Court Opinion

ID: 5009030
Source: CourtListenerOpinion
Date Created: 2021-10-01 02:33:09.249431+00
Date Added: 2024-06-11T08:17:21.557715
License: Public Domain

On Rehearing.
In the original opinion there is listed as exceptions from the general obligation of the vendee to take all the merchantable gas certain items designated “(1)” to “(7)”, inclusive, supplemented parenthetically with the statement that “We omit one or two other provisions, as not material to a proper decision, concerning which there are questions of more or less difficulty of whether they constitute exceptions or not.” The exceptions thus referred to exist, if at all, as the result of the following provisions of the contract, to-wit: “Vendee: shall connect all wells to its lines within 60 days after completion * * * shall not be required to take gas except when delivered in commercial quantities, free from water or other fluid substances and at pressures sufficient to enter its lines against varied working pressure therein, nor to-connect with unprofitable wells, nor to continue connection with any well. after it becomes unprofitable to vendee; but vendee will endeavor so far as operating conditions will permit, to apportion gas taken from this field on the basis of capacity and rock pressure of wells, and to protect the interests of the vendor against drainage through offset wells * * *.
“This contract is subject to all present and future valid orders, rules and regulations of any regulatory body of the State in which these premises are situated.”
The parenthetical statement had reference to the clause: “but vendee will endeavor, so far as operating conditions will permit, to apportion gas taken from this field on the basis of capacity and rock pressure of wells and to protect the interests of the vendor against drainage through offset wells.”
This clause, up to this time, has seemed to us to defy any reasonable interpretation consistent with other parts of the contract. In a previous motion for rehearing, appellants made an able argument on the question of its proper construction which, while not entirely convincing, did at least shake our previous conviction that the proration provision was an exception, like the others, from the obligation of the vendee to take all the gas. It was our view, however, that' *156the matter was not of controlling importance. Upon further consideration of the question we have concluded that appellants’ suggested construction of the clause is not wholly unreasonable, and is necessary to avoid conflict with other provisions, and, at the same time, permit of some effect being given to that part of the clause referring to protection from drainage.
This conclusion necessarily ascribes to the language a different meaning and purpose and renders our former statement enumerating “exceptions” inaccurate.
The clause beginning “but vendee will endeavor” does not, according to appellants’ construction, which we have now come to adopt, refer to vendee’s general obligation to take all the gas, but only refers to the preceding clause (or a part or parts of same) beginning “shall not be required to take gas except * * * * Considering the provisions of the last named clause as in the nature of exceptions from the obligation of vendee to take all the gas, we must consider said succeeding clause — “but vendee will endeavor”, etc. — as providing, in effect, exceptions to such ■ exceptions. Under this view it must be held to have been contemplated by the parties to the contract that possibly' there would exist “operating conditions” which would permit vendee to take gas not “delivered in [ordinarily] commercial quantities” and/or “free from water or other fluid substances” and/or “at pressures sufficient to enter its lines against varied working pressure therein” and/or “to connect with [ordinarily] unprofitable wells” and/or “to continue connection with any well ‘after it becomes [ordinarily] unprofitable to vendee.’ ” It is unnecessary, however, that the said succeeding clause refer to all such contingencies. It may have meaning and be given effect if it refers to any of them.
We have heretofore assumed that said clause could not refer to and limit that part of the preceding clause reading “and at pressures sufficient to enter its lines against varied working pressure therein.” It was assumed to be impossible (at least not within the contemplation of the parties) for' the vendee to accept delivery of gas at pressures insufficient to enter the lines. It was, therefore, considered that said provision related only to a situation wherein there was such a temporary demand for high line .pressure that the rock pressure of the well would not force gas into the line. Upon that view it was the conclusion that this provision was an unqualified exception from the general obligation to take all the gas.
Appellants now make the point for the first time, although it may be thought that such idea was implied, or intended to be implied, in appellants’ original, brief or first motion for rehearing, that, according to evidence in the record, appellee did sometimes take gas at pressures which would not force the gas into its lines, accomplishing such result by applying mechanical suction to the wells. This, perhaps, should have occurred to us without specific mention, but the truth is that it did not. That fact is important in our revised conclusions. Its recognition permits the line pressure provision to be given a different meaning than the one heretofore ascribed to it. Instead of being an unqualified exception, its true nature is that of a conditional or qualified exception. If it be so regarded, then meaning and effect may be given to the “but vendee will endeavor” clause as one for the benefit of the vendor which unquestionably it purports to be.
Without argumentative amplification we think the last named clause operates to limit the effect of the circumstances enumerated in the preceding clause to the extent that notwithstanding the existence of such circumstances, or anyone or more of them, the vendee is under duty to continue to take gas “so far as operating conditions will permit”, by good faith endeavor, in order to protect the interests of vendor against drainage through offset wells, or to effect a further recovery of gas, apportioned to the recovery from other wells in the same field based upon “capacity and rock pressure of wells.”
