Court Opinion

ID: 9765551
Source: CourtListenerOpinion
Date Created: 2023-08-29 04:06:22.878953+00
Date Added: 2024-06-11T07:30:11.134173
License: Public Domain

SMITH, JUSTICE,
dissenting.
I respectfully dissent. I cannot accept the theory adopted by the majority in the case of Railroad Commission v. C. Murel Williams, 163 Tex. 370, 356 S.W. 2d 131, which completely destroyed the effect of the holdings in many Texas cases, including Halbouty v. Darsey, Foster v. Railroad Commission, and Atlantic Refining Company v. Railroad Commission. Those cases stand for the proposition that the owner of an involuntarily segregated tract is entitled to drill at least one well on his tract, however small the tract may be. We do not have a situation where just a theory has been destroyed, but we have the incongruous situation where it is now, in effect, held by the majority that the Williams case overruled the above cases and many others without even mentioning such cases. The disposition of this case by the majority is far more unusual than the case itself. We find this Court so determined to uphold the fantastic Charles Meyers’1 theories lifted out of context and adopted in Williams that it is now willing to go further and hold that Coloma has discharged its burden and established that the order of the Railroad Commission granting Appell a permit to drill on Lot 9, Block 81, is not supported by substantial evidence. In other words, the majority is now saying that the holding in the Williams case demonstrates conclusively that the order of the Railroad Commission granting Appell a permit to drill on Lot 9, Block 81, is not supported by substantial evidence.
*489The Railroad Commission et al, in its application for writ of error in the Williams case, did not rely upon the Law Review Article, C. J. Meyers, “Common Ownership and Control in Spacing Cases”, 31 Texas L. Rev. 18 at 22, quoted in a footnote by the majority in Williams. The only quotation from Meyers1 was in connection with the Commission’s argument that after Smith Price entered the Addie Stephens unit, the development rights of H. P. Williams became exactly the same in the 3.3 acres as they were in the 42.5 acres and the two interests merged. The Commission et al. made the further argument that “Once merged, any attempt to repart them would plainly constitute an illegal subdivision under the spacing rules then in effect.” My concurring opinion was based largely upon the argument advanced by the Attorney General, Will Wilson, and the many attorneys representing the American Petrofina Company of Texas, and the Southern National Gas Company. The argument was this:
“Viewed from the standpoint of Railroad Commission administration, the proposition becomes perfectly clear. When Smith Price joined the Addie Stephens unit the Commission had to grant the unit an allowable based in part upon Smith Price’s interest. If it gave the unit an allowable based upon 3.3 acres and was proper in doing so, then the entire tract was thereby protected from confiscation and could not properly be awarded further exceptions to the spacing rules. If the Commission gave the unit an allowable based upon 1.65 acres, then the interest of H. P. Williams was rendered entirely free and separate from the Smith Price interest and became identical to H. P. Williams’ interest in the 42.5 acres, with which it could have been fairly developed under the Commission’s rules.
“If the cotenancy between H. P. Williams and Smith Price represents an ownership entity entitled to development separately from the 42.5 acres, then it has been so developed as a part of the Addie Stephens and Reynolds units and no spacing exceptions are necessary or proper. If H. P. Williams’ development rights in the 3.3 acres are independent of Smith Price’s, then H. P. Williams’ rights are the same in the 3.3 acres and in the 42.5 acres and the two tracts must be developed together under the Commission’s rules. Stated another way, H. P. Williams (and respondent as his successor) is *490not entitled to further protection against confiscation because his cotenancy interest in the 3.3 acres has been developed by the activities of cotenant Smith Price or, if not, then because his interest, being thereby free and clear of Smith Price, could have been developed along with and on the same basis as the 42.5 acres.
“It may be that the case can be soundly decided on either of these grounds, but it ought to be decided on one of them. Accordingly, the judgments of the Court of Civil Appeals and of the district court should be reversed.”
My concurring opinion in Williams is in harmony with this view. Williams was not entitled to a permit to drill the reconstructed 3.3 acres in view of the fact that Mrs. Price, by her lease and unitization agreement had, in legal effect, secured a permit from the Railroad Commission to drill one well on the tract. Since the tract was entitled to only one well, and in view of the undisputed facts, Williams failed to discharge his burden of proving that the order of the Railroad Commission was not supported by substantial evidence. For these reasons, I concurred in the result reached by the Court in Williams, but, at the same time, I dissented and disagreed with the reasoning expressed by the Court. My only regret is that I did not at the time fully discuss my reasons for disagreeing with the action of the Court on lifting from the Meyers’ Article one statement,2 which, when considered in context, was entirely foreign to the factual situation in Williams. Nevertheless, such was made all controlling in the disposition of the question before the Court in the Williams case. Under the circumstances, I have ample precedent to support my contention that it is my duty and it is the Court’s duty to review the principles of law announced by the majority in any given case, when the question later arises in other litigation. Federal Royalty Co. v. State, 128 Texas 324, 98 S.W. 2d 993.
