Court Opinion

ID: 9765552
Source: CourtListenerOpinion
Date Created: 2023-08-29 04:06:22.885658+00
Date Added: 2024-06-11T07:30:11.139550
License: Public Domain

CHIEF JUSTICE CALVERT,
dissenting.
I dissent.
I agree that the validity of the Commission’s order granting the Appell permit may not be upheld on the ground that the tract on which it was granted is entitled to separate development as a matter of law. Our decision in Railroad Commission v. C. Murel Williams, 163 Texas 370, 356 S.W. 2d 131, destroys that theory for the granting of drilling permits as exceptions to Rule 37.
The real issue remaining in the case is this: Does the evidence introduced in the trial court discharge Coloma’s burden of proving that the order of the Railroad Commission granting the permit is not supported by substantial evidence? The burden included in the issue is imposed on Coloma by Art. 6049c, Sec. 8, V.A.T.S.C., which expressly provides that the order of the Commission “shall be deemed prima facie valid” and that on appeal to the district court “the burden of proof shall be upon the party complaining” of the order. See also Railroad Commission v. Magnolia Pet. Co., 130 Texas 484, 109 S.W. 2d 967; Gulf Land Co. v. Atlantic Refining Co., 134 Texas 59, 131 S.W. 2d 73; Brown v. Humble Oil. & Refining Co., 126 Texas 296, 83 S.W. 2d 935, 87 S.W. 2d 1069; Cook Drilling Co. v. Gulf Oil Corp., 139 Texas 80, 161 S.W. 2d 1035; Thomas v. Stanolind Oil & Gas Co., 145 Texas 270, 198 S.W. 2d 420. That the issue is to be tried under the substantial evidence rule is settled by Trapp v. Shell Oil Co., 145 Texas 323, 198 S.W. 2d 424. And that the burden imposed in substantial evidence rule *496cases is one of proving that the order is not supported is also settled by our decisions. Board of Firemen’s Relief, etc. v. Marks, 150 Texas 433, 242 S.W. 2d 181, 183, 27 A.L.R. 2d 965; White v. Bolner, Texas Civ. App., 223 S.W. 2d 686, 689, writ refused; Collins v. Board of Firemen, etc., Texas Civ. App., 319 S.W. 2d 174, writ refused.
The majority do not quarrel with those rules. Apparently they recognize them as well established and sound. But in their application the majority desert all precedent in ordering a reversal of the judgments of the courts below.
Most of the majority opinion is concerned with the erroneous theory on which the Commission defended the case in the trial court and has sought to sustain the trial court’s judgment on appeal. No doubt recognizing, however, that defense of the suit on an unsound theory is no more a ground for reversing an errorless judgment than is action of the Commission in granting the permit for a wrong reason, Railroad Commission v. Magnolia Petroleum Co., 130 Texas 484, 109 S.W. 2d 967, 970; Gulf Land Co. v. Atlantic Refining Co., 134 Texas 59, 131 S.W. 2d 73, 84, or the giving of a wrong reason by the Court of Civil Appeals for sustaining the order, Gulf Land Co. v. Atlantic Refining Co., supra; 4 Texas Jur. 2d 248, Appeal and Error, Sec. 750,1 the majority, without examination of any of the myriad of Rule 37 cases heretofore decided, simply announce the conclusion “that the uncontradicted evidence” in the record establishes that the Commission’s order is not supported by substantial evidence. I shall deal only with that conclusion as it relates to the issue of confiscation.
While, as indicated, much attention is given by the majority to the fact that the Commission has defended the case on a wrong theory, none is given to the fact that Coloma has prosecuted it on a right theory. Coloma’s petition in the trial court sought to set aside the Commission’s order on the ground that the permit was not necessary to prevent either waste or confiscation and therefore the order granting it was illegal and arbitrary. It is a standard petition for trying the validity of the Commission’s orders under the substantial evidence rule. Coloma’s offer of evidence was on a substantial evidence theory. When the trial court sustained the validity of the order, Coloma presented but one point of error in the Court of Civil Appeals, and *497that was that the evidence showed that the Commission’s order was not reasonably supported by substantial evidence of either waste or confiscation. A similar point of error is contained in the application for writ of error. In other words, Coloma has correctly recognized throughout the course of the litigation that it was not entitled to a favorable judgment unless it established by proof that the Commission’s order was not supported by substantial evidence. The fact that the Commission had a different theory of the issue to be tried and has consistently stood by that theory has no bearing on the true issue and should not be held to supply proof which was essential to Coloma’s case.
