Hall v. McWilliams
| Decision Date | 15 June 1966 |
| Docket Number | No. 11411,11411 |
| Parties | Richard A. HALL et al., Appellants, v. E. S. McWILLIAMS, Appellee. . Austin |
| Court | Texas Court of Appeals |
Rutledge & Rutledge, R. M. Rutledge, Abilene, for appellants.
Bedford & Underwood, E. B. Underwood, Ballinger, for appellee.
This is a suit brought by E. S. McWilliams, appellee, against appellants Richard A. Hall and others asking the court to declare an oil and gas lease terminated by its own terms 1 by reason of a complete cessation of production of oil, gas and other minerals from the leased land for periods in excess of 60 days during the secondary term. That during said periods in excess of 60 days there were no drilling or reworking operations on said land instituted by lessee or his assigns. Appellee lessor also sued for the value of minerals owned by him and removed from the land after the termination of the lease. Appellants here are the assignees of the original lessee.
At the close of the trial and by agreement of the parties, the case was withdrawn from the jury and submitted to the court.
The trial court declared the lease terminated by its own terms as of January 1, 1964. The judgment also held those who were operating lease owners accountable for the oil produced since May 1, 1964, the date of their leasehold assignments. Upon agreement and stipulation of the parties, appellee allowed the defendants-operators recovery of their lease operating expenses after cancellation.
We affirm the judgment of the trial court.
The lease under attack is on a printed form containing the standard habendum clause for a term and so long thereafter as oil, gas or other mineral is produced thereunder. It also contains the 60 day drilling and reworking provision set out above.
Production was established in the primary term but by September of 1963 there remained only one producing well which pumped oil with a large amount of salt water. The salt water was being moved to an adjoining lease and pumped into an injection well. On September 9, 1963 the Railroad Commission of Texas suspended the permit for the injection well and the lessee here was left with a producing oil well but with accompanying salt water that had to be disposed of in some other manner. The trial court found that no oil was taken out of the ground during the months of October, November and December, 1963. During this time a pumper continued to service the lease each week, started the motor on the well and pumped the well for about five minutes or long enough to pass fluid by the pump to keep it from sticking. In January and February of 1964 there was a resumption of routine pumping and the trial court found that a measurable quantity of oil, forty-six barrels, was brought to the surface; that in April 176 barrels of oil were produced.
In March of 1964 the Railroad Commission granted permission to inject water into another well on an adjoining lease, however the well would not take the water until it was reworked.
By July 28, 1964 regular production from the lease in question was resumed which continued with reasonable regularity through the trial in September of 1965.
On November 4, 1964 appellee notified his lessee of his intention to cancel the lease.
Appellee is before this Court with six points of error, the first being that of the court in cancelling the lease as of January 1, 1964 without evidence that lessee was not making a profit and that a reasonably prudent operator would have ceased to operate the well under the circumstances.
We overrule this point.
Appellants rely on Clifton v. Koontz, 160 Tex. 82, 325 S.W.2d 684 and Skelly Oil Co. v. Archer, 163 Tex. 336, 356 S.W.2d 774 for his point of error number one. These cases are not in point here as they are applicable only to the question of whether Paying production from a lease has ceased.
In the case at bar the trial court found, and the evidence here is undisputed, that there was no production from the lease in question and no drilling or reworking operations on the lease for more than 60 days. The trial court correctly held that the lease terminated under its own terms. See Wainwright v. Wainwright, Tex.Civ.App., 359 S.W.2d 628, er. ref., n.r.e.
Appellants' second and third points, briefed together, are the error of the trial court in holding and concluding that such cessation of production (actual lifting of oil out of the ground) as did occur was not 'temporary;' the error of the trial court in not holding plaintiff estopped to assert termination of the lease on account of his...
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