Lone Star Gas Co. v. Murchison

• Decision Date: 05 January 1962
• Docket Number: No. 15947,15947
• Parties: LONE STAR GAS COMPANY, Appellant, v. J. W. MURCHISON and R. B. Sanders, Appellees.
• Court: Texas Court of Appeals

Page 870

353 S.W.2d 870

94 A.L.R.2d 529

LONE STAR GAS COMPANY, Appellant, v. J. W. MURCHISON and R. B. Sanders, Appellees.

No. 15947.

Court of Civil Appeals of Texas, Dallas.

Jan. 5, 1962.

Rehearing Denied Feb. 2, 1962.

Roy E. Pitts, Archie D. Kroney, and Jackson, Walker, Winstead, Cantwell & Miller, Dallas, Luther C. Johnston, Palestine, and Justice, Justice & Kugle, Athens, for appellant.

E. Tate McCain, Jr., Palestine, Wallace H. Scott, Jr., Hart and Hart, James P. Hart, Austin, for appellees.

WILLIAMS, Justice.

This appeal presents a question of first impression in Texas. The primary question presented is whether title to natural gas, once having been reduced to possession, is lost by the injection of such gas into a natural underground reservoir for storage purposes.

Lone Start Gas Company, a natural gas public utility company, brought this suit against J. W. Murchison and R. B. Sanders, in the District Court of Henderson County, Texas, for, taking appropriating and converting to their own use natural gas alleged to belong to Lone Star. Appellant, Lone Star, sought to recover the value of the gas taken, as well as punitive damages, and an injunction against the continuing coversion of its gas. Appellees, in their countervailing pleadings, attack the jurisdiction of the District Court of Henderson County, Texas on the theory that the cause of action asserted by appellant was, in reality, a collateral attack upon a certain Railroad Commission orders and therefore exclusive jurisdiction was vested in the District Court of Travis County, Texas perforce Art. 6049c Vernon's Ann.Civ.St. Subject to this plea, appellees leveled a number of special exceptions to appellant's petition based primarily on the proposition that appellant had lost title to the natural gas in question when same had been injected into an underground reservoir for storage purposes. The trial court overruled the plea to the jurisdiction and sustained appellees' special exceptions, holding that appellant's petition did not state a cause of action and therefore dismissed the suit. In so doing the trial court specifically held that the appellant's petition revealed that title to its gas had been lost, hence there could be no conversion. From this judgment, appellant appeals contending, in eight points of error, that the trial court erred in holding that appellant's petition failed to state a cause of action; that the court erred in holding that the appellant lost title to the gas injected for storage; that the trial court erred in holding that the rule of capture applies to gas stored by appellant in underground revervoirs; that the court erred in sustaining various special exceptions; and that the court erred in disnissing appellant's suit. Appellees, by counterpoints one and two, contend that the trial court was correct in dismissing appellant's suit because there was no jurisdiction of the subject matter and further that appellant's petition had failed to state a cause of action. By cross-point appellees assail the action of the trial court in overruling their plea to the jurisdiction.

We have concluded that the prvotal question presented by this appeal is propriety of the trial court's action in holding that Lone Star's pleadings failed to state a cause of action and in dismissing the suit. Accordingly, we consider first appellant's points one through eight, and in doing so we must necessarily center our attention upon the petition. There are no disputed facts presented for determination. Since the Court below disposed of this case by sustaining special exceptions the facts alleged by Lone Star in its pleadings must be taken as true. Grimes v. Talbot, Tex.Civ.App., 233 S.W.2d 206; City of San Antonio v. Earnest, 144 Tex. 83, 188 S.W.2d 775. The petition is best presented by copying same haec verba:

THE PETITION

'Now comes the plaintiff, LONE STAR GAS COMPANY, a corporation orgnaized under the laws of the State of Texas with its principal office in Dallas, Texas, complaining of the Defendants, J. W. Murchison and R. B. Sanders, both of whom reside in Henderson County, Texas, and for cause of action respectfully shows:

'I.

