Friedman, Sam J.

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Louisiana Law ReviewVolume 21 | Number 1Law-Medicine and Professional Responsibility: ASymposiumSymposium on Civil ProcedureDecember 1960Mineral Rights - Alienation of Minerals By StatePolitical Subdivisions an AgenciesSam J. FriedmanThis Note is brought to you for free and open access by the Law Reviews and Journals at LSU Law Digital Commons. It has been accepted for inclusionin Louisiana Law Review by an authorized editor of LSU Law Digital Commons. For more information, please contact kreed25@lsu.edu.Repository CitationSam J. Friedman, Mineral Rights - Alienation of Minerals By State Political Subdivisions an Agencies, 21 La. L. Rev. (1960)Available at: https://digitalcommons.law.lsu.edu/lalrev/vol21/iss1/25The instant case seems to impose "impossible standards" 45 on thedrafting of valid obscenity legislation, and denies the operationof the "genuine construction" rule of the Criminal Code. Such aconstruction seemingly runs contrary to the obvious intent andpurpose of the legislation, and it is submitted that a more reason-able construction of such statutes will better serve to accordthem their appropriate scope, and to fulfill the objectives of legis-lative design.James A. GeorgeMINERAL RIGHTS- ALIENATION OF MINERALS BY STATEPOLITICAL SUBDIVISIONS AND AGENCIESPlaintiff instituted a concursus proceeding to determine theownership of proceeds from the production of oil and gas onthe land in question. A dispute over the ownership of the min-erals existed between the claimant school board and the claimantHarrison. The school board acquired the property by purchase,and by mesne conveyances the title ultimately descended toHarrison. In the deeds the minerals were neither excepted normentioned. Harrison executed an oil, gas, and mineral lease toplaintiff, and about one year later, claimant school board exe-cuted a similar lease to plaintiff. The trial court determinedthat the school board was included within the ambit of ArticleIV, Section 2, of the State Constitution of 1921, which providesthat mineral rights sold by the state shall be reserved and thusby virtue of the constitutional provision could not alienate theminerals on any land it sold. Therefore, the State of Louisiana,through its agent the school board, was found to be the ownerof the minerals. The court of appeal reversed and on review bythe Louisiana Supreme Court, held, judgment of the court ofappeal affirmed. The constitutional. provision of Article IV, Sec-tion 2, applies to the "state" only and not to a political subdivi-sion or state agency. Thus the sale of the land included themineral rights since the latter were not expressly reserved bythe school board. Stokes v. Harrison, 238 La. 343, 115 So.2d373 (1959).The Louisiana Constitution of 1921 in Article IV, Section 2,provides: "In all cases the mineral rights on any and all property45. Roth v. United States, 354 U.S. 476, 491 (1957).19603 NOTES 271LOUISIANA LAW REVIEWsold by the state shall be reserved."' (Emphasis added.) Thescope of application of this article turns on the meaning to begiven to the word "state"; more specifically, does the word stateinclude state agencies, 2 such as school boards, or is it limitedto the state in its sovereign capacity. This provision of the Con-stitution has been construed in only two cases, both involvingconveyances by levee boards. In State ex rel. Board of Commi8-sioners of Tensas Basin Levee District v. Grace,3 the TensasLevee Board sought a writ of mandamus to compel the Registrarof the State Land Office and the Auditor to certify certain landsgranted by the legislature to the levee board in its act of crea-tion. The Registrar and Auditor refused to certify the convey-ance, contending that the land grant was partially revoked byArticle IV, Section 2, of the Constitution of 1921. The court ingranting the mandamus held that Article IV, Section 2, did notrevoke the conveyance because the transfer of the land to thelevee district would not be parting with the land within themeaning of that section, but was only a placing of the landunder the control of a state agency for the purpose of con-structing and maintaining levees. The court pointed out that,therefore, the prohibition in Article IV, Section 2, against theinclusion of minerals in sales of state land did not apply tolands conveyed by the state to the levee district. In a subsequentcase, Board of Commissioners of the Caddo Levee District v.Pure Oil Co.,4 the Caddo Levee Board, as lessor, filed suitagainst the lessee for royalties resulting from oil productionon the leased premises. To the defendant's plea