US SUPREME COURT DECISIONS

1. A state excise on the production of oil which extends to the royalty interest of the lessor in the oil produced under an oil lease as well as to the interest of the lessee engaged in the active work of production, the tax being apportioned between these parties according to their respective interests in the common venture, held not arbitrary as regards the lessor, but consistent with due process. P. 299 U. S. 36.

2. An oil lease imposing on the lessee the obligation of delivering to the credit of the lessor "free of cost" in the pipeline the equal 1/8 part of the oil produced by the lessee, though it may intend that the lessor shall be relieved of all taxes on production, is nevertheless chanrobles.com-red

Page 299 U. S. 34

made in subordination to the power of the State to impose such taxes and to apportion them between the parties in proportion to their respective interests. P. 299 U. S. 40.

3. The State's power thus to direct the incidence of the production tax and shift part of its burden from lessee to lessor is not affected by the fact that, by the law in force when the lease contract was made, and for some years thereafter, the entire tax was on the lessee. P. 299 U. S. 41.

89 S.W.2d 1026 affirmed.

Appeal from a judgment affirming a judgment in favor of the Comptroller and the Treasurer of the Texas, appellees herein, in a suit brought by the appellants to secure a refund of taxes paid under protest together with an injunction against collection of further taxes in respect of the interests of the appellants, as lessors, in the production of oil under an oil lease. The Supreme Court of the State had declined to take the case on a writ of error before it was appealed to this Court.