Railroad Commission ofTexas Austin, Texas
Dear Sirs: Opinion **No.** O-3181 Re: ,Questions relating to the application of spacing rules and the subdivision rule as appIied to the Hawkins field.
We have the letter of February 17. 1941, signed by Commissioners Sadler and Culberson. asking us thirteen questions with reference to the application ofthe spacing rules and the subdivision rule to the Hawkins field. Inyour letter you’first set forth the applicable rules as follows:

‘On January 22, 1941. the Railroad Commission of

Texas, after due notice and hearing, promulgated and adoptedfield rules for the Hawkins field, Wood County, Texas, which was discovered during the month ofSeptember, 1940. Rule 1of the rules referred to provides as follows:

“‘RULE 1. (A) No well shall be drilled hereafter fur oil and gas or either ofthem nearer than Nine Hundred Thirty-Three (933) feet to any other completed or drilling well onthe same or adjoining tract or farm, and nowell shall be drilled nearer than Four Hundred Sixty-Six (466) feet from any property line, lease line, or subdivision line; provided that, subject to the further provisions hereof, the commission, in order toprevent waste or to prevent the confiscation ofproperty, will~grant exceptions to permit drilling within shorter distances than above prescr~ibed whenever the commission shall determine that such exceptions are necessary either to prevent waste or to prevent the confiscation ofproperty. When exceptions tothis rule are desired, application therefor shall be filed with the commission, fully stating the facts, which application shall be accompanied by a plat drawn to the scale of One inch equalling Four Hundred (400) feet, accurately showing to scale the property onwhichRailroad Commission of Texas, Page 2 (O-3181)

permit is sought to drill awell under an exception tothis rule, and accurately showing to scale all other completed, drilling and permitted wells on such property; and accurately showing to scale all adjacent surrounding properties and wells. Such application shall be verified by some person acquainted with the facts, stating that all facts therein stated are within the knowledge ofthe affiant true, and that the **accom** panying plat is accurately drawn to scale and correctly reflects all pertinent and required data. Such exceptions shall be granted only after at least ten days’ notice to all adjacent lessees, affected thereby, has been given, and after public hearing atwhich all interested parties may appear and be heard~, and after the commission has determined that an exception tothis rule is necessary either to prevent waste or to protect the property belonging to applicants from confiscation. All pending applications shallbe amended to conform to this rule before, being acted upon.

“‘(b) Inapplying this rule, the general order ofthe commission with relation to subdivision ofproperties shall be observed.’
“On May 29, 1934, the Railroad Commission of Texas duly entered its order which read as follows:

“‘IT ISORDERED BY the Railroad Commission ofTexas that in applying Rule 37 (Spacing Rule) of statewide application and inapplying every spacing rule with relation to spacing ,.inevery field in,this state. no subdivision of property,made subsequent to the adoption ofthe original spaeing~,rule will be considered in determining whether or not any property is being confiscated within the terms of such spacing rule and no subdivision of property will be regarded inapplying such spacing rule or in determining the matter of confiscation if such subdivision took place subsequent to the promulgation and adoption ofthe original spac~ingrule;’
“On January 3, 1940, the Railroad Commission entered an order which read as follows:. . .Railrcad Commission of Texas, Page 3 (O-3181)

“‘IT ISHEREBY ,ORDERED by the Railroad Commission of Texas that in all orders, other than those dealing with strictly departmental affairs, hereinafter promulgated or adopted by the commission no motion for reheaiing shall be entertained unless same is filed within a period of Fifteen (15) days from the date ofthe promulgation and adoption of any such order by the commission.

“‘All such motions shall be filed inwriting by the applicant for a rehearing specifying indetail the grounds uponwhic’h the rehearing is sought. Inno event shall the commission consider **any** grounds not specified in such motion for rehearing inpassing upon the merits of same.’
“All of the rules and orders hereinabove set out are now in force and effect.”

Inyour letter you make separate statements and ask separate questions relating thereto. and we will follow this form in replying to your questions.

I.

“STATEMENT

“Article 6036a ofthe Revised Civil Statutes now in effect provides in part as follows:

“‘No rule, regulation or order shall be adopted by the commission under the provisions of this act or of Title 102 of the Revised Civil Statutes of Texas, 1925, as amended, dealingwith the confiscation of oil and gas and the prevention ofwaste thereof, except after at Ieast 10days’ notice given in the manner and form prescribed by the commiss~ion * * *’ “Rule 1ofthe spacing rules ofthe Hawkins field, hereinabove referred to provides inpart:

“When exceptions tothis rule are desired. applrcation therefor shall be filed with the commission fully stating the facts * * * Such exceptions. .

Railroad Commission of Texas, page 4 (O-3 181)

shall be granted only after at least ten (10) days’ notice toall adjacent lessees affected thereby, has been given, and after public hearing atwhich all interested parties may appear and be heard and after the c,ommission has determined that an exception to this rule is necessary either to prevent waste or to protect the property belonging to applicant from confiscation.’

QUESTION NO. 1

“Will you please advise whom the rule contemplates as adjacent lessees as would entitle them to notice ofahearing on an application to drill an oil or gas well in the Hawkins field?”

The proper c,onstruction ofthe notice provisions ofRule 37, as applied to other fields inthis State, has been discussed inafew cases. InMagnolia Petroleum Company v. Edgar, 62 S.W.(Zd) 359, 361 (writ refused) itwas pointed out thatArticle 6036a. Vernon’s Annotated Civil Statutes. merely provides that notice shall be given “in the manner and form prescribed by Commission, ”and the court further observed:

“The statute itself does not undertake to designate towhom such notice is to be given nor inwhat form. This for the obvious reason that itwould be impossible to designate specifically who are the interested parties.”

