Jackson v. Texas Co.

75 F.2d 549, 1935 U.S. App. LEXIS 2990
CourtCourt of Appeals for the Tenth Circuit
DecidedFebruary 2, 1935
DocketNo. 1068
StatusPublished
Cited by4 cases

This text of 75 F.2d 549 (Jackson v. Texas Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jackson v. Texas Co., 75 F.2d 549, 1935 U.S. App. LEXIS 2990 (10th Cir. 1935).

Opinion

JOHNSON, District Judge.

This suit commenced in the state court was removed to the court below on the ground of diversity of citizenship. The court below sustained the general demurrer of the defendant, the Texas Company, a Delaware corporation, appellee here, to the complaint, and plaintiff, appellant here, electing to stand upon her complaint, judgment was entered dismissing the action. Appellant thereupon appealed the case to this court. The ruling of the trial court on the demurrer is the sole question for review by this court.

The facts in the case, as alleged in the complaint and admitted by the demurrer, are the following: The Texas Company, a Texas corporation, by a deed dated June 21, 1920, a copy of which is attached to the complaint, conveyed to appellant the N. 2 of S. E. 4 and S. W. 4 of S. E. 4 of section 7, township 18 north, range 9 east, situated in Creek county, Old., with other lands. On April 19, 1927, the Texas Company, a Texas corporation, conveyed to the appellee, the Texas Company, a Delaware corporation, all its assets including all its right, title, claim, and interest in the lands conveyed to appellant by the deed dated June 21, 1920. At the time of the conveyance of the lands described to appellee, the Texas corporation was the owner of an oil and gas lease upon the following described premises: the W. 2 of W. 2 of N. W. 4 of S. W. 4 of section 8, township 18 north, range 9 east, Creek county, state of Oklahoma, which lands are adjacent to and immediately east of the lands conveyed to appellant. This lease was conveyed to appellee, the Delaware corporation, with the other lands and property conveyed to it by the Texas corporation, on April 19, 1927. A copy of this deed is attached to the complaint and made a part thereof. At some time unknown to appellant the appel-lee, the Delaware corporation, or its predecessor, the Texas corporation, drilled and equipped an oil and gas well on the leased premises above described at a location offsetting the east line of appellant’s lands above described, at a cost not to exceed $4,-000. This well has produced many thousand barrels of oil. Because of its proximity, it has drained crude oil from under her land of the value of not less than $200,000, and, if [550]*550continued, will drain oil from under her land of the value • of $100,000. Appellant has made • repeated demands upon appellee to drill an.offset well on her land to protect against- and prevent this drainage. ■ Appellee has refused to drill such offset well itself and has also refused to permit appellant to do so. In her complaint appellant claims a one-eighth interest in the oil drained and to be drained from under her land and prays judgment for the sum of $37,500 as damages.

The deed to' appellant from the Texas . corporation, dated June 21, 1920, contains .the following provisions:

“But is is expressly understood and agreed that there is reserved and excepted from, and not included in, this conveyance, the oil, gas, coal, sulphur and other minerals , of any character, whatsoever, that may be on, in or under the aforesaid described land, together with the right of ingress and egress thereon, in perpetuity, and with the full right and privilege of grantor, its successors and assigns, to the use of so much of the surface of. said tract of land as may be reasonably necessary to build and erect there- , on works and appliances to facilitate the development, exploration and operation for the , removal of such minerals. And it is further .covenanted and agreed, which agreement shall be a covenant running with the land, that the possession of the surface of the heretofore described premises by the grantee, her agents, lessees, heirs, administrators or assigns, shall not be held or construed to be adverse to the grantor, its successors or assigns, insofar as such possession may effect the mineral reservation and right of operation set forth in this instrument.
“It is agreed that while party of the first part, its successors and assigns, shall never -be under any obligation to develop said land for minerals, should it, its successors or assigns, at any time hereafter produce minerals in paying quantities, it agrees to pay to party of the second part, her heirs or assigns, a royalty of one-eighth {%) of the oil and gas or other minerals produced and saved from the above described land.”

Counsel for appellant open their argument in their brief with this statement: “The sole question presented, argued and decided in the trial court, and the sole question to be presented to this court, in our view of the case, is this: Is there, in the deed from the Texas Company to Pearl B. Jackson, an implied covenant on the part of the grantor to protect the premises from drain- ' age ?”

In the development of their argument counsel assimilate the provisions of the deed above quoted to the provisions of oil and gas leases^ particularly in respect of implied covenants in such leases to drill off-set wells to prevent drainage by wells upon adjacent property. They state their proposition in this way: “When the Texas Company inserted in its deed an express covenant that it should ‘never be under any obligation to develop said land for minerals,’ it destroyed the possibility of the existence of any implied covenant on its part to well develop— drill up — the property if oil or gas were discovered. But that express covenant in no wise affected its obligation to protect the premises from drainage. Such covenant is independent of, is separate and distinct from, and covers a subj ect-matter other than that embraced in, the covenant to develop. The express covenant as to development and the implied covenant as to protection from drainage are not conflicting and may and do exist together. One does not destroy the other.”

In support of this proposition they cite and rely upon: Denker v. Mid-Continent Petroleum Corporation (C. C. A.) 56 F.(2d) 725, 84 A. L. R. 756; Orr v. Comar Oil Company (C. C. A.) 46 F.(2d) 59; Pelham Petroleum Co. v. North, 78 Okl. 39, 188 P. 1069; Fox Pet. Co. v. Booker, 123 Okl. 276, 253 P. 33.

Counsel for appellee in their opening statement in their brief say: “This matter being before the court on appeal by the plaintiff from an order of the United States District Court for the Northern District of Oklahoma sustaining the demurrer of the defendant to the plaintiff’s petition, we are fortunate in that no questions of fact are here presented. The matter resolves itself into a question of law involving the construction of a deed which we think is determinative of the case.”

Following this opening statement counsel for appellee say:

“On or about the 21st day of June, 1920, The Texas Company (a corporation of Texas,- and the predecessor of the present defendant), sold and conveyed the surface rights in and to the North Half of the Southeast Quarter and the Southwest Quarter of the Southeast quarter of Section 7, Township 18 North, Range 9 East, in Creek County, Oklahoma (and other lands not involved in this litigation), to the plaintiff, Pearl B. Jackson. This conveyance was made in the form of a deed of that date which expressly [551]*551reserved and excepted from such conveyance ‘the oil, gas, coal, sulphur and other minerals of any character whatsoever,’ and which deed also expressly reserved to said The Texas Company, its successors and assigns, the right of ingress and egress and the right to the use of so much of the surface as might be reasonably necessary to explore for and carry on its operations for the mining and removal of such minerals.

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Bluebook (online)
75 F.2d 549, 1935 U.S. App. LEXIS 2990, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jackson-v-texas-co-ca10-1935.