Bryan v. Sinclair Oil & Gas Co.

1 S.W.2d 917
CourtCourt of Appeals of Texas
DecidedDecember 22, 1927
DocketNo. 9036.
StatusPublished

This text of 1 S.W.2d 917 (Bryan v. Sinclair Oil & Gas Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bryan v. Sinclair Oil & Gas Co., 1 S.W.2d 917 (Tex. Ct. App. 1927).

Opinion

GRAVES, J.

As lessors or owners of the royalty interest under oil lease 513, appellants sued appellee as the lessee thereunder for damages for its alleged failure to develop a 87-acre tract of land in the Damon Mound oil field, as so contracted for, in two respects:

(1) In not protecting the boundaries of the tract against drainage by wells on adjoining lands, as required by paragraph VII of the lease contract.

(2) In not fully developing the land as a whole, after the finding of oil thereon in paying quantities, pursuant to paragraph IX of the lease.

The provisions of the contract thus invoked were these:

Paragraph VII: “It is further agreed that the party of the second part shall at all times protect the boundaries of the herein leased premises so that the oil and sulphur under said land may not be drained out by wells on adjoining lands, and any time oil or sulphur in paying quantities is developed on adjoining lands within three hundred (300) feet of the boundary of said herein leased land the party of the second part shall proceed at once to faithfully and diligently protect by development the portion of said herein leased land adjacent to said well or wells on adjoining land.”

Paragraph IX: “When oil or sulphur in paying quantities on the herein leased land is developed, said party of the second part shall with all due and proper diligence fully develop said herSin leased land for the product or products as found, and shall proceed with all due diligence to drill and complete other wells on said herein leased land until said land is fully developed.”

At the close of the evidence, the trial court peremptorily withdrew the cause of action for drainage from consideration by the jury, on the holding that appellants “had failed to prove it,” but submitted to them the other ground of recovery declared upon in this inquiry :

“Special Issue No. 1: Have the operations of defendant, Sinclair Oil & Gas Company, conducted on the lease 513 since September 1, 1920, been sufficient to develop the leased premises as an ordinarily prudent oil operator, familiar with the facts as they existed from time to time, and having due regard for the rights of the lessors as well as the lessee, would have developed and operated same?”

Following the return of an affirmative answer to this question, judgment was rendered in favor of the appellee, and the appeal proceeds as a protest against it.

Under an assignment and appended proposition challenging the correctness of the peremptory instruction, appellants contend* that the evidence did clearly raise an issue over whether or not they showed recoverable damage as from the appellee’s failure to protect their tract against drainage by wells on adjoining lands, in that it was shown not to have “faithfully and diligently protected by development” — that is, by the drilling of proper offsets thereon — the portions of the leased tract adjacent to and within 300 feet of these five wells on adjoining lands, in which oil in paying quantities had been developed, to wit, Humble-Bryan No. 1, Ramdohr No. 1, Woodward No. 3, Bryan No. 14, and Bryan No. 18.

After examining the evidence in the light of what the law requires it must encompass, we are unable to agree that it does *919 raise any such, issue, concluding rather that the learned trial judge was right in holding it did not.

Under paragraph YII appealed to on this branch of the case, the obligation to “proceed at once to faithfully and diligently protect by development” the boundaries of this tract adjacent to wells on adjoining lands, in which oil in paying quantities had been developed, did not, we think, there being no specific agreement nor requirement to drill vel non, impose upon the appellee a more burdensome development than an ordinarily prudent oil operator, having due regard for his •own as well as his lessors’ rights, would reasonably have made under the same circumstances. George v. Franklin, 219 Ky. 377, 292 S. W. 1093; Kellar v. Craig (C. C. A.) 126 F. 630; Watehorn v. Roxana Petroleum Corporation (C. C. A.) 5 F.(2d) 636. That is, it did not become its duty to immediately drill a well on this land adjacent to every well -developed on adjoining lands, regardless of all the attending circumstances at the time and whether or not that would have promot•ed the mutual advantage of both parties to the contract. Brewster v. Zinc Co. (C. C. A.) 140 F. 801; Eastern Oil Co. v. Beatty, 71 Okl. 275, 177 P. 105; Ohio Fuel Supply Co. v. Shilling, 101 Ohio St. 106, 127 N. E. 873; Steel v. American Oil Development Co., 80 W. Va. 206, 92 S. E. 410, D. R. A. 1917E, 975; Grass v. Big Creek Development Co., 75 W. Va. 719, 84 S. E. 750, L. R. A. 1915E, 1057; Ammons v. Oil Co., 47 W. Va. 610, 35 S. E. 1004.

It is true that the five enumerated wells, which appellants claim their tract was not protected against drainage 'from, were on adjoining lands within the stipulated 300 feet of their boundaries, and that each of them was shown to have produced a large quantity ■of oil first and last during its operation; hut that is about as far toward establishment of the case for damage from drainage as any concrete and tangible evidence goes.

Without undertaking to detail the evidence making that result manifest, there was under the whole proof for that claim a failure to establish, even by legitimate inference, any one of these essential elements:

(1) That oil in paying quantities was either ■developed in any one of the five adjoining wells depended upon, or that any of them actually drained any oil from under this 67 .acres, or, if so, appreciably how much,' during the imminency of appellee’s quoted obligation with reference thereto — that is, on and .after September 1, 1920.

(2) That the wells appellee did drill on the 67 acres during the time just specified — that is: (a) Wells No. 10 to the north and No. 4 to the south of Bryan No. 14; (b) wells No. 6 to the west and No. 4 to the north of Ram-dohr No. 1; (c) well No. 11 opposite Woodward No. 3; (d) wells Nos. 11, 5, and 9, opposite to and nearer the boundaries of lease 513 than Humble-Bryan No. 1; and (e) Nos. 20 (1), 20 (2), 23 and 25, near to and closer to the boundary line than Bryan No. 18 — did not properly offset, within the meaning of the contract, all these five enumerated wells on adjoining lands.

(3)Either that an ordinarily prudent oil operator, familiar with the existing facts throughout the material time involved, and having due regard for the several rights as well as interests of both lessors and lessee, would have drilled additional Wells on this tract to those specified in preceding paragraphs (2), or that, if any such additional wells had been drilled, what amount of oil, if any, would have been so produced, and whether or not its production would have been with profit or loss to the lessee.

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Bluebook (online)
1 S.W.2d 917, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bryan-v-sinclair-oil-gas-co-texapp-1927.