Richfield Oil Corp. v. Crawford

• Decision Date: 21 October 1952
• Citation: 249 P.2d 600,39 Cal.2d 729
• Court: California Supreme Court
• Parties: RICHFIELD OIL CORP. et al. v. CRAWFORD et al. L. A. 21956.

Page 600

249 P.2d 600

39 Cal.2d 729

RICHFIELD OIL CORP. et al. v. CRAWFORD et al.

L. A. 21956.

Supreme Court of California, in Bank.

Oct. 21, 1952.

As Modified on Denial of Rehearing Nov. 17, 1952.

Cree & Brooks, John W. Brooks, Long Beach, Marlon F. Schade, Los Angeles, Griffith & Thornburgh, C. Douglas Smith, Santa Barbara, O'Melveny & Myers, Jackson W. Chance, and Rodney K. Potter, Los Angeles, for appellants.

Everett S. Layman, Kenneth S. Carey, San Francisco, Howard H. Bell, Bakersheld, Richard E. Tuttle, Los Angeles, Lawrance L. Otis and James F. Healey, Jr., Los Angeles, as amici curiae, for appellants.

Joseph A. Ball, Clark Heggeness, Ball, Hunt and Hart, Long Beach, Schauer, Ryon & McMahon, Thomas M. Mullen, Santa Barbara, and Harry E. Templeton, Los Angeles, for interveners and respondents.

Arthur C. Fisher, Overton, Lyman, Prince & Vermille, Donald H. Ford, Faries & McDowell, McIntyre Faries and Wayne R. Hackett, Los Angeles, as amici curiae for respondents.

TRAYNOR, Justice.

This appeal involves the interpretation and application to certain parcels of land of section 3600 of the Public Resources Code regulating the spacing of oil and gas wells. The accompanying diagram shows the relationship of the parcels and the well thereon. All oil wells are producing from the Colgrove formation in the Cuyama oil field. The dotted line across the diagram represents the Hadley-Stone fault, running in a northwest-southeast direction. This fault acts as a barrier to oil and gas and thus limits production to that portion of the Colgrove formation north and east of the fault.

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

All of the property is owned by H. S. Russell. In 1945 he leased the property to the Norris Oil Company. Subsequently in 1945, Norris subleased parcels two and three to predecessors in interest of plaintiff Richfield Oil Corporation. In 1947 Norris subleased parcels one and four to Carpenter and Henderson, plaintiffs in intervention. In 1948 Carpenter and Henderson subleased parcels one and four to Anderson Associates who in turn assigned an undivided half-in-terest therein to Richfield. Shortly thereafter Anderson Associates and Richfield quitclaimed all their interest in parcel four to Carpenter and Henderson. In June 1949 Carpenter and Henderson subleased parcel four to defendants Crawford and Hiles. Since July 25, 1949 defendants have been producing oil from Well 1. The surface location of this well is more than 200 feet from the boundaries of parcel four, but its producing interval or bottom is in oil producing land northeast of the fault, less than 100 feet from the boundaries of defendants' property. Richfield is sublesses under oil and gas leases for parcels one, two, and three, and is producing oil from Wells 88, 187, 18 and 11 on those parcels.

Richfield sought to enjoin operation of Well 1 and recover damages for its past operations on two theories: that the well was operated in violation of Public Resources Code, § 3600 and that it constituted a subsurface trespass on Richfield's property. In a third action Richfield sought a declaration as to the location of the boundary between the parcels in relation to the subsurface location of Well 1. Plaintiffs in intervention, Carpenter and Henderson, sought declaratory relief to have their rights declared respecing royalty interests in Well 1. The trial court denied Richfield injunctive and monetary relief, declared that the well was entirely within defendants' property, and declared that Carpenter and Henderson owned 23 per cent of the production of Well 1 and that Richfield had no interest therein. Richfield appeals from the judgment.

Construction of section 3600

Section 3600 provides that 'any well hereafter drilled for oil or gas, or hereafter drilled and permitted to produce oil or gas, which is located within one hundred feet of an outer boundary of the parcel of land on which the well is situated, or within one hundred feet of a public street or road or highway dedicated prior to the commencement of drilling of the well, or within one hundred fifty feet of either a well being drilled or a well theretofore drilled which is producing oil or gas or a well which has been drilled and is not producing but which is capable of producing oil or gas, is a public nuisance.' Richfield contends that Well 1 is a public nuisance, on the ground that it 'is located within one hundred feet of an outer boundary of the parcel of land on which the well is situated'. Richfield concedes that the surface location of Well 1 is more than 100 feet from the boundary, but contends that the statute is violated when the producing interval of a well is less than 100 feet from the boundary. Defendants contend that section 3600 restricts only the surface location of oil wells and does not apply to the producing intervals thereof.

