                                            June 22,200O


The Honorable Bill Ratliff                          Opinion No. JC-0237
Chair, Senate Finance Committee
Texas State Senate                                  Re: Whether an oyster-bed lease authorized by
P.O. Box 12068                                      chapter 76 of the Parks and Wildlife Code is a
Austin, Texas 78711                                 perpetual lease or an annual lease, and related
                                                    questions (RQ-0163-JC)

Dear Senator Ratliff:

         You ask anumber ofquestions regarding oyster-bed leases under chapter 76 of the Parks and
Wildlife Code. Because you do not ask about any particular lease or situation, we answer your
questions in genera1 terms and only with reference to chapter 76. We conclude that a chapter 76
oyster-bed lease is a periodic, year-to-year lease that may be terminated at the end of any lease year
by giving reasonable notice ofthe termination; it is not a perpetual lease. We also conclude that an
oyster-bed leaseholder is authorized to sell or convey the oyster-bed lease, and that the lease does
not expire when the leaseholder dies. Additionally, chapter 76 does not prohibit a family member
or family business partner from acting as an agent for other leaseholders; rather it proscribes the
“control” of more than 100 acres of submerged land by the same person. No person may exercise
power or authority over more than 100 acres of submerged land pursuant to one or more oyster-bed
leases. Finally, we conclude that control of more than 100 acres of land covered by water pursuant
to another person’s oyster-bed lease is not a “lease-breaking condition” that allows the state to cancel
the lease by which such control is exercised.

        Your first series of questions pertains to the terms and conditions of an oyster-bed lease:

                         In a lease between the state and an individual, does the
                absence of a stated term ofthe lease grant that leasehold in perpetuity,
                or does a lessee’s payment of annual rent on leased lands render the
                lease an annual one? If the state, at some point in the future, revokes
                or renegotiates terms of these leases, will it owe compensation for
                lost property rights to these leaseholders? If the leasehold is indeed
                granted in perpetuity, does the leaseholder have an unlimited right to
                sell or convey the lease? Does the lease expire when the leaseholder
                dies, or can it be conveyed to heirs?
The Honorable   Bill Ratliff   - Page 2           (JC-0237)




Letter from Honorable Bill Ratliff, Chairman, Senate Finance Committee, Texas State Senate, to the
Honorable John Comyn, Texas Attorney General, at I (Dec. 15, 1999) (on file with Opinion
Committee) [hereinafter “Request Letter”].

         Before addressing your specific questions in detail, we review the statutes regarding oyster-
bed leases. All beds and bottoms and the products ofthe beds and bottoms ofbays and inlets in this
state and that part of the Gulf of Mexico within the jurisdiction of the state are state property. See
TEX. PARKS& WILD. CODE ANN. 4 1.01 l(c) (Vernon 1991). The statemaypermit               useofthe waters
and the bottoms and taking of products therefrom. See id. The Parks and Wildlife Department (the
“Department”), a state agency, is directed to regulate the taking and conservation of all forms of
marine life and shells, and to administer the laws relating to fish, oysters, and marine life in
accordance with the Parks and Wildlife Code (the “Code”). Id. 5s 1.01 l(d), 11.001, 12.001(a); see
also 31 TEX. ADMIN. CODERS. 58 (1999) (Oyster and Shrimp). Chapter 76 of the Code deals with
oyster-bed leases and is the codification of various statutes enacted in 1919 and earlier. See Act of
July21,1919,36thLeg.,2dC.S.,ch.73,          1919Tex.Gen.Laws191;ActofMay30,1975,64thLeg.,
RX, ch. 545, subtit. D, 1975 Tex. Gen. Laws 1405,1568. Under chapter 76, an oyster bed or reef,
other than a natural oyster bed, is subject to “location” by the Department. See TEX. PARKS & WILD.
CODE ANN. 5 76.003 (Vernon 1991); see also id. $5 76.001(“A natural oyster bed exists when at
least five barrels of oysters are found within 2,500 square feet of any position on a reef or bed.“),
76.004(c) (natural oyster bed, bay shore area within 100 yards of shore, area subject to riparian
rights, and area already under certification as location are not subject to location). Any United States
citizen or domestic corporation may apply for a certificate authorizing the applicant to plant oysters
and make a private oyster bed at a described location. See id. 5 76.006(a), (b). If the location is
subject to certification, see id. 5 76.009, the Department must issue a certificate that describes the
location by metes and bounds and with reference to compass points and natural objects, see id.
 5 76.012.

