Holchak v. Clark
| Decision Date | 26 October 1955 |
| Docket Number | No. 12854,12854 |
| Parties | Maggie Pearl HOLCHAK, Appellant, v. Edwin T. CLARK, Appellee. |
| Court | Texas Court of Appeals |
John N. Barnhart, Reese Wade, Beeville, for appellant.
Reynolds N. Cate, San Antonio, for appellee.
This being the second appeal of this cause, we refer to our former opinion, Clark v. Holchak, Tex.Civ.App., 247 S.W.2d 463, and that of the Supreme Court, Clark v. Holchak, 152 Tex. 26, 254 S.W.2d 101, for a more complete statement of the case.
The limitation or condition of defeasance contained in the habendum clause of the royalty deed reads as follows:
'It is further agreed and herein stipulated that in case there is no paying production on said land on December 10, 1945, and for six months thereafter, that this grant shall become null and void, and the minerals hereby conveyed shall revert to the said Grantor, their heirs and assigns, but should there be such production, then and in that event, this grant shall remain in full force and effect until such production ceases, after which this instrument shall become null and void.'
Upon the former appeal, the Supreme Court held that the mineral estate conveyed by the deed would not terminate unless for a six months period following December 10, 1945, there should be an absence of paying production. The question presented by the record now before us is that expressly pretermitted by the Supreme Court, that is, 'whether or not there was paying production from the land within six months after December 10, 1945,' i. e., on June 10, 1946.
The answer to this inquiry is, or should be, simple of solution. Paying production undoubtedly means the production of oil, gas or other minerals from the premises in paying quantities. Mr. Leslie D. Harlowe, a practicing oil geologist and witness for the appellee, testified categorically that on or before June 10, 1946, there was no production from the well situated on the premises covered by the royalty deed. This testimony was uncontradicted and should end the matter, as the defeasance clause provides 'that in case there is no paying production on said land on December 10, 1945, and for six months thereafter (June 10, 1946), that this grant shall become null and void, and the minerals hereby conveyed shall revert to the said Grantor, their heirs and assigns, * * *.'
The trial judge, however, did not construe the word 'production' as having the same meaning as that accorded to it by the oil geologist, nor did he construe the phrase 'paying production' according to its common ordinary meaning, but gave it a much broader and more inclusive construction. This is apparent from the findings of fact and conclusions of law filed at appellant's request. From the findings it appears that on June 9, 1946, between the hours of midnight and 8 A.M., a drill stem test was run in the well at the depth of approximately 4266 feet, and some 200 feet of pipe line oil and 180 feet of oily mud was recovered. Some of the oil was placed in a small bottle and the balance was run into the slush pits. Drilling was thereafter resumed and the well finally completed on July 14, 1946, at a depth of 7640 feet. Other than that recovered in the drill stem test of June 9, 1946, no oil was taken from the 4266 foot depth. The trial judge concluded as a matter of law that, 'Said discovery of oil on June 9, 1946, kept said royalty deed in full force and effect until a reasonable time thereafter for the purpose of determining whether or not said well would produce oil in paying quantities.'
The royalty deed, in the defeasance clause or elsewhere, does not provide that the discovery of oil, followed by the completion of a well within a reasonable time thereafter, shall operate to extend the term of the grant beyond June 10, 1946, the date set for termination unless paying production was obtained. The trial court's position, however, has support in the authorities. The doctrine that the discovery of oil within the definite term, followed by diligent operations thereafter, will extend the term of the lease or deed containing a 'paying production' habendum clause, seems to have first been propounded by the Supreme Court of West Virginia. In Eastern Oil Co. v. Coulehan, 65 W.Va. 531, 64 S.E. 836, 839, the West Virginia Court seemingly proceeds upon the theory that the discovery of oil, gas or other minerals vests the lessee or grantee 'with an estate in the right to produce oil and gas,' and that this estate or right is not lost by abandonment or otherwise so long as operations are diligently continued after the expiration of the definite term and production is eventually obtained.
In constuing the habendum clause in South Penn Oil Co. v. Snodgrass, 71 W.Va. 438, 76 S.E. 961, 967, 43 L.R.A.,N.S., 848, the...
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