The Chargé in Mexico (Summerlin) to the Secretary of State

No. 4317

Sir: Supplementary to my despatch No. 4275, of September 2, 1921,81 in regard to the reported decision of the Mexican Supreme Court on amparo proceeding instituted by the Texas Oil Company against the Secretary of Industry, Commerce and Labor and the President of the Republic, for having issued a title of concession in favor of Rafael Cortina for lot No. 36, Zacamixtle, I have the honor to forward herewith a translation of the remarks of Associate Justice Benito Flores81 in explanation of his vote on this case. The opinion on which the decision of the Supreme Court will be based and which will be signed by all of the members of the Court, has not yet been made public. It is reported that the Justices have held a number of secret sessions in regard to this opinion, but that no agreement has yet been reached as to the actual wording of the document. It appears that each member of the Court rendered a separate “dictamen” in the argument explaining his vote, and it now becomes necessary to harmonize these several “dictamens”.

Until the opinion is made public it will not be possible to say what was decided in this case, however, I am reliably informed that the facts of the case are as follows:—

The Texas Oil Company obtained by assignment a lease of a certain tract of land authorizing the Company to explore and exploit the petroleum and carbide gases of the sub-soil. The lease had been executed by the owners of the land prior to May 1, 1917, the date the Constitution of that year became effective. The Company failed to manifest the lease within the first fifteen days of August, 1918, as required by the Carranza Decree of July 31, 1918,82 and was, by this failure, subject to denouncement. It was denounced by Rafael Cortina and the denouncement was accepted by the Department of Industry, Commerce and Labor.

The Texas Oil Company asked for amparo against the act of the Government in admitting the denouncement and based the amparo on the grounds that it had acquired the lease of the lands prior to [Page 463] May 1, 1917, and that the lease was protected under the mining laws of 1884, 1892 and 1902 [1909?], which reserved to the owner of the surface of the land the right to explore and exploit the coal and petroleum and carbide gases that might be found in the subsoil of the lands.

The District Court refused the amparo and the Company appealed to the Supreme Court for revision, and the Supreme Court by unanimous decision granted the amparo. It is stated, therefore, that the only point decided by this case is that leases for the exploration and exploitation of petroleum and carbide gases in the sub-soil of lands, which leases were granted prior to May 1, 1917, by the owners of the land described in the leases, are to be protected under the provisions of Article 14 of the Constitution of 1917, which declares that:

“No law shall be given retroactive effect to the prejudice of any person whatsoever”,

and that the Carranza Decree of July 31, 1918, was retroactive in its effects and, therefore, its application to the case before the Court is prohibited by Article 14 of the Constitution.

It is reported that all of the various arguments of the Supreme Court Justices in this case appear to be confined strictly to the protection of leases made prior to May 1, 1917, and that these arguments seem to indicate the distinction between “rights acquired” and “rights in expectancy”. It might, therefore, appear that the owners of lands who have not leased them for petroleum purposes, or who have not themselves developed the oil on their own lands, prior to May 1, 1917, would not be protected.

It is stated that the decisions of the Mexican Supreme Court are not precedents and that another Court or the same Court can in the future decide a similar case precisely to the contrary. However, in view of the declarations of General Obregon in regard to non-retroactivity, it is hardly probable that this decision will be reversed during the present administration.

I have [etc.]

George T. Summerlin
  1. Not printed.
  2. Not printed.
  3. Foreign Relations, 1918, p. 752.