        Chapter 76 provides little guidance as to the nature, terms, or conditions of an oyster-bed
location certification. Only section 76.017 deals to a limited extent with the terms and conditions
of an oyster-bed location certification, referring to it as a “lease” and providing that:

                    (a) No rental fee is owed on any location when oysters are not
                sold or marketed from the location for a period of five years after the
                date of the establishment of the location.

                    (b) When oysters are sold or marketed from the location and
                thereafter, the holder of the certificate shall pay to the department $3
                per acre of location per year. In lieu of that payment, the commission
                may set the required payment under this section in a greater amount.

                     (c) Rental fees are due annually by March 1.

                     (d) The failure to pay any rental when due terminates the lease.
The Honorable Bill Ratliff - Page 3               (JC-0237)




Id. 5 76.017 (emphasis added); see also 31 TEX. ADMIN. CODE 5 58.30 (1999) (Private Oyster
Leases). While section 76.017(b) allows the Department to set a higher rental than $3 per acre per
year, the Department has not done so. See 31 TEX. ADMIN. CODE 5 58,30(d)(5)(B) (1999). The
Department’s rules track the statutory rental provisions with one exception. Section 58,30(d)(5)(E)
ofthe Department rules provides that “[ilfoysters from the lease are not sold or marketed within five
years from the date of establishment of the lease, the lease is void.” Id. 5 58,30(d)(5)(E). Section
76.017 does not specifically state the type of leasehold interest created by an oyster-bed lease, i.e.,
whether it is annual or perpetual. Moreover, we have found no Texas cases construing a chapter 76
oyster-bed lease.

         Based on the limited provisions of section 76.017 of the Code, we conclude that an oyster-
bed lease authorized under chapter 76 is a periodic, year-to-year lease that is terminable at the end
of any lease year with reasonable notice. At common law, there are four kinds of tenancies,
classified as follows: (I) tenancy for a definite term or term for years; (2) periodic tenancy, as from
year-to-year or month-to-month;    (3) tenancy-at-will; and (4) tenancy at sufferance. See generally
49 TEX. JUR. 30 Landlord and Tenant $5 24-27 (1986); RESTATEMENT(SECOND) OF PROPERTY
$5 I .4, I .5, 1.6 (1977). The classification is important because it determines the incidences of a
tenancy. See generally 49 TEX. JUR. 3D Landlord and Tenant $5 24-27 (1986); RESTATEMENT
(SECOND)OFPROPERTY$5 1.4,1.5,1.6 (1977). To classify the oyster-bed lease, we look at its terms
under section 76.017. No rent is required for a five-year period if no oysters are sold or marketed
from that location; and the lease terminates at the end of that period if no oysters are sold or
marketed. See TEX. PARKS & WILD. CODE ANN. 8 76.017(a), (b) (Vernon 1991); 31 TEX. ADMIN.
CODE $ 58,30(d)(5)(E) (1999). As soon as oysters are sold and marketed, a leaseholder must pay
annual rent by March 1, even during the initial five-year period; otherwise the lease terminates. See
TEX. PARKS & WILD. CODE ANN. $ 76.017(c), (d) (V emon 1991). Once oysters are sold and
marketed, section 76.017 thus provides for periodic rent and termination of the lease ifthe rental is
not paid by March 1, but it does not provide for an absolute lease termination date or the number of
annual periods for which the lease may be held. The duration of the lease is uncertain. A lease for
an uncertain duration that requires periodic rent creates a periodic tenancy. See Panola County
Appraisal Review Bd. v. Pepper, 936 S.W.2d IO, 12 (Tex. App.-Texarkana 1996, no writ) (“Periodic
tenancies are those where the agreement provides no fixed term, but is for period to period at the will
of the lessor or lessee.“); RESTATEMENT(SECOND)OF PROPERTY$j 1.5 cmt. d (1977) (parties may
 expressly provide for periodic tenancy, agreement may be apparent from circumstances, or where
no duration is stated but periodic rent is reserved, periodic tenancy is presumed).