Considering the majority’s approach to the real problem before us, one wonders if the desire to reverse, based on an individual concept of abstract justice, is not father to their conclusion. If so, it is not amiss to recall at this point the philosophy expressed by Oran M. Boberts, a great former Justice of this Court, when, in writing on rehearing in Duncan v. Magette, 25 Texas 245, with both parties “strongly demanding the claims of justice in its behalf, abstractly considered,” he took occasion to present his views “upon the foundation and force of this appeal to the sense of justice of the court, whether used as an influencing consideration, in interpreting and enforcing the rules of law, or directly urged as a basis of judicial action.” After defining “Justice” and “Law” and allocating to each its proper place in the decision of legal controversies, Justice Boberts continued :
“The act of moulding justice into a system of rules detracts from its capacity of abstract adaptation in each particular case; and the rules of law, when applied to each case, are most usually but an approximation to justice. Still, mankind have generally thought it better to have their rights determined by such a system of rules, than by the sense of abstract justice, as determined by any one man, or set of men, whose duty it may have been to adjudge them.
“Whoever undertakes to determine a case solely by his own notions of its abstract justice, breaks down the barriers by which rules of justice are erected into a system, and thereby annihilates law.”
“To follow the dictates of justice, when in harmony with the law, must be a pleasure; but to follow the rules of law, in their true spirit, to whatever consequences they may lead, *498is a duty. This applies as well to rules establishing remedies, as to those establishing rights. * * *”
If that philosophy be not sound, we had as well amend the rules of procedure which govern our conduct as a court to authorize those of us who happen at the moment to compose it to affirm or reverse judgments on the basis of our personal reactions to their abstract justice.
There was, of course, no burden on the Commission in the trial court to introduce “contradicting” evidence. The question before us is strictly a question of law. Thomas v. Stanolind Oil & Gas Co., 145 Texas 270, 198 S.W. 2d 420; Board of Firemen’s Relief, etc. v. Marks, 150 Texas 433, 242 S.W. 2d 181. It is our duty, as it was the duty of the trial court, to decide the question on the evidence which was introduced, whether by one or by both parties, and not on whether evidence introduced by one was contradicted by evidence introduced by the other. If the evidence introduced overcomes the statutory presumption, the judgments of the courts below should be reversed. If it does not, the judgments should be affirmed. This should require, at the very least, an analysis of the evidence and of decided cases for the purpose of discovering what has been required of other litigants in Coloma’s situation. Neither is to be found in the majority opinion.
The majority’s holding is that the uncontradicted evidence in the trial court establishes that the order of the Commission is not supported by substantial evidence. In so far as that evidence is reflected in the majority opinion it is this: “* * * the relative locations and proximity of an existing Appell well on a separate tract, the second well granted Appell by the permit in question, and an existing Coloma well, together with the fact that all three wells would be in a common reservoir of oil and gas bearing sands of substantially uniform thickness and character and with free communication between the wells.” Considered as a guide to courts and future litigants the majority opinion on its face thus lays down a rule (and courts and litigants have no other place to look) that evidence that a drilling permit is granted as an exception to a field-wide spacing rule; that the permit is granted to one who has an existing well on a separate tract; that another operator who protests the permit has an existing well; that all three wells are in a common reservoir with producing sands of substantially uniform thickness and character, and that there is free communication between the sands, overcomes the statutory presumption that the permit is necessary to prevent confiscation.- It is difficult to believe *499that the majority can seriously intend what they say. The holding gives no weight to the order of the Commission charged primarily with proper administration of the law, all but nullifies the presumption of validity expressly created by statute, and puts all of the burden of developing material evidence in the trial court on the issue of confiscation on the holder of the permit.