InRabbit Creek Oil Co. v. Shell Petroleum Corporation, 66 SW. (2d) 737,739 the question was raised as towhether Rule 37was valid. in that it provided merely for notice to “adjacent lessees,” and did not provide for notice to other adjacent owners. Inholding the rule to be valid, the c~ourtsaid:

” * * * But rule 37 is not unconstitutional because it failed to provide for notice to adjacent landowners. The rule deals with the practical matter of giving notice to the party most vitally interested inthe drilling ofawell as an exception to the rule. Exceptions are only necessary after the particular field has been proved. The adjacent lessees have the control and the respons~ibility ofdeveloping their respective leases. They are charged with the obligation of drilling offset wells. Their interest also requires them to procure all the oil possible under their leases, and the lessees’ interest in the oil is greater than that ofthe owner of the fee, who usually receives only one-eighth ofthe oil as royalty. Royalty interests are often sold by the owners ofRailroad Commission of Texas, page 5 (O-3181)

the fee to numerous ,purchasers, resident as well as nonres,ident. and towhom in many instances notice ofan application and hearing for the permit could,not be given. Ifit should occur that an adjacent owner has developed or intends to develop his own land, then the commission can give him notice. The commission is required to permit the development ofproven,fields in accordance with the conservation laws, and’as a pra~ctical proposition notice to the adjacent lessees in most cas,es should be and is sufficient.- Compare Humble Oil &Refining Company v. Railroad Commission, 68 SW. (2d) 622, 624 (affirmed, sub non, Brown v. Humble Oil &I Refining Company. 126 Tex. 296, 83 S.W.Tm)m, 87 S,m ) 106’9) in whic,h the court said:

“While the statute (Vemon*s Ann. Civ. St. art. 6036a) does not undertake to define who are interested parties, it does provide that hearing must be held before the commission shall adopt a rule or regulation, after notice given in the manner and form prescribed by the commission itself. This we think clearly implies notice to those interested in or tobe affected by the rule or regulation contemplated. ***-
From the foregoing authorities. we c,onclude that thewords, “adjacent lessees,.” are generally tobe given their ordinary meaning, that is, owners of oil and gas leases c~overing tracts of land adjoining or bordering onthe tract of land onwhich the application for an exception is filed. The usual situation presented to the Commission will be one where all of the land in question has been leased for oil and gas purposes,, and in such cases the ‘lesseesa are the persons owning the working interest ineach lease. Ifcases should arise inwhich an oil and gas lease has not been executed, the owner or owners of the land should be given notice.
II.

“STATEMENT
“As lessee ‘A’ owns a lease of 160 acres the size and shape ofwhich admits ofdevelopment in accordance with the spacing regulations adopted for the field. Less,ee also owns all contiguous and adjacent leases to that ofhis 160- acre tract. “QUESTION NO; 2

‘In view ofthe provisions of the spacing rule adopted for the field and that lessee owns the lbO-acr~e tract and all. .

Railroad Commission of Texas, page’ 6 (O-3181)

contiguous and adjacent leases, is it necessary when application for a permit to drill is filed by the owner ofthe 160-acre tract for the commission to give notice to the owner of the 160-acre tract who is also the owner ofthe contiguous and adjacent leases ofhis intention to drill?”

Although it is not explicitly so stated. we assume from your question that, while the tract in question could be developed without exceptions to Rule 37, a permit is applied for to drill awell as an exception to Rule 37 at a closer distance to a lease line or another well than is allowed by the rule. Under our answer to question No. 3. infra, if the well is tobe drilled under the general provisions of the rule, a-not as an exception, no notice to adjacent lessees is required.

Under the facts stated, where the applicant owns all contiguous and adjacent leases~, we see no necessity of giving notice to him, as adjacent lessee, that he, as applicant, has applied for a permit. Of course such applicant, in his capacity as applicant, should be notified of the time and place of the hearing on his application, but, in his capacity as an adjacent lessee, there is no necessity ofgiving him another notice to the same effect.
III.

“STATEMENT
“Lessee owns a tract of 160 acres which is susceptible to development under the spacing rule applicable to the field and desires to drill awell which is not nearer than Nine Hundred Thirty-three (933) feet to any other completed or drilling well onthe same or adjoining tract or farm and not nearer than Four Hundred Sixty-six (466) feet from any property line, lease line or subdivision line. “QUESTION NO. 3 “Please advise ,whether under any spacing rule or the statutes ofthis state it is necessary for said lessee to obtain a permit from the commission authorizing the drilling of said well andwhether, if such permit is necessary, any notices are required tobe issued toany adjace’nt lessee or interested parties.”

Under the facts stated, the well may be drilled under the general terms ofRule 37, and no permit to drill as an exception to Rule ?7 need be obtained. See~Gulf land Co. v. Atlantic Refining Company, 134 Tex. 59, 70, 131 S.W.Tm) 73. 80. inwhich the Supreme Court said. in construing Rule 37:. . Railr~oad Commission of Texas, page 7 (o-3181)

“,** * Inorder toaccomplish orderly drilling, the Commission has s~imply promulgated a rule fixing minimum spacing distances atwhich wells may be drilled without application, notice or hearing. * + * w

We also direct your attention to the Railroad Commission Statewide Rule No. 9, as amended effective January 1. 1940, which reads in part as follows:

“* * * No permit to drill any well or wells for oil or gas shall be required by the Commission except for such wells as may be drilled unde~rexceptions to Rule 37 of statewide application or as exceptions under special field rules governing the drilling ofany well or wells which have been or may hereafter be adopted by the Railroad Commission.”
IV.

