Halbouty v. Railroad Commission, A-8200

• Decision Date: 14 February 1962
• Docket Number: No. A-8200,A-8200
• Citation: 357 S.W.2d 364,163 Tex. 417
• Parties: Michel T. HALBOUTY et al., Appellants, v. RAILROAD COMMISSION of Texas et al., Appellees.
• Court: Texas Supreme Court

Page 364

357 S.W.2d 364

163 Tex. 417

Michel T. HALBOUTY et al., Appellants, v. RAILROAD COMMISSION of Texas et al., Appellees.

No. A-8200.

Supreme Court of Texas.

Feb. 14, 1962.

Rehearing Denied May 23, 1962.

Andrews, kurth, Campbell & Jones, Houston (L. E. Frazier, Jr., and Harry R. Jones, Houston), for Michel T. Halbouty & Meredith & Company.

Butler, Binion, Rice & Cook, Houston (A. E. Amerman, Jr., Cecil Cook, and James D. Smullen, Houston), for Peter Henderson Oil Company.

Turner, Rodgers, Winn, Scurlock & Terry, Dallas (Frank J. Scurlock, Dallas), for Pan American Petroleum Corporation.

Will Wilson, Atty. Gen., Austin (Houghton Brownlee, Jr., and Linward Shivers, Asst. Attys. Gen., Austin), for Railroad Commission of Texas.

Blalock, Lohman & Blalock, Houston, Hart & Hart, Austin, for Intervenors H. L. Dillon et al.

Wallace H. Scott, Jr., Austin, for Intervenor J. C. Barnes.

McKay & Avery, Austin, for Intervenor Tyrell-Combest Realty Co.

Spruiell, Lowry, Potter, Lasater & Guinn, Tyler, for Intervenor P. G. Lake, Inc.

CULVER, Justice.

Michel T. Halbouty and others bring this direct appeal from a decree of the trial court upholding certain orders of the Railroad Commission of Texas and denying to the appellants a permanent injunction and all other relief prayed for.

In the trial court the appellants sought to restrain the Railroad Commission from continuing in effect the allocation formula adopted August 18, 1958, for the Port Acres Field in its order #3-38,395 which reads as follows:

'RULE 3. The daily allowable production of gas from individual wells completed in a non-associated gas reservoir of the subject field shall be determined by allocating the allowable producting, after deductions have been made for wells which are incapable of producing their gas allowables, among the individual wells in the following manner:

'(a) Two-thirds (2/3) of the allowed gas production from a non-associated gas reservoir shall be allocated to the individual wells completed therein in that proportion that the acreage assigned to each such well bears to the sum of the acreage in the reservoir.

'(b) One-third (1/3) of the allowed gas production from a non-associated gas reservoir shall be allocated equally among the individual wells completed therein.

'(c) The total daily non-associated gas allowable for each well shall be the sum of its acreage and per well allowables.'

They also prayed that the Commission be further enjoined from allowing the marketing of gas from the Port Acres Field until the Commission required the operators in the field to maintain the pressure at such point as would permit the maximum recovery of hydrocarbons contained in the reservoir and to prevent unnecessary waste of those natural resources.

The trial court sustained exceptions to the pleadings in so far as they were directed to the refusal of the Railroad Commission to enter the compulsory cycling and pressure maintenance order and found and concluded that the order of the Commission otherwise complained of was reasonably sustained by substantial evidence and is lawful and valid.

At the outset the Railroad Commission and the other appellees vigorously challenge our jurisdiction of this direct appeal on the ground that such appeal will lie only where the purpose of the suit is to restrain action or threatened action on the part of the Commission and not when the object of the suit is to compel action. In other words they say that the real purpose and object of this suit is to compel the Railroad Commission to enter a new proration order and to order cycling and pressure maintenance in the Port Acres Field.

To support their position in this respect they rely on our decision in Boston v. Garrison, 152 Tex. 253, 256 S.W.2d 67. That suit as first filed sought to restrain the officials of the Department of Public Safety from suspending a chauffeur's license. Prior to the trial the license had expired and plaintiff, by an amendment to his petition, sought to compel the department to renew the old or issue a new license. We held that a direct appeal would not lie in that respect and that his only redress was in the nature of a mandamus. We did not hold that we would not have jurisdiction of the appeal from the refusal of the trial court to restrain the department from suspending the license but that matter had become moot.