        Our construction of a chapter 76 oyster-bed lease as a periodic, year-to-year lease is
supported by Texas case law dealing with leases generally. By way of background, an at-will
tenancy is one that is terminable at the will of either party to the lease at any time, see Holcombe v.
Lorino, 79 S.W.2d 307, 310 (Tex. 1935); RESTATEMENT(SECOND) OF PROPERTY 3 1.6 cmt. a
(1977); and a lease for an uncertain term is prima facie an at-will lease, see Holcombe, 79 S.W.2d
at 310. Where parties enter into a lease of uncertain duration, but periodic rent is required or paid,
Texas courts - conflating a tenancy-at-will and a periodic tenancy - characterize the arrangement
The Honorable    Bill Ratliff   - Page 4           (X-0237)




as an “at-will lease,” but one that establishes a tenancy from month-to-month or year-to-year and is
terminable at the end of the specified period “at the will” of either party. See, e.g., Virani v. Syal,
836 S.W.2d 749, 751-52 ((Tex. App.-Houston [lst Dist.] 1992, writ denied); Sellers v. Spiller, 64
S.W.2d 1049,105l (Tex. Civ. App.-Austin 1933, no writ); Hillv. Hunter, 157 S.W. 247 (Tex. Civ.
App.-Austin 1913, writ ref d)); but see RESTATEMENT       (SECOND)OFPROPERTY         5 I .5 cmt. d (I 977)
(Where the parties enter into a lease of no stated duration and periodic rent is reserved or paid, a
periodic tenancy [rather than a tenancy at will] is presumed.“). In Virani v. Syal, for example, the
court considered a lease where the parties did not agree to the lease term, but agreed on a rent of
$800 per month. See Viruni, 836 S.W.2d at 750. The Virani court held that the tenants “were
tenants at will occupying the property on a month-to-month basis.” Id. at 752. Similarly, in Sellers
v. Spiller, the court stated with respect to an agreement to lease at a specified monthly rental, but
for an unspecified time, “[ s ]UCh contracts have uniformly been held to be merely tenancies from
month to month, subject to termination by either party upon reasonable notice to the other.” Sellers,
64 S.W.2d at 105 I. Finally, in Hill v. Hunter, the court determined that a lease for an uncertain term
 after expiration of an annual holding, was “a mere tenancy at will; and that in the present case, where
there was a holding over[,] under the former annual holdings, and the rent payable annually, the
tenancy was from year to year, terminable at the end of any year at the will of either party.” Hill,
 157 S.W. at 253. In sum, under these cases, a lease of uncertain duration, but that requires periodic
payment, is both a periodic tenancy because it is a “year-to-year” or “month-to-month”            tenancy
 terminable only at the end of the particular period and an at-will tenancy because it may still be
 terminated “at the will” of either party.

         The Texas courts’ conflation of at-will and periodic tenancies is relevant for our purposes
because it has implications for the lessee’s right to notice of termination.    A periodic tenancy is
differentiated at common law from other tenancies by the notice requirement:           “[The periodic
tenancy] was developed by the English judges for purpose of relieving the injustice resulting from
the power of both the landlord and the tenant to summarily terminate the tenancy at will.         The
implication in law of an agreement to give notice to terminate the tenancy was the vehicle by which
the courts sought to remove the old injustices of the tenancy at will. This requirement of notice was
a distinguishing factor between the year to year tenancy and the other tenancies.” See generally
Edward G. Northcut, Creation and Termination of Periodic Tenancies, I5 BAYLORL. REV. 329
(1963) (footnotes omitted). But with respect to the Texas case law, it has been noted that: “As to
year to year tenancies it seems to be the law in Texas, that a year to year tenancy terminates ‘at the
end of each year at the will of either party.’ Evidently no notice is required to terminate a year to
year tenancy and either party may end this tenancy, presumably, at the end of any year he desires.”
Id. at 338 (footnotes omitted).

