Mueller v. Sutherland

Decision Date18 November 1943
Docket NumberNo. 4340.,4340.
Citation179 S.W.2d 801
PartiesMUELLER v. SUTHERLAND et al.
CourtTexas Court of Appeals

Appeal from District Court, Jim Wells County; L. Broeter, Judge.

Suit by J. W. Sutherland and others against Mrs. Augusta Mueller, individually and as independent executrix, and others, to recover their share of certain oil and gas royalties. From a judgment for plaintiffs, the defendants appeal.

Affirmed.

Lloyd & Lloyd, of Alice, for appellants.

Keys, Holt & Head and Tillman Smith, all of Corpus Christi, and Carmel F. Davis and Perkins & Floyd, all of Alice, for appellees.

PRICE, Chief Justice.

This appeal is from a judgment of the District Court of Jim Wells County. We shall almost literally adopt the statement contained in appellants' brief as to the nature and result of the suit.

The appellants are Augusta Mueller, a widow, and her children. They now own Tract 2, containing 124.2 acres, and Tract 3, containing 124.7 acres, in the F. S. Schleicher Subdivision of 1502.9 acres of land in Jim Wells County, with the exception of 24 acres in the southwest corner of Tract 3, sold by them to Henry Deuval, Sr., and with a certain other exception later noted. The Deuval tract of 24 acres is not involved in this controversy. However, it may be noted that the sale thereof left appellants owning 100.7 acres in Tract 3.

On January 26, 1938 appellants executed in favor of appellee Anderson-Prichard Oil Corporation an oil, gas and mineral lease which covers Tract 2 and the aforesaid 100.7 acres of Tract 3. Subsequently the lease as applied to the 100.7 acres in Tract 3 was conveyed to and is now held by appellee Atlantic Refining Company; otherwise, there has been no change to the title to that lease. All of the royalty, which is one-eighth, under these two tracts is owned by appellants and appellees John F. Judge and Gilbert W. Judge, except under 24 acres of land owned by Alfred Nollkamper. Appellee Southern Minerals Corporation is a party because it purchased and has impounded the proceeds of the royalty from oil produced from Tract 2.

By deed dated February 16, 1938, appellants conveyed a tract of 24 acres of land out of Tracts 2 and 3 to Farmers State Bank of Orange, Texas. Appellee Nollkamper later acquired that tract, which was subject to the oil and gas lease above mentioned. Appellees J. W. Sutherland, A. G. Thompson, George E. Gray, Maston Nixon, J. C. Hatridge and Nathan Pitcairn purchased and now own a portion of the royalty under that 24 acres of land. The controversy involved in this litigation revolves about this particular tract, which we shall hereafter refer to as "the Nollkamper land."

The north 12 acres of the Nollkamper land lies in Tract 2 and is under that portion of the aforesaid oil and gas lease now owned by Anderson-Prichard Oil Corporation and there is a producing well thereon. The south 12 acres lies in Tract 3 and is under the portion owned by the Atlantic Refining Company, and there is a producing well thereon.

In the field in which the aforesaid land is located the Railroad Commission has limited the drilling to one well on each 20 acres by virtue of its authority under Rule 37, and has also fixed the quantity of oil, usually referred to as "allowable," that can be produced from each well on the basis of that acreage. There are two wells drilled on the Nollkamper 24 acres of land, one on the portion lying in Tract 2, and the other on the portion lying in Tract 3.

Appellees Sutherland, Thompson, Gray and Nollkamper brought this suit to recover their share of all the royalty produced from the Nollkamper 24 acres, alleging that they and the appellees Nixon, Hatridge and Pitcairn own all the royalty under that tract. In their cross action Nixon, Hatridge and Pitcairn sought the same relief.

Southern Minerals Corporation and the Atlantic Refining Company, being purchasers of the oil, in their answers set out the amount of oil they each purchased and tendered the proceeds of their various purchases into the Registry of the Court.

Defendants John F. Judge and Gilbert W. Judge disclaimed any interest in the 24 acres of land, but alleged they owned one-fourth of the royalty under the remainder of Tracts 2 and 3 covered by the lease.

Appellants answered that those appellees who own the royalty under the Nollkamper 24-acre tract were entitled to only 12/20ths of the total royalty produced from each of the wells under the spacing rule and allowable made and fixed by the Railroad Commission of Texas. They based this contention upon the fact that the two wells drilled upon the Nollkamper lands were drilled upon two units, each composed of 12 acres belonging to the appellees and 8 acres belonging to appellants.

