Railroad Commission v. Col-Tex Refining Co.

236 S.W.2d 221, 1950 Tex. App. LEXIS 2456
CourtCourt of Appeals of Texas
DecidedDecember 20, 1950
DocketNo. 9926
StatusPublished
Cited by2 cases

This text of 236 S.W.2d 221 (Railroad Commission v. Col-Tex Refining 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
Railroad Commission v. Col-Tex Refining Co., 236 S.W.2d 221, 1950 Tex. App. LEXIS 2456 (Tex. Ct. App. 1950).

Opinion

HUGHES, Justice.

Col-Tex Refining Company seeks by this suit to invalidate and enjoin the enforcement of the following order made by the [222]*222Railroad Commission of Texas on November 29, 1949:

“It is ordered by the Railroad Commission of Texas that Coltex Refining Company purchase and take all oil offered it for purchase, from its connections in the Howard Glasscock, latan East Howard, latan North Howard, Snyder, Westbrook, Sharon Ridge 1700 and Sharon Ridge 240O' Fields, including its Coffield & Guthrie, Inc., connection, ratably and that the total quantity of crude oil purchases and takes from each well in said fields, including the wells served by the gathering system of Coffield & Guthrie, Inc., shall be the same percentage of the allowable of such wells that the total purchases and take of Coltex Refining Company bears to the total allowable assigned by the Commission to all such wells, this without discrimination in favor of one producer or person as against another in the same field, and without discrimination between fields.

“It is further ordered that if Coltex Refining Company should during any calendar month hereafter restrict its purchases and takes of crude oil from any of its connections in the Howard Glasscock, latan East Howard, latan North Howard, Snyder, Westbrook, Sharon Ridge 170CK and Sharon Ridge 2400' Fields to less than the allowable assigned by the Commission to the wells from which Coltex Refining Company purchases and takes oil in said fields, then the total quantity of crude oil purchases or takes from each such well, including those served by Coffield & Guthrie, Inc. connections, during such month shall be the same percentage of the allowable of such well that the total purchases and takes 'by Col-tex Refining Company from all such wells bears to the allowable assigned by the Commission to all such wells, this without discrimination in favor of one producer or person as against another in the same field, and without discrimination between fields.”

The validity of this order depends upon a proper construction of the Common Purchase Act, Acts 41st Leg., Sth C.S. 1930, p. 171, as amended by Acts 42nd Leg., 1st C.S. 1931, p. 58, Art. 6049a, Vernon’s Ann. Civ.St., and the application or non-application of such Act, particularly Secs. 8 and 8aa, as so construed to the undisputed fact situation disclosed by this record.

Col-Tex owns and operates 65 miles of oil pipe lines in Mitchell, Howard, Glass-cock and Scurry Counties; but it is not a common carrier pipe line. Col-Tex Refining Co. v. Hart, Tex.Civ.App., 144 S.W.2d 909 (Writ Ref.). It also owns an oil refinery in Colorado City in Mitchell County.

As part of its pipe lines, Col-Tex has gathering systems in each of the oil fields named in the above order of the Commission, except in the Sharon Ridge fields, in Scurry and Mitchell Counties. The oil from the Sharon Ridge fields is gathered by Coffield & Guthrie, Inc., a common carrier pipe line company, and delivered to Col-Tex at its Westbrook Station, a distance of some 8 to 12 miles.

The contract between Coffield & Guthrie, Inc., and Col-Tex regarding this Sharon Ridge oil provides that it shall deliver all oil which it can gather or procure in these fields to Col-Tex at its Westbrook Station as to which Col-Tex “here now promises, contracts and agrees to take, and it here now purchases each and all of the crude oil so procured, transported and delivered to it by said Coffield & Guthrie, Inc., as aforesaid, and promises and agrees to pay to said Coffield & Guthrie, Inc., at Rock-dale, Texas, the price posted by Coffield & Guthrie, Inc., which price shall be based on average posted price by any three of the major companies for like grades of crude oil in the area in which it is received on the day on which it is received by said Col-Tex Refining Company, plus twelve and one-half cents per barrel.”

This contract further provided that: “The title to such oil shall remain in Cof-field & Guthrie, Inc., until delivered in the Col-Tex Refining Company’s tanks, at which time the title shall pass to said Col-Tex Refining Company. Said Col-Tex Refining Company shall have no control nor right to control, nor right to exercise any authority over the manner of gathering, transporting or delivering any of said oils, but all of the same shall be under the ex-[223]*223elusive control and management of Coffield & Guthrie, Inc.”

The pipe line facilities of Coffield & Guthrie, Inc., are the only pipe line facilities connected with production in the Sharon Ridge fields.

During the year 1949 Col-Tex purchased less than the allowable production from its connections in the Howard Glasscock, latan East Howard, latan North Howard, Westbrook and Snyder fields, but during the same period it took 100% of the allowable production from the Sharon Ridge fields under its contract with Coffield & Guthrie, Inc. Protests of producers and royalty owners in the slighted fields to the Railroad Commission prompted promulgation of the order copied above. Representing some of these interests is the inter-venor Howard County Producers and Royalty Owners Association.

There are only two questions presented by this appeal:

(1) Whether Sec. 8aa, Art. 6049a, V.A. C.S., requires common purchasers of oil therein defined to purchase without unjust and unreasonable discrimination as between fields; and, if in the affirmative,

(2) Whether the Sharon Ridge fields should be included in the ratable purchase order along with the other named fields.

The trial court, without a jury, held that Col-Tex is a common purchaser under Sec. 8aa, Art. 6049a, as to all involved fields except the Sharon Ridge fields and that such section while it requires a common purchaser to purchase without discrimination in favor of one producer or person as against another in the same field that it does not require a common purchaser to purchase without unjust or unreasonable discrimination as between different fields.

Judgment was accordingly rendered can-celling the Commission order of November 29, 1949, and permanently enjoining its enforcement.

We have no difficulty in deciding the first question in the affirmative.

Section 8aa reads: “In addition to persons enumerated in Section 8, hereof, any and all other persons, association of persons, or corporations, operating any pipe line, which may now, or hereafter, purchase crude oil, petroleum, or natural gas in this State, whether they be common carriers or affiliated with common carriers or not, shall be a common purchaser of such crude oil, petroleum or natural gas, and shall purchase crude oil, petroleum or natural gas, offered it for purchase without discrimination in favor of one producer or person as against another as provided in Section 8 hereof.”

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Rivas v. State
506 S.W.2d 233 (Court of Criminal Appeals of Texas, 1974)
Col-Tex Refining Co. v. Railroad Commission of Texas
240 S.W.2d 747 (Texas Supreme Court, 1951)

Cite This Page — Counsel Stack

Bluebook (online)
236 S.W.2d 221, 1950 Tex. App. LEXIS 2456, Counsel Stack Legal Research, https://law.counselstack.com/opinion/railroad-commission-v-col-tex-refining-co-texapp-1950.