Hoffman v. Magnolia Petroleum Co.

260 S.W. 950, 1924 Tex. App. LEXIS 322
CourtCourt of Appeals of Texas
DecidedMarch 26, 1924
DocketNo. 7129. [fn*]
StatusPublished
Cited by6 cases

This text of 260 S.W. 950 (Hoffman v. Magnolia Petroleum 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
Hoffman v. Magnolia Petroleum Co., 260 S.W. 950, 1924 Tex. App. LEXIS 322 (Tex. Ct. App. 1924).

Opinion

FLY, C. J.

This is a suit instituted by Peter ,L. Hoffman against the Magnolia Petroleum Company, the Trans-Continental Oil Company, Tex-Pen Oil Company, United Producers’ Pipe Line Company, and 24 individuals, for an accounting by the pipe line companies, and for the recovery of a share of the oil produced upon a certain tract of land consisting of 320 acres, more or less. A general demurrer was sustained to the petition as well as to a cross-action of F. A. Weiser, one of the defendants.

In substance the petition, which is quite long and complicated, alleges that defendants J. N. Duke and wife, on January 1, 1918, executed an oil and gas lease on 320 acres to E. O. Harvey, reserving certain money for rent and one-eighth of all oil produced on the property, $200 a year for each gas well, $10 a year for each oil well from which gas was also sold, $15 per year for each well from which casing head gas is manufactured into gasoline, and $330 each six months that drilling operations are delayed. Afterwards the said lessors, Duke and wife, conveyed to Peter ,L. Hoffman an undivided one-half interest in all minerals, oil, and gas in and under 90 acres out of the leased 320 acres of land.

The mineral deed contained the following provision:

“It is understood and agreed that this sale is made subject to said lease, but covers and includes one-half of all the oil royalty and gas rental or royalty due to be paid under the terms of said lease. It is agre'ed that one-half of the money rentals which may be paid to extend the term within which a well may be begun under the term of said lease is to be paid to the said Peter L. Hoffman.”

On that clause is based a claim for one-half of all the oil and gas royalties and rentals payable under the lease, of which it was alleged that the Trans-Continental Oil Company was the present owner, by assignment of the original lease.

The claim of appellant Hoffman is that he is entitled not only to one-half of the oil and gas royalties from the 90 acres, the mineral rights of which were conveyed to him by Duke and wife, but also that “he is in truth and in fact entitled to one-half of all the royalties payable under the terms of said lease, or if not entitled to all of one-half oil rentals and royalties payable under the terms of said lease, then he is entitled to is4s2o interest in all of the oil and gas royalties and rentals accruing under the terms of said lease.” It is not alleged that any oil or gas has been found or taken from the 90 acres, but that appellees have drilled wells surrounding said 90 acres and drained oil therefrom to appellant’s damage.” The deed from Duke and wife conveys to Hoffman “one-half (%) interest in and to all of the oil, gas and other minerals in and under an;l that may be produced from the following described lands, situated in Comanche county, Texas, to wit: A certain 90 acres, etc.,” describing it by metes and bounds.

There is no allegation that any well had been sunk on the 90 acres conveyed to appellant; the claim being that appellant, by the terms of his contract, is entitled to part of the gas and oil royalties and rentals from the 320 acres of land, or is entitled to some amount by reason of the oil being drained through wells on the other parts of the land.

No reasonable construction of the instrument given by Duke and wife to Hoffman would entitle him to anything except to a certain interest in and to all the oil and gas royalties and rentals on the 90 acres of land. The language of the conveyance is that the grantors convey to Hoffman the oil, gas, and other minerals from the 90 acres of land, followed by a description of the land by metes and bounds, and the further statement:

“It is understood and agreed that this sale is made subject to said lease, but covers and includes one-half of all the oil royalty and gas rental or royalty due to be paid under the terms of said lease.”

Due to be paid on what? Why the land that was being conveyed, of course, because that was all the conveyance had any reference to. The forced construction of the deed indulged in by appellants cannot be sanctioned, and such construction cannot form the basis of a claim against other parts of the land.

The allegations as to the oil and gas being drained from the 90 acres is vague and indefinite. There is no allegation that wells had been drilled so near the boundary lines of the 90 acres of land as to draw the oil and gas therefrom, and if there had been it would not form the basis fox a cause of action. The remedy would be to drill a sufficient number of offset wells along the lines to protect the owner’s property from the drainage. Thornton, Law of Oil and Gas, §§ 109 and 882; Gain v. South Penn Oil Co., 76 W. Va. 769, 86 S. E. 883; L. R. A. 1916B, 1002. In the case cited it was held that the drilling of wells near the division line afforded no basis for a claim to a share in or an accounting for the oil so produced, or for a receivership thereof.,

The law applicable to cases of draining oil and gas from the land of another is thus *952 stated by Thornton in section 109, herein cited:

“By' drilling a well close to .the boundary line of his land the owner may not only drain the oil or gas from his own territory, but from that of his adjoining neighbor. This is easily perceived in instances of drilling wells on ordinary town lots, which are often only thirty or forty feet wide and three or four times as long. It is quite' obvious in such an instance one well may drain the oil or gas from under several or even many lots. And yet, who has the right to say the owner of a lot may not put down a well on it for fear, or from the fact, he may get the oil or gas, or a part of it, under his neighbor’s lot? His neighbor has the power to protect his interests, by sinking a well on his own lot; and if he does not see fit to do so, he has no right to prevent another and adjoining lot owner from developing his own territory. 1 He cannot play, as it were, ‘the dog in the manger’ policy. Of course, the same is true of larger tracts — tracts of even hundreds of acres.”

The facts alleged in the petition may seem to differentiate it to some extent from cases in which the owner or lessee of land adjoining another drills wells which drain the other’s land. In this case the owners leased all of the land to a certain lessee and afterwards sold one-half interest in and to all of the oil, gas, and other minerals in and under 90 acres of the leased land. This sale was made subject to the prior lease to R. O. Harvey. Under that lease the lessee had the right to dig wells on any part of the land that might be desirable to him, and his choice of location could not be controlled by the lessor or any subsequent vendee of the lessor. Duke and wife did not reserve the right to select the points on the leased land at which wells should be sunk, but that was the prerogative and right of the lessee. If he chose to dig wells close to the 90 acres conveyed to Hoffman, 'he undoubtedly had the right to do so, without interference on the part of his lessor or Hoffman. The latter was in no better or stronger position than his vendor, the lessor of the 320 acres of land, and Hoffman bought with full knowledge of all the facts necessary to put him upon notice of everything in connection with the lease. The sale could not and did not deprive the lessee of any rights he had in all the land.

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Related

Ottis v. Haas
569 S.W.2d 508 (Court of Appeals of Texas, 1978)
Central Pipe Line Co. v. Hutson
82 N.E.2d 624 (Illinois Supreme Court, 1948)
Hill v. Roberts
284 S.W. 246 (Court of Appeals of Texas, 1926)
Japhet v. McRae
276 S.W. 669 (Texas Commission of Appeals, 1925)
Hoffman v. Magnolia Petroleum Co.
273 S.W. 828 (Texas Commission of Appeals, 1925)
McRae v. Japhet
269 S.W. 829 (Court of Appeals of Texas, 1925)

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Bluebook (online)
260 S.W. 950, 1924 Tex. App. LEXIS 322, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hoffman-v-magnolia-petroleum-co-texapp-1924.