In the case here the appellants assert that the proration formula of one-third and two-thirds is unjustified, unreasonable and invalid and of that issue we do have jurisdiction. Incidentally, a striking down of this proration order would, in the natural course of things, enjoin upon the Railroad Commission the duty to write a new order, but it is not within the scope of our jurisdiction here to direct the Commission in that regard. What we have before us is the validity vel non of the order as written. Railroad Commission v. Sterling Oil & Refining Co., 147 Tex. 547, 218 S.W.2d 415; Board of Water Engineers v. Colorado River Municipal Water District, 152 Tex. 77, 254 S.W.2d 369; Texas & N. O. Ry. Co. v. Railroad Commission, 155 Tex. 323, 286 S.W.2d 112; Railroad Commission v. Shell Oil Co., 146 Tex. 286, 206 S.W.2d 235.

Article 1738a, Vernon's Ann.Civ.Stat., reads in part as follows:

'* * * appeals may be taken direct to the Supreme Court of this State from any order of any trial court granting or denying an interlocutory or permanent injunction * * * on the ground of the validity or invalidity of any administrative order issued by any State Board or Commission under any statute of this State. * * *'

The article further provides that the Supreme Court shall prescribe the necessary procedural rules to be followed in perfecting such appeal. Pursuant to that directive, Rule 499-a was adopted.

In Atlantic Refining Co. v. Railroad Commission of Texas, Tex., 346 S.W.2d 801, our jurisdiction of the direct appeal was attacked and while we did not there discuss the question of jurisdiction that decision by implication holds contrary to appellees' contention.

In so far as appellants complain of the refusal of the Railroad Commission to require compulsory cycling and pressure maintenance in this field is concerned, we do not have jurisdiction of the appeal. The jurisdiction of the Supreme Court on direct appeal is dependent upon and limited to the wording of the Constitutional Amendment, Art. 5, § 3b, Vernon's Ann.Civ.St., and Art. 1738a, Vernon's Ann.Civ.Stat. While in the trial court appellants prayed for an injunction to restrain the Commission 'from approving or allowing the withdrawals of gas to market from the Port Acres Field in such quantity and under such conditions as will result in the preventable waste of the hydrocarbon content of such gas until such time as the Commission has duly entered an order or orders requiring the operators in such field to maintain the pressure in the field at a point which will permit the maximum recovery of the hydrocarbons contained in the reservoir to the end that preventable waste of such natural resources shall be prevented,' nevertheless the actual relief sought was to require the Commission to enter a compulsory cycling and pressure maintenance order. It was so considered and treated by the Commission.

These proceedings were instituted before the Commission in the following manner: On November 19th, three months after the adoption of Special Order No. 3-38,395, Peter Henderson Oil Company requested that the Commission hold a hearing to reconsider and amend Rule 3 thereof. Notice was given that the hearing was set for January 27, 1959. On January 22nd Halbouty and Meredith joined in the Henderson Company request and asked that the issues be broadened to include the question of whether recycling or other secondary recovery operations should be instituted and conducted. On January 23rd Pan American Joined in the Halbouty-Meredith request. On July 6, 1959, after hearing and consideration, the Commission notified all parties of its action as follows:

'This is to advise that the Commission, at a formal conference held July 6, 1959, denied your application for a mandatory cycling order for the Port Acres (Lower Hackberry) Field, Jefferson County, Texas.

'The Commission further denied your application for an allocation formula based on net acre feet for the subject field and ruled that the allocation formula based on 2/3 acreage and 1/3 per well shall continue to remain in effect.'

In Boston v. Garrison et al., supra, under the direct appeal provision it was pointed out that the Supreme Court does not have jurisdiction where the purpose of the suit is to require or to compel action although the relator prayed 'that mandatory injunction shall issue requiring the defendants to issue plaintiff's renewal license or provisional license.' That in effect was an application for mandamus to compel the department to issue the license.

In Lane v. Ross, 151 Tex. 268, 249 S.W.2d 591, the relators prayed that the respondent be ordered and commanded not to transmit to the chairman of a state political committee certain minutes and returns of election and the respondent be ordered to transmit certain other minutes and returns. We held that in this original action this court did have jurisdiction to issue a writ of mandamus but no jurisdiction to grant injunctive relief and since there appeared to be no need for issuance of the mandamus the petition was dismissed.

In Boston v. Garrison we said:

'* * * In that case (Lane v. Ross) there was jurisdiction to issue the writ of mandamus but no jurisdiction to issue a writ of injunction, and because of the want of jurisdiction the injunctive relief was denied. Here, assuming that constitutionality or validity is properly involved, the court has jurisdiction on direct appeal from an order or judgment granting or denying an injunction, but no jurisdiction on direct appeal from an order or judgment granting or denying mandamus.'

So here an...