Tiller v. Fields

301 S.W.2d 185, 7 Oil & Gas Rep. 1513, 1957 Tex. App. LEXIS 1705
CourtCourt of Appeals of Texas
DecidedFebruary 28, 1957
Docket6948
StatusPublished
Cited by34 cases

This text of 301 S.W.2d 185 (Tiller v. Fields) 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
Tiller v. Fields, 301 S.W.2d 185, 7 Oil & Gas Rep. 1513, 1957 Tex. App. LEXIS 1705 (Tex. Ct. App. 1957).

Opinion

FANNING, Justice.

Mouzon Tiller and wife, Frances Tiller, brought suit against Bert Fields, W. S. Fields and H. T. Manning, Trustee of the Bert Fields, Jr. Trust, seeking a declaratory judgment that the pooling provision, contained in an oil and gas lease executed by the Tillers was altered after the execution of such lease by the deletion of the-words “such pooling to be into a unit or units not exceeding 40 acres each,” and that therefore the unitization of such lease and the tracts described therein with other tracts and leases into a 590.05 acre gas unit was unauthorized. The plaintiffs claimed in the alternative that if the 40-acre unit limitation was deleted prior to-the execution of the lease, that the resulting pooling provision was ineffective to-authorize the formation of the 590.05 acre gas unit because such provision was vague,, indefinite and in violation of the Statute of Frauds and the Conveyancing Statutes. Plaintiffs further contended that the unit was void because the Unit Declaration creating the unit was not filed for record until after the well was drilled. The cause was tried before a jury and in response to the single special issue submitted, the jury found that the words “such pooling to be into a unit or units not exceeding 40 acres each” were deleted prior to the execution of the lease. The trial court rendered judgment for defendants-appel-lees, and found that the lease in question and the tracts described therein were validly pooled and unitized into the 590.05 acre Bert Fields et al. — Mouzon Tiller Gas Unit. Plaintiffs have appealed.

Appellants present six points on appeal wherein they contend to the effect: that the pooling provision in question (as deleted) is in violation of the Statute of Frauds and the Conveyancing Statutes of this State; that the lease in question and the lands described therein were not validly pooled and unitized into the gas unit in question; that plaintiffs were entitled to receive ⅛ of all the oil, gas and other minerals produced from the well drilled on their land described in the lease; and that the unit declaration in question was not validly established and was ineffective to bind or pool plaintiffs’ royalty interest *187 under the lease in question because the unit declaration was not filed for record until after the gas well on the lease in question was drilled.

Appellants executed an oil and gas lease to H. T. Manning, dated September 15, 1944, for a primary term of 10 years from that date, which covered the interests of the appellants in two tracts described as 53i/$ acres each in the William Tiller Survey, in Harrison Gounty, Texas. This lease contained the following pooling provision:

“Lessee, at its option, is hereby given the right and power to pool or combine the acreage covered by this lease or any portion thereof with other land, lease or leases in the immediate vicinity thereof, when in Lessee’s judgment it is necessary or advisable to do so in order properly to develop and operate said premises in compliance with the spacing rules of the Railroad Commission of Texas or other lawful authority, or when to do so would, in the judgment of Lessee promote the conservation of the oil and gas in and under and that may be produced from said premises. Lessee shall execute in writing an instrument identifying and describing the pooled acreage. The entire acreage so pooled into a tract or unit shall be treated, for all purposes except the payments of royalties on production from the pooled unit, as if it were included in this lease. If production is found on the pooled acreage, it shall be treated as if production is had from this lease, whether the well or wells be located on the premises covered by this lease or not. In lieu of the royalties elsewhere herein specified, Lessor shall receive on production from a unit so pooled only such portion of the royalty stipulated herein as the amount of his acreage placed in the unit or his royalty interest therein on an acreage basis bears to the total acreage so pooled in the particular unit involved.”

The jury found that the 40 acre provision was stricken from the lease prior to execution. Appellants present no point attacking this finding of the jury.

In 1952, the appellees, Bert Fields, W. S. Fields, and H. T. Manning, Trustee of the Bert Fields, Jr. Trust, the then holders of said lease, by written Unit Declaration dated and executed on April 1, 1952, filed for record on July 18, 1952, and recorded on July 23, 1952, in the Deed Records of Harrison County, Texas, pooled and unitized this lease and the tracts described therein, along with other leases and tracts also described therein into the “Bert Fields et al. Mouzon Tiller Gas Unit” consisting of 590.05 acres of the William Tiller, James Shandoin and Mary Richardson Surveys. Subsequent to the execution of the Unit Declaration, the appellees drilled and completed a gas well on one of the tracts described in the appellants’ lease and within the unitized area. This well is now, and has continuously since the date of first runs in 1952, produced gas in commercial quantities.

Appellants in their brief, after referring to a line of cases which held to the effect that the act of pooling or unitizing effects a cross-assignment of the royalties involved, state: “Whether a cross transfer of royalty interests among various lessors is accomplished by an effective act of unitization by a lessee or whether the act o'f pooling merely established and determines contractual relationships between the royalty owners whose interests are so unitized need not be decided here.”

Both appellants and appellees take the position in their briefs that it is unnecessary to a decision in this case to decide the exact legal nature of the pooling provision. With this we concur.

Anticipatory provisions in leases for the commitment by the lessee of such leases to unitization, of necessity must be in general terms. Neither the lessor nor the lessee has any way of knowing at the time the lease is taken the facts with respect to which it *188 will be necessary for the lessee to apply his power. It is not'practicable for the lessee to await the ascertainment of such facts. He knows from experience that because of the possibility of many changes in ownership of the lessor’s interest as time goes on, it may be difficult to effect an agreement if the right to unitize is not included in the lease itself. Phillips Petroleum Co, v. Peterson, 10 Cir., 218 F.2d 926. The Texas courts, as well as other courts, have recognized these basic facts, and have consistently sustained the basic validity of lease pooling provisions and units formed under their authority. See the following authorities : Leopard v. Stanolind Oil & Gas Co., Tex.Civ.App., 220 S.W.2d 259, wr. ref., N.R.E.; Phillips Petroleum Co. v. Peterson, 218 F.2d 926, certiorari denied 349 U.S. 947, 75 S.Ct. 871, 99 L.Ed. 1273; Grimes v. La Gloria Corp., Tex.Civ.App., 251 S.W.2d 755, wr. ref., N.R.E.; Miles v.

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Bluebook (online)
301 S.W.2d 185, 7 Oil & Gas Rep. 1513, 1957 Tex. App. LEXIS 1705, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tiller-v-fields-texapp-1957.