Skipper-Bivens Oil Co. v. State

• Decision Date: 30 March 1938
• Docket Number: No. 8622.,8622.
• Citation: 115 S.W.2d 1016
• Parties: SKIPPER-BIVENS OIL CO. et al. v. STATE.
• Court: Texas Court of Appeals

115 S.W.2d 1016

SKIPPER-BIVENS OIL CO. et al. v. STATE.

No. 8622.

Court of Civil Appeals of Texas. Austin.

March 30, 1938.

Rehearing Denied April 27, 1938.

Error from District Court, Travis County; W. F. Robertson, Judge.

Proceedings by the State against the Skipper-Bivens Oil Company and others to confiscate 10,000 barrels of oil alleged to be illegal, in that it was produced in violation of the conservation laws and the rules of the Railroad Commission promulgated thereunder. From a judgment for the State, defendants bring error.

Affirmed.

Felts, Wheeler & Wheeler, of Austin, for plaintiffs in error.

Wm. McCraw, Atty. Gen., and Wm. C. Davis, Asst. Atty. Gen., for the State.

McCLENDON, Chief Justice.

Appeal (by writ of error) from a judgment in favor of the State, confiscating 10,000 barrels of oil alleged and found to be "illegal," in that it was produced in violation of the conservation laws of the State, and the rules of the Railroad Commission promulgated thereunder.

The finding that the oil was illegal is not attacked. The only questions urged are that the act under which the suit was brought, H.B. 581, Acts 44th Leg. Reg.Sess. c. 246, Vernon's Ann.Civ.St., art. 6066a, § 10, is unconstitutional in so far as applied to the oil in question on two grounds, substantially stated as follows:

(1) The oil being in steel storage tanks, and being a useful article and commodity in commerce, and not inherently vicious, it was not in fact a nuisance and could not be made so by legislative fiat.

(2) The oil was produced prior to the effective date (May 11, 1935) of the act; therefore, as to it the act was retroactive and void.

These same questions were urged in Dyer v. R. R. Comm., Tex.Civ.App., 115 S.W.2d 1020, motion for rehearing in which is this day overruled.

Probably no legal principle is more firmly grounded in our jurisprudence than that the State has power to conserve the natural resources within its boundaries, and to enact such laws, and through properly constituted legislative agencies promulgate such regulations thereunder, as may be necessary or appropriate to effectuate that objective. The validity of the act in question, both generally and as applied to the case at bar, seemed so plain to us that we thought it necessary only to cite some leading authorities.

Beginning with the Oxford Oil Company Case, Oxford Oil Co. v. Atlantic Oil Co., in the federal court, D.C., 16 F. 2d 639, affirmed, 5 Cir., 22 F.2d 597, certiorari denied, 277 U.S. 585, 48 S.Ct. 433, 72 L.Ed. 1000, and the Bass Case, Railroad Comm., v. Bass, 10 S.W.2d 586, in this court, the oil well spacing rule (rule 37) and beginning with the Danciger Case, Danciger Oil & Refining Co. v. Railroad Comm., Tex.Civ. App., 49 S.W.2d 837, the proration orders of the Commission have been uniformly upheld. The holdings in the Bass and Danciger Cases were expressly approved by the Supreme Court in Brown v. Humble Oil Co., 126 Tex. 296, 83 S.W.2d 935, 87 S.W.2d 1069, 99 A.L.R. 1107, 101 A.L.R. 1393.

In Culver v. Smith, Tex.Civ.App., 74 S.W.2d 754, the act, Vernon's Ann.Civ.St., art. 6049c, § 5, requiring all engaged in oil production and processing to make sworn reports of their business and submit their records to the Commission for inspection was upheld. In State v. Blue Diamond Oil Corp., Tex.Civ.App., 76 S.W. 2d 852, this act was held to authorize the Commission to require tenders for the movement of oil and oil products. Under this act and the supplementary act of March 9, 1934, H.B. 99, Acts 1934, 2d Called.Sess., c. 45, Vernon's Ann.Civ.St. art 6049c, § 5, the Commission entered an order on December 5, 1934, requiring inventories of all oil and oil products in the East Texas field. These orders were upheld in a number of cases in this court. Railroad Commission v. Burnham, Tex. Civ.App., 80 S.W.2d 496; Railroad Comm. v. Tyler Oil Co., Tex.Civ.App., 80 S.W. 2d 500; Railroad Comm. v. Linzie Refining Co., Tex.Civ.App., 80 S.W.2d 504; Railroad Comm. v. Archer, Tex.Civ.App., 80 S.W.2d 506; Railroad Comm. v. Bradshaw, Tex.Civ.App., 80 S.W.2d 508; Railroad Comm. v. Primrose Petroleum Co., Tex.Civ.App., 80 S.W.2d 509; Railroad Comm. v. Phoenix Refining Co., Tex.Civ. App., 80 S.W.2d 510. Also, see Railroad Comm. v. Morgan, Tex.Civ.App., 92 S.W. 2d 1131.

The ultimate objective of the spacing and proration regulations was to conserve the oil. The other acts and regulations thereunder were designed as enforcement measures; the difficulties incident to which are matters of history.

The effect of these acts and regulations, prior to the act in question, was to constitute oil produced or transported in violation thereof illegal. This was expressly held in the above cases decided February 16, 1935 (some three months before the act in question became effective). 80 S.W.2d pages 496-512. Such illegal oil could not lawfully be transported, sold, or moved in commerce. The holdings in these cases have been uniformly followed both in the state and federal courts.

For all practical purposes, and therefore logically, such oil constituted a nuisance in fact, independently of any legislative declaration upon the subject.

It is so well established as to be now axiomatic in the law that legislative bodies are not endowed with alchemistic powers, and cannot by saying so change a thing into something which in fact it is not. But they do have the power to prescribe rules of human conduct, and legislate in the interest of the general welfare, which includes, as already stated, the conservation of natural resources. Such powers include all incidental powers necessary or appropriate to the general powers. So that while the Legislature may not transform a useful, nonharmful article of commerce into a nuisance, it may lawfully declare anything a nuisance and subject it to confiscation which is produced or made use of in violation of its laws. This general principle is so old and well established that it hardly requires citation of authority. Familiar illustrations are found in various statutes and acts of Congress subjecting to...