*1 417 15, contemplated Texas Civil Statutes. Article Vernon’s Therefore, judge disqualified to hear trial court was this cause. reversed, judgment Appeals
The Court Civil the cause is new trial. remanded for
Opinion April delivered 1962. concurring. SMITH,
JUSTICE judge disqualified. judgment The trial he entered Indemnity Ellis, in this case was void. Mutual Postal v. Co. being true, 140 proceedings Texas 482. S.W. 2d This nullity. Any regardless judgment rendered, were whether plaintiff defendant, for the should have been set aside and naught. judgment held party cannot void as to one as to the voidable other. Appellants
Michel T.
al,
et
al, Appellees
Railroad
Texas et
No.
A-8200. Decided February
Rehearing Denied
CIATE JUSTICE SMITH Frazier, Andrews, Campbell Houston, (L. Kurth, Jones, E. & Jr., Harry Jones, Houston) R. for Michel T. Company.
Meredith & Jr., Butler, Binion, (A. Amerman, Cook, Rice E. & Houston Cook, Smullen, Houston) Cecil D. Henderson James for Peter Company. Oil (Frank
Turner, Rodgers, Winn, Terry, J. Scurlock & Dallas Scurlock, Dallas), Corporation. for Petroleum Pan American Brownlee, Jr., Wilson, Gen., (Houghton Atty. Austin Will Shivers, Gen., Attys. Austin) for Railroad and Linward Asst. of Texas. Hart, Austin, Blalock, Blalock, Houston, Hart Lohman & & for L. et Intervenors H. Dillon al. Scott, Austin, Jr., H. Barnes.
Wallace for Intervener J. C. McKay Avery, Tyrell-Combest Austin, & for Intervenor Realty Co.
Spruiell, Lowry, Potter, Guinn, Tyler, Inter- Lasater & Lake, venor P. G. Inc. *3 opinion
ASSOCIATE JUSTICE delivered the of CULVER the Court. from, bring appeal
Michel T. and others this direct upholding a decree of the trial court certain orders the Rail- denying road permanent injunction appellants Commission of Texas and prayed and all other relief for. sought the trial appellants court the to restrain the Rail- continuing
road Commission from in effect the allocation formula adopted August 18, 1958, for the Port Acres Field in its order 3-38,395 No. which reads as follows: gas daily production
“RULE 3. The allowable from completed gas individual wells in a non-associated reservoir subject allocating field shall determined the allow- be production, able after been made deductions have for wells incapable producing gas among allowables, their following the individual wells in the manner: “a) gas production Two-thirds (2/3) the allowed from gas a non-associated reservoir shall be allocated to the individual completed proportion acreage wells therein assigned acreage to each such well bears to the sum of the the reservoir. gas
“(b) production One-third (1/3) allowed from equally among a non-associated reservoir shall be allocated completed the individual wells therein. daily
“(c) each The total non-associated allowable acreage per allowables.” well shall the sum of its and well enjoined They prayed further also Commission allowing marketing Acres Field from Port operators the field required until pressure point permit at such as the maximum maintain recovery pre- hydrocarbons and the reservoir contained in unnecessary waste of those natural resources. vent exceptions pleadings so The trial court sustained they far Railroad Commis- were directed to the refusal of the cycling compulsory pressure maintenance sion to enter the order and order of the Commission found concluded that the complained reasonably otherwise of was sustained substantial evidence and lawful and valid. ap- and the other
At the outset the Railroad Commission challenge appeal pellees vigorously jurisdiction direct our of this ground purpose appeal where on the that such will lie part of the suit restrain action or threatened action on is to object the suit is to of the compel and not when the purpose they say that the real action. In other words object compel to enter of this proration is to the Railroad Commission suit cycling pressure mainte- order and to order new nance in the Port Acres Field. respect rely support position on our
To their in this *4 Garrison, 253, 2d 67. decision in Boston v. 152 Texas 256 S.W. sought of the De- That suit as first filed to restrain the officials partment Safety suspending license. from a chauffeur’s of Public expired by an plaintiff, Prior to the trial the license had department petition, sought compel amendment to his the appeal the a held that direct renew old or issue new license. We respect in the would not lie in that and that his redress was not have we would nature of a mandamus. We did not hold that jurisdiction court to appeal the trial of the from refusal of department suspending that restrain the the license but become moot. matter had proration appellants assert
