Richey v. Shell Petroleum Corporation

• Decision Date: 26 April 1939
• Docket Number: No. 8821.,8821.
• Citation: 128 S.W.2d 898
• Parties: RICHEY et al. v. SHELL PETROLEUM CORPORATION et al.
• Court: Texas Court of Appeals

128 S.W.2d 898

RICHEY et al. v. SHELL PETROLEUM CORPORATION et al.

No. 8821.

Court of Civil Appeals of Texas. Austin.

April 26, 1939.

Rehearings Denied May 24, 1939.

Appeal from District Court, Travis County; J. D. Moore, Judge.

Consolidated suits in equity by the Shell Petroleum Corporation and by the Humble Oil & Refining Company, in which the former corporation intervened, against Ida Richey, the Railroad Commission of Texas, and others, to set aside permits to drill three oil wells. From a judgment sustaining two of the permits and setting aside third permit, plaintiffs and named defendants appeal.

Affirmed.

Williams & Williams, of Austin, for appellant Ida Richey.

Wm. McCraw, Atty. Gen., and Chas. D. Rutta and Julian C. Clopton, Jr., Asst. Attys. Gen., for appellant Railroad Commission.

R. E. Seagler and H. E. Bell, both of Houston, Powell, Wirtz, Rauhut & Gideon, of Austin, E. A. Groff and R. H. Whilden, both of Houston, and Greenwood, Moody & Robertson, of Austin, for Humble Oil & Refining Co. and Shell Petroleum Corporation.

Gerald C. Mann, Atty. Gen. (succeeding Wm. McCraw), and Edgar Cale, Asst. Atty. Gen., for Railroad Commission.

M. C. Robinson, of Austin, for appellee Louise Carr.

Felts, Wheeler & Wheeler, of Austin, for appellee John E. Taylor.

BAUGH, Justice.

Appeal is from a judgment of the trial court, wherein three Rule 37 cases were consolidated and tried as one. Three separate permits to drill three wells in the East Texas field are involved. One of the permits was attacked by the Humble Oil & Refining Co., as plaintiff, in which the Shell Petroleum Corporation intervened, and the other two by the Shell as plaintiff. Each permit was granted to a distinct and separate party. The Railroad Commission is the only defendant common to all suits. Two of the permits were sustained by the trial court and one was set aside. Consequently, the Shell, the Humble, and the Railroad Commission appear herein as both appellant and appellee; one of the permit holders as appellant; and the other two as appellees. Because of the adversity of interest not only between the original plaintiffs and the defendants; but in some respects as between the respective defendants themselves, considerable confusion has resulted in the trial itself, as well as on the appeal from the trial court's judgment. The cases were consolidated on motion of the plaintiffs, over the objection of the several defendants. The case was tried to a jury, but at the close of the evidence the trial court instructed a verdict and rendered judgment accordingly; hence this appeal.

The first tract of land here involved, rectangular in shape, consists of 20 acres, being approximately 1,130 feet long, north and south, approximately 771 feet wide, east and west, and will hereinafter be designated as the 20-acre tract. The second tract begins at the S. W. corner of the 20-acre tract, is 42 feet wide, runs eastward adjoining the 20-acre tract approximately 256 feet, contains .25 of an acre, and will be hereinafter designated as the .25-acre tract. The third tract, consisting of .67 of an acre, joins the south line of the .25-acre tract, is approximately rectangular in shape, being 150 feet wide, north and south, with a mean length, east and west, of 256 feet, and will be hereinafter designated as the .67 acre tract. These three tracts and their relative positions are shown on the accompanying map. The locations of the wells involved are shown by the small circles on said tracts. The dots show producing wells on the surrounding tracts.

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

The permits involved were granted as follows: on June 29, 1937, the Railroad Commission granted to John E. Taylor a permit to drill a well in the center of the .25-acre tract. On October 1, 1937, the Commission granted to Louise Carr a permit for an additional well in the S. W. corner of the 20-acre tract to be located 133 feet north of the south line, and 135 feet east of the west line of the 20-acre tract. On the same day, October 1, 1937, the Commission granted to Mrs. Ida Richey a permit for a well near the center of the .67 acre tract. All of these permits were granted on the recited grounds "to prevent confiscation of property." The trial court sustained the Taylor and Carr permits; but set aside as invalid the Ida Richey permit on the .67 acre tract.

