Case Name: RYAN CONSOLIDATED PETROLEUM CORPORATION, Petitioner, v. W. L. PICKENS et al., Respondents
Court: Supreme Court of Texas
Jurisdiction: Texas
Decision Date: 1955-11-23
Citations: 285 S.W.2d 201
Docket Number: No. A-4650
Parties: RYAN CONSOLIDATED PETROLEUM CORPORATION, Petitioner, v. W. L. PICKENS et al., Respondents.
Judges: HICKMAN, C. J., and GARWOOD and WILSON, JJ., dissenting.
Reporter: South Western Reporter Second Series
Volume: 285
Pages: 201–215

Head Matter:
RYAN CONSOLIDATED PETROLEUM CORPORATION, Petitioner, v. W. L. PICKENS et al., Respondents.
No. A-4650.
Supreme Court of Texas.
Nov. 23, 1955.
Rehearing Denied Jan. 11, 1956.
A. W. Walker, Jr., and J. Lawson Gog-gans, Jr., Dallas, Jones, Herring & Jones, Austin, for petitioner.
Prentice Wilson, Dallas, Moody & Robertson and Hollers, O’Quinn & Crenshaw, Austin, Power, McDonald & Mell and Chilcote & Clark, Tyler, William W. Harris, Quitman, M. H. Barton, Henderson, for respondents.

Opinion:
SMITH, Justice.
The opinion rendered in this cause on the 23rd day of March, 1955 is withdrawn and the following opinion is substituted in lieu thereof.
This is a suit brought by Ryan Consolidated Petroleum Corporation, as plaintiff, for equitable relief from the confiscation of oil and gas by Pickens & Coffield, as defendants. The defendants won a take nothing judgment in the trial court which has been affirmed by the Court of Civil Appeals. 266 S.W.2d 526.
Pickens & Coffield hold an oil and gas lease upon one half and Ryan Consolidated Petroleum Corporation holds an oil and gas lease upon the other half of a tract consisting of four lots in the Hawkins townsite. The four lots were subdivided after Rule 37 became applicable. Respondents, in addition to the interest acquired under their lease, own an undivided ⅛⅛ mineral estate under Lots 10 and 11, and an undivided ⅛⅛ mineral estate under Lots 12 and 13. This interest was purchased 'from Mack Holmes, one of the minors who signed the original lease dated November 9, 1940. Pickens & Coffield secured a permit and drilled a well upon their one half. The Railroad Commission denied Ryan a permit to drill on its one half of the original tract, and Ryan now seeks in this suit an equitable share of the oil produced from the Pickens & Coffield well, based upon its proportionate ownership of the entire tract.
The permit was granted for the purpose of preventing confiscation and physical waste. On the question as to location of the well, Pickens & Coffield's expert witness testified that in order to best protect the drilling pattern of the field, to prevent waste, and from the viewpoint of maximum drainage efficiency and maximum production from the well throughout its future life, the well, in his opinion, should be located on Lot 11 (Pickens & Cof-field lot). Ryan's geological expert, Mr. Griffin, testified that the best location for the well would be on Lot 13 owned by Ryan.
The four lots comprising one tract of .4 acre of land involved in this suit was situated in the township of Hawkins. Prior to the discovery of oil in what is now known as the Hawkins Field, the Holmes Heirs were the owners thereof. The tract is described as Lots 10, 11, 12 and 13. Lot 13 was acquired by the Holmes Heirs under the ten-year statute of limitation of the State of Texas. On October 18, 1940, the adult Holmes Heirs leased to Smith and Morrison Lots 10, 11 and 12. On November 9, 1940, the minor Holmes Heirs leased their ⅝ interest in all four lots to Smith and Morrison. The leases to Smith and Morrison each provided that the lessor has "granted, demised, leased and let and by these presents does grant, demise, lease [and] let unto said lessee, with the exclusive right to prospect, operate, produce, store and remove therefrom oil, gas, casinghead gas, and all petroleum products " ; and the leases further provided: "1. Lessee shall deliver to the credit of the lessor as royalty, free of cost, in the pipe line to which it may connect its wells the equal one-eighth (⅛) part of all oil produced and saved from the leased premises."
