Chenoweth v. Nordan & Morris

• Decision Date: 28 April 1943
• Docket Number: No. 11283.,11283.
• Citation: 171 S.W.2d 386
• Parties: CHENOWETH et al. v. NORDAN & MORRIS.
• Court: Texas Court of Appeals

Page 386

171 S.W.2d 386

CHENOWETH et al. v. NORDAN & MORRIS.

No. 11283.

Court of Civil Appeals of Texas. San Antonio.

April 28, 1943.

Rehearing Denied May 19, 1943.

Appeal from District Court, Bexar County, Thirty-seventh District; Raymond Edwards, Judge.

Suit by L. V. Chenoweth and another against L. A. Nordan and Mrs. John G. Morris, composing the firm of Nordan & Morris, seeking an injunction restraining defendants from discriminating against plaintiffs in purchasing natural gas from wells owned by plaintiffs. From a judgment of dismissal, plaintiffs appeal.

Affirmed.

Neil E. Beaton and W. H. Kennon, both of San Antonio, for appellants.

Swearingen & Miller, of San Antonio, for appellees.

MURRAY, Justice.

This suit was instituted by L. V. Chenoweth and J. E. Johnson against L. A. Nordan and Mrs. John G. Morris, composing the firm of Nordan and Morris, seeking an injunction restraining defendant from discriminating against the plaintiffs in purchasing natural gas from two wells owned by plaintiffs and located in the Lopena Field, in Zapata County, Texas. The suit was also for damages.

The defendants directed certain exceptions to plaintiffs' petition which were sustained by the court. Upon plaintiffs' refusal to amend, a judgment of dismissal was entered, from which plaintiffs have prosecuted this appeal.

Nordan and Morris were the owners of a collecting pipe line which collected the gas from some twenty-one gas wells located in the Lopena Field and delivered it to the main pipe line of the United Gas Company. The plaintiffs, Chenoweth and Johnson, were the joint owners of two of these wells. They entered into two contracts, one covering each of the two wells, whereby defendants agreed to purchase the natural gas from these wells. Plaintiffs contend that these contracts expressly provide that the gas was to be taken equally on a per-well basis from the twenty-one wells in the field, while the defendants contend that the contracts expressly provide that the gas is to be taken upon a pro rata basis, according to the acreage held by each producer in the field. Plaintiffs further contend that Rule 37 fixed the effective drainage area in the Lopena Field at twenty acres per well, and hence that the defendants are required by the rules and regulations of the Railroad Commission to take gas from the field on a per-well basis, and, lastly, that if plaintiffs are wrong in these first two propositions, the court should have allowed them, nevertheless, to go to the jury on the remaining fact issues raised in their pleadings, with reference to what would have been an equitable and ratable taking of gas from the several wells located in the Lopena Field.

We shall discuss these propositions in the order stated. The language contained in the contracts which must be here construed is as follows:

"Seller (plaintiffs) * * * hereby sells and agrees to * * * deliver to buyer (defendants) * * * all of the merchantable gas which may be produced from all gas wells now drilled or which may hereafter be drilled on the * * * described premises during the term of the present leasehold * * * thereon, or any * * * extension thereof * * *.

"Buyer shall not be under any obligation to take all or any specified portion of the gas * * * during any defined or specified time; but buyer shall endeavor to take gas from the herein described lands and leaseholds in the same equitable or ratable proportions that it takes gas from the lands and leaseholds of others from whom buyer is now purchasing and/or may hereafter purchase gas in the gas field in which said premises of seller are located, including any lands which Nordan & Morris * * * might at any time own. It is recognized and agreed that varying operating mechanical and physical conditions will make it impossible for buyer to take gas from each and every well in exact ratable proportions. Buyer does agree, however, that it will, insofar as varying facts, circumstances and conditions will justify and permit, take an equitable or ratable withdrawal of gas from seller's lands and leaseholds * * * as compared with the withdrawals from the lands and leaseholds of others from whom buyer is now purchasing and/or may hereafter purchase gas in the gas field * * * including any lands which Nordan & Morris * * * might at any time own * * *.

"This contract is subject to all present and future valid orders, rules and regulations of any regulatory body of the Federal Government and the State in which these premises are situated."

Appellants contend, in effect, that the word ratable means equal, while appellees contend that it means something quite different. It is apparent that if the word ratable means equal, then defendants have contracted to take gas in equal proportions from each well, and should be required to carry out the terms of their...