-   .,




                     E         OENEY       GENERAL
                                   TEXAS



                                  June 1, 1959

         Honorable Bill Allcorn      Opinion No. WW-636
         Commissioner, Qeneral
           Land Office               Re: Whether rentals were due
         Austlh 14, Texas            December 4, 1958 on certain
                                     submerged lands leases ln,the
                                     Gulf of Mexico dated December
                                     4, 1953 if the lessees de-
                                     sired to have the running of
                                     primary terms suspended under
                                     Article 54211, VCS, and re-
         Dear Mr. CommlssionePt      lated questions.
                  In your opinion request you refer to the pending
         "Tidelands" litigation and to Attorney ffeneral'sOpinion
         No. WW-540 regarding the suspension of leases covering
         submerged tracts In the Gulf of Mexico beyond three (3)
         geographic miles under the provisions of Article 54211,
         VCS, as amended.*
                  You state:
                      "A question'has now arisen concerning the
              payment of rentals on leases executed December 4,
              1953, which would have expired December 4, 1958
              but for the fact that the running of the primary
              terms thereof were suspended as of November 7,
              1957," the date the suit was filed and which was
              approximately 13 months prior to the December 4,
              1958 rental date.
                  In your opinion request after referring to Opinion
         No. WW-540, and setting forth certain facts, you propound
         three questions, which are in'substance:

           (1)    In view of the commencement of litigation on
                  November 7, 1957, were rentals due December
                  4, 1958 on submerged lands leases in the Gulf
                  of Mexico executed December 4, 1953 If the
                  lessees desired to have the running of the


         *(Acts 1941, h7th Leg., p. 140~5,ch. 637, sec. 1, as
          amended Acts 1951, 52nd Leg., P. 750, ch. 406, sec. 1)
                                                                 .




Honorable Bill Allcorn, Page 2 (Opinion No. WW-636)


           primary terms thereof suspended under the
           provisions of Article 54211?

  (2)      If such rentals are not paid are such leases
           subject to forfeiture by the Commissioner
           under the provisions of Article 5372, VCS?

  (3)      Is the primary term of such a lease (as well
           as obligations thereunder) suspended as to
           that portion lying more than three (3) geo-
           graphic miles seaward from the ordinary low-
           water mark or outer limit of inland water,
           as indicated in Opinion No. NW-540?
         You also state that paragraph 2 of each of the leases
In question provides in part:
        "2 . On or before one year from the date of this
        lease and annually thereafter for each of the
        following years during the life of this lease,
        the lessee shall pay to the Commissioner of the
        General Land Office, Austin, Texas, an annual
        rental of Two Dollars ($2.00) per acre; provided
        that when royalties paid during any year during the
        life of this lease equal or exceed the annual
        rental, no annual rental will be due for the fol-
        lowing year; otherwlse, there shall be due and
        payable on or before the anniversary date hereof
        Two Dollars ($2.00) per acre, less the amount of
        royalties paid during the preceding year."
           Your questions will be answered in sequence:


         In view of the commencement of litigation November
7, 1957, were rentals due December 4, 1958 on submerged lands
leases In the Gulf of Mexico axecuted December 4, 1953 if
the leasues desired to have the ;,unningof the primar,'terms
thereof suspended under the p&#cvisionsof Article ,42li?


         Rentals were due on Decembe-~4, 1958 on leases
dated December +, 1953 if the lessees desired to &ve the
primary terms suspended .tnderArticle 54211, VCS.
         You ytate In substance that some of tlielessees
take the position that no rentals were due December 4, ~$58
Honorable Bill Allcorn, Page 3 (Opinion No. W-636)


because Article 54211 refers to rentals which "accrue"
during the period of litigation and that since-rental
payments have been made no further rentals will "accrue'
during the litigation, and therefore the leases are to
remain in effect without further payment. In our opinion
that view fails to take into account the further and deci-
sive wording of the statute which is underscored below:
        "Provided further, that the lessee shall pay
    all annual delay rentals and any royalties which
    accrue during the period of litigation the same
    as during any other period of the extended pri-
    mary term."
         In our opinion the statute requires rental pay-
ments not only during, but after, the primary term in
consideration for keeping the lease alive but suspended.
Otherwise, the phrase "during any other period of the
extended primary term" would be meaningless.
         A statute should be construed so as to accomplish
a purpose or result, and the object of statutory construc-
tion is to enforce and give effect to legislative intent.
(39 Tex 5ur ,&atuteg   Sec. 87, p. 160 et seq.) Here, the
intent is expressed plainly.
         "Extended" both by court decisions and dictionary
definition means to stretch or draw out; to lengthen or p-o-
low, either in spa-e or time; to protrac;, or to continue
(Webs;erts New Internatio.>alDictionar?r.2nd Edition, Una-
$%E;;    ~0. K & T K C    fT        kex& & N 0 Rv. Co'.* 17L
       ; ti..jhing
                 v. In&.b~tan~~'o~*Town of LA.,ied,
                                                H'    92 At1
2d 330, l-48Me. 24,; State v. Zozzaro, 20 At1 2d 73i, 128
Conn. 169; West Madison Stat, Bank v. Mudd, 250 Ill. A.PP.
258; dane   namelware Comoan v. Smi~L.+168 Tenn. 203, 76
S.W.2d 644                                            ,v 18
Loeffler v.                                           '.2d%62.