On December 13, 1940, Smith and Morrison released all of their interest in Lots 12 and 13. The release contains a ratification and confirmation of the leasehold estate held by Smith and Morrison on Lots 10 and 11. The instrument of release concludes with the following paragraphs :
"Now therefore, in consideration of the premises and for the purposes of consummating said settlement agreement, first parties have released and quit-claimed and do by these presents release and forever quit-claim unto second parties, their heirs and assigns, all right, title, interest and claim in and to lots twelve and thirteen of Block twenty-three, town- of Hawkins, Wood County, Texas, and all oil, gas and minerals in and under said lots and that may be produced therefrom, and,
"Second parties have ratified and confirmed and do by these presents ratify and confirm unto first parties and their assigns the above mentioned oil,- gas and mineral leases, executed by them and now shown of record in Wood County, Texas, and declare the same to be valid and binding in all their terms and conditions insofar as they cover and include Lots ten (10) and (11)' of Block Twenty-three (23), town of Hawkins of Wood County, Texas, and no further; the intention being to correct and amend said oil, gas and mineral leases by excluding from their operation lots twelve (12) and thirteen (13) as fully as though they had originally covered lots ten (10) and eleven (11)."
On December 26, 1940, Smith and Morrison assigned the lease covering Lots 10 and 11 to Coffield, who in turn assigned the lease, so far as Lot 11 was concerned, to Pickens. On the same day, December 26, 1940, the Holmes Heirs leased their interest in Lots 12 and 13 to petitioner, Ryan. The instrument of release and confirmation above referred to was duly approved by the Probate Court of Wood County, Texas. Thus, it is clear that the adult Holmes Heirs, after October 18, 1940, and the minor Holmes Heirs after November 9, 1940, had no interest in the oil rights in and under or to be produced from Lots 10 and 11, except the reserved )4⅛ of the oil and the 54⅛ interest which reverted to Mack Holmes on November 8, 1943, the date of the expiration of the primary term of the original lease executed by the Holmes minors. -They conveyed a determinable fee to Smith and Morrison of piths of the oil in and under Lots 10 and 11. The Holmes Heirs have never acquired by any subsequent conveyance or the instrument of release a greater interest in Lots 10 and 11 than that which they reserved in the original lease executed on October 18, 1940. Petitioner Ryan's lease only covered Lots 12 and 13. Petitioner acquired a determinable fee of %ths of oil to be produced from Lots 12 and 13 only. ' Ryan acquired no interest in Lots 10 and 11.
When Pickens & Coffield secured the leasehold .rights in Lots 10 and 11 they were charged by law with notice of the fact that they could not drill a well thereon except to prevent waste, or by reason of the preference right as the first lessee of Lots 10 and 11 of the- four lots, involved, or by reason of a finding by the Railroad Commission that the best location for the one well to prevent confiscation was on one of their dots.
When Ryan secured piths of the leasehold rights in Lots 12 and 13, it was charged with notice of the fact that the four lots might not be entitled to but one well to prevent confiscation. It was charged with notice that the Holmes Heirs had executed a lease on Lots 10 and 11 to Smith and Morrison (assigned to Pickens & Coffield) providing for the exclusive right to drill a well thereon and containing a general warranty of -title, and further that if the Railroad Commission found that the one well, to which the four lots were entitled to prevent confiscation, should be drilled on Lots 10 and 11, no well could be drilled on Lot 12 or on Lot 13, except to prevent waste. The permit granted to Pickens & Coffield was to prevent confiscation and waste. At the time the Holmes Heirs executed leases covering Lots 10 and 11 to Smith and Morrison, and later executed leases to Ryan covering Lots 12 and 13, it was not known whether the Railroad Commission would decide that two wells were necessary to prevent waste.
Petitioner asserts the further contention that the application for permit filed by respondents "clearly involved all four lots and that since respondents have utilized petitioner's two lots in securing the drilling permit for a well on the four lots, in sustaining such permit in the courts, and in securing an allowable for the well, respondents are judicially es-topped to deny the right of petitioner to share in the production from such well." We cannot agree with this contention. The record shows that the permit granted to Pickens & Coffield was upon an application for request to drill a well of their own on Lots 10 and 11. The record shows that petitioner and the Railroad Commission were fully advised that the Pickens & Coffield application was -not for a well on the four lots and the proceedings before the Commission and the courts show that Pickens & Coffield had consistently refused to make an agreement with petitioner pooling Lots 10 and 11 with Lots 12 and 13, but insisted that the one well to which the four lots as they existed before subdivision, were entitled should properly be drilled on Lots, 10 and 11. Petitioner was fully advised. that Pickens & Coffield, in case the well was so drilled, would claim the right to all of the oil produced thereby. The application does contain the sentence: "The application involves and is intended to involve the oil and gas leasehold rights, permit rights and development rights,1 past, present and future in Lots 10, 11 said- Block 23,- as well as Lots 12 and 13, Block 23, and particularly, as those rights existed and prior to October 18, 1940." This sentence which petitioner contends constitutes judicial es-toppel was inserted in the application in order to comply with the rule announced in the -case of Railroad Commission v. Miller, Tex.Civ.App., 165 S.W.2d 504, wherein it was held that the Railroad Commission could not grant a permit on a small segregated tract in derogation of Rule 37 except pursuant to an application for a permit on such small tract that "invoked the jurisdiction of the Railroad Commission to consider the two subdivided tracts as they existed before division thereof and pursuant to notices issued by the Railroad Commission fully stating the character of the application.
