In the General Land Office. The area In
     each permit shall be developed Independentlyof.
     other areas."
            Chapter 83 of the Acts of 1917, with the amendments
&.   T. E. Allday, page 6 (o-730)


hereinafter noted, continued In force as the basic law
governing the Issuanceof permits and leases for 011 and
gas In University lands until the effect1v.e date of Qlapter
71 of the Acts of 1925, approved March 10,..1925. Prior to
the enactment of Chapter71 of the Acts of 1925, several
amentients were made to Chapter 83, but, %n opr.opinion,
 only one of such amendementsIs material ljothis opinion.
 Such amendment Is Chapter 6, of the Acts of 1.921,approved
..February3, 1921.
          By the express terms of Section.l of.Chapter6 of
the Acts of 1921, such amendment purported,tpapply~only to:.
           "Permits to prospect for oil ani &here-
      tofore Issued on University land, and P&r
      School land which Is unsold at the tlmre.thls
      Act goes Into effect, river beds, PI!,channels
      and fresh water lakes'and Islands theein, and
      which have not expired. . .'I
           And also tici.
           "All permits to prospect for oli%d gas
      heretofore Issued on .saldlands and ape&s and
      all permits heretofore Issued after the.Mneral
      Act of 1917,went into effect... .whlah have
      ejcplredat the time this Act goes Into efcect,
      but on which the drilling of a Well Qr wekls
      has been begun ln good faith, or with ref'er-
      ence to which permits and the right of.$he
      owner of the same to the possessionqf the
      area Included therein bona fide lltlgatlon
      has existed during the whole or a pant'of
      the term of the permit. . ."
           Section 1 of Chapter 6 provided that.ill of such
.permltsas describedabove should be ex'tended"so that they
 shall remain In full force and effect for a period of five
.years from.the date of the Issuance OF the.permit, condl-
~tloned-onlyupon the performanceof the terms of this Act."
           Section 4 of Chapter 6 provided,&hat:
           "If 011 or gas should.be.productW'in Ay-
      ing quantities-uponthe area Included 'inany
      of the permits included In this Act, -@e owner
      of'the permit shall report th developmentto
      the Comfnlsslonerof the Gene& Land Office
      within thirty days thereafter,and apply for a
Mr. T. E. Allday, page 7 (o-730)


     lease, accompanyingthe application With a
     correct log of the well or wells, and thereupon
     a lease shall be Issued without the payment of
     any additional sum of money and for 8 period
     not to exceed ten years, subject to cgnewa;lor
     renewals."                           .
           Tne question IS thus presented &'to ihether Section
 4 of Chapter 6, properly construed, repea&ed and abolished
.the requirementsspecified In Section 7 oC.Chapter83,
.Acts of '1917,that a permittee, before be- entitled to a
.lease, should pay to the State $2.00 per tire for-each acre
 lncludea within his lease. and that In addition $2.00 per
 acre should be paid tkeresfter annually dur    thenlife
 of the lease. Clearly, Section 4 of Chapt,er
                                            3   was not
 intended to affect in any manner permits Qsued, subsequent
.to the effective date of Chapter 6, because Its operation
 Is expressly limited In Section 1 thereto.to"dermlts here-
 tofore Issued". If Section 4 of Chapter 6 IS.construed so
 es to repeal and abolish the requlrements,of.the$2.00 per
 acre cash payment and the $2.00 per acre &nnual payment
 required by Chapter 83, or either of such,&ments, such
.constructlonand effect must, necessarlly,,be,limltedso
 as to apply only to leases resulting from.permlts5ssued
 prior to the effective date lof=Chapter6. Permits issued
.subseqent to said date would be wholly !.u@fectedby the
.Act un1er any constructlonthereof. We pwtpone any fur-
 ther discussionas to the proper constructionto be given
 to Chapter 6 to a subsequentplace In this opinion.
           No other amendments with which ue are now,con-
 cerned were made to Chapter 83 of the Acts of 1917 until the
 enactment of Chaptex 71, Acts of 1925, apwoved,March 10,
 1925. Chapter 71, Acts of 1925, was a coqrebenslve Act
-dealingwith the sale of 011 aridgas leases on unsold Unlver-
 slty land and upon Unlversltiyland which MaQ been sold with
.mlneralreservationprior to the effectlve,datepf Chapter
 71. The operation of Chapter 71 was expresslylimited by
 the final clause of Section 1 of the Ac%.wkiichreadk as follows:
          "Provided,011 and gas permits ax&leases
     outstanding shall not be affected,by.thlsAct
     except as provided ln Section 14 theceof."
          Section 14 of Chapter 71 provld&:
          "All oil and gas permits heretokore ls-
     sued upon lands Included herein and noirin'
     force shall be extended for a term of five
     years from date thereof andkknever production
or. T. E. Allday, page 8 (O-730)


     Is secured In paying quantitiesand t&e pay-
     ment of royalty begins, the owner shaJ& not
     pay any further annual money rental.;.Pfter
     production Is secured In paying quant#les
     the owner shall be entitled to a lease_which
     shall run so long as the area covered.byhis
     lease produces 211 or gas In paying puan-
     titles, subject to the provisions of.thls Act.”
           Chapter 143, Acts of 1925, approved March 30, 1925,
 by the same Legislature which enacted Chapter 71, amended
 Section 14’of Chapter 71, so that Section.14 shall there-
.after read as follows:
          “All oil and gas permits heretogore &d
     hereafter Issued upon lands IncludedJzereln
     and which have not expired shall be -tended
     for a term of five years from date t@reof
     conditionedonly upon the payment of.the.annual
     rental, as provided by law, In advance
     and whenever production Is secured ln’.pay$ng
     quantitiesand the payment of royalty begins,
     the owner shall.not pay any further apnual
     rental money. After production Is secured in
     paying quantities, the owner shall be entitled
     to a lease which shall run so long a&the area
     covered by his lease produces oil or.gas In
     paying quantities subject to the prav.lsions
     of this Act.”