of three yearsprescription, the plaintiff contended that prescription does notrun against a levee board because it is a state agency. The courtstated that "if the question presented involved the loss by pre-scription5 of the mineral rights themselves we should most likelyhold, that since the levee district must retain such mineral rights,it could not lose them by prescription, for a state agency cannotlose by prescription that which it must retain. However, no such1. LA. CONST. art. IV, § 2. Cf. Barnett v. State Mineral Board, 193 La.1055, 192 So. 701 (1939). In this case the court held that the state legislaturecan convey the property and the minerals to a state agency such as a levee boardwithout violating Article IV, § 2.2. See State v. Standard Oil Co., 164 La. 334, 113 So. 867 (1927). This casedefines state agency, holding that it is any subdivision incorporated by an act ofthe legislature, which has the right to sue and be sued. Thus, levee boards andschool boards are state agencies.3. 161 La. 1039, 107 So. 830 (1926).4. 167 La. 801, 120 So. 373 (1929).5. LA. CIVIL CODE art. 3538 (1870). This article provides: "The following ac-tions are prescribed by three years: . . . That for arrearages of rent charge . .. ."[Vol. XXINOTESquestion is here presented, as our only inquiry is whether thedemand of a levee district for royalties under a lease is pre-scriptible, and we conclude they are." (Emphasis added.)Since the solution of the problem presented by the instantcase depends upon an interpretation of the word "state" in theLouisiana Constitution, prior judicial constructions are helpfulin determining its meaning. Two cases construing similar pro-visions lend support by analogy to upholding a conveyance ofminerals by a state agency to an individual. In one case7 thecourt held that Article 121 of the Constitution of 18458 whichprovided that "the state shall not become a subscriber to thestock of any corporation, or joint stock company" did not preventsuch subscriptions by parish and municipal corporations. A likeconstruction was given a similar provision in Article 108 of theConstitution of 1852.9In the instant case the court for the first time was squarelypresented with the issue of whether or not a state agency hadto reserve the minerals on property sold by the agency.' 0 Thecourt held that "state" as used in Article IV, Section 2, of theConstitution of 1921 refers only to the state as a sovereign andnot a state agency. Thus the conveyance from the school boardtransferred the land and the minerals. To reach this conclusionthe court first reasoned that the term "state" in the Constitu-tion sometimes refers solely to the state in its sovereign char-acter, and at other times includes within its meaning everyagency of the state. Turning to the Constitution the court notedthat in Article IV, Section 12,11 the language used is "the state6. 167 La. 801, 810, 120 So. 373, 376 (1929).7. New Orleans v. Graihle, 9 La. Ann. 561 (1854).8. LA. CONST. art. 121 (1845).9. Police Jury v. Succession of McDonogh, 8 La. Ann. 341 (1853). La. Const.art. 108 (1852) - "The state shall not subscribe for the stock of, nor make a loanto nor pledge its faith for the benefit of any corporation. .. ."A legal principle which supports alienation of minerals by a state agency wasannounced by the court in State v. Knop, 190 So, 135, 144 (La. App. 1939):"Where there is ambiguity, the language of a constitutional amendment must beinterpreted in an effort to carry out the obvious intent, such enactment may notbe broadened or extended by interpretation." Such an interpretation would restrictthe word state in Article IV, § 2, to the state in its sovereign capacity.10. No cases could be found on the interpretation to be given to the wordshall in Article IV, § 2; however, it is submitted that the direction it gives ismandatory.11. LA. COrNST. art. IV, § 12: "The funds, credit, property or things of valueof the state, or of any political corporation thereof, shall not be loaned, pledged,or granted to or for any person or persons . . .; nor shall the state, nor anypolitical corporation, purchase or subscribe to the capital or stock of any corpora-tion. . . . Nor shall the state, nor any political corporation thereof, assume theliabilities of any political . . . association .. " (Emphasis added.)19601LOUISIANA LAW REVIEWor any political corporation," and this same language -is found inSection 13 of Article IV.12 Comparing these provisions with Sec-tion 2 the~court quoted the court of appeal, saying, "a comparisonof the language of Sections 2, 12, and 13 of Article IV leaves itclear that where the framers intended that the