Prior to the filing of the application involved respondents had filed applications with the Commission for a permit to drill a well on Lots 10 and. 11 without mentioning Lots 12 and 13: These applications were refused because they were not in the form as required by the decision in Railroad Commission v. Miller, supra. In the order granting respondents a permit to drill a well on Lot 11, the Railroad -Commission found .'that the application showed good cause, and that no injustice would be , doné by the gránting of ' such exception,to respondents, and that the permit should be granted to' prevent physical waste and confiscatioii of property.
Petitioner does not claim 'title to Lots 10 and 11. Neither do Piékens & Coffiéld claim any rights acquired by Ryan under its lease from the -Holmes Heirs covering Lots 12 arid • 13. Each party filed separate applications for -permits to - drill on their' respective lots. - The Railroad Commission understood and treated petitioner's application as involving only Lots. 12-.and 13, and likewise' treated respondents! application as involving a request for a;permit to drill a well on Lots 10 and 11, and that each-application involved separate and distinct leases.' After the granting of a permit to respondents to- drill- a well on their' Own'Tot-ll under Rule 37, Caise No. 41816-A, and the -refusal of petitioner's -application in-Rule 37, Case No. 31814-A for a permit to drill a well of its own- on Lots 12 and 13, petitioners filed a motion -in respondents' case, and there sought to set. aside the - order granting respondents' permit. The Railroad Commission overruled petitioner's motion. The order overruling the motion refers to respondents' application, as being one for ,a special permit to drill a well on Lots 10 and 11, Block 23, and notion Lots 10, 11, 12 and 13. .-When the Railroad Commission overruled petitioner's motion for. rehearing on its permit case, it referred to, petitioner's permit application as being a request for a permit to drill a well of its own on Lots-12 and: 13 and not on Lots 10, 11, 12 and 13. So, what was the relationship between the parties, and what rules governed the Railroad Commission in determining the- issue before it? The release and confirmation -above referred to cannot be held to operate as. a conveyance to the Holmes Heirs or their assignee, Ryan, of any rights in Lots 10 and 11 for the reason that the Holmes Heirs did not have any -interest except the reserved ⅛⅛ royalty at the date of the release and confirmation. Since Smith and Morrison acquired their lease on October 18, 1940, and- the release executed at a subsequent date did not affect their rights under the lease, it naturally follows that Smith and Morrison and their assigns would have had the right on and after October 18, 1940 to drill on Lots 10 and 11 all the wells the Railroad Commission would permit to prevent waste, and did, under well-established rules, have a preference right to drill the one well the four lots were entitled to before subdivision to prevent confiscation, provided the Commission, hosed on substantial evidence, located such well on either Lot 10 or Lot 11. The well was located on Lot 11 (Pickens & Coffield), and was completed as a commercial producer of oil on September 13, 1946. Ryan's application for a permit to drill on Lots 12 and 13 was denied by the Railroad Commission, and the findings of the Railroad Commission, so far as the location of the well is concerned have been upheld by the district court and the Court of Civil Appeals. Ryan Consolidated Petroleum Corp. v. Pickens, 266 S.W.2d 526.
