Corzelius v. Harrell

• Decision Date: 04 April 1945
• Docket Number: No. A-167.,A-167.
• Citation: 186 S.W.2d 961
• Parties: CORZELIUS et al. v. HARRELL.
• Court: Texas Supreme Court

186 S.W.2d 961

CORZELIUS et al. v. HARRELL.

No. A-167.

Supreme Court of Texas.

April 4, 1945.

Rehearing Denied May 9, 1945.

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

Suit by H. M. Harrell to set aside orders of the Railroad Commission limiting production of natural gas from a certain field and providing for proration of production when it exceeded a specified quantity, in which F. M. Corzelius and another intervened. A judgment canceling the orders, permanently enjoining the Commission from entering any similar orders, and permanently enjoining named intervener from producing gas under the canceled orders or any similar orders, was affirmed by the Court of Civil Appeals, 179 S.W.2d 419, and interveners bring error.

Judgments reversed, and cause dismissed.

Black, Graves & Stayton and John W. Stayton, all of Austin, for plaintiffs in error.

J. A. Rauhut, of Austin, amicus curiæ.

Hornsby, Hornsby & Kirk, of Austin, and R. M. Thornton, Jr., of Houston, for defendant in error.

SHARP, Justice.

This suit was instituted by H. M. Harrell to set aside certain orders of the Railroad Commission relating to the production of natural gas from the Bammel Field in Harris County. Corzelius and Meincke, one of his lessors, intervened. The orders under attack limited production of natural gas for light and fuel purposes to twenty million cubic feet daily, and provided that production should be prorated only when the average daily production exceeded nineteen million cubic feet for a thirty-day period. The trial court, after withdrawing the case from the jury, rendered judgment: (1) cancelling the orders; (2) permanently enjoining the Railroad Commission from entering any similar orders; and (3) permanently enjoining F. M. Corzelius, one of the defendants, from producing gas under the cancelled orders or any similar orders. Upon appeal to the Court of Civil Appeals for the Third Supreme Judicial District by the intervenors only, the judgment of the trial court was affirmed. 179 S.W.2d 419. A writ of error was granted.

Petitioners contend that Sections 10 and 11 of Article 6008, Vernon's Annotated Civil Statutes, are unconstitutional, in that they confer purely judicial duties upon an administrative body, and cite in support of such contention the case of Board of Water Engineers v. McKnight, 111 Tex. 82, 229 S.W. 301, 304. This Court granted a writ of error on account of the holding of this Court in the case of Board of Water Engineers v. McKnight, supra.

The Articles of our Statutes involved in the case of Board of Water Engineers v. McKnight, supra, were Sections 105 to 132 of the Act of March 19, 1917, Chapter 88, General Laws 35th Legislature, Regular Session, pages 211-243, being Articles 5011½f to 5011½ss in the then supplement of Vernon's Texas Civil and Criminal Statutes. Such statutes became effective on June 19, 1917, and their constitutionality was attacked as being repugnant to Section 1, Article II, and Section 1, Article V, of the Texas Constitution, Vernon's Ann.St. This Court in the opinion rendered in Board of Water Engineers v. McKnight, supra, declaring such sections of the statutes invalid, used the following language: "* * * the precise question to be decided is whether the Legislature could confer on persons in the executive department power to determine and adjudicate the rights and priorities of claimants of water rights, in the face of the constitutional prohibition against the exercise by officers of the executive department of any power properly attached to the judicial department, except in the instances expressly permitted."

On the same page the court stated: "The provisions of our Constitution were designed to render it impossible for the Legislature to accomplish such a purpose or object, until the people had evidenced their assent by express constitutional authorization."

Again, in the concluding paragraph, the court stated: "The Legislature having attempted by the statutes in question to confer on persons belonging to the executive department powers which properly attach to another department, without express permission of the Constitution, the statutes are void."

Article XVI, Section 59a, of the Constitution was adopted on August 21, 1917, and became effective on that date. It provides: "The conservation and development of all of the natural resources of this State * * * are each and all hereby declared public rights and duties; and the Legislature shall pass all such laws as may be appropriate thereto."

It will be noted that Article XVI, Section 59a, had not been adopted when the statutes involved in the case of Board of Water Engineers v. McKnight, supra, were considered. Therefore the validity of the statutes under consideration in that case was to be determined by the terms of the Constitution then in force. See 39 Tex.Jur. 20, 21; Stark v. Chaison, Tex. Com.App., 50 S.W.2d 776.

