Court Opinion

ID: 9665596
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:52:24.867344+00
Date Added: 2024-06-11T18:15:17.093375
License: Public Domain

Lee, J.
(dissenting).
I do not contend that the legislature was without authority to enact Chapter 256, Laws 1948, as amended by Chapter 220, Laws 1950. Thus it is unnecessary to comment on many of the authorities cited in the majority opinion. My position is that the proceedings in this case do not conform to the pattern which was formulated by the above mentioned statutes.
The appellant derived its rights under leases executed on November 7, 1939, and May 8 and 18, 1940, the primary terms of which were ten years. Unless it produced oil or gas in paying quantities from the lease lands within the primary terms, the leases became forfeited. Those contracts contained no pooling or force majeure provisions.
Subsequently the appellees acquired their mineral interests, subject to the outstanding leases. Hence, at the expiration of the primary terms of such leases, if neither oil nor gas had been produced in paying quantities, the appellants ’ reversionary fees in the minerals in place ripened into fee simple titles thereto. Koenig v. Calcote, 199 Miss. 435, 25 So. (2d) 763.
Appellant established Units 32 and 33 and completed gas wells on August 1 and September 8, 1948, respectively, and such wells have been producing gas in paying-quantities ever since.
*886Though appellees’ interests are situated in these units, the wells were not drilled on the lands in which they are interested.
Three salient provisions of Section 10(a), Chapter 220, supra, give the conditions precedent to, and set the pattern for, compulsory integration or pooling. They are as follows:
“ (1) When two or more separately owned tracts of land are embraced within an established drilling unit, the person owning the drilling rights therein and the rights to share in the production therefrom may validly agree to integrate their interests and to develop their lands as a drilling unit.
“(2) Where, however, such persons have not agreed to integrate their interests, the board may, for the prevention of waste or to avoid the drilling of unnecessary ivells require such persons to integrate their interests and to develop their lands as a drilling unit * * *.
“(3) In the event such pooling is required, the cost of development and operation of the pooled unit chargeable by the operator to the other interested owner or owners shall be limited to the actual expenditures required for such purpose not in excess of what are reasonable, including a reasonable charge for supervision; provided, however, when production of oil or gas is not secured in paying quantities as a result of such forced unitization, the operator shall have no charge against the nonconsenting owner or owner. * * *” (Emphasis supplied.)
The whole idea of both voluntary and compulsory integration is to develop the lands for oil or gas. Evidently the legislative purpose was to give a remedy where several different owners in a unit did not voluntarily agree to develop their lands, and, on that account, wells either were not drilled, or, if drilled, they would be unnecessary.
But, in this case, the lands had already been developed. Units 32 and 33 were developed units. Section 4(m)
*887Chapter 256, supra, defines developed unit as follows: “ ‘Developed area’ or ‘developed unit’ shall mean a drainage unit having a well completed therein which is capable of producing oil or gas in paying quantities.”
In this case the wells were drilled and the lands were developed in 1918, even before compulsory integration was authorized. Gas was discovered. Pipes were set. The operation was complete. Meters were installed. The faucets were turned on. All that remained was to read the meters and collect.
No other well could be drilled in either of these Units. The spacing regulations were already in effect and only one well could be located on 320 acres.
Besides, since the wells had been in operation since 1918, the danger of waste could not arise! At that time, in addition to its ordinary meaning, waste included underground and surface waste and that incident to production of gas, crude oil or petroleum. Section 8, Chapter 117, Laws 1932. It also included “the production of natural gas in excess of transportation or market facilities or reasonable market demand.” Section 9(a), Chapter 305, Laws 1936.
Thus when the Board ordered compulsory integration against the appellees, none of the conditions precedent thereto existed. The units were already developed. Prevention of waste did not necessitate such an order. It was not required for the purpose of avoiding the drilling of unnecessary wells.
The language of these Acts, relative to compulsory integration is plain and simple. The intention of the legislature 'should be gleaned from what it says. Simplicity should be commended for its forthrightness. It ought not to have its meaning and purpose sheared away for the reason that, in the maze and mystifying labyrinth of decisions from other jurisdictions, construing statutes partially or totally different, some other conclusion has been reached.
*888The majority opinion cites one Oklahoma and several Louisiana cases as authority for compulsory integration after the development of the unit.