Now, who is entitled to the oil? There is only one answer to this question. Pickens & Coffield are entitled to keep ⅞⅛3 of the oil produced from the well and the Holmes Heirs, or their assigns, were entitled to have delivered to them the ⅛⅛ of all the oil produced from said well, all in accordance with the express terms of the lease dated October 18, 1940, unaffected by the subsequent release to the Holmes Heirs of Lots 12 and 13. To hold otherwise would be contrary to the well settled law in Texas. In our case, the parties were relegated to such rights to drilling permits as existed prior to October 18, 1940, the date of the first subdivision of Lots 10, 11 and 12. Prior to that date Lots 10, 11, 12 and 13 were under one common ownership. The Railroad Commission considered the tract as it existed prior to October 18, 1940. The notice of hearing, as well as the notice on rehearing, contained the provision that the rights to be considered were those existing on or before October 18, 1940. Prior to the first subdivision neither Rule 37 nor the subdivision rule of May 29, 1934, had any application and the tract comprising the four lots was entitled to a well permit as a matter of law. Brown v. Hitchcock, Tex.Civ.App., 235 S.W.2d 478, wr. ref.; Nash v. Shell Petroleum Corp., Tex.Civ.App., 120 S.W.2d 522, er. dism.; Shell Petroleum Corp. v. Railroad Commission, Tex.Civ.App., 116 S.W.2d 439, er. dism. The effect of the voluntary subdivision rule on the right of the owner of land to produce the oil thereinunder is well stated in the case of Gulf Land Co. v. Atlantic Refining Co., 134 Tex. 59, 131 S.W.2d 73, 80. In that case this Court held that the- Railroad Commission cannot grant a well permit on a tract subdivided in derogation of Rule 37 to prevent confiscation, but can grant a permit for a well on such tract to prevent waste. The Court further said:
" It is the law that every owner or lessee of land is entitled to a fair chance to recover the oil and gas in or under his land, or their equivalents in kind. Any denial of such fair chance would be 'confiscation' within the meaning of Rule 37 and the Rule of May 29th. Empire Gas & Fuel Co. v. Railroad Commission, Tex.Civ.App., 94 S.W.2d 1240, writ refused. The right to be protected against 'confiscation' under Commission oil and gas rules is not absolutely unconditional or unlimited. We will now discuss the condition or limitation which the Rule of May 29th has imposed or engrafted on the right to be protected against 'confiscation.'
"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 became effective 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.
In this regard, the Rule of May 29th states 'no subdivision of property made subsequent to the adoption of the original spacing 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 in applying such spacing rule or in determining the matter of confiscation if such subdivision took place subsequent to the promulgation and adoption of the original spacing rule.' To our minds, language could not be made plainer, or more all inclusive. Railroad Commission v. Magnolia Petroleum Co., 130 Tex. 484, 109 S.W.2d 967, supra."
Petitioner knew that the Railroad Commission had the power to adopt the Rule of May 29, 1934 providing that a subdivision in derogation of Rule 37 would be disregarded in passing on applications for permits to drill wells to prevent confiscation. The petitioner knew that the Railroad Commission did not have the power to cause a merger or unitization of the separately owned leasehold rights of respondents in Lots 10 and 11 with those of petitioner in Lots 12 and 13.'
Petitioner's contention that this case is one for equitable relief should not be sustained for the further reason that its position is inconsistent with the law of capture, which is a well-settled rule of property in this jurisdiction. The rule of capture is simply this — that the owner of a tract of land acquires title to the oil and gas which he produces from wells drilled thereon, though part of such oil or gas may have migrated from adjoining land. The Railroad Commission is without power from the, Legislature or by decisions of this Court to do anything more than declare illegal the drilling of wells which are prohibited by Rule 37. The Railroad Commission cannot change the law of Texas. The Legislature of this State has heretofore conferred broad, extensive and exclusive regulatory powers upon the Railroad Commission of Texas in the regulation of the oil industry of this State, but the Commission has not been given the power to determine property rights as between litigants. The courts, whether sitting as'court of law or equity, determine Such matters in accordance with existing laws in Texas.
Petitioner insists that the Mississippi case, Hassie Hunt Trust v. Proctor, 215 Miss. 84, 60 So.2d 551, is directly in point. An examination of that case, as well as the case of Griffith v. Gulf Refining Co., 215 Miss. 15, 60 So.2d 518, 520, convinces us that the situation in Mississippi is entirely different from that in Texas. The case of Merrill Engineering Co. v. Capital National Bank, 192 Miss. 378, 5 So.2d 666, was decided by the Supreme Court of Mississippi on January 26, 1942. That case involved the same question as we have here, and the Court recognized the rule of capture. However, the case was decided prior to legislative enactments in the State of Mississippi which had the effect of limiting and circumscribing the rule of .capture. When the Griffith and Hassie Hunt Trust cases were decided in 1942, the Legislature of that State had prior thereto enacted Chapter 117, Laws of 1932, Code 1942, Sec. 6132 et seq. Under the holding in the Griffith case, supra, [215 Miss. 15, 60 So.2d 520] Paragraph (b), Section 6140, Code 1942 made it "the duty of the State Oil and Gas Board to prorate and regulate the gas well production from each common source of supply 'for the protection of public and private interests, and to adjust the correlative rights and opportunities of each owner of gas in a common source of supply to produce, use or sell such gas.' " (Emphasis added.)
