Falvey v. Simms Oil Co.

92 S.W.2d 292, 1936 WL 65056
Court of Appeals of Texas·Decided February 12, 1936·No. No. 8452.·Published·Cited by 12 cases

Opinions

BLAIR, Justice.

This is a rule 37 case, which arose as follows: Betty Doby and others owned jointly a 104-acre tract of land in Upshur county, and in January, 1931, leased it to Frank Foster for oil and gas development. In February, 1931, Foster assigned the north 20 acres of the 104-acre tract to one Olvey, who immediately assigned same to appellant J. C. Falvey. About the same time Foster assigned the east 41 acres of the 104-acre tract to the Magnolia Petroleum Company and the west 43 acres to Shano Oil Company. The land was in the East Texas oil field, and at the time of this sub *294 division rule 37 required that wells be spaced 300 feet apart and ISO feet from property-lines. From time to time appellant obtained permits and drilled four producing wells on his 20 acres. Likewise, the Magnolia Company obtained permits and drilled twelve producing wells on its 41 acres; and the Shano Company drilled eleven producing wells on its 43 acres. On May 15, 1935, after rule 37 had been amended to require that wells be spaced 660 feet apart, and 330 feet from property lines, appellant applied for and obtained a permit to drill well No. 5 on his 20 acres; the permit being granted as an exception to rule 37, “to prevent confiscation of property.” A plat showing all of the aforementioned wells and all producing wells drilled on adjacent tracts is as follows :

Appellees, Simms Oil Company and Stanolind Oil Company, the owners of the land lying immediately north of the Falvey 20 acres, as shown on the plat, brought this suit to set aside the permit and to temporarily and on final hearing permanently restrain appellant from drilling and producing oil from said well No. 5, alleging that the order granting the permit was invalid, arbitrary, and unjust, for the following reasons:

1. Because there was no evidence introduced by appellant at the hearing before the commission for the permit.

' 2. Because the undisputed evidence at the hearing before the commission, and at the trial on appeal before the court, established that said well No. 5 was not necessary to prevent confiscation of the property of appellant, but that to the contrary the 20-acre

*295 tract had a drainage advantage over the surrounding leases from the standpoint of opportunity to produce oil, and that the slight disadvantage of the tract to drainage on the south was more than compensated by the advantage it had over other surrounding leases in all other directions.

3. Because the drilling of such well would cause waste.

Upon a hearing, a temporary injunction was granted restraining appellant from drilling or producing oil from said well No. 5 pending the final hearing of this case; hence this appeal by appellant.

The above plat is substantially the same as the one attached to appellant's application for the permit to drill said well No. 5. The application was sworn to and stated the facts with regard to the conditions, locations, and existence of all wells on the 20-acre tract, as well as on all surrounding tracts. At the hearing before the commission, appellant testified that he was asking for said well No. 5 as an equidistant offset to the Shano well No. 11, which was 210 feet south of appellant’s south line as shown on the plat. Appellees appeared and contested the application for the permit to drill said well No. 5, and introduced in evidence a density map and statement in connection with it showing the density of wells on surrounding tracts covering an area approximately eight times the size of the 104-acre Doby tract. This same evidence was introduced on the trial in the court below, and two expert witnesses testified, one for appellant and one for ‘appellees. When their testimony is construed in connection with the above plat, the undisputed evidence showed that Shano well No. 11 substantially drained the oil from the south portion of appellant’s 20-acre tract. The undisputed evidence showed that appellees’ four wells immediately north of the 20-acre tract are nearer to appellant’s north line than appellant’s wells on the 20-acre tract are, and therefore appellees’ four wells have a drainage advantage over the wells of appellant on the 20-acre tract. The Magnolia equidistant offset wells to the southwest on the 41-acre tract are on a parity with appellant’s two west wells. Appellant has no advantage over any well either to the east or west end of his 20-acre tract. And as above pointed out, the Shano Oil Company’s three wells to the southeast, which include well No. 11, have a great drainage advantage over that portion of appellant’s 20-acre tract immediately north of them. To correct this unequal drainage, or unequal opportunity to produce oil, and commission granted appellant his said well No. 5. The record shows that throughout the operations the parties have drilled their various properties under the equidistant offset theory. The right to drill a well as an exception to rule 37 to prevent confiscation of property is established where there exists any substantial inequality or disparity between the opportunity to produce on the land of the one applying for the well and the surrounding properties. Consequently, since the undisputed evidence shows a substantial inequality or disparity between the opportunity of appellant to produce the oil from under his 20-acre tract and that of the Shano lease to the south, the commission had the authority to grant the permit to drill the well as an exception to rule 37. Humble Oil & Refining Co. v. Railroad Commission (Tex.Civ.App.) 83 S.W.(2d) 695; Brown v. Humble Oil & Refining Co. (Tex.Sup.) 87 S.W.(2d) 1069; Rabbit Creek Oil Co. v. Shell Petroleum Corporation (Tex.Civ.App.) 66 S.W.(2d) 737; Sun Oil Co. v. Gillespie (Tex.Civ.App.) 85 S.W.(2d) 652; Atlantic Oil Production Co. v. Railroad Commission (Tex.Civ.App.) 85 S.W.(2d) 655.

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Falvey v. Simms Oil Co., 92 S.W.2d 292, 1936 WL 65056 (Tex. Ct. App. 1936).

92 S.W.2d 292 (Falvey v. Simms Oil Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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