Miles v. Amerada Petroleum Corp.

241 S.W.2d 822, 1950 Tex. App. LEXIS 2354
CourtCourt of Appeals of Texas
DecidedDecember 6, 1950
Docket4756
StatusPublished
Cited by5 cases

This text of 241 S.W.2d 822 (Miles v. Amerada Petroleum Corp.) 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
Miles v. Amerada Petroleum Corp., 241 S.W.2d 822, 1950 Tex. App. LEXIS 2354 (Tex. Ct. App. 1950).

Opinions

PRICE, Chief Justice.

This is an appeal by C. A. Miles, Jr., hereinafter called Appellant, from the judgment of the District Court of Victoria County in favor of Amerada Petroleum Corporation and Ross Walker. Defendant Amerada Petroleum Company will be hereinafter referred to as Appellee, and defendant Ross Walker as Walker.

Appellant as plaintiff sought to recover from Amerada an undivided ½ mineral interest in and to the following described property, to-wit: Situated in Victoria County, Texas, and being all of lots 1 and 2 of block 3 of the J. W. Brown Addition to the Town of Bloomington, Victoria County, Texas, according to a map of said addition referred to in the pleading.

The judgment denied recovery of the ½ mineral interest free from a mineral lease thereon claimed by appellee.

The facts in this case are undisputed; the problem presented is the correct application of the law to the facts.

The property involved is two town lots each fifty feet in width and having a depth between parallel lines of 140 feet. J. J. Liggins is the common source of title. Ap-pellee claims under an oil and gas lease executed on the 25 th day of August, 1947, by the guardian of Frank James Liggins, a minor 9 years of age, and Evan Liggins, a minor two years of age. On the date of the lease to Amerada and the conveyance to Miles hereinafter referred to there is no question but that the said minors held title to the ⅛ interest as heirs of their father, J. J. Liggins. Appehant claimed under a conveyance subsequent to said lease from the guardian of said minors to said ⅛ mineral interest in said tract. There is no question but that the said conveyance conveyed to Miles such interest as the minors had in the minerals underlying the lots in question on the date it was executed. In making the lease to appellee all requisites of the law were complied with as to application by the guardian, notice thereof, order of the Probate Court arithorizing the lease, report of the consummation of the lease and order of the Probate Court confirming same and the filing of bond by the guardian. As has been stated, the same is true as to the sale to appellant.

The making of mineral leases by Guardian of the Estate of minors is governed by Art. 4192, Vernon’s Ann.Civ.St, which was in force at the time this lease was executed. In the making of the lease to appellee, as has been stated, the law was in all respects complied with as to notice, authorization, confirmation and bond as required by said Article. The lease to appellee contained a unitization provision as follows: “4. Lessee, -at its option, is hereby given the right and power to pool or combine the acreage covered by this lease or any portion thereof with other land, lease or leases in the immediate, vicinity thereof, when in Lessee’s judgment it is necessary or advisable to do so in order properly to develop and operator said premises in compliance with the spacing rules of the Railroad Commission of Texas or other lawful authority, or when to do so would, in the judgment of Lessee, promote the conservation of the oil and gas in and under and that may be produced from said premises, such pooling to be into a unit or units not exceeding 40 acres each for oil, 160 acres each for distillate and 640 acres each for gas. Lessee shall execute in writing an instrument identifying and describing the pooled acreage. The entire acreage so pooled into a tract or unit shall [824]*824be treated, for all purposes except the payment of royalties on production from the pooled unit, as if it were included in this lease. If production is found on the pooled acreage, it shall be treated as if production is had from this lease, whether the well or wel's be located on the premises covered by this lease or not. In lieu of the royalties elsewhere herein specified, Lessor shall receive on production from a unit so pooled only such portion of the royalty stipulated herein as the amount of his acreage placed in the unit or his royalty interest therein on an acreage bears to the total acreage so pooled in the particular unit invo'ved.”

Appellee held leases on several lots bordering on and adjacent to the lots in controversy; the leases all contained substantially this provision. It might be here mentioned that the primary term in the lease from the guardian to appellee was for a term of one year.

In accordance with the unitization clause in this lease and in the other leases appe'lee unitized these two lots with adjacent property upon which it held oil and gas leases, the area of the unit being about 39 acres. Production of oil and gas in paying quantities was developed on the unit, there being three producing oil wells thereon but none of these wells were drilled on the property in controversy. Appellant claims that the unitization provision in the lease from the guardian of the minors to appellee was void, it being beyond the power of the Probate Court to authorize and a'l rights to the ⅛ interest in question were conveyed to him by the deed from the guardian; that he held the interest absolutely free of any purported lease to ap-pellee. Section 5 of Article 4192 which was relied upon as giving the guardian power to make the lease in question to ap-pellee is as follows: “No such lease shall extend beyond the time that the ward shall become twenty-one years of age, unless at that time the lessee shall have discovered such minerals as are specified in the lease, or any of such minerals, upon the premises described in such lease, in which event the same shall remain in full force so long as such minerals or any of them shall be produced in paying quantities.”

The minors here involved have not yet attained the age of 21 years. On the date of the lease in 1947 one was 2 years of age, the other 9. The theory of unitization in 40 acre tracts must be that a well or wells on any part of the tract will produce oil from all parts of the tract so unitized. Where oil is produced from a unitized tract on the part thereof upon which no well has been drilled there is probably production from such unit but not from a well thereon.

Strong reliance is placed by the appellant on the case of Cheesman et al. v. Amerada Petroleum Corp., Tex.Civ.App., 227 S.W.2d 829, as sustaining the claim that in the instant case the lease by the guardian to Amerada was void on account of the pooling agreement contained therein. It is thought a brief discussion of a closely related case will help in the determination of the bearing the case has on the instant case. In the case of Amerada Petroleum Corporation v. Cheesman, Tex.Civ.App., 223 S.W.2d 74 (Wr. Den.), the title to and partition of lots 19 and 20 of Block 2, Cameron’s Addition to the town of Bloomington was involved. Amerada claimed the entire mineral interest in lots 19 and 20 by virtue of lease from the guardian of Paul Alois Skarda, a minor. This lease contained a pooling agreement the same or about the same as the pooling agreement in the instant case. It was held Amerada’s lease covered only an undivided one-half interest in the lots. D. C. Chees-man had acquired and 'held by virtue of a lease a one-half undivided interest in the ⅞ working interest of the oil and gas. The action of the trial court was assailed for ordering a partition in kind of the two lots. Amerada was awarded by the trial court all of the ⅞ working interest in lot 20 and 'Cheesman all of it in lot 19.

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241 S.W.2d 822, 1950 Tex. App. LEXIS 2354, Counsel Stack Legal Research, https://law.counselstack.com/opinion/miles-v-amerada-petroleum-corp-texapp-1950.