Court Opinion

ID: 3919768
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:46:58.886394+00
Date Added: 2024-06-11T14:16:19.056994
License: Public Domain

The writer readily agrees to the judgment in this case, but is unable to agree with the law announced by the CHIEF JUSTICE as applied to the royalty owners respective rights. It may be the disposition of the case renders unnecessary and uncalled for any comment other than that necessary on the disposition of the general demurrers. I undertake briefly to point out wherein I disagree on the law.
The Supreme Court has upheld as valid the rules and regulations of the Railroad Commission which limit the quantity of oil that may be reduced to possession through a well or wells located on the lands of any particular owner or owners, thus equalizing the recovery between separate owners above a given pool and protecting against the acquisition by one of a greater quantity of oil than that lying beneath his surface. Brown v. Humble Oil  Refining Co., 126 Tex. 296, 83 S.W.2d 935, 99 A.L.R. 1107. The actual situation presented here is: Overall-owners of the 7/8ths working interest, in compliance with lawful regulations of the Commission, have drilled two wells upon twenty acres each allotted by the rules of the field promulgated by the Commission according to the allegations stricken. The ownership of the royalty under the acreage is divided between contending owners, eight acres to one and twelve to the other. It would be inequitable if lawful to require the over-all owners to drill more wells and split the allowable, or to reduce their allowable for the wells drilled. It does seem to the writer the rule which would make legal the regulation limiting the production to what an owner is equitably entitled to and to avoid draining his neighbor's oil away would enable the adjoining royalty owner to recover his proportionate share when he is wholly powerless to protect his interest and ownership. He cannot drill off-sets, because he owns no working interest. He cannot limit the production of the over-all owners of the working interest because they are within the regulations. It does seem one under such circumstances should not be held *Page 807 
to notice and anticipation of a condition only the Deity could foretell.
If the overall ownership of the working interest were limited to the 12 acres to each well, as is the ownership of the royalty in plaintiffs and the non-appealing defendants, then the allowable would be and could be reduced to 12/20ths of the field allowable and plaintiffs' and non-appealing defendants' royalty accordingly reduced to 12/20ths of what is being produced through wells 5 and 8 — this to prevent inequities and the wrongful taking of oil belonging to adjoiners. The owners of the royalty in the 24 acres divided equally between wells 5 and 8 are at no expense incident to the production. This expense is borne by the owners of the working interest which extends to and includes the royalty owned by both appellants and appellees. The royalty produced is delivered free.
Under such circumstances, entirely beyond the control or avoidance of appellants, it seems justice and equity require a division to avoid a wrongful taking.
The Japhet case is not in point. The fact situations presumed and assumed to illustrate the conditions obtaining in that case are not the same or similar to those here. It is true a producing well may be on the very edge of a pool and as proposed in that opinion the Japhet wells on it and the five acres off of it. It does not appear there the field was operating under any proration rules such as are here. That case ante-dates the spacing and proration statutes and regulations as applied to the field here. The lands owned here by the respective parties are shown beyond question to be over the same pool. If the law asserted by the CHIEF JUSTICE is the applicable rule, then in the opinion of the writer, many thousands of royalties in small tracts owned by as many separate owners will be rendered worthless, and if the courts are powerless to remedy the situation, it warrants legislative action.
As said in the motion for rehearing in Magnolia Petroleum Co. v. Blankenship, 5 Cir., 85 F.2d at page 557, it is implied by the Act, if not expressed that an owner of oil in place and without power, because of the intervention of the State through the Railroad Commission to reduce it to possession, is not wholly to lose his oil. But the royalty owner, unlike Blankenship, the owner of the working interest, is powerless to drill a well and thereby recover his royalty.