Reading & Bates Offshore Drilling Co. v. Jergenson, 4359

• Decision Date: 24 April 1970
• Docket Number: No. 4359,4359
• Citation: 453 S.W.2d 853
• Parties: READING & BATES OFFSHORE DRILLING COMPANY, Appellant, v. Freddie JERGENSON et ux., Appellees.
• Court: Texas Court of Appeals

Page 853

453 S.W.2d 853

READING & BATES OFFSHORE DRILLING COMPANY, Appellant, v. Freddie JERGENSON et ux., Appellees.

No. 4359.

Court of Civil Appeals of Texas Eastland.

April 24, 1970.

Rehearing Denied May 15, 1970.

Folley, Snodgrass & Calhoun, Amarillo, for appellant.

Lemon, Close & Atkinson, Perryton, for appellees.

GRISSOM, Chief Justice.

Freddie Jergenson and wife sued Reading & Bates Offshore Drilling Company for damages to a 16.1 acre tract of land upon which they operated a cattle feeding business. They also sued for $750.00 which they alleged the defendant agreed to pay them for signing an agreement authorizing an increase in the size of drilling units. Plaintiffs alleged defendant's lease contained a provision that no well should be drilled within 200 feet of a barn; that over plaintiffs' protest, defendant drilled an oil well within less than 200 feet of their barn and in the edge of their ensilage pit; that their small tract was ideally located and well equipped for feeding cattle at a profit when ensilage was used as the principal ingredient; that plaintiffs' ensilage pit was at the only suitable location therefor on the tract; that their adjacent feed lot was equipped with a bunk line feeding system; that there was a hard surfaced road on the east side of the tract; that they stored their dry feed in said barn, where it was ground, and, with a mixer and conveyor on a truck, hauled a short distance over an all weather road to the bunk line feeders where it was easily and economically fed to cattle; that ensilage was the cheapest feed available and, with existing competition, such a system was the only one with which cattle could be fattened at a profit; that the topography of the 16.1 acre tract was peculiarly adapted to and his barn and ensilage pit and bunk line feeders properly located and arranged for such purpose and, with the adjoining hard surface road, the tract was readily accessible in all kinds of weather. Plaintiffs say in effect that by drilling the well at the place it was drilled his ensilage pit and the only suitable place on the tract for a pit was destroyed, his cattle feeding business ruined and his land permanently damaged.

The defendant contends in substance that by drilling where it did it violated no obligation it owed plaintiffs and that such location was reasonably necessary for proper development of the lease. Defendant also alleged plaintiffs consented to, or acquiesced in, drilling at said location.

A jury found that (1 and 2) the defendant agreed to pay plaintiffs $750.00 for executing said agreement; that (3) by drilling at said place defendant made an unreasonable use of plaintiffs' land and that (4) drilling at said place damaged the 16.1 acre tract of land and (5) was a proximate cause of the damage to plaintiffs' land; that (6) the 16.1 acre tract's reasonable market value immediately before the well was drilled was $32,000.00, but that (7) its value immediately afterward was only $24,000.00. The jury found that (8) defendant's said location of its well upon plaintiffs' land was made wilfully and deliberately, over plaintiffs' protest, and in utter disregard of plaintiffs' property rights and (9) it assessed $500.00 exemplary damages. The jury also found that (10 and 11) plaintiffs did not consent to or acquiesce in such location of the oil well.

The court rendered judgment for plaintiffs for $8,000.00 damages to the land, $750.00 for executing the contract and $500.00 exemplary damages. Reading & Bates Offshore Drilling Company has appealed.

Appellant's first two points are, in substance, that the court erred: (1) In submitting issue 3, which inquired whether appellant's location of its oil well constituted an unreasonable use of appellees' land, and in rendering judgment on the finding that it was an unreasonable use of appellees' land, because there was no evidence that such use was unreasonable, and (2) in submitting issues 4 and 5, which inquired whether such location of appellant's oil well damaged the 16.1 acre tract and was a proximate cause of the damage to the land, and in rendering judgment on the affirmative answers thereto, because there was no evidence that such damage was not reasonably necessary for the proper development of defendant's lease.

There was a conflict in the evidence as to whether drilling at said location was reasonably necessary for proper development of appellant's lease and whether drilling there constituted an unreasonable use of plaintiffs' land. The lease did not contain a provision for surface damages and appellant says none can be recovered if such damages was caused by 'the reasonable exercise of the rights granted by the lease.' We think appellants' said contention as to the law is correct. However, as to that proposition a fact question was raised by the evidence and decided against the appellant. Appellant points out testimony that the place where the well was drilled was the only suitable place for drilling an oil well and that its location was authorized by the Railroad Commission. It says the well was located 3 feet west of the ensilage pit. Appellant says it is established law that, in the absence of a provision in the lease for surface damage, the lessee has a right to use so much of the surface and to use it in such manner as is reasonably necessary for proper development of its lease. It cites Meyer v. Cox, Tex.Civ.App., 252 S.W.2d 207 (writ ref.), and Placid Oil Co. v. Lee, Tex.Civ.App., 243 S.W.2d 860. We agree with appellant's statement of the law. We think that as to these matters fact questions were presented. The lessee does have a right to use as much of the surface and to use it in such manner as is reasonably necessary to effectuate the purposes of its lease. But, as stated by Hon. Tom McMahon in 'Rights & Liabilities With Respect to Surface Usage by Mineral Lessee', Sixth Annual Institute on Oil and Gas Law, at page 232, all the authorities qualify such statement by saying that the rights of each must be exercised with due regard for the rights of the other. He also said that, when the lessee held the dominant estate, the lessor 'nevertheless retains all other rights in the lands originally owned by him other than those covered by the lease. The lessor owns the surface, and as such surface owner he can make such use of the land as is consistent with the right to drill and produce oil and gas therefrom,' and, (at page...