The very nature of the burden imposed by the statute should require, as a minimum, that a protestant-appellant of a Rule 37 permit introduce readily available evidence negativing the existence of facts and circumstances which reasonably could form the basis for the order. In a free communication reservoir confiscation occurs through drainage. Although an operator may have a well on another tract in the reservoir, whether the oil and gas underlying the separate tract on which a Rule 37 permit is sought will be drained by other operators will ordinarily turn on the density and location of wells in the surrounding area. The granting of the permit by the Commission raises the statutory presumption that the well is needed to prevent drainage and thus confiscation of the oil and gas underlying the tract. The inference from the Commission’s action is that other wells in the surrounding area are so located that they will drain the oil and gas underlying the tract. If the presumption and the inference are false, their falsity is easy to establish by readily available evidence of the number and location of other wells in the surrounding area and the direction of drainage. Coloma offered no such proof in this case.
The flimsy character of the evidence on which the Commission’s order is being invalidated is brought into sharp focus by looking at the attached plat introduced in evidence by Coloma:
The only lot in Block 81 owned by Emma Huddleston and others, on which Appell has a lease, is Lot 9. All of the other lots in the block are owned, by James E. Jacks. Whether any of these lots are drilled and producing, or whether permits have been granted therefor, we do not know because the evidence does not show. All of the lots in Block 80, separated from Lot 9, Block 81 by a 60-foot street, are owned by others. Whether they, or any of them, are drilled and producing, or whether permits have been granted therefor, we do not know because the evidence does not show. There is no evidence with respect to drilling and producing activities on the north 8 lots in Block 92. Evidence of drilling and producing activities on these thirty-nine lots is of vital and controlling importance on the issue of

*500

whether the minerals under Lot 9, Block 81, will be confiscated if the permit for drilling that lot is invalidated. A great majority of the lots are much closer to the proposed drilling site on Lot 9, Block 81 than is the existing Appell well. Coloma’s producing well is also much closer to Lot 9, Block 81 than is the existing Appell well. As a matter of fact, we have no way of knowing, except by purest surmise, that Lot 9, Block 81 is not completely surrounded by producing wells.
*501I have commented on the fact that the majority have cited no Rule 37 case to support the conclusion reached in this case. The case was submitted on oral argument and written briefs on November 22, 1961. If there are any decided cases supporting the majority theory of resolving the issue of confiscation I assume they would have been found in the briefs on file or by independent research by now. None is to be found in Coloma’s briefs or in a brief filed by amicus curiae. The only cases cited in the majority opinion are Murel Williams and Cook Drilling Co. v. Gulf Oil Corp., 139 Texas 80, 161 S.W. 2d 1035. Neither is cited in support of the majority’s conclusion that Coloma discharged its burden of proving that the Commission’s order is not supported by substantial evidence and they do not support it.
In Cook the Commission granted a Rule 37 permit. The trial court set the order aside even though the contestant introduced no evidence in court on the issues of waste and confiscation. The judgment was obviously erroneous and had to be reversed. The party having the statutory burden had not discharged it. The fact that the case had been tried on a wrong theory was used not as a basis for reversing but strictly as a basis for remanding the cause for retrial.
Murel Williams was the exact opposite of this case. In that case the Commission denied the permit and the applicant had the burden in the trial court of proving confiscation. In our opinion in the case we pointed out substantial evidence in the record supporting the Commission’s action, not as indicating that the burden rested on the Commission to offer proof in support of its order but for the purpose of showing that Williams had not discharged his burden of proving that the order was not supported by substantial evidence. But the test of confiscation announced in Murel Williams is pertinent here. We said the test was whether the permitee "has been accorded a fair and equal opportunity with other producers of surrounding tracts within the drainage area to recover his fair share of the oil in place beneath his tract”. The Commission having granted the permit in this case, the law presumes that Appell must have the permit to have equal opportunity with other producers of surrounding tracts to recover the oil and gas beneath its tract. There is no proof in the record which overcomes that presumption. The only other cases which have ever been suggested by independent research as supporting the majority’s holding on the issue of confiscation are Railroad Commission v. Shell Oil Company (The Trem Carr case), 139 Texas 66, 161 S.W. 2d 1022, Stanolind Oil & Gas Co. v. Midas Oil Co., Texas Civ. App., *502123 S.W. 2d 911, writ dismissed, and Gulf Oil Company v. Smith, Texas Civ. App., 145 S.W. 2d 280, writ refused, cited in Murel Williams. Analysis discloses that none of them support the majority conclusion in so far as the issue of confiscation is concerned.