Richfield urges that 'well' is commonly understood to mean the entire shaft from the surface of the earth to the oil pool below and that in oil leases 'boundary' usually includes 'underground boundary.' See Federal Oil Co. v. Brower, 36 Cal.2d 367, 370, 224 P.2d 4. Defendants urge on the other hand that the word 'located' usually refers only to wells on the surface of the ground, see Union Pac. R. R. Co. v. City of Los Angeles, 53 Cal.App.2d 825, 829, 128 P.2d 408, and that the words 'on which the well is situated' indicate that he statute regulates wells 'on' a parcel as opposed to wells 'in or under' a parcel. Cf. Richter v. Adams, 43 Cal.App.2d 184, 187, 110 P.2d 486. The word 'well', or any other word in section 3600, cannot be disassociated from its context or the oil well spacing legislation as a whole. Thus, in section 3602 the context shows that 'well' means the surface location, for the phrase therein 'placed as to be as far from the lateral boundary lines of the parcel of land as the configuration of the surface and the existing improvements thereon will permit' could have no reference to the entire length of the shaft. Our inquiry into the propoer interpretation of section 3600 cannot be guided solely by the dictionary meaning of each word standing alone; we must consider the well spacing legislation as a whole to determine the meaning of section 3600. People v. Moroney, 24 Cal.2d 638, 642, 150 P.2d 888; Myers v. Alta Construction Co., 37 Cal.2d 739, 742, 235 P.2d 1.

Comparison of section 3600 with other sections of the well spacing legislation supports defendants' interpretation. Thus section 3606, providing for the location of wells when the surface of the land is unsuitable for drilling, permits slant drilling into a parcel containing an acre or more when all or substantially all of the surface of such parcel is unsuitable for surface location of a well. This sectioin also provides that in such cases the producing interval must be located not less than 75 feet from the outer boundary of the parcel into which it is drilled and that the surface location must be not less than 25 feet from the outer boundary of the parcel into which it is drilled. Section 3606 finally provides that 'To enforce the provisions of this section' the State Oil and Gas Supervisor may require the operator to make a subsurface directional survey of the well and to file a plat of such survey with the supervisor, which is open to public inspection.

Section 3600, however, does not provide that a subsurface may be required by the supervisor. Under Richfield's interpretation, although the Legislature has given the supervisor ample power to enforce part of the well spacing legislation, it fails to provide him with one of the most effective means of discovering violations of another part thereof. ¹ If the Legislature intended enforcement of section 3600 to be left to action by private parties (as in the present case), difficulties remain. Section 3606 provides that the subsurface survey 'shall be open to inspection by any other operator in the field in which the well is located.' Section 3600, however, does not similarly protect adjoining landowners. Since sections 3600 and 3606 were reenacted together in 1947, it is difficult to believe that the Legislature would provide such contrasting enforcement procedures if it intended both sections to apply to subsurface locations of oil wells. 'Where a statute, with reference to one subject contains a given provision, the omission of such provision from a similar statute concerning a related subject is significant to show that a different intention existed.' People v. Valentine, 28 Cal.2d 121, 142, 169 P.2d 1, 14.

An interpretation of section 3600 as applying only to the surface location of wells is supported by the administrative interpretation of that section since its enactment in 1931. The trial court admitted the deposition of R. D. Bush, State Oil and Gas Supervisor. It appears therein that from 1931 to 1945 his office interpreted section 3600 as applying only to surface locations of oil wells. Before any well was drilled or deepened, a notice of intention to drill was filed. Section 3203. If the surface location of the proposed well was within 100 feet from the boundary of a parcel of property, the supervisor served a notice of disapproval on the operator and, if drilling continued in disregard of the disapproval, the supervisor requested the attorney general to abate the well as a public nuisance. During this period of fourteen years the supervisor did not make any investigation regarding the location of the producing interval of wells. In 1945, section 3606 was added to the coce and thereafter the supervisor required all operators wishing to drill wells under that section to include in their notices of intention to drill a statement of the proposed bottom hole location, and also required the filing of subsurface directional surveys. When wells were not drilled under section 3606, the policy remained the same as that since 1931. In 1947, section 3608 was added to the code...