In the case here unjustified, unreasonable and two-thirds is formula one-third jurisdiction. Incident we do have and invalid and of issue would, striking ally, in the natural this order down of duty things, enjoin upon Railroad course of Commission scope juris- order, is of our new not within the to write but
421 regard. we diction here to What direct the Commission validity the order as written. have us is the vel non of before Sterling Refining Co., Texas 147 Railroad Commission v. Oil & Engineers 547, 415; v. Colorado 218 2d S.W. Board Water 369; 77, Municipal District, 254 S.W. 2d River 152 Texas Water 323, Ry. Texas Texas 155 & N. O. v. Railroad Co. Co., 112; 2d Oil Railroad v. Shell S.W. Texas 235. S.W. 1738a, Stat., part as
Article Ann. reads Vernon’s Civ. follows:
*“* * Supreme appeals may be taken direct Court granting any of denying any trial or State from order of court * * * interlocutory injunction permanent an or on ground validity any invalidity or order administrative by any issued Board or under statute State * * of this State. provides Supreme
The article further Court shall prescribe necessary procedural per- rules to be followed in fecting appeal. directive, such Pursuant to that Rule 499-a was adopted. Refining
In Texas, Atlantic Co. v. Railroad Commission of jurisdiction appeal our of the direct question attacked and we while did not there discuss jurisdiction by implication contrary ap- that decision holds pellees’ contention. appellants far complain so of the refusal of the Railroad require compulsory cycling
Commission to pressure main concerned, tenance jurisdiction in this field we do not have appeal. of the appeal jurisdiction Supreme Court direct dependent upon wording and limited the Con Amendment, 3b, 1738a, stitutional Art. Section and Art. Ver non’s Ann. appellants Civ. prayed Stat. While in trial court injunction an approving to restrain the Commission “from allowing the withdrawals of to market from the Port Acres quantity Field in such and under such conditions as will result hydrocarbon preventable in the waste content of such *5 duly until such time as the Commission has an or entered order operators requiring pres orders the in such field to maintain the point permit in the field at a which will sure the maximum re covery hydrocarbons contained in the reservoir to the end preventable pre- of such natural that waste resources shall be sought require
vented,” was to the actual relief nevertheless cycling pressure mainten- compulsory a to enter by the and treated Commission. ance order. It was so considered proceedings These instituted the Commission were before after the following 19th, months three On November manner: Special 3-38,395, Henderson Oil adoption Peter Order No. hearing to re- Company requested hold that the Commission given that Notice was consider and amend 3 thereof. Rule hearing 27, January January 22nd set On for 1959. Company request asked joined and Meredith Henderson question of whether issues to include the be broadened recycling recovery operations insti- secondary should be or other joined in January tuted and Pan American conducted. On 23rd hearing 1959, Halbouty-Meredith request. July after On of its consideration, parties notified action as follows: con-
“This is at formal to advise that 6, 1959, your application a man- July for ference held denied Hackberry) datory (Lower cycling order the Port for Acres Field, County, Jefferson Texas. your application an
“The Commission further denied subject allocation on acre feet for the field formula based net acreage and ruled that the allocation formula based 2/3 per shall to remain in effect.” continue well 1/3 appeal al., supra, In Boston v. et under the direct Garrison provision pointed Supreme it was does not out Court jurisdiction purpose require of the suit is to have to where the although mandatory compel prayed action “that in- relator junction requiring plaintiff shall issue the defendants to issue ap- provisional an renewal license or plication license”. effect was That department compel for mandamus to to issue the license. Ross,
In Lane v. 151 Texas the relators prayed respondent and commanded not to be ordered political transmit of a state committee certain chairman respondent of election and that the ordered minutes and returns returns. held to transmit certain other minutes and We original jurisdiction issue action this court did have a writ of grant injunctive jurisdiction to relief mandamus no and since but appeared no need for issuance mandamus the there petition was dismissed.