“STATEMENT
“Lessee owns a lot in the unincorporated town of Hawkins, in the Hawkins field, same being of such size and shape as not tobe susceptible to development without an exception to the spacing rule adopted for the field, and files application with the commission in accordance with the rule for a special permit to drill awell on such lot, after which notices are issued to all owners ofadjacent leases and interested parties. Subsequent to the filing of such application and the issuance ofnotices to all adjacent lessees and intereste,d parties and before the hearing on such application, one or more of such adjacent lessees or interested parties conveys his or her interest in such adjacent leases to a party or parties not served with notice. “QUESTION NO. 4

“Is the commission required to postpone the date ofthe hearing theretofore set in order that such additional adjacent lessees or interested parties may be notified ofthe application and hear~ing, or are such purchasers of the interest of theadjacent leases or interested parties charged with notice ofthe filing of the application and the time ofhearing by reason ofthe notice served onthe predecessor in title?”

Where the interests ofadjacent lessees were conveyed after the notice of the hearing hadbeen given to such lessees, the grantees ofsuch adjacent lessees would be charged with notice ofthe hearing on. .

Railroad Commission of Texas,, page 8 (O-3181)

the application, and itwould not be necessary to issue notices to such grantees. Inour opinion, the analogy ofthe common law doctrine of lis pendens would be applied, and the purchasers from the adjacent less= would be placed in the same position as purchasers pendente lite. **Com** pare 28 Texas Jurisprudence 339. “Lis Pendens.” $24.
V.

“STATEMENT

“Subsequent to the discovery of oil in the Hawkins field, a 400-acre tract was subdivided into twenty 20-acre tracts, each being susceptible to development under the spacing rule applicable to the field andwithout exception to same. A purchaser of one ofthe interior tracts filed an application to drill awell on **same** as an exception to Rule 37 in order to meet offsets and to prevent undue drainage, such well being applied for less than 466 feet from the property line. “QUESTION NO. 5 “Please advise whether the owners ofthe leases contiguous to the original 400-acre tract are entitled to notice of the application and hearing as provided in said rule, or whether, such subdivision not being in contravention to the rule, notices are required tobe given only to the owners ofthe leases adjoining or contiguous to the 20-acre tract.”

The 20-acre tract, not being of such shape or area as to require development by drilling ofwells as exceptions to Rule 37 is not a subdivision inviolation ofthe subdivision rule of May 29, 1934. Ittherefore may be treated as a separate tract in determining whether awell may be drilled onit as anexception to Rule 37 in order to prevent confiscation of property, See Gulf Land Company v. Atlantic Refining Company, 134 Tex. 59, 71. 131 **S.W.** (2d) 73, 81, inwhich the Supreme Court said:

” * * 8The Rule ofMay 29th, supra, uses the term ‘subdivision’ in defining tracts of land that have no protection from confiscation. The Commission has not seen fit to define such term and ordinarily itwould not require a definition, because any tract ofland segregated from a larger tract would constitute a subdivision. Itis obvious that the term ‘subdivision.’ as used in the order or rule under discussion, has no such’general meaning. Ifsuch a meaning should be given the **term.** a partition or division ofa lOOO-acre tract of land into two 500- acre trac’ts would c’onstitute a subdivision ofthe land under the rule. Manifestly, such a construction oftheRailroad Commiss~ion ofTexas, page 9 (0-3i81)

rule would be absurd, because the tw-o500-acre tracts would come under its ban against subdivision, while tracts of much smaller area which do not constitute subdivisions after the effective date ofRule 37would not. As we construe the rule pertaining to ‘subdivision’ subsequent to the effective date of Rule 37, it means that where a tract of land is of such size and shape that itis necessary to obtain a permit as a special exception to the spacing provision ofRule 37 before awell can be drilled thereon, such a tract will be regarded as a subdivision within the meaning ofthe Rule of May 29th, supra, ifitwas subdivided out ofa large~r trac~tafter Rule 37 became effective. Humble Oil &Refining Co. v. Railroad Commission (Tex.Civ:App., writ refused), 94 S.W. (2d) 1197; Falvey v. Simms Oil Co. (Tex.Civ. App.). 92 S.W.(2d) 292.”

Since the 20-acre tract is of such size and shape that it can be developed without obtaining an exception to the spac~ing rule. it is not a subdivision and may be treated as a separate tract. and notices need be issued only to the lessee oftracts adjacent to the 20-acre tract.
VI.

‘STATEMENT
“Prior to the adoption of the spacing regulations in the Hawkins field and the discovery of oil. lesse~e obtained a lease ona 4-acre tract, same being a separate fee ownership. Subsequent thereto lessee assigned the West two acres of said tract to another party. Lessee, as the owner ofthe remaining two acres, applied for a permit to drill awell for oil as an exception to the spacing regulation on the ground that same was necessary to prevent the confiscation ofhis property by r~eason ofthe fact that other lessees had drilled wells on the property contiguous to his which were admittedly draining his oil. No well hadbeen drilled on either ofthe Z-acre tracts at the time the application was filed nor at the time ofthe hearing thereof. The application was filed for a special permit authorizing lessee to drill awell on the two acres mentioned above and no mention was made in the application or in the notice issued thereon ofthewest 2acres or ofthe 4 acres as awhole. -QUESTION NO. 6

“(A) Was the application and notice ofhearing on such application sufficient to authorize the commission to hear evidence onthe issue ofc,onfiscation and to grant the permit as.

Railroad Commiss~ion of Texas, page 10 (O-3181)

applied for onthe 2-acre tract, provided~notices were issued to the owners ofall leases adjacent and dontiguous to the original 4-acre tract and other interested parties, and provided the evidence at the hear,ing justified the commission ingranting same to prevent the confiscati~on ofthe applicant’s property?

