Holmes v. Delhi-Taylor Oil Corp., DELHI-TAYLOR

• Decision Date: 15 June 1960
• Docket Number: DELHI-TAYLOR,No. 13592,13592
• Parties: Christian R. HOLMES et al., Appellants, v.OIL CORPORATION et al., Appellees.
• Court: Texas Court of Appeals

Page 479

337 S.W.2d 479

Christian R. HOLMES et al., Appellants, v. DELHI-TAYLOR OIL CORPORATION et al., Appellees.

No. 13592.

Court of Civil Appeals of Texas, San Antonio.

June 15, 1960.

Rehearing Denied Aug. 1, 1960.

Longoria, Evins & Snedeker, Edinburg, Cox, Patterson, Freeland & Horger, McAllen, Jack Ware, William Darden, Corpus Christi, William E. York, Charles B. Swanner, McAllen, Hart & Hart, Austin, for appellants.

Charles E. Thompson, McAllen, Turner, White, Atwood, McLane & Francis, C. Sidney McClain, A. W. Walker, Jr., Dallas, for appellees.

MURRAY, Chief Justice.

This suit was instituted by Delhi-Taylor Corporation and Mayfair Minerals, Inc., against Christian R. Holmes and William L. Dugger, Jr., doing business as Dugger & Holmes, John W. Voss Drilling Company, Inc., and the City of Pharr, a municipal corporation of Hidalgo County, Texas, seeking a temporary injunction, and on final hearing a permanent injunction, restraining the defendants among other things, from sand-fracturing the sub-strata of a gas well within the corporate limits of the City of Pharr, which was directionally drilled from an adjoining lot and bottomed in the middle of the adjacent street. The street was thirty feet wide. As a process of completing this well, the defendants were preparing to 'sand-fracture' and plaintiffs were seeking by temporary and permanent injunction to prevent this from being done, on the theory that the process would crack and fracture the formation at the bottom of the well, and that these fractures or fissures would extend across property lines and into property on which the plaintiffs held an oil and gas lease.

The defendants, by plea in abatement, asserted the lack of primary jurisdiction in the district court to hear this matter, upon the ground that the primary jurisdiction over such a matter, by statute, is given to the Railroad Commission of this State. This plea in abatement was overruled by the trial court, and a temporary injunction granted, prohibiting the defendants 'from using acid under pressure sufficient to force it into the formation beyond the limits of Defendants' lease; from the use of sand and other fracturing material under pressure which would force such material out beyond the limits of Defendants' lease; from using any and all techniques and/or materials which would physically invade the subsurface of Plaintiffs' premises surrounding the well in question, and from creating channels, cracks or fissures in the subsurface of Plaintiffs' land.'

The experts who testified at the hearing differed as to how much pressure and how much material would be required to create fractures and fissures in the sub-strata that would extend into plaintiffs' lease, and thus it is seen that the provisions of the temporary injunction were rather indefinite. Defendants have prosecuted an appeal to this Court from the order granting the temporary injunction.

The controversy here presented is one over which the Railroad Commission of this State has primary jurisdiction. Title 102, Articles 6004 to 6066b, inclusive, Vernon's Ann.Civ.Stats. The effect of these statutes is to give to the Railroad Commission of this State primary jurisdiction over the methods of drilling, completing and operating oil and gas wells, and this primary jurisdiction must be exhausted before resort can be had to the courts. Railroad Commission of Texas v. Gulf Production Co., 134 Tex. 122, 132 S.W.2d 254; Peterson v. Grayce Oil Company, Tex.Civ.App., 37 S.W.2d 367, affirmed Grayce Oil Company v. Peterson, 128 Tex. 550, 98 S.W.2d 781; Humble Oil & Refining Co. v. L. & G. Oil Company, Tex.Civ.App., 259 S.W.2d 933; Kavanaugh v. Underwriters Life Insurance Company, Tex.Civ.App., 231 S.W.2d 753; Texas & New Orleans Railroad Co. v. Houston Belt & Terminal Ry. Co., Tex.Civ.App., 227 S.W.2d 610; Corzelius v. Railroad Commission, Tex.Civ.App., 182 S.W.2d 412; Far East Conference v. United States, 342 U.S. 570, 72 S.Ct. 492, 96 L.Ed. 576.