In 1894, G. W. Richey acquired as community property a 40-acre tract of land, of which said 20-acre tract is the west one-half, as community property of himself and wife, Paralee Richey. In 1898, Paralee Richey died intestate. In 1899, G. W. Richey married Ida Richey. No partition was had between G. W. Richey and his children by his first wife, and on April 2, 1931, G. W. Richey, joined by his second wife, and all the children of his first wife, executed an oil and gas lease to McCurdy & Carr on the 20-acre tract.

In 1912, G. W. Richey purchased from W. H. York, the .67-acre tract as the community property of himself and his second wife, Ida Richey. On April 13, 1931, G. W. and Ida Richey, executed an oil and gas lease on this .67-acre tract to the same parties to whom the 20-acre tract had been leased.

Manifestly, in 1931, the Richeys thought that the 20-acre tract and the .67-acre tract were contiguous, but a survey of these two tracts by their respective field notes showed the .25-acre tract to exist between them. This fact was not discovered, apparently, until 1935, and on March 14, 1935, G. W. Richey and wife, Ida Richey, leased this .25-acre tract to Armstrong. He assigned his lease thereon to Taylor, who obtained one of the permits here involved to drill a well on this tract. Title to this tract was acquired by limitation, beginning in 1912, as the community property of G. W. and Ida Richey, such title clearly having so vested long prior to the execution of the April, 1931, leases on the 20-acre and .67-acre tracts.

On June 15, 1931, the lessors of the 20-acre tract and of the .67-acre tract entered into what is by the parties, termed a "pooling agreement" with the lessees of the two tracts, wherein they stipulated that "it is the desire and intention of the lessors and the lessees in the above described oil and gas mining leases to incorporate both tracts of land described in said leases into one and the same lease"; and that the royalties be paid "in the proportion that each of us owns to the total lands covered by said lease, etc."

The combined acreage was developed and royalty payments made to the respective lessors of the combined tracts. In 1934, Ida Richey and G. W. Richey sued the lessees of the two tracts in the District Court of Gregg County, Texas, to set aside the so-called "pooling agreement" of June 15, 1931, wherein they alleged that the .67-acre tract (therein designated as a one-acre tract) was the community property of G. W. and Ida Richey. Attached to said pleadings was an agreement dated December 20, 1933, alleged to have been executed by the Richeys as a substitute for the June 15, 1931, "pooling agreement," wherein this tract was then recognized by G. W. and Ida Richey as their community property. Judgment was rendered in that case in February, 1935, cancelling both the "pooling agreement" and the April 13, 1931, oil and gas lease on the .67-acre tract. On appeal to the Court of Civil Appeals of Texarkana, this judgment was reversed. In its opinion, the Court of Civil Appeals treated this .67-acre tract as being the community property of G. W. and Ida Richey on April 13, 1931, but recited that it had subsequently become separate property of Ida Richey. Upon the second trial of this case, in which the children of G. W. Richey by his first wife intervened, the defendants, lessees of the 20-acre tract and the .67-acre tracts, defaulted, judgment was again rendered cancelling the "pooling agreement" and the original lease on the .67-acre tract. In this judgment rendered on June 1, 1937, the trial court found that this .67-acre tract had been the separate property of Ida Richey since 1912. The record here shows, however, that in the first trial of the Gregg County suit in February, 1935, counsel for the Richeys agreed, and Mrs. Ida Richey then testified, that the .67-acre tract was the community property of herself and G. W. Richey in April, 1931, when the original lease thereon was executed. The record deed upon which Ida Richey apparently relied in her application to the Railroad Commission for a permit for a well on the .67-acre tract as a separate tract, executed to her by her husband, G. W. Richey, was dated May 7, 1934, and recited that it was in lieu of a deed from him to her to the same property, executed in December, 1933, which had been lost. The judgment of the District Court of Gregg County found that she had title thereto under a deed from G. W. Richey to Ida Richey, executed in 1931, in lieu of one executed in 1912, which had been lost. If another deed from G. W. to Ida Richey was executed in 1933, it must have been in...