Hutchins v. Humble Oil & Refining Co., 11265.

• Decision Date: 26 March 1942
• Docket Number: No. 11265.,11265.
• Citation: 161 S.W.2d 571
• Parties: HUTCHINS v. HUMBLE OIL & REFINING CO.
• Court: Texas Court of Appeals

Page 571

161 S.W.2d 571

HUTCHINS v. HUMBLE OIL & REFINING CO.

No. 11265.

Court of Civil Appeals of Texas. Galveston.

March 26, 1942.

Rehearing Denied April 16, 1942.

Appeal from District Court, Harris County; Norman Atkinson, Judge.

Suit by Volney Hutchins against Humble Oil & Refining Company to recover damages for defendant's failure to reasonably develop for oil or protect from drainage two oil leases. From judgment for defendant, plaintiff appeals.

Affirmed.

Elbert Roberts, of Houston, and Willett Wilson, of Corpus Christi, for appellant.

D. H. Gregg and Robt. F. Higgins, both of Houston (E. E. Townes and R. E. Seagler, both of Houston, of counsel), for appellee.

CODY, Justice.

This suit was instituted by appellant against appellee to recover damages because of the alleged failure of appellee to reasonably develop for oil or protect from drainage two oil leases held by appellee on two tracts of land belonging to appellant, consisting of 20 acres and 8.5 acres respectively.

Appellant's two tracts of land are adjacent, and are located in the Tomball townsite, in Harris County. In January, 1933, appellant executed an oil and gas lease on the 20-acre tract to one E. S. Lyne, who thereafter transferred it to appellee in March, 1933. In February, 1933, appellant executed an oil and gas lease on the 8.5-acre tract to one Walter M. Young, who thereafter transferred it to appellee in August, 1934. On the dates the above leases were made, no spacing rule was in effect. After these leases were made the Tomball oil field was developed. Appellee owned in fee many of the lots or blocks in the Tomball townsite, including lots west and north and adjoining the land of appellant. Subsequent to the making of appellant's said two leases, the City of Tomball passed an ordinance relative to the drilling of oil wells within the townsite. This ordinance was passed after the hearing before the Railroad Commission to establish a spacing pattern within the Tomball oil field. At the hearing before the Railroad Commission, in which appellee participated, there was established a 20-acre spacing — 466 feet from any lease or property line, and 932 feet from any drilling or producing well.

In response to an application by appellee for an exception to the spacing rule of the Railroad Commission, leave was granted appellee to drill on drilling units 18 and 19, which units were formed on land belonging to appellee; unit 18 consisted of but 15.24 acres, and unit 19 consisted of but 15.81 acres. These two units adjoin appellant's land on the West, and the combined acreage of these two units exceeds the acreage (28.5) of appellant's land, covered by the two leases, by a small amount. The well located on unit 19 by appellee was located at a point only 206.4 feet from the West line of appellant's land if projected southward, and was 102 feet from the South line thereof if projected westward. And the well, which appellee drilled on unit 18 was located within 188.8 feet of appellant's west line. When appellee began drilling on these units appellant protested, and was assured by appellee that he would be protected and treated fairly.

It is appellant's position that to treat him fairly appellee should have taken steps to get exceptions to the spacing rule, whereby two units would be formed on appellant's 28.5 acres of land, held by appellee under two leases as stated above. And it is appellant's contention on this appeal, and the theory of his lawsuit, that a reasonably prudent operator would have arranged to, and would have managed to, drill two wells on his 28.5 acres; one as an offset to the well on unit 18, which he contends could have been spaced so that the drilling of it would have held the lease on the 8.5-acre tract; and one as an offset to the well on unit 19; that by so doing appellee would have fulfilled its obligations, and protected appellant against drainage. As stated before, appellee owned the fee to units 18 and 19, and therefore appellee owned both the working interest and the royalty rights therein; whereas it owned only the working interest in appellant's land. It is appellant's contention that because of this there was a greater duty on appellee to protect appellant from drainage through the wells on units 18 and 19 than had appellee owned merely the working interest in said units. Put specifically it is appellant's contention that a reasonably prudent operator, owning both leases on appellant's land (consisting of the 20-acre tract and the 8.5-acre tract) would have immediately, when units 18 and 19 were drilled, drilled offset wells on the 20-acre lease and the 8.5-acre lease; and contends that the wells would have been paying wells.

In other words, it is appellant's contention, and he has sufficient pleadings to present such theory, that a reasonably prudent operator would never have drilled at the location on appellant's land where appellee did drill, but would have taken advantage of the fact that it owned leases on adjoining tracts belonging to appellant, aggregating 28.5 acres, and have located and drilled two wells thereon. Appellant submitted special issues to be submitted to the jury, which, had they been answered favorably, would have entitled him to a verdict, and, if his theory is legally tenable, would entitle him to judgment for damages — provided there was proof of drainage.

The court evidently considered appellant's theory to be legally untenable, and declined to submit any special issue in support thereof. He declined to submit any special issues relative to the 8.5-acre lease or tract as appellee had suffered it to expire; and he submitted certain special issues, all of which became immaterial except special No. 1 when the jury answered Special...