I sincerely hope that the time will never come when a member of this Court will be deprived by the majority vote of his associates of his right of free and constructive expression and criticism of former opinions of this Court. My dissent in this case is entirely impersonal and my only desire is to get the Meyers statement upon which the majority relies in its proper *491setting. One might ask, why so much discussion about Williams in this Coloma case. My answer is simply this: When the false premise in Williams is eliminated, this Coloma opinion will have no support in law. On November 6, 1961, after the opinion in Williams was rendered, Coloma filed a supplemental brief in which it was stated that the respondents (Railroad Commission et al) were relying upon the holding in Halbouty v. Darsey, and a similar holding in other cases, but that “The holding of this Court in Railroad Commission v. Murel Williams should settle any doubt concerning this question. * * * In answer to this contention, Justice Greenhill, speaking for the Court said: * * ipjjg to a well on a tract of land, however, is not a vested right in the land itself, but is a right of the owners of the land. Railroad Commission v. Magnolia Petroleum Co., 130 Texas 484,109 S.W. 2d 967 (1937) * * *.’ ” This quotation leaves out the Footnote Three contained in the opinion immediately following the Magnolia case citation. The Williams opinion leaves the impression that the Magnolia case is authority for Meyers’ conclusion that “The error springs from the assumption that every tract has a vested right to one well, and that transfers in ownership of the tract cannot destroy that vested right. The mistake in this reasoning is, of course, that it is not the tract, as a parcel of land, that is entitled to a well, it is the owner who has the right. * * *” I cannot find where Magnolia cites or mentions this Meyers’ theory, nor do I find where Meyers cites Magnolia in support of this particular conclusion. However, I do find that Meyers cites Magnolia in support of his declaration that one of the basic rules governing the granting of exceptions is: “(3) where, however, a tract has been voluntarily subdivided, so that none of the subdivision thus created is entitled to a well as a matter of right, the tract may be reconstructed as it existed before the subdivision and granted an exception.” This fits perfectly with my theory in the Williams case. The reconstructed 3.3 acres was entitled to only one well, and since a permit had previously been granted on application for a permit which included this tract, the Railroad Commission properly denied the Williams’ application. Meyers says: “Apparently under this (Rule 3), the Rule of the Century Case, the Commission has discretion to locate the well as it sees fit.” We applied this portion of the rule in the case of Ryan Consolidated Petroleum Corp. v. Pickens, 155 Texas 221, 285 S.W. 2d 201 (1955), and held that Ryan Consolidated was charged with notice that the “* * * Holmes Heirs had executed a lease on Lots 10 and 11 to Smith and Morrison (Assigned to Pickens & Coffield) providing for the exclusive right to drill a well thereon and containing a general warranty of title, and further *492that if the Railroad Commission found that the one well, to which the four lots were entitled to prevent confiscation, should he drilled on Lots 10 and 11, no well could he drilled on Lot 12 or on Lot IS, except to prevent waste.” (Emphasis added.)
The Court of Civil Appeals in the Williams case refused to follow the rule announced in Ryan v. Pickens, supra, and overturned the Railroad Commission’s order without requiring Williams to show that the Commission acted in an unreasonable, arbitrary and capricious manner. The Court of Civil Appeals refused to follow the Ryan v. Pickens case, stating:
“A harsher, more inequitable result could not be envisioned. We are so distressed by the inequity of Ryan v. Pickens that we have concluded that we should not apply it except under identical facts.”
Thus, the Court of Civil Appeals, in effect, overruled Ryan v. Pickens by this Court, and a majority of the members of this Court in the Williams case sidestepped the issue by stating that “We do not here reach the problem raised in the Ryan case, and that opinion has no application to the decision which we have reached.”
By not applying the holding that the Railroad Commission has discretionary authority to locate the well anywhere on a reconstructed tract, the Court of Civil Appeals and this Court have deprived the Commission of the power to perform its duties, especially its conservation efforts in seeking to properly locate the drilling of gas wells in Century doctrine situations.
The majority opinion in Williams is unsound when it is realized that when Meyers said that the error springs from the assumption that every tract has a vested right to one well, and that transfers in ownership of the tract cannot destroy the vested right, he was not speaking of a situation such as we have in the Coloma case, or had in the Williams case. Before making the statement properly attributed to him by Justice Greenhill in Footnote Three, Meyers had stated that several basic principles must be kept in mind. The principle immediately appearing before the quoted language, supra, was as follows:
“Second, the purpose of allowing exceptions to tracts smaller than twenty acres is to give the landowner a reasonable opportunity to recover the oil in place. Thus, whenever the smaller tract could have been developed as part of a larger *493tract, the exception should be denied. The meaning of the common ownership and control doctrine, then, is this: if the tract for which an exception is sought could have been developed as a part of a larger tract, it was under common ownership and control and is not entitled to an exception. Thus, a segregation of such a tract is a voluntary subdivision.
“Several hypothetical cases are useful in developing the application of the doctrine.