But in Patterson v. Stanolind Oil & Gas Co., 182 Old. 155, 77 P. (2d) 83, 86, the Oklahoma case, the sole questions before the court were: “ (1) Does the state have the power to enact legislation providing for well-spacing"? (2) If it does possess such power, is the same constitutionally exercised by the enactment of (the statute in question) ?” The language thereof is as follows: “In the event a producing well, or wells, is completed upon a unit where there are two or more separately owned tracts, any royalty owner, or group of royalty owners, holding the royalty interest under a separately owned tract, shall share in one-eight (%) of all of the production from the well or wells drilled within the unit in the proportion that the acreage of their separately owned tract bears to the entire acreage of the unit. ’ ’ The court decided both questions in the affirmative. It should be kept in mind that the Oklahoma law provided for integration, after completion of the well, thus definitely assuring to the royalty owners an interest in the spaced unit, whether the well was drilled on lands in which they had an interest or not. On the contrary, our law contemplates integration before drilling. Besides, in this case, ownership of minerals not royalty is involved. Our statutes simply provide for an equitable distribution. It may be that, in a situation .such as exists here, the appellees already have their remedy. Wight v. Ingram-Day Lumber Co., 195 Miss. 823, 17 So. (2d) 196; Memphis Stone & Gravel Co. v. Archer, 137 Miss. 558, 102 So. 390. The opinion in the Oklahoma case says that the Commission, under the Constitution itself, is granted legislative, judicial and executive powers, and on that account, “the decisions from other states * * * are neither persuasive nor controlling * *
In Hunter Co., Inc., v. McHugh, 202 La. 97, 11 So. (2d) 495, one of the cited Louisiana cases, Hunter Company *889had completed the first gas well in the Jeter Zone on a 190 .acre tract on June 1, 1938. Order 28b, promulgated by the Director of the Department of Minerals on June 27,1941, under authority of Act No. 157, Laws 1940, permitted only one well to each 320 acres. The effect of the unitization order there under review was to add 130 acres to the 190 acre tract on which the well had been drilled. In other words, it was deemed unnecessary to drill a well on the 130 acres, and in lieu thereof, the owners should be permitted to share in the production from the existing well — the Director was trying to provide some benefits to the smaller holders without drilling another well. The rationale for the court’s conclusion that the police power of the state could be used to force integration in that case seems to me to be best stated by an excerpt from Lilly v. Conservation Commissioner of Louisiana, D. C., 29 F. Supp. 892, 897, used as a documenting authority. That excerpt is as follows: “Especially is this true in Louisiana, where, under the settled law, differently from some other states, the owner of the surface or holder of a mineral lease does not actually own the fugitive minerals of gas and oil, but (has) merely an exclusive right of servitude to go upon and explore for and produce the same. The ownership becomes vested only when the minerals are brought to the surface and reduced to possession. ’ ’
Our State is committed to the rule of ownership of gas, oil and other minerals in place. Koenig v. Calcote, supra. I am, therefore, unable to comprehend how the stated legal principle of Louisiana can be invoked as an .authority here, when it is so utterly different from, and in conflict with, the established jurisprudence of our state.
Even in Crichton v. Lee, 209 La. 561, 25 So. (2d) 229, 232, another Louisiana case cited in the majority opinion, the order of integration was entered before the expiration of the lease, and except for that fact, it was conceded that even in that state, the lease would have lapsed. “We concede that, under the facts in this case, the lease would have lapsed at the end of the primary term in the absence *890of Order No. 10-C, which became effective on February 1, 1941, prior to the expiration of the primary term of the lease.”
In the case before us, the primary terms of the leases had expired before the order of compulsory integration. In my opinion, the Louisiana case is authority against the conclusion of the majority opinion.
Compulsory integration and pooling of interests have been specifically authorized by Louisiana law as early as 1936. Act No. 225, Laws of 1936. The vital distinction between the Louisiana cases and the case before us is that there was both constitutional and statutory authority in Louisiana for what its courts approved in those cases, whereas, in the case before us, for the reason already assignee!, there was no authority, either constitutional or statutory, for compulsory integration of the appellees ’ interests.
Since the order of the Board, in my opinion, was beyond its power, and, under California Co. v. State Oil & Gas Board, 200 Miss. 824, 27 So. (2d) 542, 28 So. (2d) 120, this cause should be reversed and dismissed, I respectfully dissent from the conclusion reached by the majority.
On Suggestion oe Error
July 17, 1952 (59 So. (2d) 844)
Alexander, J.
It is suggested that while the opinion herein repeatedly disclaimed any purpose to adjudicate the title or interest of the parties, the following language may contain an implication that the several interests have been identified and adjudicated: “All of the lessors and mineral owners have been receiving their respective shares in such production, except the five appellees, who have refused to accept the monies which were tendered them by appellant, for reasons later stated. ” [59 So. (2d) 89.]
*891In spite of the absence of sufficient basis for such inference, but in deference to the anxieties of counsel, we reiterate that the above language was in no degree a modification of our assertions that neither the title to nor extent of the several interests is involved nor adjudicated.
However, on the merits the suggestion of error is overruled.
Overruled.
All Justices concur.