California Co. v. State Oil and Gas Bd.
| Decision Date | 14 October 1946 |
| Docket Number | 36163. |
| Citation | 200 Miss. 824,27 So.2d 542 |
| Court | Mississippi Supreme Court |
| Parties | CALIFORNIA CO. v. STATE OIL & GAS BOARD et al. |
Wells, Wells, Newman & Thomas, and Wm. N Ethridge, Jr., all of Jackson, and Engle & Laub, of Natchez, for appellant.
Butler & Snow, of Jackson, for appellees.
This appeal is from a final judgment of the Circuit Court of Adams County which dismissed an appeal taken by the appellant, the California Company, from an order of the State Oil and Gas Board, made on October 17, 1945, granting unto the appellee T. F. Hodge an exception to a general rule and regulation of the said Board for the spacing of oil wells, adopted pursuant to the authority conferred upon it by Section 6136, Code 1942. The motion of the appellee to dismiss the appeal was sustained on constitutional grounds, and therefore without an opportunity being afforded the appellant to offer proof as to whether or not the Board should have passed such order.
The general rule in question had provided, among other things that 'all oil wells must be located on a drilling unit consisting of at least forty (40) surface contiguous acres upon which no other drilling or producing well is located; and the location of the well shall not be greater than 330 feet from the center of the drilling unit unless a special exception is granted after notice and hearing * * *'.
The Oil and Gas Board had also provided in one of its general rules and regulations that it would grant exceptions to the foregoing rule, in order to prevent waste or the confiscation of property, so as to permit the drilling of wells within shorter distances than those therein mentioned 'whenever the Board shall determine, after hearing, that such exceptions are necessary'; and also that 'when an exception to such rule is desired an application therefor shall be made to the Board', and whereupon 'such exception shall be granted only after at least ten (10) days notice to all adjoining lessees affected thereby has been given', and then only 'after a public hearing at which all interested parties may appear and be heard * * *'.
After ten days notice of the application of T. F. Hodge had been given to the California Company as the sole adjacent lessee and it had filed its written objections thereto, the order of October 17, 1945, was made, granting unto the said applicant (or petitioner) a special exception so as to permit him to drill a well at a location other than that provided for by the said general spacing rule and regulation, and it recited that the same was done 'after a full hearing of all the testimony and evidence adduced by the parties and the arguments of both the parties and their attorneys'. Hence the appeal to the Circuit Court was taken therefrom, without further hearing before the Oil and Gas Board. And the only difference between this cause and the appeal in Cause No. 36,162, 27 So.2d 548, which is this day being decided, both of which challenge the validity of the said granted exception, is that in the latter cause the appellant filed a petition asking that the order granting the exception be set aside, without a further hearing and the submission of repetitious testimony.
Section 6136, Code 1942, empowers the State Oil and Gas Board 'to adopt and promulgate such rules and regulations as may be reasonable and proper and as it may deem necessary for the conservation of crude oil or petroleum * * *', and contains the further provision that 'any person, firm, association or corporation affected by or interested in any Act, order, rule or regulation of the board or of the (State Oil and Gas) Supervisor may file a petition with the board for a hearing on such Act, order, rule or regulation and on the filing of such petition for a hearing it shall be the duty of the board to thereupon set a day not less than five nor more than fifteen days from the filing of said petition for a hearing'. And this statute further provides that any one 'being a party to such petition may appeal from the decision of the board within ten days from the date of the rendition of the decision to the circuit court of Hinds county, or of the county in which the petitioner is engaged in business or drilling operations. * * * and the matter shall be tried de novo by the circuit court and the circuit court shall have full authority to approve or disapprove the action of the board'.
It is first contended by the appellees that the order of October 17, 1945, was not appealable to the Circuit Court because (a) no appeal was authorized by the statute from said order, since the order was not a decision upon a petition filed by either party under the provisions of the statute, and (b) that the appellant failed failed to exhaust its administrative remedy before the Oil and Gas Board and that, therefore, the appeal was premature.
We are of the opinion, however, that the foregoing contention is not well taken for the reason that the appellant, the California Company, was made a party to the application (or petition) of T. F. Hodge upon which the hearing was had, and since the statute provides that any one 'being a party to such petition may appeal', it was unnecessary that after the full hearing was had before the Board the losing party, whether such party had been the California Company or T. F. Hodge, should file another petition asking that the matter be heard again as a condition precedent to an appeal.
In other words, we think that the provisions of the statute for the appeal to the Circuit Court were intended to authorize such an appeal as was taken in the instant case from the granting of an exception as well as an appeal by any other person, firm, association or corporation shown to be affected by or interested in any rule or regulation of the State Oil and Gas Board and who may not have had an opportunity to be heard by the Board thereon before the same was adopted, and that only in the latter case is it necessary that a petition for a hearing shall be filed after the Board has acted. Most assuredly, the statute does not contemplate that two hearings shall be had upon the same issue between the same parties and on the same evidence.
It is next contended by the appellee that if the said order of October 17, 1945, is an appealable order, and the appeal is not premature, then the requirement that 'the matter shall be tried de novo by the circuit court and the circuit court shall have full authority to approve or disapprove the action of the board' is unconstitutional and void because it undertakes to confer nonjudicial functions upon the Circuit Court.
It will be noted that the language last above quoted to the effect that 'the matter shall be tried de novo by the circuit court' and also that the said court shall likewise have authority 'to approve or disapprove the action of the board' is wholly inconsistent. A trial de novo, within the common acceptation of that term, and as defined in the case of Knox, Attorney General, v. L. N. Dantzler Lumber Co., 148 Miss. 834, 114 So. 873, and other decisions of this Court, means that the case shall be tried the same as if it had not been tried before, and the court conducting such a trial may substitute its own findings and judgment for those of the inferior tribunal from which the appeal is taken. Whereas the mere authority to approve or disapprove the action of such tribunal means the right to affirm or reverse the case. And if the decision appealed from is disapproved, and the cause is reversed and remanded, then the inferior tribunal is authorized to take such further proceedings as the facts shall warrant and as may not be inconsistent with the decision of the appellate court.
Therefore, this Court is confronted with the necessity of determining (1) whether or not this provision for an appeal to the Circuit Court is unconstitutional in its entirety, or (2) whether or not the right of appeal in itself may be upheld as being within constitutional limitations by permitting the Circuit Court to merely approve or disapprove the decision appealed from on grounds hereinafter stated.
The decision of the foregoing questions is found to involve the question (1) of whether or not a trial de novo in the Circuit Court in the instant case would permit the Circuit Court to substitute its own findings and judgment for that of the State Oil and Gas Board on a purely legislative or administrative matter, and, (2) if so, whether or not the right of appeal should nevertheless be preserved by striking down the provision for a trial de novo and retaining the power of the Circuit Court to merely approve or disapprove the action of the State Oil and Gas Board, upon the theory that to permit said Court on a trial de novo to substitute its own ideas as to the proper spacing of oil wells for those of this administrative or legislative body is unconstitutional, while the mere right to approve or disapprove its action is a valid exercise of judicial power on a hearing as to whether or not the decision of said Board in that regard is supported by substantial evidence, is arbitrary or capricious, beyond the power of the Board to make, or violates some constitutional right of the complaining party.
We are unable to say that except for the provision granting a trial de novo the Legislature would not have given the right of appeal at all from any action of the Oil and Gas Board. It has made provision for appeals in many instances from the decisions of administrative boards created by statute in this State without requiring that the testimony taken before such boards be reduced to writing for such purpose. But it is unnecessary that we shall here digress to illustrate.
The Legislature itself had the right in the first instance to prescribe the...
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