    ;*y*
       r   On the same day, March 30, 192~~~Cha$5er140, Acts
of ,LSLj, was approved by the Legislature. Chapter 140 reads
as foil,.icC
           .~
          “Sec. 1. That subdivision2 of:: Section
     7 of Chapter 83 of the Acts of the Regu)ar
     Session of the Thirty-fifthLeglslature,ap-
     proved March 16, 1917, be amended so.88 to
     hereafter read as follows:
           “Upon the payment of $2.00 (two.dollars)
                                           .
      per acre for each acre In the permit&lease
      shall be Issued for a term of ten (10) years,
      or less, as may be desired by the applicant,
      and with the option of a renewal or renewals
      for an equal or shorter period, and $mmedlately
      after the expirationof the first year after
      the date of the lease the sum of;two -($2.00)
      dollars per acre shall be paid during the life
Mr. T. E. Allday, page 9 1'.
                           ~730)


     of the lease, and in addition there& the
     owner of the lease shall pay a sum of money
     equal to a royalty of one-eighth of the value
     of the gross production of petroleum.- The
     owner of a gas well shall pay a royalty of
     one-tenth of the value of the metre output of
     allygas disposed of off the premises;;provided, i
     however, that the provisions hereof as to the
     payment of two ($2.00) doll.arsper acre dur-
     ing the lease period and the life of.sald lease
     shall not apply to leases of bays, marshes,
     reefs, salt-waterlakes or other submerged
     lands containingas much as one hundreds.100
     acres but not In excess of five hundred t5001
     acres upon which as many as five wells,have
     been drilled, and upon which an expetidlture
     of as much as one hundred thousand ($100,000.00),
     dollars has been made. The drllllng,ofsaid wells
     and the expenditurebf>sald amount t<be estab-
     lished to the satisfactionof the Commiss~l'bner
     of the Land Office.
          "Sec. 2. The fact that leases ex1s.tupon.
     some of the bays, marshes, reefs, salt-water
     lakes and other submerged lands of the.eei
     herein Indicated upon which many wells have
     been drilled and large amounts of money
     expended, and the fact that another wrlodical
     payment of two ($2.00) dollars per acre will
     soon be due and the fact that the patient of
     said amount Is unfair and unjust to the owners
     of these leases, create an emergency,andan
     imperativepublic necessity, that the constl-
     tutlonal rule which requires bills ta be read
     on three consecutivedaya,be suspendedand
     same Is hereby suspended; and this Act ta,k&
     effect from and after lts~passageand It Is so
     enacted."
         Cha ter 140, Acts of 1925, (cop%.edabove) appears
as Article 53t.4of the 1925 Revised CivilStatutes of Texas.
           By virtue of the enactment.ofSection 14 of Chapter
‘71, Acts of 1925, as amended by Chapter l&3, Acts of 1925,
 the question Is presented as to whether such Act, properly
 construed,.has the effect of repealing an~.abollshing,
 as to permits and leases previously Issued, the-require-
 ments of Section 7, Chapter 83, of a $2.00 per acre cash
 payment at the time the,lease Is Issued and a $2.00 per-
Mr. T. E. Allday, page 10 (o-730)      -


acre annual payment thereafterduring the'ilfeof the lease.
            If it were necessary In this opinion to make a con-
:.structlonof Chapter 6, Section 4, Acts qf 1921, and Section
 14 of Chapter 71, Acts of 1925, we would,feelno hesitancy,
 In the l?.ghtof the legislativehistory preceding and follow-
 ing the Acts In question, ln holding that such Acts, pro-
 perly conshued, do not purport or Intend to release per-
 mlttees and lessees from making the $2.0qper acre cash pay-
 ment and also the $2.00 per acre annual p $ment during the
 ,llfeof the lease, asqequlred by Chapter, 3.
                    _.
           However,'.l!nview of your alter&iv& question as
 to the constltutlonalltyof Section 4 of .Chaptir6, and Sec-
 tion 14 of Chapter 71, it Is riotnecessar;y' that we at this
 time make an independentconstructionof &uqh Act. For the
 purpose only of testing the constltutlonaJ.lty  of such Act,
 we assiuaethat the constructionwhlah has.beep given to said
 Ac.tb* former Commlsslonersof the General       d Offlos Is
 .theproper construatlon. You atate In your ITetter that
 former Conunlssloners of the Qsneral Land Office have oon-
 strued Section 4 of Chapter 6 of the Aots.of   1921, as re-
 pealing and abolishing the requirementsoi.Cha tar 83,er,~:$
 .of1917, with respect to the requirementof a 'i  2.00 per acre
 cash payment at the time the lease is Issued apd a $2.00
 ,peracre annual payment thereafter durlng._the  l$fe of the
 lease as to leases falling within group ape above described.
 You further stat8 that former Land Commls oners have con-
  strued Section 14 of Chapter 71, Acts of % 25,,.asamended
 by Chapter 143, Acts of 1925, as repealing and abolishing
 the prov?:."*~z of Chapter 83, insofar as aap'ter 83 requires
  the payment-ofthe stated $2.00 per aare F\eryments with re-
  spect to leases falling in group two above described. So
  construed,are.,theActs referred to constL$ut$onal?
           Section 12 of Article 7, of the.Oo~stltutlonof
 Texas, provides as follows:
           "The land herein set apart to t   Unlver-
      slty fund shall be sold under such r2ti
                                            ula$,lons,
      at such times and on such terms as may ?e pro-
      vided by law; and the Legislature shsJ1 provide
      for the prompt collection,at maturity, of all
      debts dtieon account of University lqds, here-
      tofore sold, or that may-hereafter t&sold, and
      shall in neither event hatiethe power to grant
      relief to the purchasers."
           Section 15 of Article 7 of the Constitutionof
 Texas provides as follows:
Hr. T. E. Allday, page 11 (o-730)