“(B) The location applied for onthe East 2-acre tract is admittedly necessar’y to prevent drainage of oil from the entire 4-acre lease by reason of the density of drilling in the close proximity to the location applied for, and the owner ofthe West 2-acre tract did not protest the application. May the commission on such application to drill awell on the East two acres, issue a permit to drill awell at a location different from that applied for and on the West two acres and at a place where protection will not be afforded against drainage from wells on adjacent leases ?”

. (A) Under the facts stated. the assignment ofthe lease on 2acres out ofthe 4-acre tract constituted a subdivision under the provisions ofthe Railroad Commission’s rule of May 29. 1934. A subdivision by an oil and gas lease is held tobewithin such rule regardless ofwhen itwas made. Sun Oil Co. v. Railroad Commission, 68 S.W. (2d) 609. affirmed 126 T-39 84 SW (2d) 693 Shell Petroleum Corporation v. Railroad Commission: 133 S,W. (2d) 19d. And an assignment ofan oil and gas lease ona portion ofthe leased premises would come within the same rule andwould constitute a subdivision. Compare Humble Oil &Refining Company v. Railroad Commission, 68 SW. (2d) 625. Each ofthe L-acre tracts would be too small tobe developed separately except bywells granted as exceptions to Rule 37, since under the statewide rule prior to January 25. 1940, the minimum area was 2.07 acres, and under the statewide rule in force thereafter and the special rule for the Hawkins field promulgated January 22, 1941, the minimum area is 20 acres. Being subdivisions, neither tract as such, would be entitled to apermit to prevent confiscation. InGulf Land Co. v. Atlantic Refining Co,, 134 Tex. 59, 71. 131 SW. (2d) 73. 81, the court said:

u* * *An examination of the order or rule of May 29, 1934, hereinafter referred to as the Rule of May 29th. will show that subdivisions of land, as such, which have or hereafter may come into existence after Rule 37 becameeffective are not protected at all against confiscation. When Rule 37 and the Rule of May 29th are read together. it is evident that exception permits may be issued to protect such tracts from waste; but such excePtion permits cannot be issued to protect such tracts, as such, from confiscation. * * *”Railroad Commission ofTexas, page 11 (O-3181)

Furthermore, since the 2-acre tract is a subdivision, the Railroad Commission could validly grant the permit only on the basis of the Z-acre tract when considered as a part of the 4-acre tract. from which itwas subdivided. Railroad Commission v. Magnolia Petroleum Co., 130 Tex. 484, 109 S.W.7m) 967

.

Your question assumes that the application was made for a permit to drill awell onthe 2-acre tract, considered as a separate tract, and that the notice so stated. Inour opinion the notice would not be sufficient tojustify the granting ofa permit to drill awell on the 2-acre tract, considered as a part ofthe 4-acre tract. Persons receiving the notice would be entitled to rely on the notice as stating the matter to be considered by the Commission. A notice that a hear.ing was tobe held onwhether a permit should be granted to drill awell onthe 2-acre tract considered as a separate unit would not apprise the person receiving the notice that the Commission was going to consider the matter of granting a permit to drill awell on the 2-acre tract considered as a part of the 4-acre tract. The issues, on the question ofconfiscation. would be substantially different ifthe 2-acre tract were considered as a part ofthe 4-acre tract instead ofas a separate tract.

Itis well settled that the notice issued by the Railroad **Com** mission must give fair notice ofthe matter tobe passed onby the Railroad Commission, and conversely, that the order must c~omefairly within the terms ofthe notice. State v. Blue Diamond Oil Corp.. 76 S.W. (2d)852.

(B) Under the facts assumed inyour question the application is for a permit to drill awell onthe east 2-acre tract, considered as a separate tract. to prevent confiscation. Clearly itwould be unreasonable and arbitrary for the Railroad Commission on such application to grant the permit onan entirely different tract, and such order would not be valid.
VII.

“Oil was discovered inthe Hawkins field during the month of September, 1940. In 1937 ‘A’ owned a tract of land ofapproximately 40 acres, his home being onfive acres thereof. In 1937, prior tothe discovery ofoil in said fields, he executed a lease on all ofthe 40 acres, except the five acres uponwhich his home was located. Said lease is now at this time inforce and effect and ‘A’ desi~res to drill awell onthe five acres which he has not leased and makes application therefor.Railroad Commission of Texas, page 12 (O-3181) “QUESTION NO. 7

“Is “A’ entitled to a permit to drill one well on said 5-acre tract as a matter of law to prevent the confiscation ofthe property, there being nowell on same at the time ofthe filing ofthe application as an exception to the spacing rule in effect in the field?”

In 1937, the statewide Rule 37, providing for spacing distances of 150 feet from property lines and 300 feet from other producing wells, was in effect. The area covered by a regular location under this spacing pattern is 2.07 acres. The 5acres retained by “A” would therefore be sufficient tojustify the drilling ofawell. under the spacing rule then in effect. without obtaining a special per,mit. unless by reason ofits shape awell could not be drflled on the tract without being less than I50 feet from one or more property lines. The spacing rule in effect at the time of the subdivision controls in determining whether a special permit is required. Humble Oil and R,efining Company vs. Railroad Commission, 94 SW. (2d) 1197 (writ refused). Gulf Land Company v. Atlantic Refining Company, 134 Tex. 59, 131 S.W. (2d) 73. Ifthe 5-acre tract is of such shape that awell can be drilled onit more than 150 feet fr~omthe nearest property line and more than 300 feet from the nearest producing well. then “A” is entitled to drill one well onhis 5-acre tract as a matter of law to prevent confiscation ofproperty.

