Cockrell v. Texas Gulf Sulphur Co.

282 S.W.2d 949, 5 Oil & Gas Rep. 397, 1955 Tex. App. LEXIS 2099
CourtCourt of Appeals of Texas
DecidedOctober 6, 1955
DocketNo. 12849
StatusPublished

This text of 282 S.W.2d 949 (Cockrell v. Texas Gulf Sulphur 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
Cockrell v. Texas Gulf Sulphur Co., 282 S.W.2d 949, 5 Oil & Gas Rep. 397, 1955 Tex. App. LEXIS 2099 (Tex. Ct. App. 1955).

Opinion

HAMBLEN, Chief Justice.

This suit was instituted in the District Court of Harris County by the appellants, seeking an accounting and recovery of a royalty of $.147218 per ton on sulphur produced by appellee on land in Liberty County, Texas, referred to by the litigants as the Sergent 729.7 acre tract. Appellee denied such claim, contending that appellants were entitled to recover six and one-half cents per ton royalty on sulphur produced from the west 400 acres of the tract, there having been no sulphur production from the east 329.7 acres thereof. At the conclusion of a trial before a jury both litigants agreed that there were no issues of fact for the jury. The court thereupon rendered judgment that appellants recover from appellee six and one-half cents per ton royalty on sulphur produced from the west 400 acres of the tract, such judgment being in accord with the appellee’s contention.

A detailed statement of the voluminous record title, the legal construction of which is determinative of this litigation, would unduly extend this opinion. It is felt that the following is sufficient for a proper determination of the issues presented.

On July 27, 1925, Ruth Sergent owned in fee simple the 729.7 acres referred to as the Sergent Tract. On that date she, joined by her husband, executed an oil, gas and mineral lease upon the entire tract to Erwin W. Smith. This lease, in so far as it covered the south one-half of the tract, was released, prior to April 12, 1926. On April 12, 1926, Ruth Sergent, joined by her husband, executed an oil, gas and mineral lease upon the south one-half of the tract to A. R. Miller. The lease of April 12, 1926, to A. R. Miller is hereafter referred to as the Miller lease. The lease of July 27, 1925, in so far as it- covers the north one-half of the Sergent 729.7 acre tract is hereafter referred to as the Smith lease.

Except as to date and land described, the Smith and Miller leases are identical. Each is in the form commonly referred to as an “unless” lease. Each lease provided for a royalty to the lessor of ⅛ of the oil produced and saved, ⅛ of the value of gas produced and saved, fifty cents per long ton on sulphur, and a reasonable royalty on other minerals. Each provided for assignments, in whole or in part, and contained identical apportionment provisions expressed as follows: “in case of any change of ownership of said land, * * * all rentals and royalties accruing hereunder shall be paid to the new owners in proportion to their ownership of the whole of the land hereby leased so that no owner of a segregated part of said land shall be entitled to the whole royalties accruing from developments on said segregated tract, but only to such part of such royalty as the acreage in his tract is to the whole acreage embraced in this lease; this covenant shall be taken and construed as a covenant running with the land and binding on all successors in interest to Lessors herein. * * ”

Subsequent to the execution of the Smith and Miller leases, Mrs. Sergent sold and conveyed portions of her minerals and royalties. As' a result of such conveyances, she was, on September 28, 1931, the owner of an undivided ⅛ mineral fee interest in the west 400 acres of the Sergent 729.7 acre tract, and an undivided ½ mineral fee interest in the east 329.7 acres of such tract, together with fractional interests in the base royalties provided for in the Smith and Miller leases corresponding; [951]*951to her mineral fee ownership. On September 28, 1931, Mrs. Sergent sold and conveyed in fee to Gulf Production Company all of the 729.7 acre tract of land subject to outstanding leases and conveyances, but reserving to 'herself enumerated royalties and cash payments on minerals which might be produced. For clarity, a copy of such deed, omitting descriptive portions, is attached as Exhibit A to this opinion. Appellants have by purchase succeeded to all interest in the Sergent 729.7 acre tract which remained in Mrs. Sergent and her husband after the deed of September 28, 1931, to Gulf Production Company.

In December, 1931, Gulf Production Company assigned to appellee all rights and properties conveyed to it by Mrs. Sergent. Subsequent to such acquisition, appellee acquired from the lessees in the Smith and Miller leases, and their assignees, all of the sulphur leasehold estates created by both leases, so that before January 1, 1934, appellee owned in severalty all of fee estate owned by Mrs. Sergent on the date of her deed to Gulf Production Company and all of the sulphur leasehold estate under all leases covering it, all subject to the perpetual royalty interests expressly reserved by Mrs. Sergent in her deed to Gulf Production Company (Exhibit A).

As a result of operations by appellee, production of sulphur in paying quantities has been effected, all of which however has been from the west 400 acres of the Sergent 729.7 acre tract.

It is appellants’ theory that by virtue of the apportionment provision of the Smith and Miller leases, which have been herein-above set forth, they are entitled to be paid a royalty on sulphur produced from the Sergent -tract, calculated not upon a basis of 614 cents on that produced from the West 400 acres and 25 cents on that produced from the East 329.7 acres, but rather upon an apportioned basis representing the sum of 400/729.7 of 6(4 cents plus 329.-7/729.7 of 25 cents on each ton of sulphur produced from the entire tract. Mathematically appellants compute this apportioned royalty at 14.72180347 cents per ton.1

As reflected by the judgment rendered, it is apparent that the trial court held as a matter of law that the apportionment provisions of the Smith and Miller leases were not applicable, and that appellants were entitled to' be paid royalty upon sulphur only on a nonapportioned basis. The asserted error of such holding is the basis of appellants' two points of error, Point I being referable to the North ½ of the Sergent Tract (Smith lease) and Point II being referable to the South ½ (Miller lease).

This Court has been furnished able and exhaustive briefs by both litigants which have been of great assistance in reaching what we consider to be a proper disposition of this rather complicated law suit. A large portion of these briefs, as well as the record here presented bear upon the question of whether the Smith and Miller leases had lapsed prior to the sulphur production here in controversy. It is the contention of the appellee that the special limitations upon which the determinable fee estates created by such leases were granted has heretofore occurred, and that the production of sulphur is not subject to any. of the provisions of such leases, including of course the apportionment provision. We do not consider it necessary to decide this question, which, if appellee is correct in its contention, would admittedly be determinative of the litigation. Rather it is our opinion that even if it be conceded that the leases mentioned have not terminated and are still in effect, nevertheless the apportionment clauses therein have no applica[952]*952tion as between appellee and appellants. If, as we believe, our conclusion is correct, the judgment appealed from properly disposes of the issues raised, and must be affirmed. ! •

Appellants rely primarily upon the case of Thomas Gilcrease Foundation v. Stanolind Oil & Gas Co., 266 S.W.2d 850, by the Supreme Court of Texas.

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Related

Thomas Gilcrease Foundation v. Stanolind Oil & Gas Co.
266 S.W.2d 850 (Texas Supreme Court, 1954)
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259 S.W.2d 166 (Texas Supreme Court, 1953)
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282 S.W.2d 949, 5 Oil & Gas Rep. 397, 1955 Tex. App. LEXIS 2099, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cockrell-v-texas-gulf-sulphur-co-texapp-1955.