Rogers v. Ricane Enterprises, Inc.

852 S.W.2d 751, 1993 WL 133802
CourtCourt of Appeals of Texas
DecidedMay 26, 1993
Docket07-91-0058-CV
StatusPublished
Cited by13 cases

This text of 852 S.W.2d 751 (Rogers v. Ricane Enterprises, Inc.) 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
Rogers v. Ricane Enterprises, Inc., 852 S.W.2d 751, 1993 WL 133802 (Tex. Ct. App. 1993).

Opinion

BOYD, Justice.

Appellants 1 bring this appeal from a take-nothing judgment in their trespass to *754 try title and conversion action against ap-pellees. 2 In the suit giving rise to this appeal, appellants sought to recover the working mineral interest under an assignment of an oil and gas lease insofar as it covers a 329.8 acre tract out of approximately 7,893 acres covered by the base lease. As a basis for their action, appellants assert they are entitled to all rights held by the Western Drilling Company 3 (Western) under the assignment in question on the ground that the assignment is still valid and in full force and effect. For reasons hereinafter expressed, we affirm the judgment of the trial court.

On May 31,1937, Carrie Slaughter Dean, as lessor, entered into an oil and gas lease with P.N. Wiggins, Jr., as lessee, covering approximately 7,893 acres (base lease). The base lease included a habendum clause, which stated that Wiggins was “TO HAVE AND TO HOLD [the 7,893 acres] ... for a term of ten (10) years from [May 31, 1937] ..., hereinafter referred to as the primary term, and as long thereafter as oil and gas ...is produced_” The base lease further provided that if “the leased premises shall be hereinafter owned in the severalty or in separate tracts, the premises, nevertheless, shall be developed as one lease....”

Additionally, the lease provided that after expiration of the primary term, upon cessation of production, the lessee would have 60 days within which to commence drilling a new well, or attempt to restore production from the existing well. If commenced and prosecuted with reasonable diligence within this period, the lease would continue in effect as long as production continued. The assignment of the lease in whole or in part was expressly allowed.

Production was achieved on the base lease within the primary term. Subsequently, Superior Oil Company (Superior) acquired the base lease. On June 1, 1949, Superior assigned the lease above a depth of 5200 feet on a 329.3 acre portion of the base lease on which there was no production to Western and Leonard Latch. Western and Leonard Latch then conveyed a one-third interest to F.R. Jackson. Provisions in the assignment recited:

THIS ASSIGNMENT IS MADE SUBJECT TO THE FOLLOWING CONDITION AND PROVISION:
1.
All of the right, title, interest and privileges herein conveyed to and conferred upon Western will cease and terminate and shall revert to and revest in Superi- or, unless within thirty (30) days after the datehereof [sic], Western shall commence the actual drilling of a well for oil and gas upon the above described land and at a location thereon which shall satisfy any then existing offset obligation. ...
2.
Western shall and hereby does assume and agree to perform and discharge all of the [base] lease obligations, express or implied.... To this end, it is recognized by the parties hereto ... that there now are a number of ... off-set wells which Western shall protect against by the drilling of properly located wells on the above described land, in due and proper *755 time, and subject to all of the applicable provisions of this Agreement.
* * * * * *
5.
In the event that the production of oil, gas or other hydrocarbon substances is developed on the above described leased premises by Western, and Western desires to abandon or cease operating the same, Western shall notify Superior in writing of such desire, and Superior may, at its election, require Western to transfer and assign to Superior or to its nominee all of Western’s right, title and interest inand [sic] to said lease, together with the well or wells located thereon and together with such equipment used in connection therewith which Superior may desire to acquire....
* * * sjc ⅛: *
7.
Upon the termination of the rights of Western hereunder and/or with respect to the above described lease, as herein and in said lease expressly provided, or otherwise, Western shall deliver to Superior upon demand, a good and sufficient quit-claim deed and release. Any delay, failure or refusal on thepart [sic] of Western to deliver any such quit-claim and release shall in no way prevent such rights from terminating, and reverting to and revesting in Superior as herein expressly provided and contemplated.

Latch and F.R. Jackson assigned their interest in the assignment to Western in 1955 and 1956. All parties have agreed that Western is the common source of title to the subject property. Western immediately drilled and completed a single well, the Carrie Dean B No. 1 well, which was marginally productive and subsequently ceased production sometime in July 1961. It was then converted to salt water disposal. All parties agree that no additional wells have been drilled by Western or its shareholders on this tract from 1961 to the present.

On August 23, 1960, just prior to the cessation of production, E.P. Campbell (Campbell), the president of Western, signing in his individual capacity, conveyed to the Dakota Company, Inc. (Dakota) “all of [his] right, title and interest ... as conveyed to [him] by assignment^ ] of record in Cochran County, Texas, in and to” the Dean lease “insofar as said lease covers the North 329.3 acres” to which the assignment applies. Campbell was an officer and stockholder in Dakota. Dakota in turn gave Campbell a promissory note for $250,-000 and a deed of trust which Campbell shortly thereafter transferred to the Union Bancredit Corporation (Bancredit). Dakota defaulted in payment of the note and, on August 6, 1963, J. Tom Lash executed a substitute trustee’s deed to Bancredit. Through subsequent transactions, an assignment was made to Torreyana Oil Company, which successfully completed a new producing well on the 329.3 acres in October 1979.

On July 19, 1965, the Texas Secretary of State forfeited Western’s corporate charter, giving rise to appellants’ position that they, as shareholders and as heirs of shareholders, stand in Western’s shoes as successors to all interests belonging to the defunct corporation. In 1984, appellants brought this trespass to try title action to recover possession of the working interest on the 329.3 acre tract. They also sought damages for conversion of oil and casing-head gas produced or purchased from the property by appellees.

It is undisputed that the base lease remains in effect because of continuous production on other parts of the base lease. On that basis, appellants argue that their rights under the 1949 partial assignment also remain in effect regardless of the long period of inactivity, because Western satisfied the only condition in the assignment, the commencement of drilling for oil and gas within 30 days of the date of the assignment.

After a lengthy, complicated, and hotly contested trial, the case was submitted to the jury by 18 questions with accompanying instructions.

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Cite This Page — Counsel Stack

Bluebook (online)
852 S.W.2d 751, 1993 WL 133802, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rogers-v-ricane-enterprises-inc-texapp-1993.