If, however, the 5-acre tract is of such irregular shape that awell on it cannot be drilled except at less than 150 feet to the nearest property line or less than 300 feet to the nearest producing well, then the 5-acre tract is a subdivision within the meaning of the rule of May 29, 1934. Gulf Land Co, v. Atlantic Refining Co., 134 Tex. 59, 131 S.W.(2d) 73. Insuch a case, the Railroad Commission would have to consider the small tract as a part ofthe larger tract from which itwas subdivided, in order to determine whether the lessee of this tract is entitled to a special permit in order to prevent confiscation of property. Humble Oil and Refining Co, v. Potter 143 SW. (2d) 135; Shell Petroleum Corporation Y. Railroad Commission, 133 Saw. (2d) 194. Under the facts assumed, “A” would not be entitled as a matter of law to awell onhis 5-acre tract in order to prevent confiscation, but hewould be entitled to such well if the facts show that the original 40-acre tract is entitled to such well. Railroad Commission v. Magnolia Petroleum Co.,, 130 Tex. 484, 109 S&w 967; Atlantic Refining Co. v. Buckley, 146 SW. (2d) 1082 (writ dismissed).
VIII.

‘“STATEMENT

“In 1920 ‘A’ and ‘B’ purchased a lo-acre tract of land inthe Hawkins field and each held an undivided one-half interest therein until approximately 1935, which was prior to the discovery of oil in the Hawkins field. During the year 1935, ‘A’ and ‘B’ orally agreed to partition such IO-acre tract and did orally partition same and thereafter each exercised complete dominion over the .. . Railr.oad Commission of Texas, page 13 (O-3181)

part set aside to each ofthem. No deed of conveyance or written agreement ofpartition was ever executed or recorded ofdoing same, but the fact of partition as set out above was established without dispute at the hearing onapplication for a permit to dr.ill wells on each of said tracts filed by the owners thereof;

‘QUE,STION NO. 8 “May an oral partition be effected and established as set out above and, if so, is the commission required as a **matter** of law to grant at least one permit oneach 5-acre tract on the application ofthe owners thereof in order to prevent c’onfiscation of property?”

Under the facts stated, the oral partition together with the actual division ofpossession and dominion over the property, was legally effective to acc.omplish a partition as the parties intended, and, since the partition took place prior to the discovery of oil, the partition would not be a subdivision within the contemplation ofthe rule of May 29, 1934. Therefore, “A” and “33”would each be entitled to a permit as a matter of law onhis 5-acre tract in order to prevent confiscation of property. Shell Petroleum Corporation v. Railroad Commission, 116 S.W.(Zd) 439 writ dismissed).
M.

‘STATEMENT

“‘A’ owns and has owned for many years prior to the discovery of oil in the Hawkins field, two lots inthe unincorporated town of Hawkins in said field. Said lots are separated by a public street or road dedicated as such many yea’rs prior tothe discovery of oil in the field. The two lots owned by ‘A’ face each other across said street or road. Said road or street is 100 feet wide. ‘A’ owns no other property in the unincorporated town ofHawkins except the two lots mentioned above. “QUESTION 9

“Is ‘A’ entitled as a matter of law to drill at least onewell oneach of said lots in order to prevent the confiscation ofhis property?A

‘Aw is not entitled as a matter of law to drill at least one well oneach ofhis lots in order to prevent the confiscation ofhis property. The dedication ofa street does not operate to pass the fee title toRailroad Commission ofTexas, page 14 (O-3 181)

the public authority, but merely creates an easement infavor of the public. O’Neal v. City of Sherman. 77Tex. 182, 14 SW. 31; 14 Tex. Jur. 722. A **conveyance** ofa lot bordering on a street or alley ordinarily passes title to the center of the street or alley. subject tothe public’s easement, unless a contrar,y intention is expressed in plain and unequivocal terms. Cantley Y. Gulf Production Co., 135 Tex. 339, 143 **S,W.** (2d) 912; 60x v. Campbell. 135 Tex. 428 143 S-W. (2d) 361. Exceptional cases maye where the erantor did n’otown any interest inthe land covered bv the road or street, and in such cases. ofcburse. the purchaser ofthe 10t~would not by such conveyance acquire any title in the land covered by the street or ,road. Day v. Chambers. 62 Tex. 190. Inthe usual situation, however,

‘A”. in the case assumed by your question. would be the owner of the minerals under the street or road, as well as under the two lots bordering on it. Since the two lots and the street together constitute one continuous tract, so far as the ownership ofthe minerals is c~oncerned, the street and the two lots must be c,onsidered together in determining whether “A” is entitled to a permit to drill awell to prevent the confiscation ofhis property. Compare Railroad Commission v. Wood, 95 SW. (2d) 1328 (writ refused); Humble Oil &Refining Company v. Railroad Commission, 99 SW. (2d) 1052, (writ refused).
X.

“STATEMENT “The commission’s statewide 20-acre spacing rule became effective January 25, 1940. Subsequent tothat date and prior to the discovery of oil in the Hawkins field and the adoption offield rules for the Hawkins field, “A’ as the owner infee ofa IO-acre tract in said field, executed a lease to “B’ onfour acres out of such tract.

‘“QUESTION NO. 10

“(A) May the commission grant ‘B’S application for a permit to drill awell onhis 4-acre tract in order to prevent confiscation ofproperty?