As said in the Griffith case, supra: "The above statutes were forerunners of Chapter 256, Laws of 1948, and amendments thereto, Code 1942, § 6132-01 et seq. It will be seen that the same general idea permeates the declaration of public policy in Section 1 of said Chapter as follows: 'to protect the public and private interests against the evils of waste in the production and utilization of oil and gas, by prohibiting waste as herein defined; to safeguard, protect an,d enforce the co-equal and correlative rights of owners in a common source or pool of oil and gas to the end that each such owner in g common pool or source of supply of oil and gas may obtain his just and equitable share of production therefrom ;***.' " (Emphasis added.) Section 10,' Chapter 256 of the. Laws' of 1948, contains paragraph (b),"'The board -shall in all instances where a unit has been formed out of lands or areas of more than one ownership, require the operator when so requested by an' owner, to deliver to such owner .or . his. assigns his proportionate share of the production from the well common to such drilling unit, provided, however, that, such' owner receiving same shall provide at his own expense proper receptacles for the re-r . ceipt or storage, of such oil, gas or dis- . tíllate.' "
The Griffith case expressly' says that the question involved must be viewed in the light of these statutes. Having reached such conclusion, the court said: "We must at once brush aside such : cases as the Japhet v. McRae, Tex.Com.App., 276 S.W. 669, and Bruce v. Ohio Oil. Co., 10 Cir., 169 F.2d 709, 713, which deal-with common- law 'principles- of unrestricted capture." The Legislature of Texas has not seen fit to enact legislation which would' authorize the' Railroad Commission-to adopt and promulgate rules which would have the effect of rendering ineffective the rule of capture recognized in all.of the decisions in this state. As was said in the case o-f Gulf Land Co, v. Atlantic, supra, subdivided tracts as such are not protected at all against confiscation. Since the leases owned by Pickens & Cof-field vested a determinable fee estate in the oil and gas under Lots 10 and 11, and since they had the exclusive right to drill a well thereon and to produce and take all the oil and gas that was produced as a result of proper .drilling operations, and since the conservation statutes and the regulations of the Commission have not abolished the ownership of oil in place nor the right of capture, the respondents have .tíje. vested right to produce, store and remove from said lots through the well located on Lot 11, all the oil, gas, casing-head gas and other petroleum products, and this without liability to the petitioner, Ryan, the owner of the leasehold" rights under its lease covering Lots 12 and 13. The rule applicable to the cáse at bar is well stated in 31-A Tex.Jur., Sec. 5, pp. 24 — 27, as follows:-
" In some' states, the law looks to the fugaciousness of oil and gas in place and considers that they belong to no one until captured and confined. But this theory does''not find approval in Texas. Here oil and gas in place are by the established rules of property a part of the realty or corpus of the land, and subject to ownership, severance, conveyance, lease and taxation as such. Being, interests in land they are- not subject . to parol sale, but have the protection of the statute of. frauds, the statutes regulating conveyances and mortgages of real estate, and the statutes requiring the. recording of instruments afr . .fecting title to or liens on land. They are realty within statutes relating to yenue.- When, oil or. gas is .removed from the soil it becomes personalty.. The conservation statutes and the regulations of the Commission made thereunder have not abolished the ownership of oil in place nor the right of'capture without liability to adjoin-ving owners."