In said: Boston v. Garrison we “* * * jurisdiction there was that case [Lane Ross] jurisdiction
to issue the of no to issue writ mandamus but injunction, jurisdiction the want writ of and because of assuming Here, injunctive that consti- denied. relief was involved, juris- tutionality validity properly or the court is appeal judgment granting diction on direct an from order or denying injunction, appeal jurisdiction or an on direct but no judgment granting denying from an order mandamus.” or or application here So an restrain the Commission from allow ing gas to be marketed until the has entered an order Commission requiring recycling application equivalent an compel recycling have the court to enter the order. Commission appeal lay separate to the district court from and dis two tinct and severable orders the Commission. A combination of give juris complaints the two in one cause us serve to diction where otherwise it would not attach. appears
It produces only gas Acres Port Field 3,000 approximately condensate. It an area acres. embraces discovery completed production well was 1957. The something depth sands at a 10,000 over feet. The special field, in its adopted following spacing order rule:
“Rule 1. No well shall hereafter drilled nearer than twenty any (1320) thirteen hundred and feet to well completed drilling in or same same reservoir lease, farm, unitized tract or and no shall well be drilled thirty prop- nearer than (330) three hundred and feet to erty line, line; however, provided, lease line or subdivision will, prevent or order to waste prevent grant property exceptions per- confiscation of drilling mit within prescribed shorter distances than herein whenever the shall have determined that such exceptions necessary are prevent prevent either to waste property. exception confiscation of When to this rule is desired, application therefor shall and will be filed be acted upon in provisions accordance with the of Commission State- applicable provisions wide Rules 37 and of said incorporated rules are herein reference.
“The aforementioned distances the above rule are operator minimum flexibility locating distances to allow an fol- well, spacing rules to the other and the rule and above each one permitting well to purpose low for the one (160) sixty acre unit.” hundred *7 acres to 160 that one well Thus the determined the hydrocarbons effectively contained recover all of the field reservoir. producing 25
At the time of the trial there said were large producing drilled under wells wells units or tracts and 22 exceptions permits issued as to Rule 37. brought Corpora- by American Pan Petroleum
This suit was tion, Company. Hen- Peter Michel and Meredith appellants. A Company four are derson Oil intervened and these aligned them- tract number of the small owners intervened Dillon, Jr., They H. C. are H. L. selves with the Commission. Barnes, Lake, Tyrell-Combest Company Realty P. Inc. G. entered into Most of the small tract this field have owners in agreements. instance, Henderson Oil For number, the Peter unitization Company units, small of several hundred three consist ranging 22 are on tracts from tracts. The Rule 37 wells situated up acres; 5 less than one of an acre 16 embraced 2/10ths acre and 10 less than one-half acre. urged by principal appellants is contention the to the allocating pro this effect that formula in field per duction on well and two-thirds on basis one-third acreage reasonably tract not sustained amount of is evidence, arbitrary, unreason substantial but on the other hand is confiscatory appellants’ property. Under the record able and opinion we case is our before us controlled Refining in Atlantic v. Railroad recent decision Co. (hereinafter referred to as 162 Texas 2d 801 S.W. point Normanna) and sustained. therefore Attorney his Railroad Commis- brief General goes squarely up points sion us that to the the real issue before says operators do have a of this case. He “that townsite heart owners, right underlying large property tract in the reserves right enough right that that extends to drain oil or and gas yield opportunity a reasonable from other tracts the field to operator.” appellees profit also assert that for a right. The other tract, words, of a no matter other since the owner how In small, prevent is entitled to one well to confiscation therefore, con- entitled to gas underlying tract, he, becomes his pay properties cost adjacent sufficient fiscate support profit. drilling a reasonable operations and return his Humble v. proposition Railroad Commission of that he cites ref. wr. Refining Co., App., Tex. S.W. & Civ. Oil following n.r.e., is to be statement Hawkins where [the case] found: rules, the owner corollary held that
“As a to these it is segregated ‘involuntary’ be denied of an tract cannot right his tract however small to drill at least one well on may can From it would seem that his allowable be. longer pro- point cut no down to the where his well would Mackhank, Sup., duce, (See Railroad 802) point not be nor where it could below the operated profit.” authority (No drilled and at a reasonable *8 support conclusion). in cited latter In only proposition the Mackhank this case the decided sup- reasonably court was that was substantial there evidence porting prevent the conclusion that in order waste it was neces- to sary keep to production the two wells on and the order was there- way fore not invalid. The Mackhank decision can in no be con- authority require strued as pro- for a rule that would allowable operation duction sufficient to return the cost of the well and its plus profit. sug- a reasonable nowhere conservation statutes gest nothing such justify a factor. We find in the law to that proposition. testimony prop-
In the Hawkins case the that Humble’s per erties contained reserves of the 76.5 cent of the recoverable proration entire field and under the it was allowed effective order produce this, per the es- cent and if continued for 71.4 drainage field, years, timated life result some 27 would properties section of some the Humble’s to the Townsite witnesses, thirty million barrels of on the Humble’s oil. Some hand, productive other testified that life the Townsite 73.74 acres would shortened that of the remainder of below years position the field some ten on the struc- account of its heavy ture and the withdrawals. Another witness testified opinion production in his if were unrestricted the town lot wells produce more oil than under the order then pointed The court out and factors effect. other considerations support which served to the reasonableness of the Commission’s order.
