293 P. 899 | Cal. Ct. App. | 1930
This is an original prohibition proceeding. The petitioners seek to prevent the respondent court from enforcing a preliminary injunction and order modifying the same and also to check any further order or proceeding against them in an action pending in the respondent court entitled People of the State of Californiaon Relation of Fred G. Stevenot, Director of Natural *125 Resources of the State of California v. Associated Oil Companyet al., which action was brought for the purpose of enjoining all of the defendants therein named from unreasonably wasting natural gas from their wells in the Santa Fe Springs oil-field. On March 19, 1930, after hearing the parties to the action, the court granted a temporary injunction limiting and defining the amount of gas which the defendants would be allowed to permit to escape into the air from their wells in the field mentioned. On March 28, 1930, the court made another order somewhat relaxing the terms of the injunction pendente lite. It is asserted by petitioners that they have been irreparably injured and damaged by attempting to curtail the production of natural gas; that there is no market for a large part thereof and that if they are to be allowed as they claim it is their right, to employ the gas as a lifting power to raise the oil from below the surface they must of necessity permit a portion thereof to escape into the air; that prior to the temporary injunction they were producing 19,554 barrels of oil per day but that operating most efficiently under the amount of gas allowed to be used by the modified order they cannot possibly produce more than 10,211 barrels per day.
The action was instituted in the respondent court pursuant to the provisions of "An act to protect the natural resources of petroleum and gas from waste and destruction, etc." (Stats. 1929, p. 923), the sections of which pertinent at this point in our discussion read as follows: "Sec. 8b. The unreasonable waste of natural gas by the act, omission, sufferance or insistence of the lessor, lessee or operator of any land containing oil or gas, or both, whether before or after the removal of gasoline from such natural gas, is hereby declared to be opposed to the public interest and is hereby prohibited and declared to be unlawful. The blowing, release or escape of natural gas into the air shall be prima facie evidence of unreasonable waste. (Sec. 14b.) Whenever it appears to the director of the department of natural resources that the owners, lessors, lessees or operators of any well or wells producing oil and gas or oil or gas are causing or permitting an unreasonable waste of gas, he may institute, or have proceedings instituted, in the name of the people of the State of California, to enjoin such unreasonable waste of gas regardless of whether proceedings *126 have or have not been instituted under section 8" (a section authorizing the oil and gas supervisor to issue certain orders) "hereof, and regardless of whether an order has or has not been made therein. Such proceedings shall be instituted in the superior court for the county in which the well or wells from which the unreasonable waste of gas is occurring or any thereof are instituted. The owners, lessors, lessees or operators causing or permitting an unreasonable waste of gas in the same oil or gas field, although their properties and interests may be separately owned and their unreasonable waste separate and distinct, may be made parties to said action. In such suits no restraining order shall be issued ex parte, but otherwise the procedure shall be governed by the provisions of chapter three, title seven, part two of the Code of Civil Procedure of the State of California" (a chapter relating to injunctions) "and no temporary or permanent injunction issued in such proceedings shall be refused or dissolved or stayed pending appeal upon the giving of any bond or undertaking, or otherwise."
The arguments of the petitioners may be grouped into the following propositions: First: The act deprives petitioners of property without just compensation and without due process of law. Second: The statute is void for uncertainty and for failure of the legislature to define a standard of conduct. Third: The enactment permits the use of gas for lifting purposes in a reasonable proportion to the amount of oil produced and that the uncontroverted evidence shows no other or greater use and for that reason the court was without jurisdiction to grant the temporary injunction.
[1] Turning then to the first contention, it is asserted that the act is violative of the Fourteenth Amendment to the federal Constitution and sections 13 and 14 of article I of the state Constitution. To put the argument most favorably for the petitioners it is asserted that they have the same vested right to make use of the gas under their property for the purpose of lifting the oil thereunder that a riparian owner has to make use of the underflow of a stream passing through his property to lift the waters to levels of entry upon his land. It is therefore insisted by counsel that it is of prime importance to examine the nature of petitioners' rights. While this is true in a degree, yet we do not attach the same weight as do petitioners to the *127
pure legal question whether the owner of the surface is the owner of the gas in place under his soil subject to the right of an adjoining owner to appropriate to himself the title thereto by capture and possession, or whether the owner of the surface is vested only with the right to bore for gas and reduce it to possession. In either event he is the owner of a valuable right. Every owner of the surface has a like interest and right of property, whatever it may be. [2] We think, however, that the better reasoning, on account of the self-propelling or migratory character of natural gas, as well as oil, dictates the conclusion that while in general we may speak of the owner of the surface as being the owner of the gas and oil in place, what we really mean is that he and he alone has the right through his own property to endeavor to reduce the substances to possession; that when they are reduced to possession and then only does he have an absolute and unqualified title thereto. It is argued by petitioners and by some of those who have appeared as amici curiae that the law of California is settled to the effect that the owner of the surface is the owner of the gas and oil in situ. There are some general expressions in the authorities to this effect, particularly in tax cases where assessments have been levied upon a lease giving and granting to the lessee the right to bore for and extract the hydro-carbon substances. But they are not controlling or helpful here. On the other hand, in distinguishing between oil and other minerals in the case of Acme Oil Co. v. Williams,
In Commonwealth v. Trent,
We also find authority of a persuasive character in our own state. In Ex parte Elam,
"The first point made by petitioner — which is that the act is violative of the fourteenth amendment of the Constitution of the United States, which provides that no state shall `deprive any person of life, liberty, or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the law', and of article I, section 1 of the Constitution of this state, which provides that `all men are by nature free and independent, and have certain inalienable rights, among which are those of enjoying and defending life and liberty, acquiring, possessing and protecting property', and of section 13, article I, which provides that no person shall be `deprived of life, liberty, or property without due process of law' — seems to have been met and demonstrated to be untenable by the Supreme Court of the United States in the case of Ohio Oil Co. v.State of Indiana,
It is to be observed that the case of Ohio Oil Co. v.Indiana, supra, is approved and legislation of a character very much akin to the enactment now under scrutiny has been found not to invade the constitutional provisions against deprivation of property without compensation and without due process of law.
