Trapp v. Shell Oil Co.

• Decision Date: 15 May 1946
• Docket Number: No. A-685.,A-685.
• Parties: TRAPP et al. v. SHELL OIL CO., Inc., et al.
• Court: Texas Supreme Court

198 S.W.2d 424

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

No. A-685.

Supreme Court of Texas.

May 15, 1946.

On Rehearing November 27, 1946.

Rehearing Denied December 31, 1946.

COPYRIGHT MATERIAL OMITTED

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

Action by the Shell Oil Company, Incorporated, and another against M. E. Trapp and others to set aside an order granting defendants' application for an oil drilling permit as an exception to spacing rule 37 and to enjoin production from such well. To review a judgment of the Court of Civil Appeals, 189 S.W.2d 26 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 upholding permit.

Pollard, Lawrence & Blackburn and W. Dewey Lawrence, all of Tyler, for petitioner Trapp.

Grover Sellers, Atty. Gen., and Geo. W. Barcus, James Noel, and James D. Smullen, Asst. Attys. Gen., and Fagan Dickson, Raymond A. Lynch, and Elton M. Hyder, Jr. Former Asst. Attys. Gen., for petitioner Railroad Commission.

Joe S. Brown and John E. Green, Jr., both of Houston, and Stanley Hornsby and Hornsby, Kirk & Aycock, all of Austin, for respondent Gulf Oil Corporation.

R. H. Whilden, of Houston, and Dan Moody and J. B. Robertson, both of Austin, for respondent Shell Oil Co., Inc.

SLATTON, Justice.

This is an appeal from a judgment of the district court of Travis County which set aside a permit to drill an oil well "on the Anderson Crisp 1.77 acre tract in the McAnally and Alexander Surveys, East Texas Oil Field, Gregg County, Texas". The Railroad Commission granted the application for a second well as an exception to Rule 37 in order to prevent waste and confiscation. The Shell Oil Company and Gulf Oil Corporation filed this suit as an appeal for the purpose of canceling the permit. The trial court on the first trial sustained the permit. The Austin Court of Civil Appeals reversed and remanded the cause with instructions to try it in accordance with Railroad Commission v. Shell Oil Company, 139 Tex. 66, 161 S.W.2d 1022, and other cases cited. 169 S.W.2d 1010. This court refused the applications for writs of error filed by the Railroad Commission and permittee with the notation "refused for want of merit". The trial court on second trial canceled the permit. The Austin Court of Civil Appeals, 189 S.W.2d 26, affirmed the judgment of the trial court primarily upon the authority of Miller v. Railroad Commission, Tex.Civ.App., 185 S.W.2d 223, writ of error refused. This court granted writs of errror filed by the Railroad Commission and the permittee.

It is believed, after a careful study of the record in the present case, that the lower courts have proceeded with this case upon the theory of the law as announced by the Supreme Court in each trial and upon each appeal therefrom. The trial court in the first trial evidently tried the case in accordance with the rules announced in the case of Gulf Land Company v. Atlantic Refining Co., 134 Tex. 59, 131 S.W.2d 73, which was decided in 1939. The Austin Court of Civil Appeals undoubtedly reversed the trial court upon this court's opinion in the case of Railroad Commission et al. v. Shell Oil Corp. et al., 139 Tex. 66, 161 S.W.2d 1022, generally known as the Trem Carr case, which was decided on March 11, 1942. After the applications for writs of error were refused by this court, the case of Marrs v. Railroad Commission, 142 Tex. 293, 177 S.W.2d 941, 950, was handed down, which was January 5, 1944. In the Marrs case this court said: "In making this ruling we in nowise question or overrule anything said by this Court in either Railroad Commission of Texas v. Shell Oil Co., 139 Tex. 66, 161 S.W.2d 1022; Gulf Land Co. v. Atlantic Refining Co., supra; or Railroad Commission of Texas v. Gulf Production Co., supra [134 Tex. 122, 132 S.W.2d 254]".