The statutes relating to oil and gas involved in this case were each adopted in their present form subsequent to the adoption of Article XVI, Section 59a, of the Constitution. Article 6008, Acts 1935, 44th Leg., p. 318, Chap. 120, H.B. 266, Secs. 3 and 7, amended Acts 1941, 47th Leg., p. 117, Chap. 91, H.B. 211; Article 6049c, Sec. 7, Acts 1935, 44th Leg., p. 180, Chap. 76, Sec. 6, H.B. 782; Article 6049d, Sec. 4, Acts 1932, 42nd Leg., 4th Called Session, p. 3, Chap. 2, S.B. 1. Such statutes therefore must be considered in the light of Article XVI, Section 59a, of the Constitution, and not under the Constitution in force at the time the statutes involved in Board of Water Engineers v. McKnight, supra, were considered.

Article II, Section 1, of the Constitution reads as follows: "The powers of the Government of the State of Texas shall be divided into three distinct departments, each of which shall be confided to a separate body of magistracy, to wit, Those which are Legislative to one; those which are Executive to another, and those which are judicial to another; and no person, or collection of persons, being of one of these departments, shall exercise any power properly attached to either of the others, except in the instances herein expressly permitted."

It was not intended by the adoption of Article XVI, Section 59a, to change the rule announced in Article II, Section 1, of the Constitution. By the use of the broad language used in Article XVI, Section 59a, the Legislature is authorized to enact such laws as are necessary to carry out the purposes for which such constitutional amendment was adopted. The statutes involved here confer upon the Railroad Commission the power to adjust correlative rights in gas fields, but all of its orders are subject to review by the courts, as provided for in Article 6049c, Section 8. In view of the broad provisions of Article xvi, Section 59a, authorizing the Legislature to pass all laws that may be appropriate for the conservation and development of all natural resources, and in view of the fact that the statutes provide for a full review in the courts of all orders entered by the Railroad Commission, we are of the opinion that the statutes which authorize the Railroad Commission to adjust correlative rights of owners in a common gas reservoir do not violate the provisions of Article II, Section 1, of the Constitution.

The oil and gas industry in this State has become enormous. There are now many separate oil and gas fields operated in this State under various conditions. The handling of this great industry and its complex problems calls for the services of trained persons. It is utterly impossible for the Legislature to meet the demands of every detail in the enactment of laws relating to the production of oil and gas. The duty to carry out the just and reasonable public policy as is provided for under Article XVI, Section 59a, of the Constitution, has been placed with the Railroad Commission. The Legislature has undertaken to comply with the foregoing provisions of the Constitution by the enactment of Title 102, Article 6004 et seq., Vernon's Annotated Civil Statutes, and has authorized the Railroad Commission to handle the details relating to the preservation and conservation of the natural resources of the State. It has been repeatedly held that the Railroad Commission is authorized to act under the many articles of the statutes enacted for the purpose of conserving and preventing waste of oil and gas. Marrs v. Railroad Commission, 142 Tex. 293, 177 S.W.2d 941; Railroad Commission v. Wencker, 140 Tex. 527, 168 S.W.2d 625; Gulf Land Co. v. Atlantic Refining Co., 134 Tex. 59, 131 S.W.2d 73; Brown v. Humble Oil & Refining Co., 126 Tex. 296, 83 S.W.2d 935, 99 A.L.R. 1107; Railroad Commission v. Gulf Production Co., 134 Tex. 122, 132 S.W.2d 254.

We hold that the decision in the case of Board of Water Engineers v. McKnight, supra, does not control here, and the foregoing contention that the rule announced in that case controls in this case is overruled.

Corzelius contends that Sections 10 and 11 of Article 6008, properly construed, authorize the Railroad Commission to require proration to adjust correlative rights only as an incident to prevent waste, and where the question of waste is not involved there is no authority to adjust correlative rights.

The rule in this State recognizes the ownership of oil and gas in place, and gives to the lessee a determinable fee therein. It is also held that such rule should be considered in connection with the law of capture, which is recognized as a property right, and both rules are subject to regulation under the police power of this State. Brown v. Humble Oil Co., 126 Tex. 296, 83 S.W.2d 935, 99 A.L.R. 1107; Id., 126 Tex. 296, 87 S.W.2d 1069, 101 A.L.R. 1393, and cases cited therein.

Article 6008 contains detailed specifications relating to the production and use of natural gas. Section 1 thereof reads: "Sec. 1. Declaration of policy: In recognition of past, present, and imminent evils...