           "In addition to the lands heretofore
     granted to the University of Texas,there Is
     hereby set apart, and appropriated,Sotithe
      endowment maintenance,and support of said
     University and Its branches, one mIllJon acres
     of the unappropriatedpublic domain o.fthe
     St&te, to be designated, and surveyed;asmay
     be provided by law; and said lands shall be
      sold under the same regulations,and.the,pro-
      ceeds invested In the same manner, as Is pro-
     vided for the sale and Investmentof .theper-
     menent University Fund; and the Legislature
      shall not have power to grant any relief to
     the purchasers of,said lands."
          Section 53 of Article 3, of the Constitution,
.provldesas fgllows:
          "The Legislature shall,haveIJOpower to
     grant, or to authorize any county qr municipal
     authority to grant, any extra compensation,
     fee or allowance to a public offloer,.agent,
     servant or contractor,after servlceJlas
     been rendered, or a contract has been entered
     Into, and performed In whole or ln part. . :I'
          Section 55 of Article 3, of the Cgnstltutlon,
provides as follows:
          "The Legislature shall have no wwei'
     to release or extlngultih,or to authorize
     the releasing or extinguishing,In whole or In
     part, the indebtedness,llablllty or ,obllgatlon
     of anys;lncorporatlonor Individual,to this,
     State, or to any county or other municipal
     corporationtherein."
           Section 51 of Article 3, of the Tonstltutlon,
 provides as follows:
          "The Legislature shall have no power to
     make any grant or authorize the maklng.of-any
     grant of public money to any lndlvldu~l,asso-
     ciation of Individuals,municipal or.other
     corporationswhatsoever. . ."
           Indulgingall presumptions,as we must, In favor
 of the constitutionalityof the Acts in question, can it
 reasonably be concluded that said Acts do riotviolate any
Mr. T. E. Allday, page 12 (o-730)


,of the constitutionalprovisions above quoted?"-Stated
otherwise, the-questionto be determinedis whether or not
Section 4 of Chapter 6, Acte of 1921, or Section 14 of Chapter
71, Acts of 1925, construed as they have been construed by'
the former commissionersof the General Land Office, con-
stitute a grant of relief to purchasersof.Un$versltylands,
or a grant of public money or extra compensationto the
.lesseesof such land, or the release dr extinguishment,in
whole or In part, of an~indebtedness,llablllty or obllga-
tlon owed by such lessees to the State of Xexas?
          Inorder to decide the foregolng.que&ons, It.18
necessary that.we first consider and detegpine',the.nature
and effect of the rights, estates and obl%gatlonswhich were
created by the application for and the Issuance of permits
under Chapter 83, Acts of 1917. We belleue'.the decisions
of the Supreme Court oflTi$ae In State v.&oblson; 30 S. W.
(26) 292, and Thelsen v. Robaeon, 8 S. W."(2d) 646, have
clarified and settled such questions.
          State v. Roblson, supra, involveda comtructlon
of Chapter 71, Acts of 1925, with respect.to tpe power of
the Legislatureto withdraw University lands from lease and
under said Act after bids &ad been submltQd to the Land
Commissionerby persons desiring to purchase leases, In
accordance with said Act. The court held $hat ,Chapter71 was
In effect an offer by the Legislatureto ae&l.oll and gas
leases to the highest bidder In accordancewith the provl-
slons of such Act, and that after the person desiring to
purchase such lease had complied with the.provlsonsof the
Act and had accepted such offer, by submittinga high bid,
a contract with the State thereupon resulted, which con-
tract was beyond the power of the Leglslat+reto impair by
subsequentlegislation. The court In so~l-@ldlng  ,usedthe
following language:
          "In the case of Jumbo Cattle.-$0..v.
     Bacon, 79 Tex. 5, 14 S. W. 840, &rr3,.$hls
     court, speaking through Mr. Justice Gaines,
     says: 'When there Is an offer made hy an
     act of the Legislaturewhich is accepted by
     an individual,'thereIs a contractwhlch.ls
     not within the power of the state to Smpalr.
     ASte? an acceptanoe,a repeal of thedaw can-
     not affect the contract; but, until an accep-
     tance, a repeal of the act withdraws the offer,
     and no contract can be made."
          "This correct announcementof the law applies
Mr. T. E. Allday, page 13 (o-730)


