Terrell v. Alpha Petroleum Co.

54 S.W.2d 821, 1932 WL 69090
CourtCourt of Appeals of Texas
DecidedNovember 16, 1932
DocketNo. 2404.
StatusPublished
Cited by15 cases

This text of 54 S.W.2d 821 (Terrell v. Alpha Petroleum 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
Terrell v. Alpha Petroleum Co., 54 S.W.2d 821, 1932 WL 69090 (Tex. Ct. App. 1932).

Opinion

LAWHON, J.

Alpha Petroleum Company, a Texas corporation, filed this suit in the district court of Montgomery county against C. V. Terrell, Lon A. ¡Smith, and Ernest O. Thompson in their capacity as railroad commissioners of the state of Texas, and also against W. B. Brow-der, Howard Van Zandt, the Texas Pipeline Company, a corporation, and Beta Oil Company, a corporation. W. B. Browder is alleged to be the county attorney of Montgomery county and Howard Van Zandt is alleged to be deputy supervisor of the Conroe oil field, acting under the appointment of and at the direction of the Railroad Commission of the state of Texas. It is alleged in plaintiff’s petition that it is the owner of oil and gas leases on two tracts of land in Montgomery county near the town of Conroe, and that it has valuable producing oil wells on this land. It is also alleged that one of the wells is producing 1,750 barrels per day, but is capable of producing in excess of 6,000 barrels daily if the valves and controls should be opened so that it would flow to full capacity, and that the other well is producing 3,200 barrels per day, but is capable of producing 12,000 barrels daily. It is alleged that the wells were drilled in a proper and workmanlike manner, and were being operated without physical or other character of waste; that it has a market for its oil, so that there will be no evaporation by reason of storage; that one well was drilled at an approximate cost of $42,000, and was completed about July 28, 1932, and the other well was drilled at an approximate cost of $38,000, and was completed about September 1, 1932. It is alleged that the Conroe oil field, where the two wells mentioned aré located, is in what is known as the “coastal area,” extending from Refugio county, Tex., through a number of counties in Texas near the Gulf of Mexico, and through a number of coastal parishes in the state of Louisiana; that the Railroad Commission had heretofore issued proration orders limiting the production of oil in all the fields of Texas except those located in the “coastal area.” It is alleged that, by reason of the difference in the depths of the wells and the nature of the pools or reservoirs of oil and geological formations, the production of oil from wells outside the “coastal area” can be curtailed without permanent injury to such wells or formations, while in the “coastal area” such limitation of flow is liable to cause serious injury or destruction of such *823 wells and geological formations; that appel-lee had hy gradual processes reduced the flow of its wells far below full capacity in order to conform to the general plan of proration, but that the method it used would not work any permanent injury .to such wells; that the Railroad Commission, on September 19, 1932, promulgated an order amending a previous order, whereby production in the Montgomery county or Conroe oil field was limited to 240 barrels per day, such order to become effective September 24, 1932, and in such order Montgomery county was excluded from the “gulf coast area,” although other counties included in such area were many miles further removed from the Gulf of Mexico than Montgomery county; that in other fields near the Gulf Coast the owners were given wide discretion as to whether the reduction in the flow of oil would injure such wells, but that no such discretion was given owners or operators in the Montgomery county or Conroe field, and that the enforcement of such order would probably injure appellee’s wells, if not destroy them.

There are other allegations to the effect that the Conroe field has "been discriminated against in the order referred to, as compared to other coastal fields, such as regulating the space between wells to be drilled. It is further alleged that the Railroad Commission, its agents and servants, will seek to recover of appellee heavy penalties for violating the above-mentioned proration order unless enjoined, and that defendant Van Zandt, supervisor under the Railroad Commission, and W. B. Browder, county attorney of Montgomery county, will co-operate with the Railroad Commission, if not enjoined, in furnishing evidence upon which suits for penalties may be brought. It is also alleged that the Acts of the First Called Session of the Forty-Second Legislature (chapter 26), because it provides for the recovery of heavy penalties for violating orders of the Railroad Commission, does not give appellee due process of law, and says that such act of the Legislature is so vague and uncertain that no operator or citizen would know whether he was violating the same. Other unreasonable features are charged against the proration order referred to. Appellee prayed for a temporary restraining order and injunction against the enforcement of the order of the Railroad Commission referred to, and that such injunction so prayed for be made permanent on final hearing. The petition was verified by the president of ap-pellee corporation on the 23d day of September, 1932, and on the same day was presented to Hon. S. A. McCall, judge of the Ninth judicial district of Texas, who indorsed thereon the following order:

“This, the 23rd day of September, 1932, the foregoing petition coming on to be considered by the undersigned Judge, in Chambers, the same has been examined and considered, and I assume jurisdiction of this case and order it filed.

“It is ordered, adjudged and decreed that a temporary .restraining order issue against the Defendants, and each of them, as prayed for by the plaintiff, to continue until the further orders of this court that may be signed and entered herein. The parties are advised of the desire and purposes of the court to hear, at the convenience of the parties, any motion of any defendant that may be filed and desired heard herein, and of the further desire and purpose of the Court to hear such motion within ten (10) days of the date hereof, the Clerk will issue notice to the Defendants forthwith; provided, however, that the plaintiff shall first' file a good and sufficient bond, to be approved by the Clerk, in the sum of One Thousand Dollars ($1,000.00), payable to the undersigned Judge of this Court, for the use and benefit and protection of the defendants named herein, and each of them, and otherwise conditioned as provided by law.
“S. A. McCall, Judge Ninth Judicial
District of Texas.”

Bond was given, as provided, and writ of injunction issued. The writ enjoined the Railroad Commission from enforcing the order of the Railroad Commission dated September 19, 1932, “until the further order of said court.”

Thereafter appellee, on October 1,1932, presented to the Hon. S. A. McCall, judge of the Ninth judicial district, Montgomery county, Tex., a motion wherein it is recited that the Attorney General of the state of Texas had ordered a transcript of the proceedings in this cause from the district clerk of Montgomery county with the intention of perfecting an appeal from the order of September 23, 1932, and, while denying the right of appeal, stated that he did not want any previous orders to lapse, and requested that, pending appeal, the former order be continued in full force and effect for a period of ten days, or until and if a valid appeal should be perfected to the Court of Civil Appeals at Beaumont, Tex. The district judge endorsed on said motion the following order:

“Fiat.
“In Chambers, Conroe, Texas.
“October 1, 1932.

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Bluebook (online)
54 S.W.2d 821, 1932 WL 69090, Counsel Stack Legal Research, https://law.counselstack.com/opinion/terrell-v-alpha-petroleum-co-texapp-1932.