Distinguished counsel in the presentation of this case, both in oral argument and in the briefs, take conflicting views of the law with regard to the correct rule to be applied in a case like the present. We are therefore compelled to consider the prior opinions of this court to ascertain if there be a conflict in them, and if so, to define the correct rule which should govern in such cases. We recognize that it is at best difficult to avoid some uncertainties in the law because of the varying facts attending the different cases. However, it should not be too difficult to apply the same rule with respect to judicial review in each case within the class of cases generally designated as Rule 37 cases. The Supreme Court has heretofore decided the question before us, and but for the conflict our duty would be to follow the prior pronouncements of this court. In such a situation, it is not permissible for the present justices to decide the cases in accordance with their personal views of what the law should be. Our duty is to follow pronouncements of our predecessors. As we have stated, counsel in this case, as well as others in this class of cases, claim the prior opinions of this court to be in conflict. If this be true, it is our duty to settle the conflicts in order that the confusion will as nearly as possible be set at rest and so the lower courts as well as the lawyers may know how to proceed in the trial of this class of cases and to advise their clients with respect to their rights.

In deciding whether there is conflict with prior opinions of the Supreme Court, we shall not indulge in any refinement of language employed by the court, but we shall quote from each of the opinions.

The case of Gulf Land Company et al. v. Atlantic Refining Company, 134 Tex. 59, 131 S.W.2d 73, 81, was a suit by Atlantic to set aside a permit which the Railroad Commission had granted the Gulf Land Company to drill a well on a 2.35 acre tract of land in the East Texas Oil Field. The present case is concededly such a suit. Moreover, the Trem Carr case was the same kind of suit. This court said in the Gulf Land case as follows:

"Under our oil and gas conservation statutes `Any interested person affected * * * by any rule, regulation or order made or promulgated by the Commission thereunder, * * * shall have the right to file a suit in a Court of competent jurisdiction in Travis County, Texas, and not elsewhere, * * * to test the validity of said laws, rules, regulations or orders. * * * In all such trials, the burden of proof shall be upon the party complaining of such laws, rule, regulation or order; and such laws, rule, regulation or order so complained of shall be deemed prima facie valid.' Section 8 of Article 6049c, Vernon's Tex.Civ.St.1936. Under the above statute the suit there provided for must be filed in a district court located in Travis County. It is too plain to admit of debate that, under oil and gas conservation statutes, the Commission, being the statutory enforcement agency, must, as a general rule, also be the primary, or original, statutory fact finding agency. The Commission is given the power and is charged with the duty to make original rules and orders, proper and necessary to carry out and effectuate the aims and purposes of such statutes. Under such a law, the Commission must of necessity ascertain facts and make fact findings. Of course such fact findings may be made either expressly or by implication. In ascertaining and making fact findings the Commission exercises quasi judicial powers. It should therefore always approach each case with a judicial bearing, with but one purpose and aim in view, and that to make a fair finding.

"As already noted, our oil and gas conservation statutes provide an appeal from the Commission to the District Court of Travis County, Texas. The action before us here is such an appeal. In ordinary civil actions the district court, or any other trial court, exercises original jurisdiction to find and determine all fact questions, as well as all law questions. The action provided by statute for an appeal to a district court of Travis County to review the rules and orders of the Commission is clearly not an ordinary civil action. To the contrary, it is a special statutory action to enforce a right which exists only by statute, and not under the Constitution or at common law. Alpha Petroleum Co. v. Terrell, 122 Tex. 257, 59 S.W.2d 364; Id., 122 Tex. 257, 59 S.W.2d 372. It is the undoubted intention of the statutes under discussion to clothe the district court with all of its constitutional and statutory jurisdiction in passing on all questions of law which arise in the appeal from the Commission to such court. We encounter no difficulty in reaching this conclusion. The duty of defining the jurisdiction of the court to hear and determine fact questions under our oil and gas conservation statutes has given us very grave concern.

"Administrative boards or commissions have been set up in this State to perform many functions and purposes. We will not here attempt to classify these functions or purposes. The Railroad Commission is constituted the statutory agency to execute and enforce our oil and gas conservation statutes. In enacting such statutes, the State is seeking to regulate a business affected with a public interest. Oil and gas are very vital parts of our natural resources, and the public generally is very vitally concerned therein. It follows that the business of producing, storing, and transporting oil and gas is a business affected with a public interest and subject to regulation by the State. Brown v. Humble Oil & Refining Co., 126 Tex. 296, 83 S.W.2d 935, [1069], 99 A.L.R. 1107 ; Article 6014, R.C.S.1925, as amended. It is settled that under our oil and gas conservation statutes Rule 37 is a valid rule. Also, we thing the rule of May 29th is a perfectly valid rule.

"As already indicated, we hold that the appeal provided by Section 8 of Article 6049c, supra, contemplates that the district court shall exercise its...