State v. Harrington

• Decision Date: 12 October 1966
• Docket Number: No. A--10592,A--10592
• Citation: 407 S.W.2d 467
• Court: Texas Supreme Court
• Parties: The STATE of Texas, Petitioner, v. Harry M. HARRINGTON, Jr., et al., Respondents.

Page 467

407 S.W.2d 467

The STATE of Texas, Petitioner, v. Harry M. HARRINGTON, Jr., et al., Respondents.

No. A--10592.

Supreme Court of Texas.

Oct. 12, 1966.

Rehearing Denied Nov. 16, 1966.

Waggoner Carr, Atty. Gen., Austin, Roger B. Tyler, Jr. and Kerns Taylor, Asst. Attys. Gen., for petitioner.

Gordon Wellborn & Rex Houston, Henderson, Harrington & Harrington, H. M. Harrington, Jr., Longview, for respondents.

SMITH, Justice.

This is a civil suit for penalties. The State of Texas brought the suit under authority of Article 6036, ¹ Vernon's Annotated Civil Statutes, alleging that the defendants, Harry M. Harrington, Jr., Reid H. Allgood, Charles W. Lutes, J. W. Baton and Douglas Godfrey had drilled and operated a deviated oil well across their own lease lines in violation of the laws of the State of Texas, and in violation of the rules, regulations and orders of the Railroad Commission of the State of Texas. The Court held as a matter of law that the well was Drilled during a period of 16 days, and was Operated in violation of law during a period of 3650 days. Special issues were submitted to a jury and in answer to such issues, the jury found (1) that the well in question was bottomed off the defendants' lease; (2) that a reasonable penalty for each day of the 16 days the well was being drilled was the sum of $800.01. As to this penalty, the jury assessed the sum of $266.67 per day against each of the defendants Harrington, Allgood and Lutes, and none against the defendants Baton and Godfrey; and (3) that a reasonable penalty for each of the 3650 days the well was Operated was the sum of $80.00. In answer to an additional issue, the jury found the amount of the operating penalty per day against each of the defendants to be as follows: Harrington--$31.00; Allgood--$15.50; Lutes--$31.00; Baton--$2.50 and Godfrey--none.

On November 26, 1963, after receiving the verdict and discharging the jury and before any further action by the Court, the State of Texas filed its motion for the admission of additional evidence which was granted over the objection of the defendants, Harrington, Allgood and Lutes. The evidence introduced was from the deposition testimony of Harrington. The evidence was related to the 16-day drilling period. The State contends that this testimony was admissible under Rule 270, ² Texas Rules of Civil Procedure. The above named defendants contested the motion on the ground that 'the amount of days of drilling * * * upon which (judgment) is now sought Be entered by the plaintiff, is a very controversial matter, and under Rule 270 * * * may not at this time be received by the Court.'

On December 12, 1963, the defendant, J. W. Baton, after the Court had received the jury verdict, filed a motion for permission to introduce additional evidence. This motion was granted and evidence was introduced without objection. The State also introduced additional evidence in connection with the evidence introduced by Baton and the defendants; Harrington's, Allgood's and Lutes' objection thereto was overruled. The questions raised because of the late introduction of all of this evidence will be discussed in connection with the State's points of error.

On the 3rd day of January, 1964, the trial court signed and entered its judgment. The decretal portion of the judgment reads as follows:

'It is, therefore, ORDERED, ADJUDGED AND DECREED by the Court, that the State of Texas do have and recover of and from Harry M. Harrington, Jr., the sum of $117,416.72 with interest thereon from the date of judgment until paid at the rate of 6% Per annum, that the State of Texas do have and recover of and from Reid H. Allgood the sum of $60,841.72 with interest thereon from the date of judgment until paid at the rate of 6% Per annum, that the State of Texas do have and recover of and from Charles W. Lutes the sum of $117,416.72 with interest thereon from the date of judgment until paid at the rate of 6% Per annum, and that the State of Texas do have and recover of and from J. W. Baton the sum of $9,125.00 with interest thereon from the date of judgment until paid at the rate of 6% Per annum; and that said sums shall be payable to the Treasurer of the State of Texas for the benefit of the General Revenue Fund of the State of Texas; and

'It is also ORDERED, ADJUDGED AND DECREED that all court costs are hereby taxed against the said Harry M. Harrington, Jr., Reid H. Allgood, Charles W. Lutes and J. W. Baton, jointly and severally; and

'It is also ORDERED, ADJUDGED AND DECREED that execution shall issue in the name of the State of Texas for the collection of the judgment herein provided and for all court costs incurred in this case; and

'It is further ORDERED, ADJUDGED AND DECREED that the State of Texas take nothing against Douglas Godfrey, and that he be discharged with his costs.'