. In the original opinion it was our conclusion that of the exceptions listed as aforesaid, “the only ones applicable to the existing conditions, possibly affecting the rights of the parties involved in the suit are exceptions (4) —gas, if any, not produced at pressures sufficient to enter ven-dee’s pipe lines ‘against varying working] pressure therein’ and (7) — gas not taken! as the result of compliance with Railroad, Commission rules ,or orders. Appellants in; their petition took notice of the latter and excluded it from the amount claimed.’? That statement must now be revised tos omit “(4) — gas, if any, not produced at *157pressures sufficient to enter vendee’s pipe lines”, etc., since under the uncontroverted evidence none of the circumstances ever existed permitting the ‘operation of that provision.
We must next give attention to appellants’ contention to the effect that, granting vendor’s interest in the gas constituting the subject matter of the contract, was a right of profit a prendre, the contract constituted a transfer or conveyance of such right to the vendee with the result that the vendor’s rights and remedies therein are not governed by the principles relating to ordinary contracts for the sale of personal property. Appellants have argued most convincingly that specific performance of the contract is impossible, Such impossibility of performance results from a combination of circumstances: that the well is one of about thirty in the same field, and, therefore, subject to drainage; and, if the vendee now begins full performance of the contract the limitations upon the amount of gas which may lawfully be taken under rules of the Railroad Commission, will leave the vendor without remedy for damages previously suffered. In " other words, the difference between the amount of gas which the vendee has taken and paid for, ánd the amount which, under 'the contract it should have taken and paid for up to the time full performance may be begun under a decree of specific performance, can never be made up since the decree of specific performance will require the vendee to take all the gas which under the rules of the Railroad Commission it can lawfully take without regard to past deficiencies in the amount taken. We see no answer to this argument and are forced to concede that our former views as expressed in the original opinion upon this point are untenable.
If the conclusion is correct that the contract is one for the sale of gas at the mouth of the well as personal property it does not follow that the contract is only that. The obligation it imposed upon the vendee to take the gas was at the same time the means by which the vendor exercised the right of profit a prendre. Only by ven-dee’s discharge of its obligation to take the gas could the vendor discharge, its obligation to the lessor to proceed with the severance of the gas from the land to. their contemplated mutual profit. Unlike the usual contract for the sale of personal property, title w.as not in the vendor, but vendor having the means of acquiring such title passed that means onto the vendee as an obligation of the latter to use it. The well having been drilled, gas discovered, and vendee’s connection with the well arranged for, the performance of ■ the ven-dee’s obligation' to take the gas, as produced, at the mouth of the well, at the same time constituted performance for the vendor of the latter’s obligation to sever the gas from the land of the lessor, thereby converting it into.personal property.
The principles ordinarily governing contracts for the sale of personal property cannot apply for more than one reason. In the first place, the contract itself by its very existence and nature, destroyed the value, if any, of the gas to the vendor. Unless and until rid of the contract, vendor could not sell nor make any use of the gas which vendee had refused to take. In the next place, vendor had no .title to the gas in place in the land sufficient to support recovery of the * sale price thereof, as such, since jts means for the acquisition of title was the performance by the vendee of its obligation to take the gas, as produced, at the mouth of the well. The ordinary contract for the sale of personal property contemplates that title is in the seller.
It is our conclusion that the vendor was entitled to recover damages, the proper measure of which was the sale price of the gas which the vendee was obligated to take, credited with the amount which was taken, together with legal interest from the time it should have been taken.
The authorities believed to present the nearest analogy are those dealing with somewhat similar obligations, but differing in the fact that the obligation was implied rather than expressed, and involving an inquiry into the question of reasonable diligence in the performance of the obligation rather than compliance with a performance expressly prescribed. Of such authorities may be mentioned the following: Alabama Oil & Pipe Line Co. v. Sun Co., 99 Tex. 606, 92 S.W. 253; Texas Pac. Coal & Oil Co. v. Barker, 117 Tex. 418, 6 S.W.2d 1031, 60 A.L.R. 936; Freeport Sulphur Co. v. American Sulphur Royalty Co., 117 Tex. 439, 6 S.W.2d 1039, 60 A.L.R. 890; Empire Gas & Fuel Co. v. Pendar, Tex.Civ.App., 244 S.W. 184.
We are not convinced, however, that the evidence established conclusively the proper amount for which judgment should be rendered. Essential evidence consisted of *158the opinions of expert witnesses. We think such evidence only raised an issue of fact which was not determined, but which was required to be determined by the trial court.
It is, therefore, our conclusion that although the grounds of our decision are in some respects changed, the motions for rehearing should be overruled. It is accordingly so ordered.