    with full force to the case under cos$ldera-
    tlon In regard to the land included a schedule
    B. An act of the Legislaturemade the offer,
    and Intervenershave accepted It as wovlded
    and conditioned In the Act. A contract between
    the state and the-hi est.,bldder    was made. White
    v. bkrtinj66 Tex. 3&" 0, 17 S; W.~'727;Jumbo
     Cattle Co. v. Bacon, 79 Tex.\5, 1.4S..W. 840:
    Standifer v. Wilson, 3 Te?F232,,'54     .S, W.~ 898;
    !pyn   ~i3Klncannon,5 2 Tex. Clv. -A$$..  633,  II?9
                 Nothing remained to be done to
     eSfe;?tthe making of the contract. The.act
     apeclSlcallyprovides the means of producing
     the evidence of the Contract, I.e. lt.makes
     It the mandatory duty of the commlss%onerto
     examine the bid or bids, ascertainwith whom
     the state has contracted under Its oSSer and
     the acceptance thereof, and accordingly to,
     execute the lease. The doing of the mlnls-
     terlal acts of opening the bids, ascertaining
    .who 1s the highest bidder, and lssulngthe
     lease according to the terms of the law, 1s'
     no part of the contract Itself. It ls only
     making effectual the contractalreadsmade.
     The acceptor of the state's offer canno more
     withdraw his money deposit and back out than can
     the,commissionerrefuse to carry out the.con-
     tract as the.law requires of him. The con-
     tracts-hereare not within the power&S the
     state to impair. The Repealing Act of 1929
     (Acts 1929, c2) cannot affect these contracts,
     but does withdraw the offer of further sales.
          We believe the same statementC&I be made with
respect to the effect of Chapter 83, Acts 6S 19.l.7;that
is, Chapter 83 was an-offer-by the State tr,persons de-
siring to prospect upon.and to secure lea*8 for 011 and
gas on University lands, such offer beIng_.condltloned only
upon compliancewith the terms a1-85 provisions of Chapter
83.  Upon acceptance of such offer, by persons desiring to
secure permits or leases upon Universityl'ands,~a contract
resulted which was beyond the power of the State to impair.
          The question then arises: "Was it beyond the
power of the Legislature,after such contract was .made,to
release, extinguish or forego a compliance by the permittee
or lessee with the obligations undertakenby the lessee
under the provisions of Section 7 of Chapter 831"  We
believe a determinationof the nature of the contract so
Mr. T. E. Allday, page i4 (o-730)


entered Into between the State and Its permitteesand
lessees under Chapter 83' furnishedthe answer.to this
question. The decision In Thelsen v. Robison,'supra, clearly
defines and establishesthe nature of such,contracts.
                    .                      .
          In Thelsen v. Roblson, 8 S. W. (2) 646, the Supreme
Court of Texas construed Chapter 83 of the.Acts of 1917 and
also Chapter 71 6S the Acts of 1925, exclusive    of Section 14
of the latter Act.    In that case the two 0ct.swere attacked
as being unconstitutionalon the grounds at they conferred
                                           P
on a permittee or lessee no greater rlght.than   a mere license,
exercisableat the perm;ttee's or lessee's option; to pro-
spect for oil and gas, whereas the Constltutlon.mandatorlly
requires the Legislature to dispose of Universitylands by
         , and forbids the grant of'a merq,optlonallicense.
     our after making an.e~austlve reviewof the history '.
ii&@-E
preceding the.Acts In question held that such.actsautho-
rized a sale of University lands. The Count said:
          II       undtr,tht thoroughlysettled law of
     this state; the act8 of 1917 and of I.925operate
     not to grant mere licenses to explore for mlne-
     rals, but Instead they,authorlzeconveyancesby
     the state of minerals In place, and unce the Legls-
     lature In passing the acts obeyed the,commandof
     the constitutionto sell the Un1versLt.ylands.
          'In order to arrive at a correct understand-
     ing of the rights of a permitteeor Lessee, under
     the first Instrument Issued under these acts, we
     must considerhis rights under the succeeding
     Instrument,since the right to the succeedingln-
     strument, vests In him under the veryfirst .lnstru-
     ment as completely as the privilege of explora-
     tion, though, of course, subject to t&e conditions
     lmposed by the statutes. The right to.explore,
     to produce, and to appropriaterelat.es:back to,
     and is derived from, the Initial perv&t or lease.
          "Thus viewing the rights of the permittee
     or lessee, we find that each act authorizes the
     sale, at stipulatedprices, of a permit In the
     one case and of a lease In the other,.-,wh$oh
                                                 ln-
     vested the permittee or lessee and hiis:
                                            assigns,
     on performanceof stated obligations,with the
     exclusive right to explore certain lands for oil
     and gas, for a fixed term of years, and, upon
     the discoveryof 011 or gas In commercialor
     paying quantities,to produce and appropriate
Mr. T. E. AIlday, Page 15 (O-730)

