Court Opinion

ID: 9762902
Source: CourtListenerOpinion
Date Created: 2023-08-29 02:33:42.012728+00
Date Added: 2024-06-11T07:29:38.382452
License: Public Domain

HIGHTOWER, Justice, joined by DOGGETT, GAMMAGE and SPECTOR, Justices,
dissenting.
The court concludes that the rule of Texas Co. v. Davis, 113 Tex. 321, 254 S.W. 304 (1923), only applies if a lease states an express purpose of production of oil and gas and if there is a clause limiting duration of the lease for as long as oü and gas is produced. In discussing the manner in which oil and gas leases transfer title and abandonment of purpose, Davis stated,
Much the same practical results are obtained whether the mineral estate conveyed is regarded as determinable or is regarded as held on condition subsequent, where there has been a failure of the lessee to perform the obligations, express or implied, which are essential to the accomplishment of the purpose of the grant. Our object is to announce a rule which is truly consonant with the real intent of the contracting parties.
We are convinced: First, that Underwood and his assigns took only a determinable fee ...; and, second, that abandonment of the purpose for which Underwood and his assigns were invested with their title was necessarily fatal to the maintenance of the suit....
254 S.W. at 309. The court translates the effort to understand the purpose of the lease into a requirement that the lease expressly state the purpose. This is inconsistent with the well-settled principle that a contract shall be construed as a whole and in light of the purposes and objects for which it was made. E.g., id., 254 S.W. at 308 (quoting with approval the “irrefutable logic” of Parish Fork Oil Co. v. Bridgewater Gas Co., 51 W.Va. 583, 42 S.E. 655 (1902) (citing Ray v. Gas Co., 138 Pa. 576, 20 A. 1065 (1891))). The court does not attempt this analysis, relying instead on the proposition that obligations should not be implied into a contract, particularly in opposition to express language in the contract. This argument misses the point; although there is no express language stating what, the purpose of the contract is, the contract still has a purpose. If that purpose is the production of oil and gas, then a complete failure to pursue that purpose — “not a *771partial use, nor a negligent use, nor an imperfect use, but cessation of use,” Waggoner Estate v. Sigler Oil Co., 118 Tex. 509, 19 S.W.2d 27, 29 (1929) — is an abandonment of the purpose, which terminates the estate. Id. Because I believe that the purpose of this contract was for exploration, development, and production of oil, gas, and minerals, and because the jury determined that the purpose of the assignment was abandoned, I would apply Davis to conclude that the assignment automatically terminated. Thus, I would affirm the judgment of the trial court in favor of Ricane.