restriction orlimitation should apply to the state only as a separate entityfrom its political subdivision, the word state alone was used, butwhere the limitation or restriction was intended to apply to thestate and all its political subdivisions thereof, the intent was sospelled out in terms of 'the state or any political subdivisionthereof.' -Is The court further reasoned that normally in a con-stitution the word state expresses the combined idea of people,territory, and government, and should be so construed here. Inconsidering the two levee board decisions previously discussed,it was said that any statement construing Article IV, Section 2,was unnecessary for the decision in those cases and thereforewas dictum.An examination of the problem presented in the levee boardcases is necessary to determine the effect of the instant case, onfuture litigation involving alienation of minerals by state agen-cies. In the Grace14 case the actual issue was the constitutional-ity of a transfer of state lands from the state to a state agencywithout a reservation of the minerals. No problem of alienationof the minerals by the state agency to a private individual waspresented. However, it seems that the reasoning of the courtconcerning alienability of the land was an important link in sup-porting the decision that the property passed to the agency, forit brought out that the land, even though transferred' to anagency, would still belong to the state and could not be furthertransferred to an individual without a reservation of the min-erals. Looked at in this way a court in a later case might givemore than dictum weight to the pronouncement in the Grace caseconcerning alienability of state land by a state agency.There is some question as to the effect the instant case willhave on future sales by state agencies. It is submitted that thecourt has at least settled that a sale without a mineral reserva-12. Id. art. IV, § 13: "The legislature shall have no power to release oi ex-tinguish, or to authorize the releasing or extinguishment, in whole or in part, ofthe indebtedness, liability or obligation of any corporation or individual to theState, or to any parish or municipal corporation thereof .... " (Emphasis added.)13. Stokes v. Harrison, 238 La. 343, 359, 115 So.2d 373, 379 (1959).14. State er rel. Board of Commissioners of Tensas Basin Levee Dist. v. Grace,161 La. 1039, 109 So. 830 (1926).[Vol. XXItion, by a school board, of land purchased by the board from anindividual, will convey both the land and the minerals in theabsence of a mineral exception. Whether or not this same resultwill be reached in a case where the land sold was acquired fromthe state rather than purchased from an individual is not clear.When there is a conveyance from the state rather than a pur-chase from an individual, it is more difficult for the court tofind a separation of the land from the state. This could explainthe position of the court in the Grace case, wherein it held thatputting the property under the control of the levee board wouldnot be a parting with the property by the state but merely plac-ing it under the control of one of its agencies, and thus the landwould still be the property of the state. This seems especiallytrue when one considers that the apparent policy behind ArticleIV, Section 2, is to prevent the legislature from selling statelands for an immediate lump sum and to assure future genera-tions at least the mineral revenue from these lands. Due, how-ever, to the language of the court in the instant case, it is sub-mitted that in the future all sales by state agencies and subdi-visions will convey the minerals as well as the land unless thereis an express mineral reservation.15 Such a construction mightcreate a need for legislative and constitutional change because ofthe possibility of abuse by state agencies to avoid the spirit ofthe Constitution.Sam J. Friedman15. See Louisiana Attorney General Rulings, p. 890 (1942-44). It should benoted that such a construction was not what the Attorney General considered thelaw to be prior to the instant case. In a 1942 opinion by the office of the AttorneyGeneral, it was stated that the State Board of Health could not sell realty ac-quired by the Greenwell Springs Hospital under will, without reserving the min-eral rights to the Tuberculosis Commission as an agency of the state.19601 NOTES 275

Mineral Rights - Alienation of Minerals By State Political Subdivisions an Agencies

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Mineral Rights - Alienation of Minerals By State Political Subdivisions an Agencies

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