The Court of Civil Appeals affirmed the judgment of the trial court assessing penalties against Harrington, Lutes and Allgood and refusing to assess penalties against Baton and Godfrey for the 16 days drilling period, but in all other respects, the trial court's judgment was reversed and the cause was remanded to the trial court. 385 S.W.2d 411. We reverse the judgment of the Court of Civil Appeals and affirm that of the trial court.

We granted the State's application for writ of error primarily to review the action of the Court of Civil Appeals in holding that 'the $80.00 per day penalty found by the jury in Special Issue No. 4 ³ for the 3650 days the well was operated would not support the judgment of the trial court for such penalties,' and to review the holding that the trial court erred in not defining the word 'operated' appearing in Special Issue No. 4. The application of Harrington et al. was granted and is here for review because of the granting of the State's application.

A statement of the pleadings and the facts is essential to a proper understanding of our holding.

The Pleadings

The State alleged that the defendants were the co-owners of an oil and gas lease ⁴ on land situated in Wood County, Texas, and were Mining partners in the drilling, completion and production of oil from a deviated well surfaced on the land described in the lease, but bottomed on adjoining land. The State pleaded elements to establish a mining partnership, and that the defendants operated under the assumed name of 'HAL CO.'; that on February 5, 1952, 'HAL CO.' made application to the Railroad Commission of Texas for a permit to drill an oil well at 'a particular location, to-wit, 234 feet South of the North line of said lease and 234 feet East of the West line of said lease.' On February 28, 1952, Permit Number 42,688, authorizing the drilling of an oil well was granted. The well was drilled to completion on or about April 21, 1952.

The State further alleged that the defendants made preparations to drill such oil well (to be known as No. 1, Texas Pacific Coal Co. Mineral Fee tract, 20 ac., Charles Duncombe Survey, Hawkins Field, Wood County, Texas), but determined and made plans to drill such well at a location other than the location prescribed in the permit by making the surface location, that is, the mouth of the well, at the location prescribed in the permit, but secretly deviating and slanting the well underneath the surface of the ground in such manner that it would be closer to the west line of the defendants' said lease than authorized by the permit and in such manner that it would cross the south boundary line of said lease, and be secretly bottomed on and under other lands and leases owned by other persons. The State pleaded that the defendants entered into a fraudulent conspiracy among themselves to slant the oil well in a westerly direction and file a false well record, by which it would be represented to the Railroad Commission that said well was drilled straight down within three (3 ) degrees of vertical and bottomed on and under the defendants' lease at the location prescribed in the permit, when in truth and in fact said well would be deviated and slanted more than thirty (30 ) degrees from vertical and bottomed on and under the lands of other persons.

The defendants Harrington, Allgood and Lutes filed a general denial of all the allegations in the State's pleadings and specifically denied under oath that they or either of them were ever partners, or mining partners doing business under the name of 'HAL CO.'

We make no further reference to the defendant Godfrey since the trial court rendered judgment in his favor and there was no appeal from such action.

The Undisputed Facts

On February 28, 1952, Permit No. 42,688 authorizing the drilling of an oil well by 'HAL CO.' on the Defendants' lease was granted. Drilling of the well began April 6, 1952, and drilling continued through April 21, 1952, a period of 16 days. The documentary evidence established that on April 28, 1952, the well was tested, produced and operated. Railroad Commission Form SW--1, filed with the Commission by the Defendants, signed by J. W. Baton for the 'HAL CO.', acknowledged by H. M. Harrington, all on April 28, 1952, and registered and approved by the Railroad Commission on April 30, 1952, shows the producer's certificate of compliance and authorization to transport the well's production from the lease. The E. B. Monthly Production Reports filed by and on behalf of the petitioners and the payments to petitioners by Humbe for the oil production runs show that the wells from and after April 28, 1952, produced a full monthly allowable for the month of May, 1952 and each month thereafter through the month of June, 1962. According to the undisputed testimony of witness Ray Payne, and his compilation report, the well produced a total of 283,133 barrels. The well was unplugged for more than ten (10) years. The well was finally ordered shut down by the Railroad Commission and the pipeline severed on July 31, 1962. Thus, the State established that the well was producing...