Benz-Stoddard v. Aluminum Co. of America, BENZ-STODDARD

• Court: Supreme Court of Texas
• Citation: 368 S.W.2d 94
• Docket Number: BENZ-STODDARD,No. A-9137,A-9137
• Parties: Claireet al., Petitioner, v. ALUMINUM COMPANY OF AMERICA, Respondent.
• Decision Date: 08 May 1963

Page 94

368 S.W.2d 94 Claire BENZ-STODDARD et al., Petitioner,
v.
ALUMINUM COMPANY OF AMERICA, Respondent. No. A-9137. Supreme Court of Texas. May 8, 1963.
Rehearing Denied June 12, 1963.

Waggoner Carr (Will Wilson), Attys. Gen., H. Grady Chandler, Linward Shivers, Asst. Attys. Gen., Austin, Carter, Gallagher, Jones & Magee, Dallas, William E. York, McAllen, Hart & Hart, Austin, for petitioners.

Vinson, Elkins, Weems & Searls, H. Raybourne Thompson, James E. Allison, Jr., James W. McCartney, with above firm, Houston, Clark, Thomas, Harris, Denius & Winters, James H. Keahey, with above firm, Austin, for respondents.

HAMILTON, Justice.

This is a suit brought by Aluminum Company of America to cancel a Railroad Commission order granting a Rule 37 exception permit to prevent confiscation of the minerals underlying Claire Benz-Stoddard's .115-acre town lot. The trial court sustained special exceptions to the petition and, when Aluminum Company refused to amend, dismissed on the ground that the petition did not state a cause of action for cancellation. The Court of Civil Appeals reversed and remanded. Tex.Civ.App., 357 S.W.2d 809. Claire Benz-Stoddard and the Railroad Commission are petitioners.

We reverse the judgment of the Court of Civil Appeals and affirm the judgment of the trial court.

Since this case comes to us on a special exception in the nature of a general demurrer we must accept respondent's allegations as true. The allegations are as follows:

Underlying Claire Benz-Stoddard's .115-acre tract are ten vertically separated gas reservoirs, or horizons, among which there is no communication of gas. Multiple completion techniques make it possible to produce gas from as many as six of these reservoirs through only one well bore. The Commission's order granted Claire Benz-Stoddard's request for permit to drill one well and to make multiple completions in as many reservoirs as were productive. The order recites that the permit is granted to prevent 'confiscation and/or waste', but the parties agree that there was no issue of waste in this case, only of confiscation. Respondent alleged that because of the proration order in effect at this field at the time the permit was granted (1/3 of the allowable allocated on a per well basis and 2/3 allocated on a per acre basis), a single completion well during its life would make it possible for petitioner to recover more than her equivalent of the minerals in place in all ten reservoirs under her land, thus would fully protect her against confiscation. Respondent further alleged that petitioner has in fact made triple completions and has already recovered more than seven times the gas in place beneath her tract in all ten reservoirs, 84% of which has been drained from respondent's portion. Respondent did not allege that petitioner has access to any one of the ten reservoirs by means of another well on another tract. Respondent alleged that this was a voluntary subdivision but expressly waived and abandoned that allegation before the trial court.

The Court of Civil Appeals held that petitioner was entitled to an opportunity to recover the equivalent of her share in the ten reservoirs beneath her tract-not the

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specific minerals-and that since under the proration order in effect at the time the permit was granted she could with a completion in only one reservoir recover more than enough gas to make up her equivalent in all ten reservoirs, she was as a matter of law not entitled to multiple completions. In support of this holding the Court of Civil Appeals cites Gulf Land Co. v. Atlantic Refining Co., 134 Tex. 59, 131 S.W.2d 73; Atlantic Refining Co. v. Railroad Commission of Texas, 162 Tex. 274, 346 S.W.2d 801; Railroad Commission of Texas v. Williams, Tex., 356 S.W.2d 131; and Halbouty v....