'Plaintiff is a natural gas public utility and is engaged in the business of transporting and distributing natural gas to the public and serves a large area of consumers of gas for domestic, commercial and industrial uses. The demand for gas fluctuates so that during each year there are periods of very high demand for gas by consumers served by Plaintiff and periods of very low demand. By storing gas during periods of low demand and withdrawing the same during the periods of high demand Plaintiff can efficiently meet the peak demands of the consumers on its system and at the same time furnish a more constant and uniform outlet for producers of gas. By storing gas, Plaintiff, during periods of low consumer demand, can purchase larger quantities of gas from gas wells, and larger quantities of casinghead gas produced from oil wells, and thus improve the market for gas and help prevent the waste of casinghead gas. The only feasible and the safest method of storing gas is underground storage. For storing gas Plaintiff uses underground storage in areas geographically and geologically situated so as to allow gathering and storage of surplus gas during low demand periods and the withdrawal and transportation thereof to the consumers on Plaintiff's system in periods of high or peak demand.

II.

'The Tri-Cities Bacon Lime Field, situated in Henderson County, Texas, is an exhausted gas filed lying below the depth of 7,500 feet and constitutes a reservoir suitable for storing gas. Gas produced elsewhere can be injected therein for storage and later withdrawn as the need arises. When production of gas from said field was commenced in the year 1942, said field then contained approximately 22.5 million MCF of gas placed in such reservoir by natural forces and referred to herein as 'native gas'. The abbreviation 'MCF' as used in this petition is an abbreviation meaning 1,000 cubic feet. After production was commenced from said field many wells were drilled therein which produced gas therefrom and withdrew the native gas from said Bacon reservoir; and on April 23, 1956, and effective April 9, 1956, the Railroad Commission of Texas made and entered its order classifying said Bacon filed as a gas storage reservoir, and a copy of said order is attached to this petition and marked Exhibit 'A', and by reference incorporated herein and made a part hereof as though set out in full herein.

'III.

'Before commencing the storage of of gas as hereinafter alleged, Plaintiff acquired and ever since has been and now is the owner of and in possession of all the wells in said Bacon Lime Field (hereinafter sometimes called 'Bacon storage reservoir') and the leases upon which said wells were drilled insofar as they covered, among other formation, said Bacon Formation. By instrument effective on or about January 1, 1956, the persons then owning said leases, together with the owners of the land covered thereby, and the owners of the minerals subject to said leases, entered into a unit operating agreement with Lone Star Producing Company granting to said company, among other things, the right to inject extraneous gas and store the same in said Bacon storage reservoir, and prior to the Railroad Commission order alleged above herein Plaintiff acquired and ever since has been and now is the owner of all the rights of Lone Star Producing Company under said unit operating agreement. After said order of April 9, 1956, was made by the Railroad Commission of Texas classifying said Bacon Field as a gas storage reservoir Plaintiff expended over $2,000,000.00 in installing equipment and facilities to use said Bacon storage reservoir for the storage of gas. In November 1956, Plaintiff commenced and has thereafter continued to inject in said Bacon storage reservoir extraneous gas belonging to Plaintiff and in Plaintiff's possession in Plaintiff's pipe lines. 'Extraneous gas' as used in this petition means gas which was not produced from said Bacon Lime Field but produced elsewhere and acquired and owned by Plaintiff. All of the extraneous gas injected by Plaintiff in said Bacon storage, reservoir, as alleged in this petition, was gas in Plaintiff's pipe line acquired by Plaintiff from other sources and was injected by Plaintiff in said Bacon storage reservoir for storage purposes in order that Plaintiff would have gas in storage to withdraw to meet the demands of consumers served by plaintiff in times of high demand. Plaintiff after commencing such gas injection has from time to time withdrawn gas from said reservoir to meet the demand of consumers served by Plaintiff. After Plaintiff commenced injecting gas in said Bacon storage reservoir no withdrawal of gas have been made by anyone other than Plaintiff except the Defendants in 1959 commenced and have continued to take and appropriate extraneous gas stored in said reservoir by Plaintiff as hereinafter alleged.

'IV.

'The tract of land of 89.05 acres, more or less, in Lot No. 12 in the Jacob Tator Survey, Henderson County, described in that certain oil and gas lease dated September 15, 1958, made by W. W. Jackson and wife, as lessors, to J. W. Murchison, as lessee, and recorded in Volume 37, Page 407, Lease Records of Henderson County, Texas, is herein referred to as 'said Jackson tract'. Said Jackson tract lies in the Southwest part of said Bacon storage reservoir, and a small portion of said reservoir extends under said Jackson tract. In 1956 when Plaintiff commenced storing gas in said Bacon storage reservoir no well had ever been drilled on said Jackson tract. Said Jackson tract was not then under an oil and gas lease, and Plaintiff did not acquire a lease on said Jackson tract, and the owners of said Jackson tract were not parties to the unit operating agreement alleged above in paragraph III hereof....