Magnolia Petroleum Co. v. Edgar, 7912.

• Decision Date: 14 June 1933
• Docket Number: No. 7912.,7912.
• Citation: 62 S.W.2d 359
• Parties: MAGNOLIA PETROLEUM CO. et al. v. EDGAR.
• Court: Texas Court of Appeals

62 S.W.2d 359

MAGNOLIA PETROLEUM CO. et al. v. EDGAR.

No. 7912.

Court of Civil Appeals of Texas. Austin.

June 14, 1933.

Rehearing Denied July 12, 1933.

Appeal from District Court, Williamson County; Harry A. Dolan, Judge.

Suit by the Magnolia Petroleum Company and others against Joe Edgar. From an adverse judgment, plaintiffs appeal.

Affirmed.

Walace Hawkins, Turner, Rodgers & Winn, Thompson, Knight, Baker & Harris, and Sawnie R. Aldredge, all of Dallas, for appellants.

W. H. Nunn, Wilcox & Graves, and Sam Burnap, all of Georgetown, for appellee.

BAUGH, Justice.

On motion for rehearing herein, we have concluded that we were in error in reversing this cause, and that same should be affirmed. All orders heretofore entered herein are therefore set aside, our opinions heretofore filed are withdrawn, and this opinion is substituted in lieu thereof.

The case arose as follows: Joe Edgar owned an oil and gas lease on a strip of land, running north and south, containing between 3 1/3 and 4 acres, in the proven oil field in Gregg county. This strip was 132 feet wide at the north end, about 1,600 feet long, and about 70 feet wide at the south end. On the west of this strip running its entire length the Magnolia Petroleum Company owned a 110-acre lease; and on the east appellants, Simms Oil Company, Stanolind Oil & Gas Company, and the Peach Blossom Oil Company, owned jointly a 180-acre lease running the full length of said strip. Edgar originally made application for a permit to drill a well on said strip of land, under the exception to rule 37 of the Railroad Commission, 200 feet south of its north boundary line. After a hearing, permit was granted on September 11, 1931, by the Railroad Commission to Edgar to drill 600 feet south of his north line, on condition that only one well be drilled on the tract. On October 4, 1931, the matter was again taken up by all the interested parties before the deputy oil and gas commissioner at Austin, and agreement reached between Edgar and the adjacent lease owners on the east and west of his tract; and the deputy commissioner authorized Edgar to locate his well 740 feet south of his north line. No order was issued by the commission, however, to that effect. While the testimony is not harmonious as to details, we think it is clear that an oral agreement was reached between Edgar and the appellants, with the approval of the deputy oil and gas commissioner, that Edgar should drill his well in the center of his strip 740 feet from its north line, or 65 feet from each of its lateral boundaries at that point; that the Magnolia on the west should drill two wells on its tract alongside Edgar's strip, one not less than 65 feet from his west line, near its south end, and the other not less than 330 feet from Edgar's boundary line, near its north end; and that the owners of the lease on the east were to drill two wells, one near the north end of said strip at least 65 feet from its boundary line, and one near its south end and at least 330 feet from its boundary line.

After Edgar's No. 1 well was drilled, and the Magnolia had drilled two wells to his west, and the other appellants two wells to his east, Edgar assigned to one W. J. Riggs a one-acre block out of the south end of his strip, said assignment to be held in escrow and not to be delivered unless a permit from the Railroad Commission to drill a well on said one-acre tract was secured. Three hearings before the commission were had on such application, at each of which adjoining lease owners were notified and protested, and each time such permit was refused. After the last refusal, Riggs, joined by Edgar, brought suit in the district court of Travis county to set aside the order of the Railroad Commission refusing him such permit. Only the Railroad Commission was made a defendant, the commission's order was by the district court set aside, and judgment entered authorizing Edgar to drill a second well on his strip of land, i. e., on the one-acre tract out of the south end thereof. None of the adjoining lease owners were made parties to nor given notice of this suit. Final judgment was rendered therein without the knowledge of these appellants.

Edgar thereupon prepared to drill his second well, and this suit was for a temporary and permanent injunction brought against him by appellants, adjacent lease owners, to restrain him from doing so. The grounds for such injunction alleged were: (1) That the drilling of said well No. 2 would be in violation of the oral contract between appellants and appellee made at the time the permit to drill well No. 1 was granted, which contract had been by appellants performed (2) that such well No. 2 would be in violation of rule No. 37 of the Railroad Commission; (3) that appellee was unable to respond in damages, and they had no adequate remedy at law; and (4) that the judgment of the district court of Travis county authorizing Edgar to drill his well No. 2 on said tract was void upon its face and not binding upon appellants because they were necessary parties to said suit.

The trial court denied the plaintiffs any injunctive relief; hence this appeal. No findings of fact and conclusions of law were requested and none filed. The judgment does not indicate on what grounds the trial court denied the injunction. While the appellants urge at considerable length the oral contract between them and appellee as to the location and spacing of wells, appellee's agreement to...