        No Texas case, however, has specifically addressed the notice requirement for a year-to-year
tenancy. Sellers v. Spiller, dealing specifically with the sufficiency of notice to terminate a month-
to-month tenancy appears to adopt the common-law rule that such tenancy may be terminated only
upon reasonable notice: “it appears that [notice to vacate] was not given within a reasonable time
of the date on which Spiller sought to terminate his tenancy. In contracts from month to month, a
month’s notice in advance of intention to vacate, where time of notice is not prescribed by statute
The Honorable    Bill Ratliff   - Page 5               (JC-0237)




nor by the terms ofthe contract, has been held to be a reasonable time.” Sellers, 64 S.W.2d at 1051
(citations omitted). A more recent Texas Supreme Court case, Bockelmann v. Marynick, 788 S.W.2d
569, 571 (Tex. 1990) suggests that notice may be required when a lease does not have a definite
duration. The Bockelmann court concluded that a notice was not required to terminate the tenancy
at issue stating: “The lease created a tenancy for a definite term (a tenancy with a specified
beginning and ending date). The general rule is that a tenancy for a definite term does not require
a tenant to give notice in order to terminate the tenancy, because a tenancy for a definite term simply
expires at the end of the contract period.” Bockelmann, 788 S.W.2d at 571.

          We believe that a termination notice is required to terminate a periodic, year-to-year oyster-
bed lease because its ultimate duration is uncertain.’ Cf: Bockelmann, 788 S.W.2d at 571(lease for
definite term, with a beginning and ending date, does not require termination notice because tenancy
for definite term simply expires at end of the lease term). If rental is paid by March I, the lease
continues for an additional year and there is no statutory limit to the number of years for which it
may be so continued. There is no final lease ending date because the annual period does not define
the duration ofthe lease. Thus, although the lease terminates upon failure to pay the annual rent, and
it is terminable at the end of any lease year, the particular year in which it will terminate is unknown.
Notice in these circumstances is not only reasonable, but necessary to protect the lessee. We believe
a Texas court confronted with this issue would follow the common-law rule requiring notice to
terminate a year-to-year lease. See Sellers, 64 S.W.2d at 1051 (adopting common-law rule that
reasonable notice equal to one month required to terminate a month-to-month                       tenancy);
RESTATEMENT (SECOND) OF PROPERTY 5 1.5 cmt. f (1977) (if no notice of termination is given,
periodic lease will continue for another period). At common law, a six-month notice was required
to terminate a periodic year-to-year lease, but a shorter “reasonable” period may be sufficient. See
RESTATEMENT (SECOND) OF PROPERTY 5 1.5 cmt. f (1977).


         A chapter 76 oyster-bed lease, in our opinion, is not a lease for one year or a definite term
such as would not require notice of termination. A lease creates a tenancy for a definite term if the
tenancy has a specified beginning and ending date. See Bockelmann, 788 S.W.2d at 571 (“The lease
[for a twelve-month term ending on February 28, 19851 created a tenancy for a definite term (a
tenancy with a specified beginning and ending date).“); accord RESTATEMENT (SECOND) OF
PROPERTY 5 1.4 cmt. a (1977) (“A lease is for a fixed period of time when it specifies its beginning
date and its termination date as calendar dates. A lease is for a computable period of time when it
specifies a formula for determining the beginning and termination dates.“). Again, chapter 76 does
not provide an ending date for the oyster-bed lease: if rental is paid by March I, the lease continues
 for an additional year and there is no statutory limit to the number of years for which it may be so
 continued.




         ‘Notice to terminate a month-to-month tenancy is no longer an issue because it is specifically required by
statute.&~TEX.PROP.CODEANN. 5 91.001 (Vernon 1995) (specifying notice for termination oftenancies frommonth-
to-month or periodic tenancies).
The Honorable   Bill Ratliff   - Page 6            (JC-0237)




