Alpha Petroleum Co. v. Terrell, 1630-6363; Motion No. 10611.

• Decision Date: 13 February 1933
• Docket Number: No. 1630-6363; Motion No. 10611.,1630-6363; Motion No. 10611.
• Parties: ALPHA PETROLEUM CO. v. TERRELL et al.
• Court: Texas Supreme Court

59 S.W.2d 364

ALPHA PETROLEUM CO. v. TERRELL et al.

No. 1630-6363; Motion No. 10611.

Commission of Appeals of Texas, Section A.

February 13, 1933.

As Amended by Supreme Court February 17, 1933.

Rehearing Denied April 5, 1933.

Error to Court of Civil Appeals of Ninth Supreme Judicial District.

Suit by the Alpha Petroleum Company against C. V. Terrell and others. Judgment granting a temporary injunction was reversed by the Court of Civil Appeals [54 S. W.(2d) 821], and the temporary injunction dissolved, and plaintiff brings error.

Judgment of Court of Civil Appeals affirmed, and writs issued by Supreme Court ordered vacated.

Wm. N. Bonner and V. Childress, both of Wichita Falls, and Paul D. Page, Jr., John T. Garrison, Lawrence Lipper, William F. Grimes, Leon Sonfield, and Sewell, Taylor, Morris & Garwood, all of Houston, for plaintiff in error.

James V. Allred, Atty. Gen., and Maurice Cheek, Asst. Atty. Gen., and John C. Jackson, of Houston, for defendants in error.

CRITZ, J.

This suit was instituted in the district court of Montgomery county, Tex., by Alpha Petroleum Company, a Texas corporation, against the Texas Railroad Commission and certain other parties, to restrain the enforcement against it of the following two oil and gas rules of the Railroad Commission:

"Rule 24. Effective at 7 o'clock A. M., September 24, 1932, the amount of oil which each well in said field shall be permitted to produce daily shall be reckoned upon a combined acreage and per well basis as follows: Each and every well in said field shall be permitted to produce forty (40) barrels of oil per day and in addition thereto shall be allowed to produce the amount shown in the following table, column two (2) conforming to the acreage allotted to each well. No allowable production based on acreage will be granted on acreage units in excess of 20 acres per well. No well in the field shall be given a daily allowable in excess of two hundred and forty (240) barrels regardless of acreage it drains.

                -----------------------------------------------------
                Acreage      Acreage     Well Allowable   Total Daily
                            Allowable        Per Day       Allowables
                          Per Acre Day
                -----------------------------------------------------
                   20          10             40               240
                   19          10             40               230
                   18          10             40               220
                   17          10             40               210
                   16          10             40               200
                   15          10             40               190
                   14          10             40               180
                   13          10             40               170
                   12          10             40               160
                   11          10             40               150
                   10           9             40               130
                    9           9             40               121
                    8           9             40               112
                    7           9             40               103
                    6           9             40                94
                    5           9             40                85
                    4           9             40                76
                    3           9             40                67
                    2           9             40                58
                    1           9             40                49"
                

The above is known as rule 24.

"Rule 1. Rule 37 adopted November 26, 1919, is hereby amended insofar as it applies to the Conroe or Strake Field in Montgomery County or extensions thereof, so as to hereafter read as follows:

"No well shall hereafter be drilled for oil or gas at any point less than 933 feet from any drilling or completed well, and no well shall hereafter be drilled for oil or gas at any point less than 466 feet from any property line or division line. In order to prevent the impairment of vested rights in the carrying out of this rule and to protect the owners of small tracts in the enjoyment of such rights, the Commission shall require the several owners of adjacent small tracts of less than 20 acres and the owners of larger tracts adjacent to such small tracts to combine or pool their acreage in such way as to constitute units of 20 acres or approximately 20 acres, and upon such equitable and reasonable terms as the Commission may prescribe after notice to the owners of such adjacent tracts and after hearing. It is the purpose of this rule to limit the drilling of wells to one well to 20 acres or approximately 20 acres of surface ownership. This rule shall apply to the spacing of all wells not already actually spudded in on June 25, 1932. In order further to protect vested rights as against wells actually spudded in, drilling or completed on such date, and to conform to the irregularities in the shape of separately owned or combined tracts of 20 acres or approximately 20 acres, the Commission will, after hearing, grant exceptions permitting drilling within a less or shorter distance than hereinabove prescribed upon application duly filed fully stating the facts, notice of such application and hearing having been given to the owners of all adjacent leases affected thereby; provided that if the owners of all adjacent leases affected thereby waive in writing notice of hearing on or objection to the granting of such application, the Commission may proceed to determine such application without hearing. The mere filing of an application to drill prior to the effective date of this rule or of this order shall not entitle the party filing the same to a permit in exception to this rule or any special privileges to violate the same. Wells already spudded in prior to July 1, 1932, on 330 and 660 foot spacing under authority of the temporary rule as adopted by order of June 14, 1932, will be considered regular locations, and offsets thereto will be granted similar spacing."

