Schwartz v. Prairie Producing Co.

833 S.W.2d 629, 1992 Tex. App. LEXIS 1554, 1992 WL 133428
CourtCourt of Appeals of Texas
DecidedJune 18, 1992
DocketNo. 01-91-00491-CV
StatusPublished
Cited by1 cases

This text of 833 S.W.2d 629 (Schwartz v. Prairie Producing 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
Schwartz v. Prairie Producing Co., 833 S.W.2d 629, 1992 Tex. App. LEXIS 1554, 1992 WL 133428 (Tex. Ct. App. 1992).

Opinions

OPINION

SAM BASS, Justice.

This appeal is from an instructed verdict construing oil, gas, and mineral leases. We reverse and remand for a new trial.

Appellants, the Schwartzes, own mineral interests in two tracts of land on which they executed eight leases that were assigned to appellee, Prairie Producing Company, Inc. Prairie pooled the tracts into two separate gas units that include three producing gas wells. Each well produces sour gas, which is gas that contains hydrogen sulfide.

Prairie contracted with Cities Service Company for delivery of sour gas at the wellhead. Cities Service transported the sour gas to its processing facility, where sulphur was recovered from the hydrogen sulfide gas. Cities Service kept 15 to 20 percent of the sulphur produced, and returned the remaining sulphur to Prairie. Prairie sold the sulphur to third parties.

Prairie tendered to the Schwartzes one dollar per long ton of sulphur extracted from the gas, the royalty provided in the lease for sulphur. However, the Schwartzes refused the payments and sued, claiming that under the gas clause of the lease, they were entitled to recover their percentage interest in one-fourth of Prairie’s net proceeds from the sales of sulphur recovered from the hydrogen sulfide gas. Prairie claimed that it had correctly paid royalties under the sulphur royalty clause.

The parties disagree on which royalty provision applies. The Schwartzes contend that they are entitled to royalties on hydrogen sulfide gas under subsection 3(b)(1), the gas clause, because hydrogen sulfide is a gas that was sold to Cities Service. Prairie claims that subsection 3(c), the sulphur clause, applies because it was sulphur mined and marketed that was sold to Cities Service and to third parties.

In the first proceeding in the trial court, the court granted summary judgment for Prairie. This Court reversed the summary judgment and remanded the case to the trial court. Schwartz v. Prairie Producing Co., 727 S.W.2d 289 (Tex.App.—Houston [1st Dist.] 1987, writ ref'd n.r.e.). In that case, each of the three members of the panel wrote separate opinions. The “majority” opinion, written by Justice Cohen, held that the leases require payment under the gas clause, and the trial court erred by holding payment should be made under the sulphur clause. Id. at 292. Thus, he reversed and remanded the cause to the district court. Id. at 293.

Justice Dunn concurred only in the judgment. She found the language of the leases to be ambiguous, and was unwilling to deny either side a trial. “I cannot declare with confidence, based on this record, that there is no disputed issue of fact and that one side or the other is entitled to judgment as a matter of law.” Schwartz, 727 S.W.2d at 293.

Finally, Justice Bass dissented. He found that sulphur extracted from hydrogen sulfide gas should be paid under the sulphur clause of the lease. Schwartz, 727 S.W.2d at 293. He, therefore, would have affirmed the summary judgment of the trial court. Id.

On remand, the trial court held a jury trial on the merits. After both parties rested their cases, the court granted Prairie’s motion for instructed verdict. The court rendered judgment that the Schwartzes take nothing on their claims for additional royalties.

In their first and second points of error, the Schwartzes contend that the trial court erred in granting Prairie’s motion for instructed verdict and in sustaining one of Prairie’s special exceptions to the Schwartzes’ petition, because the Schwartzes were entitled to payment under [631]*631the gas clause based upon the doctrine of the law of the case.

The law of the case is a principle under which determination of law questions will generally be held to govern a case throughout all the subsequent stages, including a retrial and subsequent appeal. Trevino v. Turcotte, 564 S.W.2d 682, 685 (Tex.1978). The Schwartzes assert that this doctrine should be applied because the same issue before this Court today was decided in the previous appeal: whether the gas clause or the sulphur clause applies to payments for hydrogen sulfide gas.

However, a majority of this Court did not decide which of the two clauses applies. Justice Cohen was of the opinion that the gas clause applied. Justice Bass decided that the sulphur clause applied. Justice Dunn, while concurring in the result, found the issue was a question of fact that this Court should not decide. With all due respect to Justice Cohen, we hold that concurrence in the result is not sufficient to make the determination of the law by only one judge the law of the case.

The first and second points of error are overruled.

In the third point of error, the Schwartzes assert that the trial court erred in granting an instructed verdict because the leases unambiguously provide that hydrogen sulfide gas is compensable under the gas clause. Alternatively, in the fourth point of error, they claim that, even if the leases are ambiguous, the evidence presented at trial raised a fact issue concerning which clause governs payment for hydrogen sulfide gas. The disputed provision of each lease is identical. It refers to the Schwartzes as “lessor” and to Prairie as “lessee” and provides:

3. As royalty, lessee covenants and agrees ... (b) To pay lessor on gas and casinghead gas produced from said land (1) when sold by lessee, of the amount realized by lessee, computed at the mouth of the well, or (2) when used by lessee off said land or in the manufacture of gasoline or other products, the market value, at the mouth of the well, of ¼ of such gas and casinghead gas; (c) To pay lessor on all other minerals mined and marketed or utilized by lessee from said land, one-tenth either in kind or value at the well or mine at lessee’s election, except that on sulphur mined and marketed the royalty shall be one dollar per long ton.

In reviewing an instructed verdict, the appellate court must determine whether there is any evidence of probative force to raise fact issues on the material questions presented. Collora v. Navarro, 574 S.W.2d 65, 68 (Tex.1978). The court considers all of the evidence in a light most favorable to the party against whom the verdict was instructed, disregards all contrary evidence and inferences, and gives the losing the party the benefit of all reasonable inferences arising therefrom. Id. Every reasonable meaning deducible from the evidence is to be indulged in the non-movant’s favor. Trenholm v. Ratcliff, 646 S.W.2d 927, 931 (Tex.1983). If there is any conflicting evidence of probative value on any theory of recovery, an instructed verdict is improper, and the issue must go to the jury. White v. Southwestern Bell Tel. Co., 651 S.W.2d 260, 262 (Tex.1983).

Prairie’s expert witnesses testified about the natures of hydrogen sulfide and sul-phur. Larry Minter, a geologist with experience in hard mineral production, stated that hydrogen sulfide is a colorless gas.

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Bluebook (online)
833 S.W.2d 629, 1992 Tex. App. LEXIS 1554, 1992 WL 133428, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schwartz-v-prairie-producing-co-texapp-1992.