Shelton v. Taylor

615 S.W.2d 912, 70 Oil & Gas Rep. 351, 1981 Tex. App. LEXIS 3570
CourtCourt of Appeals of Texas
DecidedApril 23, 1981
Docket5555
StatusPublished
Cited by2 cases

This text of 615 S.W.2d 912 (Shelton v. Taylor) 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
Shelton v. Taylor, 615 S.W.2d 912, 70 Oil & Gas Rep. 351, 1981 Tex. App. LEXIS 3570 (Tex. Ct. App. 1981).

Opinion

DICKENSON, Justice.

The controlling question is whether a 1948 oil and gas lease terminated when production ceased for more than 30 days in 1972. It was stipulated that the lease and the term royalty interests were extended through 1971 by production, and there is evidence of continuous production from June of 1972 through the date of trial.

Plaintiffs, Lee Shelton and wife, Erma Shelton, sued all of the parties who owned or claimed any interest in the lease and the owners of term royalty interests, seeking a judgment declaring that the lease had terminated and other relief. Following a trial by jury, judgment was rendered on the verdict that Plaintiffs take nothing and declaring that the oil and gas lease is in full force and effect. Plaintiffs appeal. We affirm.

The controlling issues may be summarized as:

1. During 1972 production in commercial quantities ceased on the lease in question.
2. Such cessation of production was temporary.
3. Oil and gas wells on adjacent property are not draining condensate, gas or oil from under Plaintiffs’ land.
*914 6. Dallas International Bank did not fail to develop the lease in the manner in which a reasonably prudent operator would under the same or similar circumstances.
8. Plaintiffs knowingly recognized, ratified and confirmed the validity of the oil and gas lease.

Plaintiffs have briefed 15 Points of Error. Point 1 argues that the trial court erred in overruling Plaintiffs’ objection to the question regarding the price paid for their 648 acre ranch. Any error in this ruling was harmless error under Tex.R.Civ.P. 434. Before the objection was made Lee Shelton had testified on direct examination that he bought the property in 1971 and that it was subject to the oil and gas lease involved in this lawsuit. He also testified that he had run over 600 head of cattle. Plaintiffs also proved the price which Humble was paid for its assignment of the lease in question. There is also evidence of Plaintiffs’ royalty income from the property. Plaintiffs’ expert gave opinion testimony of past drainage of oil and gas worth $1,427,511.35 and future loss of oil and gas worth $2,760,-120.00. Plaintiffs’ expert also estimated a cost of $200,000 per well for the six wells which he felt should be drilled. Point 1 contends that reversible error is shown by the following:

Q (Mr. Suttle): How much did you pay per acre for that land?
A (Mr. Shelton): I figured I don’t have to give my personal deal here in the Court.
OBJECTION (by Mr. Shelton’s lawyer): Your Honor, we will object to that question as being immaterial in the matter pending before the Court.
RESPONSE (by Mr. Suttle): I think it will be material, Your Honor, in demonstrating the benefits that the man has received from the property, and showing the magnitude of those benefits.
CONTINUED OBJECTION (by Mr. Shelton’s lawyer): The amount he paid for the property is immaterial.
THE COURT: I will overrule the objection. There are no secrets here. Overrule the objection. You may answer.
Q (Mr. Suttle): How much did you pay for the property, Mr. Shelton?
A (Mr. Shelton): The fact of the business, I would have to go and look and see. I don’t remember.
Q (Mr. Suttle): Just the approximate amount?
A (Mr. Shelton): Oh, $125.00 or $100.00 an acre, somewhere around there.

There was no proof as to whether the property was purchased for cash or on credit, and we hold that the objection that the amount paid for the land by Plaintiffs was “immaterial” does not preserve the objection which they seek to raise for the first time on appeal, that “It is improper to contrast the wealth of the parties in a suit, in an effort to prejudice the jury against one of such parties.” Moreover, Plaintiffs have not discharged their burden of showing that the jury’s knowledge that Plaintiffs paid $64,800 to $81,000 for the land “was reasonably calculated to cause and probably did cause the rendition of an improper judgment” as required by Tex.R. Civ.P. 434.

Points 2,3 and 4 challenge the jury’s answer to Special Issue No. 2. Points 5, 6 and 7 challenge the jury’s answer to Special Issue No. 3. Points 8, 9 and 10 challenge the jury’s answer to Special Issue No. 6. Under the test stated in Martinez v. Delta Brands, Inc., 515 S.W.2d 263, at 265 (Tex.1974), we find that there is evidence to support Special Issues 2, 3 and 6. Consequently, Points 2, 5 and 8 are overruled. We also find that the evidence is factually sufficient and that those answers are not “so against the great weight and preponderance of the evidence as to be manifestly unjust.” In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660 (1951). The jury was the exclusive judge of these disputed facts. Neither the trial court nor the appellate court is authorized to substitute its judg *915 ment for that of the jury when as here, there is evidence from which the jury could have believed either side’s version on the disputed issues. Benoit v. Wilson, 150 Tex. 273, 239 S.W.2d 792 (1951). Consequently, Points 3, 4, 6, 7, 9 and 10 are overruled.

As to the temporary cessation of production, we note that the Railroad Commission records for 1972 show the following production of oil under the disputed lease:

January-244 bbls

February-228 bbls

March-27 bbls

April - 0 bbls

May- 1 bbl

June-230 bbls

July---.259 bbls

August-225 bbls.

September-274 bbls

October-344 bbls

November-249 bbls

December-284 bbls

There is testimony that the pump on the well failed and that the lessee sold the lease to another operator who restored the production.

Watson v. Rochmill, 137 Tex. 565, 155 S.W.2d 783, at 784 (1941), states in its discussion of an oil and gas lease:

It appears to be very well settled that under the terms of the lease, upon cessation of production after termination of the primary term, the lease automatically terminates.... The strictness of the above rule has been modified where there is only a temporary cessation of production due to sudden stoppage of the well or some mechanical break down of the equipment used in connection therewith, or the like. Under such circumstances there are authorities which hold that the lessee is entitled to a reasonable time in which to remedy the defect and resume production.

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615 S.W.2d 912, 70 Oil & Gas Rep. 351, 1981 Tex. App. LEXIS 3570, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shelton-v-taylor-texapp-1981.