         Neither is a chapter 76 oyster-bed lease, in our opinion, a perpetual lease. Perpetual leases
are not favored by Texas courts, and a lease will not be construed to create a perpetual leasehold
interest unless the intent to create such interest is evidenced by clear and unequivocal language. See
Philpot v. Fields, 633 S.W.2d 546,548 (Tex. Civ. App.-Texarkana          1982, no writ); Hull Y. Quanah
Pipeline Corp., 574 S.W.2d 610, 611-12 (Tex. Civ. App.San              Antonio 1978, writ refd n.r.e.);
Oglesby Y. McCoy, 255 S.E.2d 773, 776 (N.C. Ct. App. 1979). In Philpot Y. Fields, the court
considered a lease for a term of twenty years “and so long thereafter as the lessee         may use the
premises for the purpose of maintaining and operating a LTX separator                in connection with
processing, refining, treating, and storing natural gas.” Philpot, 633 S.W.2d at 547. The Philpot
court determined that the lease created a perpetual lease as long as the land was used for the stated
purpose. See id. at 548. The court distinguished its case from the line of Texas cases finding
tenancy-at-will when the lease term is uncertain on the grounds that (1) those cases did not involve
a complete, written lease clearly expressing the parties’ intent and (2) those cases did not tie the
agreement’s termination to a definite, ascertainable use ofthe land. See id. But the court also stated
that it would not apply the rationale ofthe earlier cases even ifthey were not distinguishable because
the lease in question was “specific in expressing rights, obligations, and duties of the parties” and
that:

                Although there is no definite ending date after the 20 year term, that
                date is tied to the cessation of the use of the land for certain definitely
                ascertainable purposes.          It appears that the parties intended to
                create a perpetual right to lease the land. When the parties’ intent is
                made clear, courts should enforce the agreement as written, even
                though perpetual rights are not favored.

Id.

         While we are not convinced that Philpot correctly states the law, a chapter 76 oyster-bed
lease is distinguishable fiorn the Philpot lease. We do not have before us the language of a particular
oyster-bed lease, but we note that such a lease is a creature of chapter 76. Chapter 76 does not
evidence a clearly expressed intent to authorize a perpetual leasehold interest. See also Oglesby, 255
S.E.2d at 775-77 (holding that oyster-bed lease did not provide clearly and unambiguously            for
perpetual renewal where no language in lease or in statute indicated an instrument in perpetuity).
Oyster beds are the property of the state, of which the state may allow the use by private persons.
See TEX. PARKS & WILD. CODEANN. 4 1.Ol l(c) (Vernon 1991). They are also natural resources that
the state has an interest in protecting and regulating. See Act of July 21, 1919,36th Leg., 2d C.S.
ch. 73, 1919 Tex. Gen. Laws 19l(the Act, among other things, is for the protection of oyster and
marine life, to protect natural oyster beds, and provide for location ofprivate oyster beds) (caption).
Given the state’s vested interest in oyster beds and the significance of alienating state property by
granting a perpetual interest therein tantamount to a fee title, we believe that if the legislature
 intended an oyster-bed lease to be perpetual, it would have expressly and unambiguously              so
provided. Accordingly, we determine that chapter 76 does not authorize a perpetual oyster-bed
 lease.
The Honorable Bill Ratliff    - Page 7             (JC-0237)




         Furthermore, because chapter 76 does not authorize a perpetual leasehold interest, the
Department may not enter into or provide for a perpetual lease. The Department, like any state
agency, is a legislative creature and possesses only such powers as are delegated to it expressly and
impliedly by the legislature. State v. Jackson, 376 S.W.2d 341, 344 (Tex. 1964); Texas Parks &
 WildlifeDep’t v. Callaway, 971 S.W.2d 145, 148 (Tex. App.-Austin 1998, no pet.). Specifically,
the Department may regulate taking of marine life and administer the laws relating to oysters only
in accordance with the Code. TEX. PARKS & WILD. CODE ANN. $5 1.011(d), 11.001, 12.001(a)
(Vernon 1991). Chapter 76 does not expressly provide for a perpetual lease. And because the intent
to create a perpetual lease must be evidenced by clear and unequivocal language, such authority may
not be implied.

