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Lewis v. Oates - 145 Tex. 77, 195 S.W.2d 123 (1946)

Rule:

By the enactment of the Texas Relinquishment Act (Rev. St. 1925, arts. 5367-5382), there was leased to the surface owner of lands sold by the State in which it reserved the mineral rights a percentage of the royalties, bonuses and delayed rentals on all oil and gas releases made by said surface owner in the name of the State, but said statutes did not invest in the said surface owner any title or interest in the oil and gas so leased. The surface owner was merely the agent for the State in securing and perfecting said lease and his right to the royalties, etc., fixed by the Legislature in said Relinquishment Act, existed only so long as the lease was operative. Having no permanent interest therein he possessed no right to convey such an interest, and a contract with a third party attempting to do so was void.

Facts:

Defendant John S. Oates was the owner of the surface estate of certain public school free land. In connection with an agreement that he entered with the state to gain control of the land under the Relinquishment Act (Act), 1925 Tex. Rev. Civ. Stat. arts. 5367-5382, he obtained an oil and gas royalty interest in that land. Oates later contracted with plaintiff Tyron Lewis to assign his gas and oil interests in the land to the latter. Subsequently, he leased his mineral interests in the land to a third party. Thereafter, Lewis filed suit in trespass to try title against Oates to establish a perpetual royalty interest in future leases by virtue of the parties' contract, and to recover amounts paid over to Oates by the third party under the lease. The trial court and appellate court entered a judgment in favor of Oates on the basis that the contract entered between the landowner and the prospector was void.

 

Issue:

In a suit in trespass to try title to establish a perpetual royalty interest in future leases, did the Texas Relinquishment Act permit defendant Oates to assign a permanent oil and gas royalty interest in his public free school land, thus, making the contract between Oates and plaintiff Lewis valid?

Answer:

No

Conclusion:

On appeal, the Supreme Court of Texas affirmed the judgment entered in favor of defendant Oates. This holding rested upon the Court's conclusion that the Act did not permit Oates to assign a permanent oil and gas royalty interest in public free school land.

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