Batex Oil Co. v. La Brisa Land & Cattle Co.

• Decision Date: 13 December 1961
• Docket Number: No. 13843,13843
• Parties: BATEX OIL COMPANY et al., Appellants, v. LA BRISA LAND AND CATTLE COMPANY, Appellee.
• Court: Texas Court of Appeals

Page 769

352 S.W.2d 769

BATEX OIL COMPANY et al., Appellants, v. LA BRISA LAND AND CATTLE COMPANY, Appellee.

No. 13843.

Court of Civil Appeals of Texas, San Antonio.

Dec. 13, 1961.

Rehearing Denied Jan. 10, 1962.

Lyne, Blanchette, Smith & Shelton, Erich F. Klein, Jr., Dallas, Fouts, Moore, Williams & Caldwell, Houston, for appellants.

Pope & Pope, Rio Grande City, for appellee.

BARROW, Justice.

This is a venue case. Suit was brought by La Brisa Land and Cattle Company in the District Court of Starr County, against Batex Oil Company, H. J. Porter, James W. Porter and R. L. Wheelock, along with other named defendants, to cancel and annul an oil, gas and mineral lease on a certain tract of land situated in Starr County, on the ground that the oil and gas wells on said land are not producing in paying quantities; and in the alternative plaintiff prayed for cancellation of said lease covering all the land in said tract except twenty acres surrounding each of the producing oil and gas wells, and further alternatively prayed that defendants be required to reasonably develop all the remaining portions of said tract. Each of the above-named defendants filed a plea of privilege to be sued in the county of his residence. Plaintiff controverted each of the pleas and relied on Article 1995, Subd. 14, Vernon's Ann.Civ.Stats., to maintain venue in Starr County. The defendants supplemented their pleas of privilege and affirmatively alleged that plaintiff's allegations that there was no production of oil and gas in paying quantities from said lease, were false and not made in good faith, but fraudulently made for the purpose of maintaining venue in the county of suit. Upon a hearing before the court, each of the pleas of privilege was overruled. The above-named defendants have appealed.

Appellants rely for a reversal upon three points of error. Under the view we take of the case, we need not pass upon the first point.

Under their second point appellants contend that the trial court erred in holding that the cause of action on the covenant of reasonable development was controlled by Subdivision 14 of Article 1995, Vernon's Ann.Civ.Stats. Under their third point they contend that the court erred in holding that appellee's allegations of cessation of production of oil and gas in commercial or paying quantities were made in good faith and were not fraudulently made for the purpose of maintaining venue. We shall consider both points together. $The lease involved is dated May 27, 1940, and is in the usual form of oil and gas lease. It grants a determinable fee in the mineral estate for the primary term of ten years and as long thereafter as oil, gas or other mineral is produced from said land. The lease contained the following provision;

'The breach by Lessee of any obligation arising hereunder shall not work a forfeiture or termination of this lease nor cause a termination or reversion of the estate created hereby nor be grounds for cancellation hereof in whole or in part. In the event Lessor considers that operations are not at any time being conducted in compliance with this lease, Lessor shall notify Lessee in writing of the facts relied upon as constituting a breach hereof, and Lessee, if in default, shall have sixty days after receipt of such notice in which to commence the compliance with the obligations imposed by virtue of this instrument. After the discovery of oil, gas or other mineral in paying quantities on said premises, Lessee shall reasonably develop the acreage retained hereunder, but in discharging this obligation it shall in no event be required to drill more than one well per twenty (20) acres of the area retained hereunder and capable of producing oil, gas or other mineral in paying quantities.'

Subdivision 14 of Article 1995, states:

'Lands,--Suits for the recovery of lands or damages thereto, or to remove incumbrances upon the title to land, or to quiet the title to land, or to prevent or stay waste on lands, must be brought in the county in which the land, or a part thereof, may lie.'

The precise question which will determine the decision of this case is whether or not appellee's allegation that the lease has terminated by reason of cessation of production in paying quantities, was made in good faith or only for the purpose of maintaining venue. And if it be determined that the allegation was not made in good faith, then does appellee's suit for the alleged breach of the covenant of reasonable development come within the provisions of Subdivision 14 of Article 1995, Vernon's Ann.Civ.Stats.

The venue facts under Subdivision 14 are, (1) the nature of plaintiff's claim and (2) the location of the land. Ordinarily these facts are proved by the allegations of plaintiff's petition and by evidence showing the location of the land. Piazza v. Phillips, 153 Tex. 115, 264 S.W.2d 428; Cowden v. Cowden, 143 Tex. 446, 186 S.W.2d 69. But when, as in this case, defendants allege in their pleas of privilege that plaintiff's allegation that the lease has been terminated by cessation of production of oil or gas in commercial quantities was not made in good faith, but was fraudulently joined with the action for alleged breach of covenant of reasonable development, an additional issue is raised for decision on the venue hearing. Watson v. Baker, 67 Tex. 48, 2 S.W. 375; Thornton v. Thornton, Tex.Civ.App., 74 S.W.2d 429; Southwestern Surgical Supply Co. v. Scarborough, Tex.Civ.App., 15 S.W.2d 65; Koch v. Roedenbeck, Tex.Civ.App., 259 S.W. 328; Baldwin v. Baldwin, Tex.Civ.App., 233 SW. 130; Pearce v. Wallis, Landers & Co., 58 Tex.Civ.App. 315, 124 S.W. 496; San Antonio & A. P. R. Co. v. Dolan, Tex.Civ.App., 85 S.W. 302; Texas & P.R. Co. v. Stell, Tex.Civ.App., 61 S.W. 980; Gulf, C. & S. F. R. Co. v. Short, Tex.Civ.App.,...