         You also ask in your first series of questions: “If the state, at some point in the mture,
revokes or renegotiates terms of these leases, will it owe compensation for lost property rights to
these leaseholders?’ Request Letter at 1. While not completely clear, you appear to ask about
possible, unspecified claims of unconstitutional      “taking” of unspecified vested rights under an
oyster-bed lease contract arising from unspecified actions taken by the state, assuming the oyster-bed
leases are perpetual. In view of our conclusion that a chapter 76 oyster-bed lease is not a perpetual
lease, we do not address this question. Moreover, we note that such a determination cannot be made
in the abstract, dependent as it is on, among other considerations, the particular actions complained
oftaken by the state, the legal theory ofthe taking claim, and theparticularproperty   interest affected.
See, e.g., State v. Operating Contractors, 985 S.W.2d 646 (Tex. App.-Austin 1999, pet. denied)
(discussing necessary elements of claim of constitutional “taking” based on legislative change
affecting contractual right); Callaway, 971 S.W.2d 145 (discussing claim of inverse condemnation
of contractual property easement); Bryant v. Hogarth,, 488 S.E.2d 269 ( N.C. Ct. App. 1997)
(discussing timing of government regulation as affecting taking claim relating to franchise to
cultivate shellfish); Working Waterman ‘s Ass ‘n of Va.. Inc. v. Seafood Harvesters, Inc., 3 14 S.E.2d
 159 (Va. 1984) (looking at whether statute complained of in fact substantially impaired oyster and
clam planting contract rights); Oglesby, 255 S.E.2d at 773 (looking at timing of legislative change
increasing rental for oyster-bed lease in regard to claim of impairment of contract).

         You additionally ask in your first series of questions whether a leaseholder has an
“unlimited” right to sell or convey the lease or whether the lease expires on the death of the
leaseholder. See Request Letter at 1. These questions also appear to be premised on a conclusion
that an oyster-bed lease creates a perpetual leasehold interest. However, we do not believe that these
questions arise only in the context of a perpetual lease.

          We first conclude that chapter 76 implicitly authorizes an oyster-bed leaseholder to sell or
convey an oyster-bed leasehold interest. Section 76.039 of the Code, which prohibits certain acts
relating to oyster-bed locations, provides as follows: “This section does not affect the right of a
person to sell or assign an oyster location or private bed.” TEX. PARKS & WILD. CODE ANN.
5 76.039(b) (Vernon 1991). By its terms, this provision clearly assumes that the right to sell or
convey oyster-bed leases exists and reiterates that this right continues.        We find no express
restrictions in chapter 76 on a leaseholder’s right to sell or convey an oyster-bed lease. Of course,
the leaseholder cannot convey any more interest than the leaseholder has under the lease. Cf:
The Honorable   Bill Ratliff    - Page 8            (X-0237)




Shipman Y. Mitchell, 64 Tex. 174 (1885) (person who acquired unexpired term of lease from original
lessee bound by time of expiration agreed to in original contract).

         We conclude second that a chapter 76 oyster-bed lease does not expire on the death of the
leaseholder. Again, no provision in chapter 76 addresses this issue, but under the common law, a
periodic tenancy does not terminate on the death of the leaseholder. RESTATEMENT(SECOND) OF
PROPERTY 5 1.5 cmt. f (1977) (“The death of one party to a periodic tenancy does not terminate the
lease.“); see also Frazier v. Wynn, 472 S.W.2d 750, 752 (Tex. 1971) (three-year lease did not
terminate on lessee’s death but constituted community asset and vested in widow and heir, citing
 Wilcox Y. Alexander, 32 S.W. 561 (Tex. Civ. App. 1895, no writ)); Wilcox, 32 S.W. at 561 (as a
general rule, lease is not extinguished at death and upon death of lessee, lease in question became
part of estate). In contrast, a tenancy-at-will under the common law terminates on the death of the
leaseholder. SeeMcNeely Y. Southwestern Settlement & Dev. Corp., 282 S.W.2d 932,935 (Tex. Civ.
App.-Beaumont      1955, no writ) (rights of ancestor under tenancy-at-will ended at his death and did
not pass to his heirs under statutes of descent and distribution); accord RESTATEMENT(SECOND)OF
PROPERTY 5 1.6 cmt. e (1977) (“The continuance of the tenancy-at-will depends upon the presence
of landlord’s and tenant’s wills that the tenancy continue. The death of either ends the presence of
the will of the deceased, thereby bringing the tenancy to an end.“). Accordingly, an oyster-bed
leasehold interest may be conveyed to a leaseholder’s heirs.

        In this regard we note that the Texas cases conflating at-will and periodic tenancies when a
lease is of uncertain duration, but rent is paid or accepted periodically, see Virani, 836 S.W.2d at
749; Hill, 157 S.W. at 247, are problematic. This is so because it is unclear whether an “at-will”
lease that nevertheless creates a “periodic tenancy,” is an at-will lease that terminates with the death
of the lessee, or a periodic tenancy that does not. We believe, a court confronted with this issue,
would follow the common-law position ofthe Restatement ofproperty and treat the hybrid lease as
creating a periodic tenancy that does not end when the lessee dies.