In Gulf Oil Corp. v. Smith, the Commission granted a Rule 37 permit to Smith. The Court of Civil Appeals invalidated the order. On the issue of confiscation the court observed that the uncontroverted testimony showed that Smith had already extracted a greater proportion of his estimated reserves than owners of adjoining tracts had extracted of theirs, and gave particular weight to proof of density of wells in the area. With respect to this factor the court said:
“* * The uncontroverted proof in the instant case shows * * * that Smith’s density with four wells was greater than that of any of the surrounding tracts, and greater than the eight times surrounding area whether delineated by a square, rectangle, or circle; * *
Emphasis was thus placed on well density and estimated reserves in the area.
In Stanolind Oil & Gas Co. v. Midas Oil Co., Rule 37 permits granted to Midas were invalidated. It is of particular interest that in that case the Court of Civil Appeals recognized a difference in the type of proof which was held to negative waste and that which was held to negative confiscation. With respect to the issue of waste, the court said (123 S.W. 2d 916) :
“* * * And when the contestant made proof that no underground conditions obtained in this area which would differentiate the tract in question from the surrounding area; in brief, that no conditions existed which would afford a factual basis for an exception to the general rule to prevent waste, we think appellant rebutted the presumption in favor of the validity (of the) order; and, absent any other evidence to the contrary, made prima facie proof, under the rule itself, and our repeated interpretations of it, that the drilling and operation of such well would tend to cause, rather than to prevent, waste.”
But the court did not use those reasons for holding that the presumption of confiscation had been rebutted. Instead, it commented that the presumption of confiscation had been rebutted *503by evidence that “showed a tract of 2.76 acres with 2 wells thereon, not including the well here involved, a per acre density much greater than surrounding tracts; that under the circumstances the wells already thereon afforded opportunity to recover an amount of oil equal, if not in fact much greater, than the quantity of oil originally in place beneath such tract.”
In Railroad Commission v. Shell Oil Co. (The Trem Carr case), 139 Texas 66, 161 S.W. 2d 1022, it is stated in the very beginning of the opinion that the issue of confiscation had already been decided and that the sole issue in the case is that of waste. It is of more than passing interest that confiscation as a basis for the permit in the Trem Carr case was denied on well density in the drainage area and that two other Rule 37 permits granted to the same applicants to prevent confiscation were upheld on well density in the drainage area. Richey v. Shell Pet. Corp., Texas Civ. App., 128 S.W. 2d 898, writ dismissed, correct judgment.
It will be seen from the only cases suggested as bearing on the issue that proof on the issue of confiscation which,was held to rebut and overcome the presumption of validity of the permits was well density in the area and consequent recovery of, or opportunity to recover, one’s own reserves. So far as I can discover, no Rule 37 permit, granted to prevent confiscation, has ever been invalidated on the type of evidence introduced in this case. Proof of proximity of the tract to Appell’s other well and that there is free communication of minerals in the underlying sands is proof of nothing except that the factual situation was such as to call into play the Commission’s power to grant or deny the permit as an exception to the spacing rule to prevent drainage or confiscation by other operators of wells on surrounding tracts. Proof of proximity and of free communication, and no more, is yet used by the majority in this case as evidence that the Commission was wrong in its determination. That is indeed a strange holding!
The simple fact is that Coloma misjudged the character of proof required to meet minimum standards for rebutting and overcoming the statutory presumption in a confiscation case. We should not now lower those standards or emasculate rules heretofore regarded as sound when applied to other litigants in order to afford Coloma relief from its own failure. We are confronted constantly with cases in which we know that abstract justice would require reversal of the judgment to permit a litigant to retry his case and offer additional evidence, but we *504have- steadfastly adhered to the rule heretofore that an errorless judgment will not be reversed for that purpose. Sometimes adherence to the rule saddens us. Application of the rule has often resulted in far greater injustice than would result in this case from permitting Appell’s permit to stand. Its application here should not be avoided through a figmented conclusion of error where none exists.
I would affirm the judgments of the courts below.
ASSOCIATE JUSTICES GRIFFIN and WALKER join in the dissent.
Opinion delivered June 6, 1962.

 Our action in Cook Drilling Co. vs. Gulf Oil Corp., 139 Tex. 80, 161 S.W. 2d 1035, cited by the majority, is strictly in accord with the rule that reversal of an errorless judgment may not be ordered.