‘“(B) May the commission grant ‘B’s’ application to drill awell on his 4-acre tract in order to prevent physical waste ?*

(A) The Railroad Commission may not grant “‘B”s” application for a permit to drill on his 4-acre tract, considered as a separate tract, in order to prevent confiscation ofproperty. As we have already pointed out inanswer to your 6th question, a subdivision by an oiland gas lease falls within the rule of May 29, 1934. even though such lease is made before the discovery of oil. Sun Oil Company v. Railroad Commission, 68 S.W. (2d) 609. affirmed, 126 Tex. 269, 84 S.W. (2d) 693~ Shell O-. . Railroad Commission of Texas, page 15 (O-3181)

Petroleum Corporation v. Railroad Commission, 133 SW. (2d) 194. It follows that “B’s” 4-acre tract must be considered with the tract from which itwas subdivided indetermining whether 

### l B” is entitled to drill awell on itin order to prevent confiscation ofproperty. Humble Oil & Refining Company v. Potter, 143 SW. (2d) 135; Shell Petroleum Corporation v. Railroad Commission, 133 S.W. (2d) 

### 194.

(B) The question of subdivision relates only to the issue of confiscation, and the fact that such subdivision has taken place does not prevent the granting ofa permit to ‘B” on his 4-acre tract in order to prevent waste. InGulf land Co. v. Atlantic Refining Company, 134 Tex. 59, 76, 131 S.W. (2d) 73, 83, the Supreme Court said:

”

. . . As we interpret Rule 37 and the Rule of May 29th, the fact that atract.of land is a subdivision within the meaning of the rule last mentioned is no impediment to the granting ofawell permit thereon as an exception under Rule 37 to prevent waste. Inother words, the rule pertaining to subdivisions has no application to well permits granted to prevent waste

. . .-”
XI.

“STATEMENT

‘The commission’s statewide 20-acre spacing rule became effective January 25. 1940. Subsequent to such date and prior to the discovery of oil in the Hawkins field and the adoption of the special rules applicable to said field. ‘A’ **as** the owner ofa 4-acre tract, exec,ut.ed a lease on two acres to one person and ontwo acres to another person, and each has applied f~ora permit to drill on his respective 2-acre tract. “QUESTION NO. 11

“(A) Can the commission grant to each of said applicants a special permit authorizing the drilling ofawell oneach respective tract in order to prevent confiscation ofproperty?

“(B) Can the commission grant to each of said applicants special permit authorizing the drilling ofawell on each respective tract in order toprevent physical waste ?R

(A) Under our answer to subdivision MA”under question No. 10, supra, we have pointed out that a subdivision by oil and gas lease
**comes** within the provisions of the rule ofMay 29, 1934, regardless ofRailroad Commission of Texas, page 16 (o-3181)

whether itwas before or after the discovery of oil. SunOil Company v. Railroad Commission, 68 SW. (2d) 1609, affirmed. 126 T ~Lb9 84 SW 2d 693 Sh 11P {2d{ 194; S’ etroleum Corporation v. Railroad Commi%on, ;33 S.“W,

mce each ofthe 2-acre leases would constrtute a subdivision within the meaning of the rule, neither ofthe applicants would be entitled to thewell ofhis 2-acre tract considered as a separate tract to prevent confiscation ofproperty. Gulf Land Co. v. Atlantic Refining Co.., 134 Tex. 59, 131 S.W. (2d) 73.

(B) As we have pointed out inanswering subdivision “B” of question No. 10, the question of subdivision does not affect the authority of the Railroad Commission to grant a special permit toprevent waste. Gulf Land Company v. Atlantic Refining Co., 134 Tex. 59. 131 S.W. (2d) 73. Ther,efore, rfthe Commrssron fmds upon substantial evidence that waste will be prevented by the drilling ofawell oneach tract, it may grant a special permit to each applicant.

‘XII.

“STATEMENT
“The commission’s statewide spacing rule became effective January 25. 1940. Prior to the discovery of oil inthe Hawkins field and the promulgation of the special rules applicable to the field, ‘A’ as the owner ofa separate fee ownership ofa lo-acre tract executed a lease onfour acres of **same** to ‘B’

.

‘QUESTION **NO.** 12

“Should itbe held by you, in answer to the previous questions that ‘B’ as the lessee of such 4-acre tract is not entitled to a special permit authorizing the drilling ofawell on such 4-acre tract in order to prevent confiscation of property and/or physical waste, please advise whether, if the commission should refuse a permit to drill on such 4- acre tract on the application “B’ and “B’ surrenders his lease to the fee owner, the fee owner would then be entitled to make application for and receive the permit to drilLm

As we have already stated, the Commission would not be prevented by the fact of subdivision from granting a special permit to “BR to drill awell on the 4-acre tr.act in order to prevent waste, but it would be prevented from granting a special permit to ““Bmto drill upon the 4-acre tract, considered as a separate tract in order to prevent confiscation ofproperty. If “B’ surrenders his lease to the fee owner’, and the IO-acre tract is not itself a subdivision from a larger tract, the fee owner would be entitled to one well onhis IO-acre tract in order toprevent confiscation of property. Dailey v. Railroad Commission, 133 SW. (2d) 219 (writ refused); Nash v. Shell Petr,oleum Corp00 LOS.W, (2d) 522 (wr,it dismissed).Railroad Commission ofTexas, page 17 (O-3181)

**XIII.**

“STATEMENT “The Cemetery Association within the town of Hawkins owns a 2-acre burial plot, having acquired same long prior to the adoption ofthe original statewide spacing rule in 1919. One and one&half acres of the 2-acre tract is used for burial purposes and is separated by a fence from the other one-half-acre and has been so separated for a number ofyears. The one-half-acre portion dthe 2-acre tract has never been used for*burial purposes. The Cemetery Association prior to the discovery of oil in the Hawkins field executed an oil and gas lease onthe en-, tire Iwo acres. The owner ofthe oil and gas lease then applied for a permit to drill awell onthe unused portion ofthe cemetery as an exception to the spacing rules in the Hawkins field. Nowells are now located either on the one and one-half-acre portion of the tract or the one-halfacre portion ofthe tract. “QUESTION NO. 13

“(A) Inthe absence ofany protest on the part of the families or relatives ofpeople who are buried in the cemetery, may the c,ommission. in order to prevent confiscation ofproperty or physical waste, grant a permit to drill awell as an exception to the spacing rule onthe unused portion of the entire cemetery lot.

