Court Opinion

ID: 9771548
Source: CourtListenerOpinion
Date Created: 2023-08-29 16:47:02.067357+00
Date Added: 2024-06-11T07:31:32.809231
License: Public Domain

SAM BASS, Justice,
dissenting.
I disagree with the members of the majority. I would affirm the summary judgment and hold that sulphur extracted from hydrogen sulfide gas should be paid for by appellee under the sulphur clause of the lease, section 3(c).
The present leases should be construed as a whole, not by a review of isolated parts. Each of these identical leases repeatedly mentions sulphur as a separate mineral in several different places, so as to distinguish it from oil, gas, and “all other minerals.” The most striking provision is the sulphur royalty clause, section 3(c), quoted above. However, “sulphur” is separately mentioned in three other places (the granting clause of paragraph one, the savings clause of paragraph six, and the proportionate reduction clause, paragraph ten) and is incorporated by reference to “operations” in another (the savings clause of paragraph six). While only the royalty clause, section 3, appears to treat sulphur differently from the other listed minerals, the repeated reference to “sulphur” indicates the parties’ understanding that sul-phur is not the same thing as “oil,” “gas,” or “other minerals.” Hudrogen sulfide gas by contrast, is not mentioned in the lease. *294From this, I would conclude that the specific mention and different treatment of sul-phur in the royalty clause should control over any general reference to “gas” that might otherwise inferentially include it. Therefore, I would hold that the specific royalty provision for sulphur in paragraph 3(c) should control, not the general royalty provision for “gas” in paragraph 3(b)(1).
All parties contend that the leases are not ambiguous. If, as Judge Dunn argues in her concurring opinion, the leases are ambiguous, I would hold that the summary judgment evidence in this record resolves the ambiguity. In Taslog, 638 F.2d at 795-96, the court considered ■ summary judgment evidence concerning industry practice, even though it held that the lease was not ambiguous. Appellee’s summary judgment evidence included the affidavit of James Hinson, its vice-president and secretary, that:
Since 1984, the date of first production from the leases on lands pooled therewith (that is, from the Units), all sales of sulphur by Prairie from the Leases and lands pooled therewith have been of elemental sulphur (S) on a price basis of a given posted dollar amount per ton sold. This is the historical and industry-wide basis on which elemental sulphur (S) has been and is sold. Elemental sulphur (S) is traditionally sold in solid form or, in some instances as with Prairie’s elemental sulphur (S), sold while still in molten form, both instances being sales by the ton.
Hinson’s affidavit establishes that current and historic industry practice is for buyers to pay for sulphur extracted from hydrogen sulfide gas in the manner provided by sub-section 3(c), the sulphur clause, and that that practice has been followed by appellee when conducting its operations under these leases. Appellants have pointed out no summary judgment evidence to the contrary. Hinson’s affidavit distinguishes this case from Taslog, where the parties stipulated to the opposite, and from Pursue, where the evidence denied the existence of any consistent industry practice. See Pursue I, 784 F.2d at 664.
The undisputed summary judgment evidence in this case showed that hydrogen sulfide gas had no market value at the well-head in that form. Its sole value was based upon the amount of sulphur (and other components) that could be extracted from it. Since sulphur is what makes this hydrogen sulfide gas valuable, I would answer the question posed by Judge Jolly, the dissenter in Pursue II, and hold that sul-phur, not hydrogen sulfide gas, should be paid for, and that it should be paid for under the sulphur clause, section 3(c). I would, therefore, affirm the summary judgment.
I respectfully dissent.