Patton v. Rogers

417 S.W.2d 470, 27 Oil & Gas Rep. 211, 1967 Tex. App. LEXIS 2035
CourtCourt of Appeals of Texas
DecidedJune 28, 1967
Docket14579
StatusPublished
Cited by16 cases

This text of 417 S.W.2d 470 (Patton v. Rogers) 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
Patton v. Rogers, 417 S.W.2d 470, 27 Oil & Gas Rep. 211, 1967 Tex. App. LEXIS 2035 (Tex. Ct. App. 1967).

Opinion

KLINGEMAN, Justice.

Suit by plaintiffs, U. E. Rogers and wife, Mary Evelyn Rogers, to cancel an oil, gas and mineral lease, dated March 24, 1962, executed by plaintiffs in favor of J. Lloyd Patton as lessee," covering a tract of approximately 999 acres in Menard County, Texas. The trial court, sitting without a jury, decreed that said lease “is declared to have terminated in accordance with its own terms and provisions on December 28, 1965,” but further ordered that defendants had the right to remove all personal property, including casing, from the lease. No findings of fact or conclusions of law were requested or filed by the trial court. From the judgment cancelling the lease, defendants, J. Lloyd Patton et al., have appealed, and plaintiffs, U. E. Rogers et ux., have appealed from that portion of the judgment authorizing the defendants to draw and remove the casing and other fixtures from the gas well on said land.

The lease in controversy was one of several executed by Rogers to Patton, and was known and identified as the Rogers “C” lease. Such lease was for a primary term commencing on March 24, 1962, the date of such lease, and ending on December 28, 1963, “and so long thereafter as oil, ■gas or other mineral is produced from said land.” It contains a customary shut-in royalty provision that where gas is not being sold or used, leasee may pay as royalty $50.00 per well per year; however, said lease also contains an attached rider providing, among other things, that notwithstanding anything in the lease to the contrary such lease could not be maintained in force solely by the payment of shut-in royalty for a period in excess of two years beyond the expiration of the primary term thereof. In August of 1963, a gas well was completed on the “C” lease, but was shut-in due to lack of a market. Although Patton was the operator of the “C” lease, he had assigned some of the working interest in such lease to the other defendants. No other wells were completed on such lease. Patton was also the operator and owned interest in the Rogers “D” lease, on which there was a producing oil well.

In a nonjury case where no findings of fact or conclusions of law are filed by the trial judge, the judgment should be affirmed if there is evidence to support it on any theory of the case. City of Abilene v. Meek, Tex.Civ.App., 311 S.W.2d 654, writ ref’d; Western Woods Products Co. v. Bagley, 274 S.W.2d 111, writ ref’d n. r. e.; 4 Tex.Jur.2d, Appeal and Error, § 747 (1959). In cases tried before the court without a jury, in the absence of a point that the judgment is contrary to the overwhelming weight and preponderance of the evidence, the rule is well settled that the judgment must be affirmed if there is any evidence of probative value to support it, and that only evidence which tends to support the judgment may be considered. Holley v. Painters Local Union No. 318, 376 S.W.2d 44, 46, writ ref’d n. r. e.; Frazier v. Williams, Tex.Civ.App., 359 S.W.2d 213, no writ. See also Wilson v. Teague Ind. School Dist., Tex.Civ.App., 251 S.W.2d 263, writ ref’d, and Calvert, “No Evidence and Insufficient Evidence Points of Error,” 38 Texas L.Rev. 361 (1961).

*473 Defendants’ first point of error is that the trial court erred in rendering judgment terminating the “C” lease, since a bona fide commercial market for gas produced from the “C” lease existed on December 28, 1965.

It appears from the evidence that Patton had made various efforts to obtain a market for the gas, without success, but that in 1965 he was negotiating with Sinclair Oil & Gas Company and a market was promised. The signed gas purchase contract introduced in evidence bears the date of January 17, 1966. On December 22, 1965, six days before such lease would terminate in the absence of such production as would hold the lease, Patton ran a ½ inch pipe line from the gas well on the “C” lease to a producing oil well on the “D” lease, which said gas line was connected to a gas engine and a “heater-treater” which Patton had just installed on the “D” lease. This oil well had previously been pumped by an electric engine which Patton removed at this time. Patton maintains that he was having trouble with the oil being produced from such “D” well because of excessive emulsion and water in the oil, and that the device installed, which was sometimes referred to as a flow-line heater, was a device commonly employed to remove water and emulsion from oil. Patton testified that it was agreed between the owners of the “C” lease and the owners of the “D” lease that the owners of the “C” lease would be paid on a basis of 16 cents per M.C.F. for all gas taken from the “C” lease and used on the “D” lease, and that there would be a guaranteed minimum royalty payment of $100.00 a month for the gas taken. The working interest owners of the “C” lease and the “D” lease are identical, except for some small interest of which there is not common ownership.

Rogers contends that the implied findings of the trial court that there was not a bona fide commercial market is supported by the following evidence: (a) The nearest gas pipe line was approximately 9 miles away from the well, and the nearest town approximately 20 miles; (b) the agreed price of 16 cents per M.C.F. is almost twice the price of the nearest gas sales, and Patton himself testified that 10½ cents per M.C.F. was a fair market value; (c) such gas purchase for the operation of the “D” lease oil well increased the fuel cost to $1.54 per barrel for each barrel of oil produced, and it actually made the operation of such “D” lease well unprofitable; (d) Patton himself admitted that a good faith operator could not afford to pay $1.54 per barrel for fuel; (e) the production from such oil well decreased from an average of about 80 barrels per month to an average of about 60 barrels per month, following the change to the gas engine; (f) plaintiffs’ expert witness testified that the so-called “heater-treater” was nothing more than a “sophisticated flare,” that such heater could not separate the oil from the water, and that he could not see any useful purpose of such heater on such lease; (g) testimony to the effect that such heater-treater was not even lighted from shortly after its installation until after the suit was filed, a period of approximately three months, which testimony was disputed; (h) the oil produced from such oil well had previously been treated for this condition by a chemical method at a much lower cost than the gas-heat treatment; the average total monthly fuel or power cost for such oil well before the change to gas was about $12.76 a month, and after the gas “purchase” agreement such cost was many times that amount; (i) no real standard was used in arriving at the $100.00 per month minimum payment, except that Patton testified he “figured it would be more than fair,” and on the amount of gas used, according to metering, the price being paid under such minimum payment was almost 70 cents per M.C.F. in an area where the actual sales were at a price of less than 10 cents per M.C.F.; (j) no gas pipe line was being built to the lease on December 28, 1965, and on such date Sinclair didn’t have a gas line within nine miles of the “C” lease well.

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Bluebook (online)
417 S.W.2d 470, 27 Oil & Gas Rep. 211, 1967 Tex. App. LEXIS 2035, Counsel Stack Legal Research, https://law.counselstack.com/opinion/patton-v-rogers-texapp-1967.