Shell Oil Co. v. Trapp

• Decision Date: 10 March 1943
• Docket Number: No. 9284.,9284.
• Citation: 169 S.W.2d 1010
• Parties: SHELL OIL CO., Inc., et al. v. TRAPP et al.
• Court: Texas Court of Appeals

169 S.W.2d 1010

SHELL OIL CO., Inc., et al. v. TRAPP et al.

No. 9284.

Court of Civil Appeals of Texas. Austin.

March 10, 1943.

Rehearing Denied March 31, 1943.

Appeal from District Court, Travis County; J. Harris Gardner, Judge.

Action by the Shell Oil Company, Inc., and another against M. E. Trapp and others to set aside an order granting defendants' application to drill a well as an exception to Spacing Rule 37, and to enjoin production from the well. From a judgment upon an instructed verdict for defendants, plaintiffs appeal.

Reversed and remanded for trial in accordance with opinion.

John E. Green, Jr., and Joe S. Brown, both of Houston, Stanley Hornsby, of Austin, R. H. Whilden, of Houston, and Dan Moody and J. B. Robertson, both of Austin, for appellants.

Pollard & Lawrence and W. Dewey Lawrence, all of Tyler, for M. E. Trapp.

Gerald C. Mann, Atty. Gen., and Grover Sellers, Ed. Roy Simmons, James D. Smullen, and Lloyd Armstrong, Asst. Attys. Gen., for Railroad Commission.

BLAIR, Justice.

Rule 37 case. The Commission granted appellee M. E. Trapp's application to drill a second well on a tract of land in the Alexander-McNally Survey, Gregg County, Texas, which according to the map attached contained 1.77 acres. The application for the first well on the tract showed that it contained 1.25 acres, but in fixing the allowable of oil therefrom the Commission considered it as containing 3 acres. The second well was granted on the "1.77 acres or 3 acres" tract, and "to prevent waste and to prevent confiscation" of oil. Appellants Shell Oil Company and Gulf Oil Corporation, owners of adjoining leases, appealed from the order, seeking to set it aside and to enjoin production of oil from the well upon three grounds, as follows:

1. That the second well on the tract was not necessary to prevent waste or confiscation of oil within the meaning of Rule 37.

2. That appellee made an incorrect statement and representation to the Commission as to the configuration, size and acreage of his land and as containing 1.77 or 3 acres, whereas it contained only 1.366 acres, which was drilled more densely than the eight times surrounding area, and that the net drainage of oil was to appellee's tract rather than away from it.

3. That the undisputed evidence showed a bona fide dispute both before the Commission and the trial court as to ownership by appellee of more than 1.366 acres of land, which issue the Commission could not determine, but which issue the trial court could but did not determine; and at the conclusion of appellants' evidence instructed a verdict sustaining the permit to drill the well.

In instructing a verdict and after discussing what the court regarded as confusion in certain Rule 37 cases, the court stated as reasons for the instructed verdict, as follows:

"In this case, then, I am forced to this conclusion, — that the evidence, while it was admissible on the trial de novo, failed to raise or to demonstrate that the evidence before the Railroad Commission was not substantial, because we were talking about one tract of land, and they were talking about another, and that matter has not been decided, and I doubt whether this court should settle it. * * * but the testimony here about drainage, and whether or not there was another well necessary there to protect the rights of the parties, I think comes within the purview and discretion of the Railroad Commission, and that overbalances the situation. I know we can't balance it from this point here."

The trial court erred in instructing a verdict upon the grounds stated, but should have proceeded under the rule announced in the recent cases of Railroad...