The provisions of Article 6023, supra, among other things give to the Railroad Commission primary jurisdiction over all persons engaged in drilling, operating or producing natural gas, as well as over all oil or gas wells in Texas. The Article provides as follows:

'Power and authority are hereby conferred upon the Railroad Commission of Texas, over * * * all oil and gas wells in Texas, and over all persons, associations or corporations owning or operating pipe lines in Texas, and over all persons, associations and corporations owning or engaged in drilling or operating oil or gas wells in Texas; and all such persons, associations and corporations and their pipe lines, oil and gas wells are subject to the jurisdiction conferred by law upon the Commission, and the Commission is authorized and empowered to make all necessary rules and regulations for the government and regulation of such persons, associations and corporations and their operations, and the Attorney General shall enforce the provisions of this title by injunction or other adequate remedy and as otherwise provided by law. * * *'

Article 6024, supra, provides as follows:

'In all matters pertaining to the discharge of its duties and the enforcement of its powers and authority as provided by the terms of this title, the Commission shall institute suits, hear and determine complaints, require the attendance of witnesses, pay their expenses out of the fund herein created, and sue out such writs and process as may be necessary for the enforcement of its orders, and punish for contempt or disobedience of its orders as the district court may do.'

There are so many provisions of Title 102, placing the duties upon the Railroad Commission with reference to the drilling, completing and producing of gas wells that it would not be proper to set them all out here. Some of the provisions of Article 6014, supra, are especially important. We quote:

'The production, storage or transportation of crude petroleum oil or of natural gas and such manner, in such amount, or under such conditions as to constitute waste is hereby declared to be unlawful and is prohibited. The term 'waste' among other things shall specifically include: * * *

'(f) Physical waste or loss incident to, or resulting from, so drilling, equipping, locating, spacing or operating well or wells as to reduce or tend to reduce the total ultimate recovery of crude petroleum oil or natural gas from any pool.'

It is apparent from the testimony, that when a well is sand-fractured the cracks and fissures cover an area with a diameter of some 600 feet, and some fissures are likely to extend a great deal farther. Thus, if the court may enjoin appellants from sand-fracturing a well bottomed in a 30-foot street because the fissures caused thereby will cross property lines, then in like manner the court may enjoin a person who holds a lease on a city lot in Pharr from sand-fracturing his wells for a like reason, and the production of gas from that part of the Pharr Field that underlies the City could be enjoined from producing any gas, and thus the total ultimate recovery of natural gas from the entire pool would be reduced. The state expressly says this is a matter to be administered by the Railroad Commission. Certainly, if such matters are to be handled in a fair and uniform manner, it must be done by the Railroad Commission. If such matters are to be handled by the courts, without the power to make rules and regulations such as can be done by the Railroad Commission, under the findings of a jury in one court a person having a small lot might be permitted to sand-fracture, while under the findings of a jury in another court a person with a much larger lot might be denied the right to sand-fracture. It was to avoid these inequities and to establish uniformity that such matters were turned over to the Railroad Commission, with a right to appeal from the rulings and orders of the Railroad Commission to the courts. There can be no question about the Railroad Commission having primary jurisdiction of the controversy here presented.

The primary jurisdiction of the subject matter of this suit having been vested, by statute, exclusively in the Railroad Commission, the district court did not have jurisdiction to issue the temporary injunction. Art. 5, Sec. 8, Texas Constitution, Vernon's Ann.St., limits the jurisdiction of the district courts to issuing injunctions which are necessary to enforce their jurisdiction. Dallas General Drivers, Wardhousemen and Helpers v. Wamix, Inc. of Dallas, 156 Tex. 408, 295 S.W.2d 873; Carter v. Tomlinson, 149 Tex. 7, 227 S.W.2d 795; White v. Maverick County Water Control and Improvement Dist. No. 1, Tex.Civ.App., 26 S.W.2d 659, reversed on other grounds Tex.Com.App., 35 S.W.2d 107.

Appellees lay great stress upon the holding in Hastings Oil Co. v. Texas Company, 149 Tex. 416, 234 S.W.2d 389. However, in that case apparently the question of jurisdiction of the Railroad...