                                          .
     same, so long as ~profltableproductlqnmay con-
     tinue. While the act of 1917 does not in terms
     provide that the right of productionand of
     appropriationshall continue as long as 011 or
     gas Is produced In paying quantltles,.asdoes
     the 1925 act, yet the provision of ths,act of
     1917 for successlve.lease.renewals, at the option
     of the lessee or his assign, necessanllyhas the
     same effect as an express provision &bat the lease
     shall remain In force as long as oil&r gas may be
     profitably produced."
          After referring to and quoting fsom the oplnlon
In Stephens Co. v. Mid-Kansas Oil & Gas Co., 254 s. w. 290,
the court stated:
          'In legal effect, the grants authorized by the
     acts are not essentiallydifferent Srpipthe grant
     In the ordinary oil and gas lease, such as was before
     the court In the Stephens County Case. .The ordinary
     lease confers first an option to exp&ore for oil or
     gas, but, after discovery of 011 or aa ln paying
     quantities, It confers the right to produce and appro-
     priate the 011 or gas. It 1s lmmattnlalthat the
     right to appropriate the 011 or gas under the 1917
     and.1925 acts follows and does not pnecede the
     final leavecause,     as already pointed out, the
     permittee or.lessee may compel the execution of the
     final lease on performing the obligationswhich the
     act imposes on him. Under the ordinary lease, the
     right to continue to produce and appropriate 011 or
     gas is contingenton-performanceof similar obllga-
     tions. It Is unthinkable to treat tk&,ordlnary
     lease as conveying minerals in place and to refuse
     to give that effect to the grants aut&orl,zedby
     these acts."
            The Supreme Court of the United States In Group
No. 1 Oil C:rf?oration  v. Bass, 283 U. S. p9,  75 L. ed. -.
1032, has occasion to pass upon the naturspf the.interest
created by the Issuance of permits and leases..ur-+derChapter
83 of the 1917 Acts. The lessee In such case was claiming
immunity from taxation with respect to income derived from
the.sale of 011 and gas, produced under l-sea issued under
Chapter 83.    The claim of tax immunity was based upon the
contentionthat the asserted tax was one upon an instru-
mentality of the State. The court~heldthat under the pro-
visions of Chapter 83, "a completelyexecuted sale, without
restrictions"occurred. The following language was used by
or. T. E. Allday, page   16   (o-730)



the court:
          "But no case has extended such &unity
     to property, real or personal,or lncpme de-
     rived from its sale, where It has passed to the
     buyer by a completely executedact of..sale,wlth-
     out restriction,and no Interest In It has been
     retained for the benefit of the Indians';Whatever
     may be the appropriate limits of the &mnunity, as
     applied in this class of cases, those limits are
     clearly exceeded by that asserted hene."
          In State v. Ratcher, 281 S. W. 1;92,and in Sawyer
v. Roblson, 268 S. W. 151, It was held by,the Supreme Court
of Teds that the transactionsauthorlzed.bychapter 83
of the Acts of 1917, constituteda sale o~Unlverslty~and.
          The above cited authorities,we believe, conclu-
sively establish the followingproposition:
          1. That Chapter 83 of the Acts:of 1917 con-
     stituted an offer by the state to persons desiring
     to purchase mineral rights ln the University
     lands, and that a contractbinding uRon both
     the State and the premlttee resulted.whensuch
      ersons complied with the provlsions.oSChapter
     83 and secured a permit to prospect for oil
     and gas under the terms and conditionsset forth
     in the Act.
          2. That the Issuanceof a permit under
     Chapter 83, Acts of 1917, constitutedsale by
     the State to such permitteeof University land
     within the meaning of Sections 12 and15, Artl-
     cle 7 of the Constitutionof Texas.
          3.  The considerationsand obll$atlonspro-
     vided for in said contractand sale,agreed~and
     undertakenby the permitteeto'be pati and per-
     formed, are prescribed definitelyin Sections
     6 and 7 of Chapter 83, Acts of 1917. .Cne of.the
     obligations.asprescribedin Sectlon.6,is that
     the permittee shall perform certain avelopment
     work within a prescribedperiod. In.Section7,
     it Is prescribed and required that an application
     for lease shall be made within 30 days after dis-
     covery of oil, accompaniedby "a first payment
     of $2.00 per acre for a lease of the area included
     In the permit. t .", and that "annuallyafter the
Mr. T. E. Allday, page 17 (o-730)


     expiration of the first year after the .dateof the
     lease, the sum of $2.00 per acre shaW be paid
     during the life of the lease, and that In addition
     thereto the owner of the lease ahal pay a sum of
     money equal to a royalty of 1/8th of the value of
     gross production of petroleum. The owner of a gas
     well shall pay a royalty of l/lOth of-the value
     of the meter output of all gas disposed of off the
     premises."
            If subsequent acts of the IeglsIatureare con-
 strued to release and extinguishthe'obllgatlonand llablllty
 of permittees, whose permits were Issued wlor to the amen-
 datory acts, to pay the $2.00 per acre cash price upon the
 issuance of a lease  and the $2.00 per acrewual    payment
 required during the life of the lease, or dither of them,
 do such acts violate  any of the constltutlonalprovisions
 quoted above? We have concludedthat suoh acts, when so
..construed, do.clearly violate such constl&utlonal~provl-
 slons unless the State receives   an adequate..oonslderatlon
 In return for the purported release of such obligation
 and llablllty.
            In our opinion, the plain effect of Section 4, or
 Chapter 6, Acts of 1921, and of Section 111,Cha,pter71, Acts
 of 1925, when so construed, la to attempt&o release and
 discharge permittees from the obligationto make the 42.00
 per acre aash and annual payments which such permittees
 agreed and bound themselves to make at the,tlme of their
 applications for permit under Chapter 83, Acts of 1917.   The
 permittee'sobligations as well as his r#Qts were fixed and
 secured upon the granting to him of a pe&$ as prescribed
 by Chapter 83.   We hold that the Leglslatlrre,as held ln
 State.v. Robison, supra, was prohibitedfrom thereafter
 Impairing the permittee's rightiland Srom,lnzreasingthe
 permIttee% obligations to the State beyord,the provisions
 of Chapter 83, and this because of constitutionalpro-
 visions which prohibit the impairmentof previously existing
 contract rights. We as firmly believe,and we here hold, that
 the Legislature, by reason of the constltutlonalprovislor\g
 hereinabove quoted, Is likewise prohlblte&.fromreleasing
 or extinguishingany of the permittee'sobligationsor lla-
 bllltles as prescribed by Chapter 83, unless an adequate con-
 sideration is received by the State ln payment for such
 discharge. We further hold that the.Legislature Is without
 .powerto grant relief to such permitteesor lessees.
           We have searched ln vain Chapter 6 and Chapter 71
 for any provision or conditionwhich can reasonably be deemed
Mr. T. E. AIlday, page 1.8 (o-730)