426 accepted rule goes state the further
The Hawkins case must theory allowable contradictory that the which is this basis, namely, plus profit “In exercise fixed on cost recognized rules and generally rule of curtailment regulations must, reason- practical, and within adopted as far as op- a fair property owners able limitations afford the several underlying lands their portunity recoverable oil firmly estab- equivalent.” or its rule had theretofore been This jurisdiction. lished our Refining Co., Tex. Land Gulf Co. v. Atlantic (1939),
S.W. 2d 73 we held: “* * * land is every lessee of It is the law owner gas in or under entitled a fair chance to recover oil land, Any fair equivalents denial of such his or their in kind. meaning of Rule chance would be ‘confiscation’ within May Empire Rail- 29th. & Fuel Co. v. and the Rule of Gas re- App., writ Tex. road Civ. 94 S.W. ” * * * fused. Refining App., Again Co., Trapp v. Atlantic Civ. ref., it is said: wr. “* * * holding the criterion uniform been necessary exception implicit is whether the well (or right protect his fair share the owner in his to obtain underlying thereof) equivalent oil his recoverable exceptions upheld land. of these were discussed Both *9 Refining Co., 59, 131 Land Atlantic 134 Texas Co. v. Gulf has 2d the issue raised in contention been 73. Since original propo- conclusively adjudicated, its discussion as an so unnecessary and undesirable.” sition both Legislature policy in the announced a declaration of gas 1, production use natural Art. 6008 as and of Section follows: recognition past, present,
“In of and imminent evils oc- curring gas, production in the and use natural as a result production in the and use thereof in the absence of waste gas opportunities in a correlative of owners of common re- same, and use the this law is enacted servoir against private protection public and interests such evils compelling by prohibiting production.” and waste ratable 961, 509, we Harrell, 186 S.W. In Corzelius v. language by approval the United States quoted used with Corporation, 300 Supreme Thompson Gas Court in v. Consolidated 364, 55, Sup. L. Ed. 510: Ct. U.S. “* * * may that House Bill 266 It be assumed 6008] [Art. regulations prevent authorizing should be construed rights
waste, protect of owners and to create and correlative proportionate justly in a their common reservoir of ” * * * neighboring thereof, drainage lands. shares free of 293, 177 S.W. Marrs v. Railroad 142 Tex. oil and law of this we held that “Under the settled State tarry part and parcel form a of the land wherein belong assigns; to the land and such owner owner of such or his right subject conservation minerals to the mine such Every laws of this a fair owner or lessee is entitled to State. land, their chance to equivalent his recover the oil or in or under kind, denial of such fair chance amounts to confiscation.” pointed
As out in in the Marrs case Normanna we also held entirely that the separate allowables fixed for the areas were two proportion taking out potentials in the and would result Although property giving of one man’s it to another. rejected rule,
Marrs case the substantial nevertheless evidence say that is not to the rules of law otherwise announced wrong decision are or have overruled later decisions been of this court. presently
In the case sub- before us the basic facts are not stantially dispute. The contentions arise conclusions to be over witness, testimony drawn from those facts. From the of Dillon’s only by any appellees, appears witness offered a 1-acre tract under the formula would have a total 1/3-2/3 gross April productive income from to the end of its period $407,501.00. well, including The total cost of such a drilling, operating, royalty expenses, $361,674.00, would be leaving profit $45,827.00. testimony a net The same shows that producing sand, under a formula on acre feet based each 1-acre prior production tract gross even without would have a total $50,867.00. income of This witness further testified that the hydrocarbon recovery total from each 1-acre tract under the *10 1,542,987 gas 69,358 formula would be and MCF of 1/3-2/3 recovery, 1,432,987 of condensate. That of barrels this total MCF 62,858 of of and barrels condensate would be contributed drainage upon depends