“Assume that oil has not been discovered in the area. A is the owner of a ten-acre tract of land. He acquires an adjoining ten-acre tract. Oil is then discovered and Rule 37 attaches. It is uniformly held that A is not entitled to an exception for the ten-acre tract which he acquired. While the former owner of the ten-acre tract was entitled to an exception (assuming ten acres were his total holdings), A is not, because when the rule attached, A owned twenty acres. The source of his title is immaterial. At the time Rule 37 became applicable, A’s twenty acres could be developed as a single unit, with one well; hence any attempt to develop the two tracts separately, such as leasing ten acres to one operator and ten to another, constitutes a voluntary subdivision.
“Although the cases uniformly support this proposition, there have been occasional instances of judicial language suggesting the contrary. * * *”
Thus, it is seen that Appell is now being deprived of his right to a well permit on a theory that has no application whatever. The Murel Williams case could not have by any stretch of the imagination overruled the case of Halbouty v. Darsey, Texas Civ. App., 326 S.W. 2d 528 (1959), wr. ref. n.r.e., wherein it was held:
“Admittedly the .48 acre tract is not an unlawful subdivision * * * the tract is not of such size and shape to meet the acreage and distance requirements of the spacing rule applicable to the field, however, admittedly it meets the requirements for an exception under Statewide Rule 37A. As such it is entitled to a well. Kraker v. Railroad Commission, Texas Civ. App., 188 S.W. 2d 912, er. ref. w.o.m.; Dailey v. Railroad Commission, Texas Civ. App., 133 S.W. 2d 1069, 99 A.L.R. 1939. Where Rule 37 and its exceptions were considered and also the rules of ownership, convenience and vested *494rights. Citation of additional authorities on this well settled question is not deemed necessary.” (Emphasis added.)
For additional authorities, I call attention to: Nash v. Shell Petroleum Corp., Texas Civ. App., 120 S.W. 2d 522, wr. dism.; Railroad Commission v. Humble Oil & Ref. Co., 151 Texas 51, 245 S.W. 2d 488; Wencker v. Railroad Commission, Texas Civ. App., 149 S.W. 2d 1009; Railroad Commission v. Wencker, 140 Texas 527, 168 S.W. 2d 625; Ryan Consolidated Petroleum Corporation v. Pickens, et al., supra.
The majority in the present case has, without first finding error, reversed and remanded the cause to the trial court for further proceedings in accordance with its opinion. If this decision becomes final, then I say Appell will be standing before the trial court in the same position as though there had been an unlawful subdivision of his tract. Not only that, the trial court will be called upon to pass upon questions that were not passed on by the Railroad Commission. The Railroad Commission is given the power under the statute to determine primarily all fact issues, that is, all issues that are not established as a matter of law. Railroad Commission v. Wencker, supra. The trial court will be considering irrelevant and immaterial evidence if and when it considers the volumes of evidence going to show a comparison between the proposed Appell well, and the existing Appell and Coloma wells. The evidence discussed in the majority opinion and referred to in the dissenting opinion by Chief Justice Calvert was introduced in evidence in the trial court, but special exceptions were filed and timely objection thereto was made by the Railroad Commission. The special exceptions were not ruled upon but were carried along with the case. The Commission and Appell objected to the introduction of any evidence offered by Coloma with respect to alleged common underlying reservoirs, costs of operations, quantities of production, condition of the underlying strata of oil and gas sands and geology with regard to the leases in question, for the reason that such evidence so offered was irrelevant and immaterial to any issue in the case, since such tract was entitled to its first well as a matter of law. Since it is undisputed that there is no question of a voluntary subdivision in this case, the Commission properly granted the permit and the action of the District Court and Court of Civil Appeals in sustaining the order of the Commission granting the permit was correct.
Coloma should not be sustained in its contention that since Appell has one producing well, then he is not entitled to a second *495well even though the second well would be located on a separate noncontiguous tract, some 402 feet from the present producing well. The law, as heretofore stated, provides that each tract, regardless of shape, size, or location is entitled to its first well as a matter of law. See Railroad Commission of Texas, et al v. Humble Oil and Refining Company, 151 Texas 51, 245 S.W. 2d 488. The holding of the majority amounts to a confiscation of Appell’s property and destroys his investment in the tract of land involved and the value thereof without a proper judicial determination of the issue of confiscation, all of which amounts to a denial to Appell of his rights under the Fourteenth Amendment to the United States Constitution.
The judgment of the Court of Civil Appeals should be affirmed.
Opinion delivered June 6, 1962.

 * * Thus, whenever the smaller tract could have been developed as part of a larger tract, the exception should be denied. The meaning of the common ownership and control doctrine, then, is this: if the tract for which an exception is sought could have been developed as a part of a larger tract, it was under common ownership and control and is not entitled to an exception.”

 “* * * The error springs from the assumption that every tract has a vested right to one well, and that transfers in ownership of the tract cannot destroy that vested right. The mistake in this reasoning is, of course, that it is not the tract, as a parcel of land, that is entitled to a well; it is the owner who has the right. * * *”