a considerationrequired to be paid by the,permitteein
return for a release of the $2.00 payments...ln
                                              question. The
plain result of such statutes, In our opinion, If construed
as aforesaid, Is to grant to the permittee.the Identical
property, Interests and rights which are provided for In
Chapter 83 of the Acts of 1917, without requiring from him
in return therefor any promise, payment ox other consldera-
tlon moving to the State. In support of this conclusion,
we refer to the following cases: Delta County v. Blackburn,
100 Tex. 51, 93 S. W. 419; Judklns v. Robison, 109 Tex. p.
6, 160 S. W. 955; Greene v. Roblson, 117 Tex. 515, 8 s. W.
(26) 655; Empire Gas & Fe1 Co. v. State, J,21 Tex, 138, 47
s. W. (26) 265.
          In Delta County v. Blackburn,93.S. W. 419, the
Supreme Court of Texas decided that an order entered by the
CommissionersCourt of Delta County attemptingto reduce
the rate of Interest upon notes given In payment for the
balance of the purchase price owing upon a sale of county
school land from 7 per cent, as provided In the notes, to
3 per cent, violated Section 55 of Artlole 3 .oS the Con-
stitution,In that such order was an attempt,to release
and extinguish the llablllty and obllgatlqp::ofthe purchaser
of such land. In so holding the court said:
           "But while tht Commissioners Court may be
      conceded, for present,purposes,to possess such
      an authority as was there exercised,as Incidental
      to Its control as vendor over the title to the land,
      It does not follow that It has all of the power
      which an Individualwould have to chs.nge.at will
      the rights arising out of a contractalready made
      In selling. It cannot lawfully  lnve&.the proceeds.
      of sales otherwise than as the law directs; nor can It
      release or extinguishllabllltlesor obligations
      which have accrue'dto the county or State further
      than may be essential to the proper exercise of
      the power of sale or dispositionglvenjto It."-
           With regard to the Commlssloners~&!ourtls
                                                   attempt
.to reduce the lnterest called for-in the pu;rchaser's
                                                     notes,
the Supreme Court said:
           "They simply attempted to releaw him from
      his alternative bbligatlon to pay the.whole debt
      at one or to continue to pay Interestat the
      rate of seven per cent, which, under the Const'l-
      tutlon, they had not the power to do. It Is Idle
      to say that they exerted the power given them
Mr. T. E. Allday, page 19 (o-730)


        to sell or dispose of'the land. It haa been sold
        and _.
            neither
                  . _party Intended
                                  . that
                                      . the- sale
                                             ._ -. should
        be disturbed.   Such an extension or aat power 1s
        not at all essential to Its full and S+ee exercise,
        but would.make It lmplnge upon the other positive
        conetltutlonalprovisions which restact the autho-
        rity of the counties In dealing with such subjects
        and would open the door for many eva.qoiB thereof. . .I'
             "Differentlyvlcwed, as the comm$ssloners
        viewed It, their attempt, instead of wttlng at
        naught the contract of sale, reassertingthe
        title of the county and reselling the.land, was -
        to keep the sale In force, and, by releasing-the
        vendee from a part of his unquestionableobllga-
        tlon to the county, to Induce him to perform th'e
        remainder ln a somewhat different wagcI,yhichln-
        fringed the other provision of the Cws$ltutlon
        forbidding the release.or extlngulshu&?rjt
                                                 .QS
        llabllltlesand obligationsto the acult)ty."
          In Judklns v. Roblson, 160 S. W.,955, the Supreme
Court had under considerationthe constltuttidnallty of the
repurchase Act of Zgl;, Article 5423, R. C..S. of 1911.
The court laid down the following rules foz.determlnln&
the constltutlonalltyoS.euch an Act:
             "The test to be applied to it, thtyefore,
        Is whether Its necessary operation Is to enable
        the previous owner to reacquire the Land at a
        less price than he was obligated to mx under
        his former purchase. Is its terms wex~ to.that
        effect or such were Its necessary opexatlon,we
        think it should be held Invalid, though It purported
        to deal with the previous owner as a alpnger  ‘.
        to the title, as such an act would bu.$$rove an
        easy method.to alrcumventthe constitutional
        provision."
             In Greene v. Rnbison, 8.~.   W. (&;‘.655,   at page
 658,   the Supreme Court said:
             "We cannot agree with responden&.the land
        commissionerand his attorney that tti Legislature
        has authority to relinquish to the owner OS the
        soil, without payment of considerationtherefor,
        minerals reserved to the state prior to the sale
        of the land and withheld In his purchase thereof,
        or that the cases of Cox v. Roblson, 105 Tex. 426,
Mr. T. E. Allday, page 20 (9-730)