The petition prays for the issuance of temporary restraining orders or temporary injunctions, prohibitory or mandatory, and in either case to be made permanent on final hearing, to the end that plaintiff may be permitted to produce and transport its oil as heretofore without injury to its wells, and to the end that it may be permitted to drill at least one additional well on one of its leases, and that defendants and all of them be prohibited from instituting any suit against the plaintiffs for penalties, or for other relief of any character, other than to answer this suit, etc.

On September 23, 1932, the plaintiff's petition was presented to the Honorable S. A. McCall, judge of said district court, who, in chambers, and without notice or hearing, indorsed thereon the following order:

                                 "In Chambers
                                 "At Conroe, Texas
                

"This, the 23rd day of September, 1932, the foregoing petition coming on to be considered by the undersigned Judge, in Chambers, the same has been examined and considered, and I assume jurisdiction of this case and order it filed.

"It is ordered, adjudged and decreed that a temporary restraining order issue against the Defendants, and each of them, as prayed for by the Plaintiff, to continue until the further orders of this court that may be signed and entered herein. The parties are advised of the desire and purposes of the court to hear, at the convenience of the parties, any motion of any Defendant that may be filed and desired heard herein, and of the further desire and purpose of the court to hear such motion within ten (10) days of the date hereof, the Clerk will issue notice to the defendants forthwith; provided, however, that the Plaintiff shall first file a good and sufficient bond, to be approved by the Clerk, in the sum of one thousand dollars ($1,000.00), payable to the undersigned Judge of this court, for the use and benefit and protection of the Defendants named herein, and each of them, and otherwise conditioned as provided by law.

                                   "S. A. McCall
                                   "Judge of the 9th Judicial
                                       District of Texas."
                

Bond was given as provided by the above order, and writ of injunction issued. The writ enjoined the Railroad Commission from enforcing only the rule first above quoted, known as rule 24, "until the further order of said court."

We here copy the following from the opinion of the Court of Civil Appeals:

"Thereafter appellee, on October 1, 1932, presented to the Hon. S. A. McCall, judge of the Ninth judicial district, Montgomery county, Tex., a motion wherein it is recited that the Attorney General of the state of Texas had ordered a transcript of the proceedings in this cause from the district clerk of Montgomery county with the intention of perfecting an appeal from the order of September 23, 1932, and, while denying the right of appeal, stated that he did not want any previous orders to lapse, and requested that, pending appeal, the former order be continued in full force and effect for a period of ten days, or until and if a valid appeal should be perfected to the Court of Civil Appeals at Beaumont, Tex. The district judge endorsed on said motion the following order:

                             "`Fiat
                             "`In Chambers, Conroe, Texas
                             "`October 1, 1932
                

"`The above and foregoing motion having been presented to me on this the 1st day of October, 1932, and being of the opinion that said motion shows good cause for the extension of my order heretofore entered herein, on September 23rd, 1932, it is accordingly ordered that said temporary restraining order issued by me on September 23rd, 1932, be and the same is hereby in all respects extended for a period of ten days, and subject to the further orders of this court made and entered herein.

"`The Clerk of the Court will issue appropriate notices.

                           "`S. A. McCall, Judge of the 9th
                               Judicial District, Montgomery
                               County, Texas.'
                

"The original transcript, which did not contain the last order mentioned, was filed in this court on October 4, 1932, although the transcript was certified by the clerk of the ...