         In enacting Article 54211, as amended, it is ap-
parent that the Legislature had in mind the fact that litiga-
tion can be protracted. It was providing for the eventuality
that the litigation could well extend beyond the primary term,
but, for the protection of the State it provided for a con-
tinuance in the payment of rentals during the extended term,
and for the protection of the lessees it provided for the
rentals to be held in suspense and subject to refund to the
lessees if the State was unsuccessful in the litigation. It
is difficult to conceive how the Legislature could have en-
acted a more just statute protecting, as it does, both the
State and the lessees.
Honorable Bill Allcorn, Page 4 (Opinion No. W-636).


         Paragraph 2 of the leases, quoted above, evidences
that the Land Commissioner followed the Legislative intent,
and the lessees are, of course, bound by the terms of the
leases they received. That paragraph refers to the "life"
of the lease. Under the circumstances the "life" of the
lease can be extended by compliance with Article 54211. If
the lessees choose not to pay the annual rental (which does
not appear to be an "annual delay rental" in the tradi-
tional sense) to effectuate the suspension then the leases
may be forfeited.

                          (2)

         If such rentals are not paid are such leases sub-
ject to forfeiture by the Commissioner under the provisions
of Article 5372, VCS?
                        ANSWER:
         Assuming that the leases In question were executed
under and by virtue of Title 86, chapter 4, RCS, then if
the rentals referred to were not paid such leases are sub-
ject to forfeiture by the Commissioner under the provisions
of Article 5372, VCS (Acts 2nd C.S. 1919, p. 249) for the
reasons set forth in our answer to question No. 1.

                          (3)
         Is the primary term of a lease (as well as obli-
gations thereunder) suspended as to that portion of a lease
lying more than three geographic miles seaward from the
ordinary low-water mark or outer limit of inland waters, as
indicated in Opinion No. W-540?
                        ANSWER:
         If a portion of a lease lies more than three (3)
geographic miles seaward from the low-water mark or from
the outer limits of inland waters oi'fthe coast of Texas,
and a portion lies landward of that line, the obligations
of the lessees, under Article 54211, are not suspended as
to the portion lying landward of that line, but the primary
terms and other lease obligations are suspended as to that
portion lying seaward of such line except that the lessees
must continue to pay annual delay rentals or royalties on
the seaward portion. The statute in question reads in part
as follows:
              "The running of the primary term of any
     oil, gas or mineral lease. . .which may hereafter
Honorable Bill Allcorn, Page 5 (OpInionNo. NN-636)


    become involved in litigation. . .shall be
    suspended, and all obliaatlons imposed by such
    leases shall be set at rest during the period
    of such litigation . . *provided. . .that the
    lessees shall pay all annual delay rentals or
    any royalties which accrue during the period
    of litigation. . .' (Emphasis supplied.)


                       SUMMARY
            As to submerged lands leases in the
       Gulf of Mexico involved in the "Tidelands"
       litigation* as to which four prior rental
       payments had been made and which would
       have expired December 4, 1958, but for the
       fact that about 13 months prior thereto
       the running of the primary terms was con-
       ditionally suspended under Article 54211
       as of November 7, 195 , (date last "Tide-
       lands" suit was filed7 such leases could
       be continued in effect during the lltiga-
       Won under that Statute if, and only If,
       such lesseesmade annual rental payments
       December 4, 1958 and continue to make
       annual rental payments in tue future during
       the period of litigation (whether during,
       or after, the ordinary primary terms of the
       leases throughout the period of the 'ex-
             ) primary terms. Non-payment of such
       tended'
       rentals subjects the leases to forfeiture
       by the Commissioner under Article 5372,
       vcs. If a portion lies more than three (3)
       geographic miles seaward from the ordinary
       low-water mark or from the outer limits of
       inland waters off the coast of Texas in the
       Gulf of Mexico, and a portion lies landward
       of that line, the obligations of the lessee
       (under Article j&211, 3s amended) are not
       suspentiedas to the portion lying landward
       of that line, but the primary term and other
       lease obligations are suspended as to that
       portion lying seaward of such line except


* (United States v. Louisiana, et al, U.S. Sup. Ct. No. 10
  Original,October Term 1958, now set for argument October
  12, 1959.)
Honorable Bill Allcorn, Page 6 (Opinion No. WW-636)


          the lessee must continue to pay rentals and
          royalties on the seaward portion as stated
          in Opinion No. WW-540, to which reference is
          here made.
                               Very truly yours,
                               WILL WILSON
                               Attoqey General of 'Texas

                                           v   -.-

                                        S N. LUDLUFi--
                                V   First Assistant

JNL:bct
APPROVED:
OPINION COMMITTEE:
Geo. P. Blackburn, Chairman
James H. Rogers
Grundy Williams
John Wildenthal, Jr,
APPROVED FOR THE ATTORNEX GENERAL

By:   W. V. Geppert