“(B) Over the protest onthe part ofthe families or relatives ofpeople who are buried in the cemetery, may the commission, in order to prevent confiscation ofproperty or physical waste, grant a permit to drill awell as an exception to the spacing rule on the unused portion ofthe entire cemetery lot? *

For convenience, we shall answer subdivision (B) before answering subdivision (A).

(B) From the facts stated, we assume that the entire 2- acre tract was acquired by the Cemetery Association for burial purposes, but that only one and one-half acres of this tract is actually occupied by graves. the remaining one-half acre being reserved for such use when it may be needed at some future time. Based onthis assumption, it is our opinion that if the families or relatives of persons who are buried in the cemetery pr~otest, the Cemetery Association would have no lawful authority to permit the use ofany part ofthe cemetery for uses other than burials. In Oakland Cemetery Company v. Peoples Cemetery Association, 93 Tex. 569, 514~,5IS.W. 27, 28, the Supreme Court said:Railroad Commission ofTexas, page 18 (O-3181)

“After the dedication ofthe land. thenlegal title remained inthe~c’orporation only for the purpose ofconveying the lots tothose who desired to use them for the purpose ofburying the dead. No power is given by the statute to such corporations to c,onvey the property for any other purpose, andthe,fact that the lots and ‘subdivi- ” sions are made ‘unchangeable and that the power to convey is restricted to the conveyance of ‘any lot or lots * * * for purposes of sepulture’ operates as a limitation upon the power of the corporation to convey the land to “alot or lots’ and for the uses named. Upon dedications the doeminion of the corporation over the land as owner infee simple was surrendered and the corporation became in effect a trustee to Sell and convey’the ,lots for the purposes specified and to carry outthe purposes enumerated in the statute, with the right to appropriate the pr~oceeds ofthe sale to itself in payment ofthe land’

.” ‘~

,‘~ InHouston Or1Co.,vi, Williams:; 57 S.Wa (2~d)380, 384, (writ refused) the court sard: ,”

I
o e ‘- Itappears tobe the rule that,.where.‘property hasbeen actually ippiopriated either as a private family burying ground orwasa publi cemetery, it cannot in either instance,be inherited’or’conveyed’as~other property’ is done so as to interfere with the use and purposes towhich it has been devoted. Peterson v. Stoltz (Tex.Civ.App.) 269 SW. 113; Stewart v. Ga,rrettr’119:.Ga:386:,~ 46.S.E. ,427, 64 L.R. R. A. 99,‘,100 Am,St.Rep.’ 1,79; Hines ,v; State; 126.Tenna 1, 149 S.W. 1058, 1059, 42 L.R.A. (N.S.) 1138, and other cases. Quoting, as very aptly stated, fi~bm the Hines Case, supra:

‘When once dedicated to.bur’ial.purposeS, and interments have there been made;the then cAvnir holds ,the’ti,tle,to some extent in **tiust** for,the’benefit ofthose entitled toburial in it, and the heir at iaw,‘devisee, or;vendee takes. the property subject tothis trust.‘m : ,: I The relatives ofpersons buried innthe cemetery would be entitled to raise objections to the use ofthe cemeter,y for purposes ‘other than as a place ofburial. In‘Barker
~’D7-I v azel;Fain Oil Co;; 2,19 SW. 874, 879 (writ refused) tbe’court said:

”*De They have, as we think, a r’ight to protect the graves of‘their ‘dead;, not only ,as against~the’~origina1 donor and the trustees of;the Pleasant Grove Church, but also as against all persons so long as the graveyard maintains its lawful existence., ,‘*‘O2’ ”

The right ofthe’family and relatives ofpersons buried ‘in a **cemetery** to object to the drilling ofan oil well in the cemetery extends’ ‘Railroad Commission of Texas, page 19 (O-3181)

to all ofthe cemetery. and not merely to the part ofthe cemetery that is actually occupied by graves. InCochran v. Hill, 255 S.**W.** 768, 770, the c,ourt said:
“We believe this equity power extends to the protection of the entire lot owned’by the Cemetery Association, irrespective ofwhether there are any graves in any certain part ofit or not. Those who have loved ones buried there are entitled to have the hallowed spots protected from the heedless search for hidden wealth and from the rapacious hands who would~convert its sacred confines into a place of money getting.”

InWhite v. Williams, 57 S.W. (2d) 395, 386, the court said:

“* * *therefore the only question to ba determined onthis appeal is whether under the facts,, inthis case Mrs. White was entitled to apply to a court of‘equity for a restraining order to prevent the drilling ofan oil well onthis plot of ground. We think she had such right. This was the effect of the holding in the case of Barker et al v. HaeelFain Oil Co., et al. (Tex.Civ.App.) 219 SW. 874, 875, and that this right extends to thewhole plot ofground and not just to that portion ofthe same where inter’ments had already been made, Cochran et al v. Hill et al. (Tex.Civ. App.) 255 SW. 768.”

