State Ex Rel. Pan American Production Co. v. Texas City

295 S.W.2d 697, 1956 Tex. App. LEXIS 1949
CourtCourt of Appeals of Texas
DecidedNovember 1, 1956
Docket12974
StatusPublished
Cited by21 cases

This text of 295 S.W.2d 697 (State Ex Rel. Pan American Production Co. v. Texas City) 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
State Ex Rel. Pan American Production Co. v. Texas City, 295 S.W.2d 697, 1956 Tex. App. LEXIS 1949 (Tex. Ct. App. 1956).

Opinion

GANNON, Justice.

This is a proceeding in the nature of quo warranto brought by the. State of Texas against the City of Texas City and its governing body on relation of Pan American Production Company, Sun Oil Company, Freeport Sulphur Company, John W. Mecom, and Radford Byerly, Trustee of the Mecom Trust. The purpose of the suit was to test the validity of an annexation ordinance insofar as the ordinance'purports to include within the city boundaries, as extended thereby, navigable submerged lands of the State, of Texas and. certain mineral leasehold interests of relators therein. All of the disputed territory lies within the shorelines of Moses Lake and Dollar Bay in Galveston County. These waters together constitute a single arm or extension of Galveston Bay.

Judgment below went against the.' State and relators, and they appeal.

Since, in our opinion, the State and re-lators neither allege nor can' allege facts entitling them to the relief they ask, we forego a discussion of the detail of the trial below, and treat the appeal as if the trial court had rendered judgment on the face of the pleadings without allowing the plaintiff and relators right of amendment.

A summary of the facts and contentions shown by the trial petition as clarified and altered by certain stipulated facts follows:

The City of Texas City is a home-rule city. On the 12th of November, 1954, its governing body finally enacted an ordinance extending the boundaries of the City to include a large amount of additional territory in the northerly vicinity of the City’s prior existing limits. Included within the area described in the annexing ordinance are the disputed areas of Moses Lake and Dollar Bay, in parts of which relators hold ' leasehold estates consisting of oil, gas and minerals conveyed to them by the State of Texas. Unless restrained 'the defendants will place the property of re-lators on the tax rolls of the City of Texas City and will tax said property for municipal purposes.

Relators hold title directly from the State to the oil, gas and other minerals in two certain tracts ■ of land numbered respectively 356 and 357. The leasehold estate in Tract No. 356 covers 726 acres and has at all times been owned exclusively by Pan American Production Company. The leasehold estate in Tract No. 357 *700 originally leased by the State to Sun Oil Company consists of 617 acres in Dollar .Bay. Eighty' acres of minerals in said tract are owned jointly by Sun Oil Company, Freeport Sulphur Company, John W. Mecom, and the Mecom Trust. The remainder of ..the leasehold estate in this tract is wholly owned by Sun Oil Company.

Each and all of relators’ leasehold estates include the usual and ordinary appurtenant surface rights reasonably necessary or desirable to conduct exploration and production operations.

At all material times oil and gas in paying quantities have been produced from each of said leases and each of said leases remains valid and subsisting.

Pan American Production Company is presently producing oil from points in strata underlying the area of its lease through eighteen producing wells, all directionally drilled from surface locations oh dry land outside the boundaries of the shorelines of Moses Lake, except seven which were drilled from, surface locations on the south shore of Moses Lake. The surface locations from which said seven wells were drilled lie inside the boundaries described in the annexing ordinance under review. The well heads of all other wells of Pan American Production Company lie outside of the boundaries of Texas City, however , determined. All of Pan American Production Company’s producing wells are producing from points in sands located within the area described in the annexing ordinance. Each of Pan American Production Company’s producing points is located far out in Moses Lake and is under submerged territory.

The mineral estate jointly owned by Sun Oil Company, Freeport Sulphur Company, John W. Mecom, and the Mecom Trust is producing from two wells directionally drilled from shore locations on the south shore of Dollar Bay. These wells are drilled to, completed at, and are producing from, sands at points well within the area of the Bay. The leasehold estate wholly owned by Sun Oil Company is presently producing from only one well. Such well and another abandoned well originally productive of oil and gas in paying quantities were drilled as straight bore holes from barges out in the Bay. The completion and production equipment necessary to produce said wells includes a well head platform and the usual Christmas tree and fittings.

Except for relators’ leasehold estates, all property interests within the -shorelines of Moses Lake and Dollar Bay are owned by the State of Texas.

While appellants allege nothing in derogation of relators’ surface rights in the area of Moses Lake and Dollar Bay, they do allege that with the sole exception of the platform and Christmas Tree connections on one presently producing Sun Oil Company well they have not in fact installed, and do not maintain, any physical surface production properties of any nature whatsoever within the shoreline boundaries of Moses Lake and Dollar Bay, such as platforms, pilings, derricks, tanks, pipelines, or other surface equipment. If no pipeline has ever been maintained from the straight bore holes of Sun Oil Company, it is a fair inference from the petition that the production from such well is transported to dry land either over or through the waters submerging the area of the leasehold estate by equipment capable of negotiating the trip.

It is alleged that relators’ present directional methods of operation, both in drilling and producing their leases from dry land locations, are practicable and that none of relators has any present intention of ever installing “any other physical properties of the nature hereinabove referred to [surface equipment] upon the bed of said lake and/or bay or the surface waters thereof in the enjoyment of said leasehold estates.” However, the right of relators to do so is not negatived.

*701 The area described in the annexing-ordinance includes 5,539 acres, of which 3,528 acres is dry land, the remaining 2,011 acres being submerged lands underlying Moses Lake and Dollar Bay. The submerged area is bounded on the west and east by dry land and on the south by the existing dry land northerly boundary of Texas City. The submerged opening where Moses Lake and Dollar Bay join Galveston Bay is approximately 2,500 feet wide. The waters in Moses Lake and Dollar Bay are navigable and are subject to tidal effects. This territory is a part of the sovereign jurisdiction of Texas and of the United States. Presently the State is exercising its regulatory jurisdiction of the area to the extent thought necessary through the Railroad Commission of Texas and the Game, Fish & Oyster Commission. Likewise the United States presently exercises its jurisdiction over navigation and navigable waters in the area through the Corps of Engineers of the United States Army. Though not alleged, we must presume the State is also exercising its taxing jurisdiction over relators’ private property interests through its properly constituted executive authority, in compliance with constitutional mandates.

No humans inhabit the submerged areas covered by Moses Lake and Dollar Bay, and no structures designed for human habitation exist therein.

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295 S.W.2d 697, 1956 Tex. App. LEXIS 1949, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-pan-american-production-co-v-texas-city-texapp-1956.