The trial court sustained the two special exceptions of the royalty owners in the Nollkamper land directed at paragraphs seven and eight of appellants' Second Amended Original Answer, and the appellants having declined to further amend, the court struck from their answer the aforesaid pleaded defense of appellants. Upon the trial of the case the court refused to permit appellants to introduce any evidence in support of that defense. Judgment was rendered for all of the appellees as prayed for. Plaintiffs were quieted in the title as to the royalty interest and recovered all royalty payments from the two wells on the 24-acre tract. Appellants perfected this appeal.

In this case the specific ground of error urged is as to the sustaining by the court of a special exception urged to paragraphs seven and eight of Appellants' Second Amended Original Answer.

Paragraphs seven and eight are as follows:

"VII. These defendants allege that prior to and at the time of the drilling of each of the wells on the twenty-four (24) acres of land conveyed to Alfred Nollkamper as aforesaid, divided into two tracts of approximately twelve (12) acres each as described in plaintiffs' Petition, as well as at the time of the acquisition of the oil, gas, mineral and royalty rights, if any, of the plaintiffs and the other defendants herein, respectively, no well could be drilled under the laws of this State in search of oil in the Wade City Field where said tract of land is located on a tract containing less than twenty (20) acres without a special permit from the Railroad Commission of the State of Texas; that if any well was and is so drilled on a smaller tract than twenty (20) acres, the amount of oil that could be produced from such smaller tract was and is reduced in the ratio that the acreage in such smaller tract bears to the twenty (20) acre tract allotted for the drilling of each well under the rules and regulations of the Railroad Commission of the State of Texas; and that such rule was and is based upon the fact that one well on each twenty (20) acres of land will drain all of the oil from such twenty (20) acre tract.

"That in order to withdraw the full allowable of oil under the rules and regulations of the Railroad Commission of Texas, adopted pursuant to the laws of this State to comply with such spacing rule, it is necessary that twenty (20) acres of land be allotted to each of such wells referred to in plaintiffs' petition; that, as a result of such requirement, sixteen (16) acres of land belonging to these defendants, amounting to eight (8) additional acres to each twelve (12) acre tract described in said petition, were and are in fact allotted to each such well, that is, each such well has been and is now producing the amount of oil allowed each twenty (20) acres of land for a well drilled thereon; that the plaintiffs and the other defendants herein are not entitled to receive any greater portion of the royalty from the said oil wells, or either of them, so drilled and now producing oil from the 24 acres of land acquired by Alfred Nollkamper as aforesaid than such amount of approximately twelve (12) acres on which each well is located bears to the twenty (20) acres prescribed by the Railroad Commission of the State of Texas for the spacing of a well producing oil in the Wade City Field; and that should the ownership of the plaintiffs and other defendants in said twenty-four (24) acres of land be established, as contended for by them, then these defendants say that the plaintiffs and the other defendants are not entitled to recover from either of such wells more than their proportionate part of 12/20ths of the royalty produced from either of said wells.

"VIII. That there has been and is being taken and drained from the land belonging to these defendants 8/20ths of the oil produced from each of the wells drilled on the tract acquired by plaintiff Alfred Nollkamper, as aforesaid, since said wells were completed; and that these defendants should recover and be awarded the royalty therefrom as they own their interests therein."

In view of the fact that some question is raised as to the sufficiency of the special exceptions we here reproduce same.

Defendants Nixon, Hatridge and Pitcairn urge this exception:

"These defendants specially except to Paragraphs VII and VIII of said second amended original answer for the reason that the facts set forth therein constitute no basis for a cause of action against them or any defense to the cause of action alleged by these defendants, but that such facts are wholly irrelevant and immaterial to any of the issues involved in this case."

The special exception urged by plaintiffs was as follows:

"Plaintiffs specially except to Paragraphs VII and VIII of said Answer for the reason that the allegations therein contained constitute no defense to Plaintiffs' cause of action as set out in their First Amended Original Petition, nor any basis for any cause of action against them, but on the contrary that such allegations, even if true, are wholly irrelevant and immaterial to any of the issues involved in this suit."

Plaintiff appellees sought a vindication of...

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