drainage. words, lot 1-acre each other its condensate gas recovery of of its for recovery. 90.63% 92.87% capa- field estimated The witness further testified 7,458,732 con- bility 165,932,900 barrels MCF recover densate; combined the 22 small tract wells This 33,945,714 1,525,876 of condensate. barrels ofMCF producing sand 116,063 acre feet estimates a total of witness assigns 2,050 this total acre feet of and he in the Port Acres Field figures, According these his 22 Rule 37 tracts. 1.77% producing under sand would small tracts with 1.77% gas and con- total of the field’s formula recover 1/3-2/3 20.46% potential. densate allowable from the Railroad Commission Petitioner’s exhibit awith September, 1960, 20 Rules 37 wells shows schedule for gas. Twenty-five 193,599 wells on MCF of total allowable acres) being (some than 160 proration units less 160-acre normal gas. 1,116,416 tracts on produce allowed MCF acres, comprise only situated 19.89 the 20 37 wells are Rule Thus, 3,036 on a regular acres. are located on the 25 wells while productive acreage basis, having the total the 20 wells acre .65% of the allowable. receive 14.6% largest way comparison the well on one of By between units, the smallest well one of producing units and the testimony appellees’ following from the is constructed table witness: (MCF) ALLOWABLE AVERAGE ACREAGE MONTHLY
SURFACE per 48,587 276.06 MCF acre 1—176.00 Amer ican-W ard Pan 38,060.00 per 48,587 Thompson-Sassine MCF acre .25 ACRE FEET OF SAND 4,932 per 9,851.9 9,515 ft. MCF acre Pan American-Ward 1— Thompson-Sassine 9,515 per 17.8 534.551 MCF acre ft.
Thus, present proration on the basis of the order well on the one-fourth acre tract is allowed to 137 times much gas per acre as the well on per 176 acres and 107 times more acre producing foot of sand. Stat.,
Article provides Section Vernon’s Ann. Civ. proceed regulate that the prorate gas Commission shall pro- duction in the reservoir “on a reasonable basis”. The Article *11 be shall allowable monthly reservoir provides that “the further gas so as therefrom among entitled to all wells allocated produced from gas to be give fair share of each well its to reservoir, provided amount to the restricted each well shall be that waste.” Section gas produced from it without can that ac- into take shall provides that that statute gas well each production for fixing daily allowable count daily producing tract, the relation between of the size all and wells aggregate daily capacity of capacity and the pertinent. are other factors which potentially testimony there is that appellees some offered result that the east to the west
a water drive from longer portion the field greater production in the western being theory that located, are where the Rule 37 wells forcing wells the eastern would limit and flood out water drive the higher Henderson where the into the structure westward at least located, compensating Henderson thus Rule 37 wells appellants’ drainage hand the part the other for the loss. On presently water no emphatically assert there is witnesses any occurrence deny indication of such drive and there testimony that no water understand from the future. We flooding any yet loss to or occurred that has resulted drive has Ad- first felt. where the drive would wells to the east mittedly in the area where these Rule 37 wells are located higher. producing stratum is thicker and the structure sand opinion offer comfort In our neither of these factors completely appellees their tracts are almost sur- Rule 37 because oil Peter Henderson and lie within the confines of the rounded necessarily units. There is testi- drain from those units and will mony Meredith under the in the record 1/3-2/3 substantially es- eventually produce all of the formula will land, does not tend to make this fact timated to underlie their but the Rule 37 wells a reasonable one between the formula Henderson. making Henderson units comparison the Peter between appellees’ testimony of wit use
and the 20 Rule 37 wells1 we comprise 520.3 acres or The Henderson units ness. 19.84% acreage total field allow of the and have the total field 16.13% a total of acres or 19.88 the 20 Rule 37 wells have able while .76% acreage the total allowable. and receive of the total 14.78% testimony appears same that Peter From the witness October, 1960, Only Proration are used. Schedule wells on 1. feet 33,807 total acre