       Your next three questions pertain to the meaning and consequences of “control” of more
than 100 acres of submerged land that is prohibited by section 76.007 of the Code:

                        When a family member or family business partner acts as an
                agent for several oyster bed leaseholders, does that violate Parks and
                Wildlife Code, Sec. 76.007       ? What constitutes ‘control’? If it is
                proven that individuals do indeed control more than 100 acres at a
                time, is that a lease-breaking condition?

Request Letter at 2.

        Section 76.007 of      the Code provides that: “No person may own, lease, or control more than
100 acres of land covered      by water under certificates of location.” TEX. PARKS&WILD. CODE ANN.
5 76.007 (Vernon 1991).         But neither section 76.007 of the Code nor another provision provides a
remedy for a violation of       section 76.007.
The Honorable Bill Ratliff - Page 9                     (JC-0237)




        With respect to your first question, neither section 76.007, or any other provision we have
found prohibits a family member or family business partner from acting as an agent for other oyster-
bed leaseholders.  Section 76.007 does not prohibit an agency relationship.      Rather, it proscribes
“control” of more than 100 acres of submerged land by the same person pursuant to an oyster-bed
lease.

         Neither section 76.007 nor another provision defines “control.” When the legislature fails
to define a word or term, we must ascribe to the word or term its ordinary meaning. See Monsanto
Co. v. Cornerstones Mun. Util. Dist., 865 S.W.2d 937,939 (Tex. 1993); see also TEX. GOV’TCODE
ANN. $3 11 ,011 (Vernon 1998) (statutory words and phrases are to be read in context and construed
according to common usage unless they have acquired technical or particular meaning).           The
ordinary meaning of “control,” in the present context, is “to exercise power or authority over.” III
OXFORD ENGLISH DICTIONARY 853 (2d ed. 1989); see also BLACK’S LAW DICTIONARY 330 (7th ed.
 1999) (“To exercise power or influence over.“); accord American Fidelity & Cas. Co. v. Traders &
Gen. Ins. Co., 334 S.W.2d 772,775 (Tex. 1959) (“control”means “‘[ploweror authority to manage,
direct, govern, administer, or oversee.“‘). Ascribing this meaning to “control” as used in section
76.007 of the Code, we determine that no person may exercise power or authority over more than
 100 acres of submerged land pursuant to one or more oyster-bed leases. Whether aparticularperson
 exercises power and authority over submerged lands in excess of 100 acres pursuant to one or more
oyster-bed leases requires investigation and resolution of fact questions, which cannot be done in
 an attorney general opinion.’

         While control of more than 100 acres of land under water pursuant to an oyster-bed lease
is prohibited, we do not believe it is a “lease-breaking condition” that allows the state to cancel a
lease by which such control is exercised for the following reasons. Texas courts generally do not
favor conditions or limitations, the violation of which results in the termination of a leasehold
interest. See Sirtex Oil Indus., Inc. v. Erigan, 403 S.W.2d 784, 787 (Tex. 1966); Hearne v.
Bradshaw, 312 S.W.2d 948, 951 (Tex. 1958); Henshaw v. Texas Natural Resources Found., 216
S.W.2d 566,570 (Tex. 1949); Johnson v. Gurley, 52 Tex. 222,224 (Tex. 1879). At common law,
a lessee does not forfeit his or her lease for using the “premises” for an unlawful purpose in the
absence of a provision in the lease contract permitting a forfeiture in such a case. See, e.g., Wilson
v. Boyd, 556 S.W.2d 121, 124 (Tex. Civ. App.-Eastland         1977, no writ); Moore v. Kirgan, 250
S.W.2d 759, 767 (Tex. Civ. App.-El Paso 1952, no writ). See generally Annotation, Lease
Provisions Allowing Termination or Forfeiture for Violation of Law, 92 A.L.R. 3d 967 (1979 &
Supp. 1999). Accordingly, absent such a forfeiture provision in the lease, a lessor may not cancel
a lease for a violation of the law unless a statute expressly provides for the forfeiture. See Moore,
250 S.W.2d at 767. In the present case, we presume that an oyster-bed lease does not contain a
provision that allows the state to cancel the lease for a violation of section 76.007. Additionally,
 section 76.007 does not authorize termination ofa lease for violation ofthat section. Compare TEX.


