Thomas v. Stanolind Oil & Gas Co., A-650.

• Decision Date: 15 May 1946
• Docket Number: No. A-650.,A-650.
• Parties: THOMAS et al. v. STANOLIND OIL & GAS CO. et al.
• Court: Texas Supreme Court

Page 420

198 S.W.2d 420

THOMAS et al. v. STANOLIND OIL & GAS CO. et al.

No. A-650.

Supreme Court of Texas.

May 15, 1946.

Rehearing Denied November 27, 1946.

Error to Court of Civil Appeals of Third Supreme Judicial District.

Suit by Stanolind Oil & Gas Company and another against John J. Thomas and

others to cancel a permit issued by the Railroad Commission to named defendant to drill a well as an exception to Rule 37 to prevent waste and confiscation, wherein Shell Oil Company intervened as party plaintiff. To review a judgment of the Court of Civil Appeals, 188 S.W.2d 418, affirming a district court judgment canceling the permit, defendants bring error.

Judgments of the Court of Civil Appeals and of the district court reversed and judgment rendered.

Grover Sellers, Atty. Gen., J. C. Davis, Raymond A. Lynch, James Noel, and James D. Smullen, Asst. Attys. Gen., for petitioner Railroad Commission of Texas.

Looney & Clark and Everett L. Looney, all of Austin, for petitioner John J. Thomas.

Turner, Rodgers & Winn and Frank J. Scurlock, all of Dallas, and Donald Campbell, of Tulsa, Okl., for respondent Stanolind Oil & Gas Co.

Dan Moody and J. B. Robertson, both of Austin, for respondent Shell Oil Co.

Y. P. Broome, of Tulsa, Okl., for respondent Tide Water Oil Co.

HICKMAN, Justice.

In this case the trial court rendered judgment cancelling a permit issued by the Railroad Commission to Jno. J. Thomas to drill a second well on a 3.33-acre tract of land in the East Texas oil field as an exception to Rule 37 in order to prevent waste and confiscation and enjoining further production from the well theretofore drilled under the permit. The Court of Civil Appeals affirmed the trial court's judgment. 188 S.W.2d 418. The 3.33-acre tract is the middle one-third of a 10-acre tract which had been voluntarily subdivided and the well covered by the permit was regarded by the Commission and by the Court of Civil Appeals as a fourth well on the 10-acre tract rather than as a second well on the 3.33-acre tract and it will be so regarded here.

This case involves the application of the substantial evidence rule as announced in Gulf Land Co. v. Atlantic Refining Co., 134 Tex. 59, 74, 131 S.W.2d 73, 82, in this language: "* * * The court, on appeal from the Commission's order, should not set aside an order of the Commission either granting or refusing to grant a well permit unless such order is illegal, unreasonable, or arbitrary. In so far as the fact findings upon which the order is based are concerned, the order is not illegal, unreasonable, or arbitrary if it is reasonably supported by substantial evidence. Stated in another way, the court does not act as an administrative body to determine whether or not it would have reached the same fact conclusion that the Commission reached, but will consider only whether the action of the Commission in its determination of the facts is reasonably supported by substantial evidence."

A proceeding of this nature is not comparable to a proceeding in an ordinary civil suit in which the fact findings of a jury are attacked on the ground of the insufficiency of the evidence to sustain them. In that proceeding trial courts and courts of civil appeals are clothed with the authority, not possessed by this court, to set aside such findings if they are thought to be against the great weight and overwhelming preponderance of the evidence. But those courts are not clothed with authority to set aside fact findings of an administrative agency made within the scope of its statutory powers on that ground. The Legislature has clothed administrative agencies with special powers to perform special functions and in reviewing fact findings of such agencies no question of the preponderance of the evidence is involved. The question is whether or not there is any substantial evidence affording reasonable support for such findings and the orders entered thereunder. That is a question of law of which this court, along with the lower courts, has jurisdiction and in the exercise of that jurisdiction we consider the record before us.

Mr. Gordon Griffin, an experienced petroleum engineer familiar with the East Texas field and with the particular area involved, testified in detail concerning the conditions under and surrounding the 10-acre tract. He gave it as his opinion that it was necessary that this fourth well be drilled on the 10-acre tract in order to give that tract an equal opportunity of producing its fair share of oil underlying the area; that the drilling of such fourth well will result in recovering a substantial amount of oil which would not otherwise be recovered from those sands; that the sands underlying this 10-acre tract are less permeable than those in the field as a whole and less permeable than the Dollahite lease adjoining it; that in his opinion the sand conditions underlying this area are different from those in the remaining part of the field and such conditions require more dense drilling in order to recover the oil in place than is required in the field as a whole; that on the 40 acres immediately adjacent to the 10 acres in question and consisting of four tracts of 10 acres each bounding it on each side there are 16 wells, which is an average of four wells to each 10-acre tract; that this would be a comparable density to the density on the 10 acres if the fourth well were permitted to be drilled and to produce; that drilling had been concentrated around this 10-acre tract; that there are 19 wells in the eight times area, 16 of which are in the four times area; that all of the 16 wells are offset wells to the 10-acre tract; that normally, with 3 wells on that tract, there should be 12 offsets and with 4 wells thereon there should...