Gex v. Texas Company

337 S.W.2d 820
CourtCourt of Appeals of Texas
DecidedJune 27, 1960
Docket6940
StatusPublished
Cited by11 cases

This text of 337 S.W.2d 820 (Gex v. Texas Company) 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
Gex v. Texas Company, 337 S.W.2d 820 (Tex. Ct. App. 1960).

Opinion

*822 CHAPMAN, Justice

This opinion is in lieu of our opinion announced on March 28, 1960.

This is an appeal from a summary judgment granted appellee, The Texas Company, against plaintiffs below, appellants here, Louis S. Gex and E. E. Coons.

On August 19, 1926, the then owners of Section 39, Block 1-C, GH&H RR Co. Survey, in Sherman County, Texas, Louis S. Gex and wife, Kate E. Gex, executed and delivered to appellee an instrument which we shall hereafter refer to as The Mineral Deed. Material to this proceeding the instrument provided:

“ * * * for and in consideration of the sum of Four Thousand, One Hundred Sixty Dollars ($4,160.00) cash in hand paid by The Texas Company, A Texas corporation, Grantee, do hereby Grant, Bargain, Sell and Convey unto the said The Texas Company all of the oil, gas and other minerals, whether similar or dissimilar, on, in or under the following described tract of land in the County of Sherman, State of Texas, to-wit:
“All of Section number Thirty-Nine (39), Block number One C (lc), G. H. & H. R. R. Co., containing six hundred forty (640) acres, more or less, together with the rights of ingress and egress for the purpose of drilling or mining for, and producing, storing and transporting oil, gas and other minerals, and of erecting any and all necessary structures for such drilling, mining, transporting and storing, and erecting any and all buildings necessary or incident to such operation; with the right to remove any and all property of whatever kind or character placed on said premises.
“It is agreed that The Texas Company, its successors or assigns, shall never be under obligation to drill or mine for oil or gas or other minerals, but that such mining or drilling, both before and after production, shall be wholly at the option of said grantee, its successors or assigns. However, should oil or gas be produced from said premises in paying quantities by The Texas Company, its successors or assigns, then there shall be paid to grantors, their heirs and assigns, a royalty of one-eighth (⅛) of the interest hereby conveyed in all oil and . gas produced and saved by said grantee, its successors or assigns; The Texas Company, its successors or assigns, having free use of oil and gas for fuel for operations conducted on said premises.
“To Have and to Hold the above described oil, gas and other minerals and the rights herein granted, all and singular, unto the said The Texas Company, its successors and assigns, forever; and we do hereby bind ourselves, our heirs, executors and administrators, to warrant and forever defend all and singular said oil, gas and other minerals and the rights herein granted unto the said The Texas Company, its successors and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof.” (Emphasis supplied.)

More than twenty-four years later, to-wit, December 1, 1950, the then owners of the described land executed a “Modification of Mineral Deed” to appellee supplementing the Mineral Deed, agreeing, “that said Mineral Deed be and the same is hereby amended to contain the following additional clauses and provisions, * * * ” then granting appellee the right to commu-nitize the section with other lands, provided the communitized area shall not exceed an area of 650 acres. This instrument further provided:

“In the event Grantee exercises such right, it is agreed that the entire area within any such communitized area *823 shall be deemed, treated and operated as though the same where covered and included in a single deed and/or oil and gas lease, except as to the rate and division and payment of royalties, and as to such it is agreed:
“(a) The royalty to be paid Grantor on gas, including casinghead gas or other gaseous substance, produced from said land and sold or used off the premises or in the manufacture of gasoline or other produce therefrom, the market value at the well of one-eighth of the gas or sold or used, provided that on gas sold at the wells the royalty shall be one-eighth of the amount realized by Grantee from such sale, or such market value, whichever is greater.
“(b) The payment of such royalty on gas to Grantor herein on gas produced from a well or from wells located on any part of any such communi-tized area shall be only in the proportion that the acreage covered by this deed and included in such communi-tized area bears to the total acreage in such communitized area and as though all of the lands included in such communitized area had been originally covered by this deed. The communitization of the lands or any part thereof covered by this deed in accordance with the foregoing provisions hereof shall be accomplished by the execution by the Grantee herein itself or joined by others, and the filing in the recording office of Sherman County, Texas, of an instrument in writing declaring its or their purpose to communitize, and describing the leases and lands communitized, which communitization shall cover natural or dry gas rights only. ‘It is understood and agreed that said communitized area shall cover all of said Section 39.’ ”
“Said above quoted provision being hereby incorporated in said deed with like effect as though the same had originally been contained therein.” (Emphasis supplied.)

In their first count appellants alleged the “Modification of Mineral Deed” is controlling, that it provided “that on gas sold at the wells the royalty shall be one-eighth of the amount realized by grantee from such sale, or such market value, whichever is greater;” that they own .03125 of the gas produced, less tax, that it was of the reasonable market value on the dates produced of 10 cents per M Cubic feet, that their part was of a value after taxes of $2,894.50, that they had been paid $1,476.93 and appellee still owed them the difference in the two sums just named of $1,417.57, with interest at 6 per cent per annum from the respective dates payments were made, constituting the difference in what it was sold for and the fair market value.

In their second count they alleged in the alternative that in the event the Modification of Mineral Deed is not controlling, then The Mineral Deed is and that it provides for payment to appellants of their one-eighth royalty in kind, that appellee has had the use of such funds that were not paid to appellants, but should have been and has failed and refuses to pay the market value of the gas of $2,894.50, leaving the additional amount due of $1,417.57 with 6 per cent interest per annum from the respective dates payments were made.

On November 21, 1958, appellee filed its Motion for Summary Judgment, on March 13, 1959, its First. Amended Motion for Summary Judgment and its Second Amended Original Answer containing special exceptions.

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Bluebook (online)
337 S.W.2d 820, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gex-v-texas-company-texapp-1960.