The same holding is found in Smallwood v. Midfield Oil Company, 89 SW. (2d) 1086, 1090, (writ dismissed) where the court sard:

” * 8* The dedication of Mt. &AoriahCemetery had been effected by actual interment and inclosure many years prior to the Martin deed. Such dedication extended to all that portion ofthe ground thus set apart for the graveyard, whether actually occupied by graves or **not.** ***** ***** ***** *****

See also Smith v. Merrill. 81 F. (2d) 609. and Rairr’roadCommis~sion v. Wood, 95 S;W. (Ld) 13~8 (writ refused). Zn,each of these cases, a cemetery was involved and an order of the Railroad Commission refusing to grant a permit to drill an oil well was sustained. However, each case was decided onpoints which did not involve the right to drill an oil‘ well ina cemetery.

(A) Althou.gh the,law has not been settled,by any court decision, we are ofthe opinion that where the Cemetery A,ssociation by its proper officers hasexecuted aiaoil and gas..,lease and all owners of lots inthe cemetery and a11of the~,familiea and,re:lativ+s ~pfpersons buried in the cemetery consentto the drilling ofa well ona.portion of the.cemetery snotactually used f.or graves, the Railroad,,Gommission would beRailroad Commission ofTexas; Rage ‘26 (O-3181)”

, ,C? .I ,.i authorized to grant a permit to.drill! a,we.11on,such,portion ofthe cemetery. Article 922a,‘Vernon’s Annotated Civil, Statutes, provides as folIows:
“After such property is so dedicated to cemetery purposes, neither the dedication nor the title ofa plot owner shall ever be affected by the dissolution of the association or bynon-user ,onits part, or by alienations ofthe property. or by any encumbrances thereon, or by forced sale under execution or otherwise, and such dedication shall ,notbe,deemed or,held invalid as violating any existing laws against perpetuities or the suspension ofthe power ofalienation oftitle to or use ofprop-

. erty. but such dedicatron is hereby expressly permitted, and shall be and shall~be deemed to be in~respect for the dead, a provision for the disposition ofthe bodies ofdeceased persons, and a,dutyto, and for the benefit of, the general public, and said property shall be held and used exclusively for cemetery purposes unless and until the dedication shall be,removed by an order and decree of the District Court ofthecounty inwhich the same is situated, in a proceeding brought therefor by the governing body ofthe city, if said cemetery is within, or within five (5) miles’from the city limits of, any city or more than twenty-five thousand (25,090) inhabitants according to the last preceding Federal Census.,, or.by the District Attorney, if said cemetery is not within, or within five (5) miles of the city limits of,.a city of,more than twentyfive thousand (25,OOO),inhabilnnts~, according to the last ‘i preceding FedeiaJ Census..or by.the owne,r of property so situated that its value is a,ffected, by said cemetery, upon notice and proof s,atisfactory ,tothe Court that all bodies have been re~moved therefrom, or that no interments were made therein, or that,the same is no longer used or reguired for interment purposes. or until the maintenance of said cemeter,y is enjoined or abated as a nuisance’,as he~reinafter provided for. After. such~dedication and as long as said property shall remain,dedicated to cemetery purposes, no railroads, street, road, alley, pipe line, pole line, telephone, telegraph, or electric line, or other public utility o.rthoroughfare; whatsoeve’r shall ever be laid out through, over , or across any part thereof, without the consent~of, the directors. offthe cemetery association owning or.pperating.the same, or ofnot:less than two-thirds (2/3.) of the,owners ofburial, plots therein. bnd all of such property, .includingroads;;alLeys;and walks therein, shall be exempt from public improvement assessments and all public taxation. and shall not be liable to beRailroad Commission ofTexas, page 21 (O-3181)

sold on execution or applied in payment ofdebts due from individual owners ofburial plots therein. (Acts 1934, 43rd Leg., 2nd C-S., p. 146, ch. 66, § 1.)~”

Itwill be noted that this statute provides inpart that the dedication ofproperty for cemetery purposes shall not be affected “by alienations ofthe property”, but it is further provided that for certain specified purposes, rights ofway may be granted across part of the premises by the consent ofthe directors or oftwo-thirds ofthe owners of burial plots therein. Article 923a. Vernon’s Annotated Civil Statutes, also provides that avested right of interment may be waived. While these statutes do not relate to the spec,ific problem here involved, they do indicate a policy that rights in a cemetery or a part thereof may be waived or abandoned. Compare Meadows v. Edwards. 116 S.W. (2d) 831. 834 (writ refused), inwhich the court said, with reference to a private cemetery:

“These undisputed facts and circumstances coming in the main from appellees, show in our opinion, conclusively that only that part ofthis tract of land inclosed by the fence as ithas existed since 1931 is impressed with and devoted to a cemetery. Houston Oil Co. of Tex. v. Williams, Tex.Civ.App.. 57 S.W.(2d) 380, writ refused. And the oil and gas leases given by these appellees and their joint owners covering this tract of land, so long as operations thereunder were confined to the land outside the inclosed cemetery and no desecration thereof occurred, were not illegal, immoral, or against any phase of our public policy

. . eR

We believes, therefore. that public policy would not prohibit an agreement which ineffect constituted an abandonment by all interested parties oftheir rights to insist that a certain portion ofthe premises be used for cemetery purposes, where the portion of the premises so abandoned are not actually occupied by graves or sepulchers. We further believe that the Railroad Commission would be authorized to require the applicant to make proof that all persons owning burial plots and all ofthe families and relatives ofpers’ons buried in the cemetery had been given adequate notice and had failed to protest or had consented to the granting of such permit.

APPROVED MAR 24, 1941 Yours very truly
ATTORNEY GENERAL OF TEXAS /s/ Grover Sellers FIRST ASSISTANT ATTORNEY GENERAL By /s/ James P. Hart James P. Hart Assistant
JPH:EP/cm APPROVED OPINION COMMITTEE By /s/ BWB Chairman