Hickey v. Spangler

358 S.W.2d 216, 17 Oil & Gas Rep. 65, 1962 Tex. App. LEXIS 2503
CourtCourt of Appeals of Texas
DecidedMay 22, 1962
Docket7380
StatusPublished
Cited by7 cases

This text of 358 S.W.2d 216 (Hickey v. Spangler) 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
Hickey v. Spangler, 358 S.W.2d 216, 17 Oil & Gas Rep. 65, 1962 Tex. App. LEXIS 2503 (Tex. Ct. App. 1962).

Opinion

CHADICK, Chief Justice.

This action originated as a trespass to try title suit to recover the mineral leasehold estate in a small tract of land. A judgment based on jury answers to special issues was entered and the plaintiffs in the trial court have appealed. The judgment is reversed and the case remanded for new trial.

Curtis Hickey and R. H. Lee, as plaintiffs, brought the suit naming Charles Spangler and sixteen others as defendants. Brief reference to the pleadings and evidence sufficient only to suggest the nature and scope of the suit is made at this point; a more detailed statement where pertinent to questions discussed will be made as the occasion arises. The plaintiffs allege that an oil, gas and mineral lease with a primary term of thirty days executed by Hickey and assigned to Spangler and the other defendants terminated in accordance with the terms of the instrument prior to the institution of the suit. Relief by way of receivership, temporary restraining order, temporary and permanent injunction, cancellation, etc., was sought. The defendants answered by a general denial and plead their title, estoppel, joint adventure, mutual mistake, for reformation of the lease, improvements made in good faith, etc., and for relief appropriate thereto.

The Hickey mineral lease was dated September 8, 1959, and provided for a primary term of thirty days from date. Paragraph 6 of the lease is in this language:

“6. If prior to discovery of oil, gas or other mineral on said land or Lessee should drill a dry hole or holes thereon, or if after discovery of oil, gas or *218 other mineral, the production thereof should cease from any cause, this lease shall not terminate if Lessee commences additional drilling or reworking operations within sixty (60) days thereafter, or if at the expiration of the primary term, oil, gas or other mineral is not being produced on said land, or on acreage pooled therewith, but Lessee is then engaged in drilling or reworking operations thereon or shall have completed a dry hole thereon within sixty (60) days prior to the end of the primary, term, the lease shall remain in force so long as operations are prosecuted with no cessation of more than sixty (60) consecutive days, and if they result in the production of oil, gas or other mineral, so long thereafter as oil, gas or other mineral is produced from said land or acreage pooled therewith * * (Last sentence omitted as it pertains to other contingencies. Emphasis added.)

Exploration was begun within the primary term of the lease, and a well capable of producing oil and gas in commercial quantities was completed January 20, 1960, 105 days after expiration of the primary term. No contention is made that the lease expired before completion date.

The well was shut in at completion. However, at that time a switcher was hired, and from the completion date until the ap-pellees were enjoined from going on the leased premises the switcher opened the well’s controls at least once each week and allowed the gas to blow and be burned. Flaring the well was thought necessary to keep it from logging up and being killed by salt water or other liquid.

Commencing the week of completion Spangler continuously negotiated for a gas sales contract with four separate purchasing companies. The negotiations resulted in the execution of a contract on July 18, 1960, to sell the gas produced from the well to Tennessee Gas Transmission Company. Immediately following completion of the well the location was cleaned up, slush pits filled, and pits and firewall used in burning gas were constructed. This particular work was completed January 29, 1960. Spangler and his associates also negotiated for the construction of a pipeline to connect the well with a gathering system in the period between completion and the execution of the gas sales contract. Hickey assisted the lease owners in obtaining a right-of-way from the county for this purpose. Additionally, between completion time and institution of the lawsuit Spangler and Hickey negotiated with an adjoining lease owner in an effort to form a unit and increase the allowable of the well. While awaiting consummation of the sales contract mentioned Spangler retained an attorney for the purpose of securing a Federal Power Commission permit to produce gas from the well. The exact date does not appear, but sometime after June 23, 1960, and prior to institution of the suit the plaintiffs, Curtis Hickey and R. H. Lee, advised Spangler that the mineral lease had terminated by reason of non-production of minerals, and that he and his associate lessees owned no interest in the leasehold estate.

The motion for re-hearing of appellees, Spangler and his co-lessees, asserts that judgment of the trial court should be affirmed upon the undisputed facts, and supports that position by citing the very recent case of Skelly Oil Company v. Harris, Tex., 352 S.W.2d 950. The record will not sustain the appellees as the facts of this case clearly distinguishes it from the Harris case. In Harris a mineral lease dated October 21, 1943, for a primary term of ten years was assigned to Skelly Oil Company. Pursuant to pooling provisions the leased tract was pooled with other land October 5, 1953. On that same date operations were commenced for drilling a well on the pooled acreage. Actual drilling began October 17, 1953, and was continuously prosecuted until November 24, 1953. At the last mentioned date a gas well was completed and capped. The completed well was capable of producing gas and condensate in paying quanti *219 ties. The lessee, Skelly Oil Company, thereafter requested and obtained a production allowable, arranged for a gathering system to run lines to the well, installed meters and meter stations, and negotiated a contract with a buyer for sale of the gas as produced from the well. Production from the well began January 4, 1954, forty-one days after completion, and continued without interruption. Production began within the sixty days following completion. The distinguishing facts of the two cases are apparent on reference to the facts of this case heretofore related. To summarize, in this case the well was commenced during the primary term which expired October 8, 1959, and was completed January 20, 1960. The well was shut in, thereafter the gas was flared and burned each week to prevent logging, negotiations entered into for sale of gas, right-of-way, system connections, Federal Power Commission permit, etc., but no actual production of minerals, as that term is used in the Hickey mineral lease, was begun within sixty days after completion on January 20, I960, nor before August 1, 1960, the date Hickey and Lee filed suit.

Because production or its absence, in relation to completion date differs as shown, the Harris case does not support the judgment of the trial court in this case. But Harris is directly in point and controls the construction of the language of the emphasized portion of paragraph 6 of the Hickey mineral lease heretofore quoted. Language in the Harris case mineral lease, identical with that in the lease here considered, was construed by the Supreme Court.

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Bluebook (online)
358 S.W.2d 216, 17 Oil & Gas Rep. 65, 1962 Tex. App. LEXIS 2503, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hickey-v-spangler-texapp-1962.