       150 S. W. 1149, and Greene v. Robisop..:'
                                              09 Tex.
       367,                                $#,
            210 S. W. 498, can be so construe.:

           In Empire Gas & ~BuelCo. v. Stati,'@ S. W. (2d)
265,  the Supreme Court was 'calledupon to,determlnewhether
 or not Chapter 23 of the Acts of 1931 was.constltutlonal.
 Said act attempted to relieve the purchaser of school land
 sold with mineral reservationfrom the pawent of any amount
 over and above a l/16 royalty and 10 centg_per acre rental,
 notwithstandingthe fact that the Supreme&qurt in the case
~of Qreene v. Roblson, 8 S. W. (26) 655, had that Chapter
 81 of the Acts of 1919 limited such purchaser'sright to
 one-half of the royaltyand onerh+f of.t& Fental as com-
.pensatlonfor damages to the s&face, the.remalnlngone-half
 of the royalty and rentals to be paid to the State. In
 striking down such act as In violation of Section 51,
 Article 3, Section 53, Article 3, and section 4 of Article
 :a~$~~~Constltution, the Supreme Court wed the following
           whloh languagewe .balleveto be decisive of the
 questionJat hand:
             '"Asconstruedby the Supreme Court,,thls.   law
       +$horlzes the 011 and gas to be sol&,~.retalnlng
        to the state as a minimum l/l6 of all-gas and
        minerals as roylaty and 10 cents per acre per annum
        and one-half of all amounts received hy the.owner
        over and above the foregoingamounts.. The law
        fixed the rights of the state, as well as the rights
        of the purchaser. Since the lnceptla of this act,
        all purchasers of lands from the stat,e,..under  the
        provisions thereof,agreed to pay the state, over and
        above l/16 royalty and 10 cents per acce, one-half
        of all other sums received for the gag'and.011. Besides,
        the provisions of the act made the pu.chaser of
        land the agent of the state to secure%w;;;;sybat
        and fixed his compensationdefinitely,.
        does the Legislatureundertake to do under.cerCaln
        provisions of Senate Bill 310? It expbessly undertakes
        to relieve the purchaser from the pawent of any sum
        over and above the l/16    royalty and the,.10cents per
        acre. This Is a plain violation of action 51, Arti-
        cle 3, of the.Constltutlonquoted abo.ve. The Pelin-
        qulshment Act constitutedthe buyer Ue agent of
        the State In making mineral leases and fixed his
        compensationand under the provisions of that act
        he was to receive for his services one-half of all
        sums over and above the royalty and 10 cents per
        acre rental. The provls?ons of Senate Bill.310 undertake
                                ..
Mr. T. E. Allday, page 21 (o-730)


     to take from the state all of the bonps
     and give It to the agent whose right&were
     fixed In the RelinquishmentAct enact&d ln
     1919 * This Is in clear violation of45ectlon
     53, article 3, of the Constitution above quoted,
          "Again, the Legislatureln Sena$i$lll 310
     undertakes to grant relief to purchasers of oil
     and gas sold by the state under the pxo~lslons
     of the RelinquishmentAct, and this I@ plainly
     contrary to the provisionsof Section 4, Article
     7 of the Constitutionof this state..;
                                          .a.
                                            .
          "As shown by this record, the s-ices of
     Tlppett as an agent for the state had-been
     rendered, his compensationfixed, anb.t~e..Empire    ',
     Gas eC-1   Company and Tippett owe the #ate
     one-halt'of all sums received above Ue,roylaty
     arid10 cents per acre rental. These,slghtsand
     obligations of the parties were definitely fixed
     by law. For the Legislatureto undentake to change
     the oondltlons fired by law by releaalng or extln-
     Zulshlng the debt owing by Tlppett @    the
     Empire Gas.& Fuel Company to the stat&by re-
     lieving them or either of them of thar. obllga-
     tions, or any part thereof, to the sta& or grant-
     ing them or either of them any relief as purchasers
     of the mineral rights, In so'far as Se@e Bill 310
     undertakes to do this, it Is clearly.Eepugnantto
     the provisions of the Constitution,qd Is therefore
     void."
          The above quoted language of the'isupremeCourt Is
directly applicable to-the question we are,now .conslderlng.
As the Acts of 1918 ftxed the obllgations,pfpurchasers
from the State with respect to the payment&S royalty and
rentals, so did Chapter 83 of the Acts ofLJ.917fix such
obligations with Respect to permits and leases Issued to
purchasers under chapter 83. What does t&&eglslature
undertake to do by enactmentof Chapter 6.&.the Acts of
1921 and Chapter 71 of the Acts of 1925, I& such acts are
construed as they have been mormer    Land Commissioners?
It undertakes to relieve purchasersunder Chapter 83
from the payment of the $2.00 per acre ca& payment at the
time of the issuance of the lease and the‘-$2'.00cper
                                                    acre
annual payments during the life of the le'lse. The obllga-
tions as well as the rights of the permittee and the
State were definitelyfixed by Cha ter 83. The attempted
release and extinguishmentof the f2.00 per acre obligations
Mr. T. E. Allday, page 2i (o-730)