         %e, e.g.. Tex. Att’y Gen. Op. Nos. JC-0020 (1999) at 2 (“[I] nvestigation and resolution of fact question[ ]
     cannot be done in the opinion process.“); DM-98 (1992) at 3 (“[Qluestions of fact. cmmt be resolved in the
 opinion process.“); O-291 i(1940) at 2 (“Whether [buildings are owned and used exclusively for school purposes]
 presents a fact question which we are unable to answer.” ).
The Honorable    Bill Ratliff   Page 10            (X-0237)




PARKS AND WILD. CODE ANN. 5 76.007 (Vernon 1991) with id. 5 76.017 (d) (Vernon 1991) (failure
to pay rent when due will terminate lease).

         Additionally, with respect to a contract that is not on its face illegal, determining whether the
contract violates a statute requires looking at the specific facts of the case and the intention of the
parties in executing the contract. See Texas Employers ‘Ins. Ass ‘n v.Tabor, 283 S.W. 779,780 (Tex.
Comm’n App. 1926, judgm’t adopted); Peniche v. Aeromexico, 580 S.W.2d 152, 156 (Tex. Civ.
App.-Houston      [ 1st Dist.] 1979, no writ ). While it is the general rule that a Texas contract made in
violation of the express provisions of a state statute, or one that cannot be performed without such
violation, is void and unenforceable, where the illegality does not appear on the face of the contract
it will not be held void unless the facts showing its illegality are before the court. See Lewis v.
Davis, 199 S.W.2d 146,148-49(Tex. 1947); TenasEmployers’Ins. Ass ‘n,283 S.W. at 780;Peniche,
580 S.W.2d at 156. Furthermore, a contract that could have been performed in a legal manner will
not be declared void because it may have been performed in an illegal manner. Lewis, 199 S.W.2d
at 149.

         In the present case, it is not clear to us that any illegality, i.e., violation of section 76.007,
appears on the face of an oyster-bed lease. Clearly, a person who controls 100 acres of land under
water pursuant to an oyster-bed lease is ineligible to control additional locations under section
76.007 through a lease in his or her name. And the Department does not, we assume, grant a lease
to a person who already leases or controls 100 acres pursuant to an oyster-bed lease given section
76.007’s proscription. Consequently, we presume that control over more than 100 acres is acquired
or exercised through a lease in another person’s name, and the lease. that “violates” section 76.007
is with a person other than the “violator” of the statute, i.e., the person controlling more than 100
acres of submerged land. Thus, a lease by which control over more than 100 acres is exercised
would not on its face show a violation of section 76.007. To support a termination of such a lease
for violation of section 76.007 and prevail, the state would have to show a court facts and intentions
surrounding the questionable lease establishing its illegality when it was executed.
The Honorable   Bill Ratliff   Page 11            (X-0237)




                                        SUMMARY

                         An oyster-bed lease authorized under chapter 76 of the Parks
                and Wildlife Code is a periodic, year-to-year lease that may be
                terminated at the end of any lease year by the state after giving
                reasonable notice oftermination.   A chapter 76 oyster-bed lease does
                not create a perpetual leasehold interest. An oyster-bed leaseholder
                is authorized to sell or convey the oyster-bed lease. The lease does
                not expire on the death of the leaseholder.       Chapter 76 does not
                prohibit a family member or family business partner from acting as
                an agent for other leaseholders; rather it proscribes the “control” of
                more than 100 acres of submerged land by the same person. No
                person may exercise power or authority over more than 100 acres of
                submerged land pursuant to one or more oyster-bed leases. Control
                over more than 100 acres of land covered by water pursuant to
                another person’s oyster-bed lease is not a “lease-breaking condition”
                that allows the state to cancel the lease by which such control is
                exercised.




                                               Attorney General of Texas

ANDY TAYLOR
First Assistant Attorney General

CLARK RENT ERVIN
Deputy Attorney General - General Counsel

ELIZABETH ROBINSON
Chair, Opinion Committee

Sheela Rai
Assistant Attorney General - Opinion Committee