Henderson has acre feet or 29.37% only 1,957 field, in the while the 20 wells have Rule 37 1.70% of the total. distinguishable urge appellees this case is not con- Normanna on the latter should the facts therefore substantially (1) They say trol. had not the Normanna Field been *12 developed, developed. whereas the Port Acres Field is well While true, appear the this is militate in favor of fact would greater appellants the appellees the rather than of the because geological development in- and the more accurate the obtainable formation, applying justification the the can found for less proration (2) They standard maintain that the formula. 1/3-2/3 large tract allocation formula here is beneficial to some rights. producers deprive any property and does not them of Although producers, there due to is evidence that some of these early reasons, production, may or for other recover or more 100% place, clear, however, least of their reserves in it is that at one large them, Company, composed Henderson Oil whose units are drainage tracts, of unitized small will suffer loss from They say (3) as Rule 37 wells. contrasted with Normanna this large against solely is not a case of tracts small ones because inequitable Henderson makes the contention that formula is the among large see tracts. fail to how this would make We distinction, although principally material the case here is one against of small tracts that have been unitized small tracts whose preferred not to unitize. In owners have cerned Normanna we were con- permits tract. with one small Here 40 have been granted field, to drill small tracts of there are 500 in the presenting problem orderly a much more serious so far as eco- development is concerned. nomical point urged
Another of distinction in Normanna the against attack was made formula while in this case 1/3-2/3 appellants asked the Commission to enter their “recommended order” in lieu of the order. In other words 1/3-2/3 say appellants’ application the terms of the Commission acceptance rejection to an was limited of the recommended appellants order in that asked for no other relief than aon They argue great it” “take or leave basis. that there is a dif- procedurally application specific ference between an to enter a claiming unduly and one that the rule in effect order harmful requesting to rescind Commission that rule and enter one and in its stead. that is fair proceedings do not so construe the
We in this case nor evi- dently application “On reads: did the Henderson’s Commission. request Company wish to behalf hearing Peter Henderson Oil we adopt- special order to reconsider and amend Rule 3 of the ing regulations Hackberry] rules and for the Port Acres [Lower filing County, of Hen- Field of Jefferson At the time of Texas.” application, 19, 1958, only permit drill derson’s November one exception requested in this and it field as an to Rule had been granted hear- was not ing until December 1958. The notice hearing issued recited that Commission considering purpose application held for Hen- of Peter Company derson “Pursuant Oil and concluded as follows: rules, regulations, Hearing said such Commission will enter judgment presented may justify.” and orders inas its the evidence rehearing In Henderson’s motion to the it is argued present unjust that the formula is and unfair and does parties opportunity allow to all a fair to have and their fair share of the and condensate from the reservoir. urges that connection the motion to take into thickness, consideration the variation of the sand size of the *13 tracts, drainage portion from the thick sand of the field into pertinent the thin by sand and all other factors shown the evi- argued dence to exist. It is per also that if the well factor is re- substantially tained it should be less than one-third. proceedings
The
before the Railroad Commission are informal
validity
and their
by
will not be tested
the technical rules of
pleadings
practice
and
that obtain in court trials. Railroad Com-
Magnolia
Co.,
mission
484,
v.
Petroleum
130 Tex.
109
2d
S.W.
967;