In the discussion of the problem to this point we think the essential difference from the question involved in Herminghaus
v. Southern Cal. Edison Co.,
[5] We therefore turn to the second angle of our problem: Is the statute void for uncertainty and the failure of the legislature to define a standard of conduct? The objection thus urged against the enactment arises from the use of the word "unreasonable". Were it not for the argument that it is not waste to permit the use of the gas to lift the oil to the surface it would be obvious that without the qualifying word the enactment could not be subjected to attack on the ground of uncertainty. As we have heretofore observed, the Indiana statutes prohibited all waste, and the United States Supreme Court concluded it to be a proper exercise of the legislative authority despite the argument that the owners of the surface were entitled to make use of its force to raise the oil from beneath the ground. Undoubtedly the legislature had in mind the Indiana statute and its construction, as well as others from other oil producing states. It would seem to logically follow that they made use of the word "unreasonable" for the very purpose of providing that the operators of a well might utilize a reasonable proportion of gas for the purpose of lifting the oil to the surface. This thought coincides with that indicated by the language we have already quoted to the effect that it shall be held to be an unreasonable waste of gas for one to produce gas in excess of "a reasonable proportion to the amount of oil produced", when such gas is not conveniently necessary for other than lifting purposes. When viewed in this light we think the word "unreasonable" is not so uncertain as to render the enactment void and inoperative. In fact, our courts have frequently applied the rule of reasonable use between riparian owners where similar correlative rights are involved. We have already cited the case of Eckel v. Springfield Tunneletc. Co., supra, and Ex parte Elam, supra, and to these we may add the following: Fall River Valley Irr. Dist. v. Mt. ShastaP. Corp.,
These authorities set at rest the contention that the enactment is uncertain as well as the incidental assertion that the legislature has by the language of the act and its failure to define a standard of conduct with greater rigidity, *140
attempted to confer upon the court a legislative function. From them, as well as those cases such as Standard Oil Co. v.United States,
[6] Sufficient has been said to effectually dispose of the remaining argument of the petitioners and demonstrate that it is founded on a misconception of the legislative intent. Their argument is in effect that they are not producing an undue proportion of gas when the gas production is measured by the oil from one specific well. But this is obviously not the purpose of the law, as may clearly be indicated by a single illustration. Suppose a well is drilled and comes in, as what is commonly termed "a gasser", that is, a well which produces an insignificant quantity of oil. Conceivably such a well might drain the field of its supply of gas, leaving the oil therein unrecoverable, to the great and irreparable injury of the other surface owners. We have instanced an extreme possibility, but our interpretation of the act is that it was intended to remedy a lesser, but nevertheless unreasonable, degree of waste of the same character.
[7] Another answer to this argument of petitioners is that having determined that the court has the jurisdiction to determine what is an unreasonable waste, we cannot interfere by the writ of prohibition to deprive its judgment of effect. And we here direct attention to the determination of the respondent court that "there appears to be an unreasonable waste of natural gas in the Santa Fe Oil Field", and "that the evidence available . . . shows that the unreasonable waste of natural gas in the said field may be *141 substantially reduced and that the equities of all parties may be fairly conserved by a preliminary injunction which will limit the waste of gas by restricting the production thereof to a quantity reasonably in excess of the present outlets for beneficial use above ground, etc., etc." It does not appear from the facts presented to us that in so far as the particular case before us is concerned the court exceeded its jurisdiction in finding as we have already quoted.
It is suggested in the briefs that the legislature is without authority to restrict the production of oil, and lest we be misunderstood we deem it expedient to add that the record does not indicate that the temporary injunction was founded upon such a theory. Nor are we determining that the act attempts to confer upon the court any such power. Rather we are convinced that a proper construction of the enactment confines the authority within the limits of enjoining the production of gas when in excess of the reasonable proportion to the oil for the particular field involved, when not conveniently necessary for other than lifting purposes.
Writ of prohibition denied.
Works, P.J., and Craig, J., concurred.
A petition for a rehearing of this cause was denied by the District Court of Appeal on December 27, 1930, and an application by petitioners to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on January 26, 1931.