The courts of Texas have consistently held that the- rule of capture is. still in force in this State. It has become a vested property right. • As - said in the-case of Brown v. Humble Oil & Refining Co., 126 Tex. 296, 83 S.W.2d 935, 940, 87 S.W.2d 1069, 99 A.L.R. 1107, 101 A.L.R. 1393: "Owing to the peculiar characteristics of oil and gas, the foregoing rule of owner-' ship of oil and gas in place should he considered ' in' connection with the law of capture. This rule gives the right to produce all of the oil and gas that will flow out of the well on one's land; and this is a property right." In the case of Japhet v. McRae, Tex.Com.App., 276 S.W. 669, 670, Japhet made the following contention:
" 'Where the lessor of land for oil and gas, subsequently to the execution of the lease, but prior to the develop- ' ment of the land and the production of oil or gas under the lease, sells a portion or portions of the land to others, and oil and gas are thereafter produced under the lease from some portion of the leased premises, the royalties therefrom belong to the owner of the particular tract upon' which the well is located, and the owner or owners of other portions of the leased premises have no interest therein.' "
In affirming the trial court's judgment, which upheld such contention, the Court said, in part:
" As our Supreme Court has held, oil is fugitive in its nature, . and ordinarily should belong to him who captures it and brings it to the surface. The quest' for it 'involves tremendous expense and a vast element of chance. In spite of the scientific knowledge of the geologists, the industry still partakes largely of a . gamble. It seems to us that the only safe rule, and the only one free from much confusion, is the one which gives .the oil to, the man who owns the land.upon which the w.ell is located. »
Petitioner also contends in its ápplicá-' tidn' fhaf "since respondents' application to thé Commission clearly involved all four lots and at such time respondents owned an unleased ⅛⅛ mineral fee in all four lots, being a co-tenant with petitioner as to Lots 12 .and 13, respondents cannot' secure a permit to drill on the four-lot unit and drill the well pursuant to such permit without accounting to its co-tenant, petitioner, fop any part of the oil produced from such four-lot unit." Here, again, petitioner proceeds on an erroneous assumption that respondents' application for a permit inyolved all - four, lots. In answer to this contention the respondents present two counterpoints as follows:
"Counterpoint Ten
"The Holmes heirs segregated the mineral estate in Lots 10 and 11 from that in Lots 12 and 13 by separate leases to different parties and by conveying interests in royalties and in the oil payment to différent parties; all owners of interests in Lots 10 and 11 and all owners of interests in Lots 12 and 13 have not joined in any transaction that would nullify this segregation ; the i/£th fee interest of Respondents in Lots 10 and 11 has not merged with the similar interest in Lots 12 and 13 and Respondents were not tenants in common with Petitioner.
"Counterpoint Eleven '
"Even if Pickens and Coffield had been cotenants of Petitioner as owners of a 14th mineral fee interest in Lots .10 and 11 and of a similar interest in Lots 12 and 13 so as to burden their development of Lots 10 and 11 as claimed, by Petitioner, they could not as such owners drill a well on Lot 12 or Lot 13 if the leases to Ryan on Lots 12 and 13 were still effective because in such case the only right Pick-ens and Coffield would have had in relation to Lots 12 and 13 under such mineral interest would have been to affirm the lease to Ryan 'and afterward claim a royalty under such lease or to elect to pay 0f the cost of drilling' ánd opérating any well drilled on' Lots 12 and 13 and to take i^th of the oil produced therefrom. If the lease to Petitioner was not still effective it, had lost any right it ever had."
The position of respondents 'is sound. The mineral rights in Lots 10 and 11 were segregated from those in Lots 12 and 13 when the Holmes Héirs 'forced the surrender by Smith and Morrison of their leasehold. rights in Lots 12 and 13. The Holmes Heirs later leased Lots 12 and 13 to petitioner,. The mineral lease to petitioner gav.e it the exclusive right to drill for oil on Lots 12 and 13. Petitioner was never a tenant in common with respondents in the fee interest or in the leasehold 'estate in Lots 10 and 11. See 11 Tex.Jur. 410. The fee interest owned by respondents in Lots 12 and 13 and the separate fee interest in Lots 10 and 11 did not merge into one. See 31 C.J.S., Estates, § 123, p. 141; Humphreys-Mexia Co. v. Gammon, 113 Tex. 247, 254 S.W. 296, 29 A.L.R. 607; 17 Tex.Jur. 122, 123.
The theory of cotenancy advanced by petitioner cannot prevail for another reason. Respondents acquired the above mentioned undivided ⅛ mineral estate under Lots 10 and 11, and a separate undivided mineral estate under Lots 12 and 13, after petitioner obtained its lease from the Holmes Heirs. The lease granted to petitioner the exclusive right to explore Lots 12 and 13 for production of oil and to produce oil therefrom. So long as this lease remained effective, respondents' mineral estate would be subordinate to the exclusive rights of petitioner under the lease. Under such circumstances the respondents could either ratify the lease or take ⅛⅛ of the oil and gas less %th of the expenses. See 31 Tex.Jur. 657, Sec. SI; Texas & Pacific Coal & Oil Co. v. Kirtley, Tex.Civ.App., 288 S.W. 619, wr. ref.
Respondents' motion for rehearing is granted and the judgments of the trial court and the Court of Civil Appeals are affirmed.
HICKMAN, C. J., and GARWOOD and WILSON, JJ., dissenting.