owed to the State, and the attempted grantpf such lease
.by the State to the permittee without the,aaymentof the
amounts prescribedby Chapter‘83, In our *ion,      constl-
tutes a plain vlolatlon.ofSection 51, Artjcle 3, Section
53, Article 3, and S ctlon 12 and 15 of Ar$l&Le 7 of the
 State Constitution. Accord ly, It Is ouc'oplnlon,and
you are advised that Section"$ of Chapter & Act:zcf1921,
and Section 14, Chapter 71, of the Acts of.'1925,and
,Chapter143, Acts 1925, Insofar as said Acts m&y be con-
 strued to repeal and abolish the requirementsof the $2.00
per acre cash payment upon the Issuance ol,the lease and
 the $2.00 per acre annual payment thereaf-r during the life
 of the lease, are invalid and unconstltutlongl.
                                             !
           If said Acts are construed otherkie than as re-
 leasing and abolishingthe requlrmentsfo&$he two $2.00
 per acre payments,lt,&f course, follows.th$tthe requlre-
ments made by Section7; Chapter 83, of t
 for such paymentshave remained and are w,~tzf       2%
 and effect, unaffectedand unrepealedby &y.'subsequent
~.leglslatlon.In such event, said smounts,.lf. they have
 not heretofore been paid, are now exlstln&and unpaid
 obligationsdue to the State by all lessees whose permits
 and leases were Issued under Chapter 83. .We believe this
 statement,when considered In the light of.&he remainder
.of this opinion, constitutesa sufficient.&swer to all
 of the questions propounded ln your letter+.
          In conclusion,we will state that.we have given
careful considerationto the case of Rhoads.Drlll1n.g Co.
vs. Allred, 70 S. W. (26) 576, as well as&o the other
decisions cited In that opinion. We bell.*e-'that the
facts and holding In Rhoads Drilling Company v,-Allred,and
the other cases therein cited, are clearly-,dlstingulshable
from the facts and conclusionsexpressed'tithis opinion. In
?he?hoads case the decision as to the cona$l$utlonallty
of the statute there attacked was expressl&based upon a
Pinding that an adequate considerationpa&by the lessee
there Involved supportedand rendered vallQ.the reduction
In the royalty obligationgranted to t&e Leigee. The
considerationfor the reduction of such romJ.ty obligation
IS set forth on pages 584, 585, and 586 of.tfieopinion.
           This distinction1s clearly poded out in the
 opinion of the Rhoads Drilling Co. case on.pag'$583 where
 the Court says:
           "The act would be within the constitutional
      pro~lbltlon~lfIt undertook to authorize the'
Mr. T. E. Allday, page 23 (o-730)


     gratuitous releasingIn whole or in par&~of an
     existing,r.,lndebtedness,
                            liability, or obligation
     to the State. Delta County v. Blackburn, 100
     Tex. 51, 93 S. W. 419, 420; Judklns v.,Robison,
     109 Tex. 6, 160 S. W. 955; Greene v. ,Roblson,
     117 Tex. 516, 8 S. W. (26) 655; Empire-Gas &
     Fuel Co, v. State, 121 Tex. 138, 47 S. W. (2d)
     265."

          In the Statutesnow under consideration,we find
nothing which we can construe as a considerationrequired to
be paid by the permitteesor lessees in return for the
attempted release and extinguishmentof the.permittee'sand
lessee's obligationto pay the $2.00 per s.crecase and annual
payments required by Chapter 83.  Nor are wellnformed of
any considerationactually paid to the State,,forsuch at-
tempted release. In brief, the State has not received any
considerationfor the attempted release an& ext-$ngulshment,
nor do the statutes condition such release and extingulsh-
ment upon a receipt by the State of a conalderatlon.
          In opposing the conclusion of ttxls opinion, It
will possibly be contendedby lessees who are affected by
this opinion, that they for several years have held their
leases In relianceupon the constructionwhich has heretofore
been given by commissionersto the Acts in.,questlon..In
reply to any such possible contentton, we tiu now state
some of,the factualhistory in connection With oil and gas
leases covering tens of thousands of acres-of University
land which leases were issued by virtue of.Chapter83.
We are informed that such lesseesIn many instances have
for many years retained their leases by the drilling of
a single well on an isolated section of a lease, and
in many Instances the particular section upon which a well
was drilled is situated In a county far removed from the
location of other sections of land coverebgy such lease.
Furthermore,these leases have been secured.andheld
without the payment by the lessees of the algina $2.00
per acre cash at the time of the issuance&the     lease as
provided in Chapter 83 and without the payme@ of a single
$2.00 per acre annual payment. The mere swtement of the
actual conditionswhich exist with regard to University
lands upon which permits and leases have been issued under
Chapter 83 serves, we believe, as an effe
a contentionthat the position we take inYe.t is answe~r
                                                opinionto
                                                        is
lacking in equity.
          This opinion has been extended to some length
because of the importanceof the questions involved. We
Mr.   T. E. Allday, page 24 (o-730)


t,;::ct
      that a full ar.;rcti
                        has-been given to your questions.
                                         Yours very truly
                                                ..,
                                      ATTORNEYGXNERALOF TMAS
                                      By /s/ RoBert E. Kepke
                                             Robert E. Kepke
                                              Assistant
REK:BT:br
APPROVED AUG 31,    1939

/a/ Gerald C. Harm
ATTORIiEYGEI?ERAL
                OFTMAS
