Court Opinion

ID: 9858045
Source: CourtListenerOpinion
Date Created: 2023-09-24 16:12:58.324457+00
Date Added: 2024-06-11T10:01:29.676830
License: Public Domain

SUTTON, Justice
(dissenting).
I am unable to agree with the disposition of this case. It is my -opinion the judgment of the trial -court should be affirmed. The views expressed in the paragraph on pages 7 and 8 of the majority opinion stating the position of appellees most strongly are the views noted by me on the -oral arguments. The doctrine applied in unitized lease -cases is based and grounded on the proposition production from any part of the lease will be regarded and is regarded as production from the whole of the lease. The question here, it seems to me, is not whether or not the unit lease enlarges the grant in Southland’s mineral deed, but is, Is the production from the wells located on the unit lease production from the 200-acre Southland-Powell tract? It occurs to me that if there be any logic or reason in the unitized lease doctine (and of course there is) then the affirmative answer follows -as a matter of course. Powell and Southland knew, -as all know, when the one-half mineral estate was conveyed to Southland it was not practical to explore and produce the 200 acre except through -a pooling of it. If Southland developed and produced it it would have to account to Powell for his one-half interest. When they each pooled their interest with the other S0-acre tract, upon which the producing wells are located, they did so with the knowledge and understanding under the law each owner would receive royalty in the proportion his interest bore to the whole. Had the wells been on the 200-acre tract beyond any question South-land’s estate would have been extended for the life of the production, but it would have received just exactly what it did receive. The only reason Southland ever received anything was because the production was regarded -by law as production from its 200-acre interest.
I regard the rule applied in the Louisiana and Oklahoma cases cited in the majority opinion applicable here. The consequences are the same whether the pooling be voluntarily made or made under conservation rule or law. The purpose of the pooling is exactly the same — to secure the development and production of small areas and interests in the most practical and economical way open to the parties. It is a matter of common knowledge lessees universally require the conveyance of the seven-eighths working interest before exploration and production can be secured.
The unit lease had nothing to do- with an extension or enlargement of the original Southland grant. It got an estate for twenty years and so long thereafter as oil, gas or other minerals are produced from the lands. The production under the unit lease simply continues the grant under its terms after the expiration of the twenty year period. When the unit lease was entered into, Southland, Powell, and the owners of the 50-acre tract -and their successors in interest were joint owners of the royalty under the 250 acres embraced in the unit lease. Veal v. Thomason, 138 Tex. 341, 159 S.W.2d 472, loe. cit. 476 (T); Brown v. Smith, 141 Tex. 425, 174 S.W;2d 43, loe. cit. 46(4, 5).