Drilling
Corporation,
80,
Cook
Co. v. Gulf Oil
139 Tex.
mission that recovery formula should limit sub- stantially place to the reserves in each beneath tract does not right complain foreclose their of the formula which con- inequitable confiscatory property sidered of their nor does it solely option limit the rejecting accepting to the of either or proposed parties, course, formula in All toto. empowered concede that the court is not to direct the Commis- weight sion as the nature or terms of its order or what should given passing to the several allowed factors. We are limited to upon validity promulgated. the order as seeking appellees, uphold formula adopted by length discuss at considerable the so- 432 protection capture” and some benefit claim
called “rule Humble among v. Brown They other cases that rule. cite under 935, 2d 296, 2d 87 S.W. Refining Co., Tex. 83 S.W. Oil & 961; Ryan 509, Harrell, 1069; 143 Tex. v. Corzelius Pickens, Corporation Tex. v. Petroleum Consolidated stated Cor- these cases is doctrine of 2d 201. The 285 S.W. as follows: zelius recognizes ownership oil and rule in this
“The State therein. gives fee place, lessee determinable in connec considered It held that such rule should be is also recognized prop capture, as which is subject tion the law of with regulation right under are erty rules both police power of this State.” Drilling positively in Eliff Texon we said
Somewhat more 4 A.L.R. 2d Company (1948), 210 S.W. 191,2 that: having regarded as absolute
“In state the landowner our severalty place his land. to the oil and beneath title in ownership is that it must qualification of that rule of capture and is in connection with the law of considered regulations.” subject police Ryan courts of Texas have v. Pickens it is stated “The capture consistently rule of is still in force in this held that the right.” say, property That is not to It has a vested become State. capture however, is unlimited or not modified that the rule of recognized by accompanying rule the cases stated Ryan case follows: * * “* place oil and the es- Here [in Texas] *14 corpus property part realty the or of rules of of tablished severance, land, ownership, conveyance, subject and to the * * *.” taxation as such. lease and right very pro- fact that the has the to limit acreage recognition principle. of of that duction on the basis legal right, they formerly has the ex- If the ercised, per formula to fix a based one-half well and also cases cited: 2. See Garner, 502, 769; Humphreys-Mexia 121 Texas 50 2d v. S.W. Lemar Co. v. 247, 296, 607; Gammon, Waggoner Sigler 254 29 Texas S.W. A.L.R. 113 Estate v. 509, 27; Co., Daugherty, 226, 19 Texas 118 Texas S.W. Co. v. 107 Texas Oil 1917F, 717, L.R.A. 989. 176 S.W.
433 generally prac- acreage, and as now on of one-half the amount the acre- basing the on on well ticed the allowable of 1/3 2/3 age, nothing capture that would make the then there is rule judgment its illegal sound for the exercise of it the Commission weight greater well or give less to the to or and discretion now acreage reserves matter to the amount of factors or provided by the statute. place field factors as other an reservoir one tract It is obvious result that if in a common gas produce many underlies owner is allowed to times than more denying his he is some in the reservoir tract to other landowner gas underlying produce a fair chance to the his land. right following capture, appellees the
As to refer 297, Refining Co., statement Brown Humble Oil Tex. & 126 935, 83 S.W. S.W. 1096:
“Owing peculiar gas, to the characteristics of oil and foregoing ownership gas place rule of oil and should be capture. considered in connection with the law This rule gives right gas all of the oil and that will flow land; right. out of the property well one’s and this is a And only by physical possiblity is limited adjoining diminishing landowner oil and under one’s land right capture. following the exercise same de- capture cisions applied discuss law of in this State: Stephens County Co., 160, v. Mid-Kansas Oil & Gas 113 Tex. 290, 566; Ry. East, 29 A.L.R. H. & T. C. Co. v. 146, 738, Rep. 81 S.W. 66 L.R.A. Am. St. 827; 4 Ann. Cas. Prairie (Tex. Oil & Gas Co. v. State Com. App.) subject regula- 231 S.W. 1089. Both rules are police power under tion of a state.” stating merely The court seems here to be what the rule of
capture rights, is if unlimited preceding correlative for in the paragraph expressly the court reaffirms that in Texas the law recognizes ownership oil place gives lessee a determinable fee therein. gives capture infer that the To rule of to the landowner right
legally capture protected the oil underlying his neighbor’s entirely tract is inconsistent with the ownership theory. rules, capture To harmonize both the rule of can mean little more fugitive nature, hydrocarbons than that due to their when belong captured owner of the well they flowed, to which may irrespective of where have place been in originally, *15 drainage. say liability neighbor to his That is without to gas point low in a of since the a will flow to continuous reservoir gas that pressure particular the the landowner is not restricted to may of all that property originally the owner underlie his but is substantially may legally the which he recover. This seems to be supra. expressed Humble, in view Brown v. Co., Stephens In Mid-Kansas Oil & Gas cap- rule A.L.R. that the of it was determined ownership of the
ture does not conflict with of absolute the view adjacent place quote: lands minerals in and we “If the owners of right liability, appropriate, and oil the the have to without land, neighbor underlying neighbor’s has cor- their then their the drainage, rights through appropriate, relative like to methods underlying adjacent to own.” In the the and oil the tracts his existing proration application Port under the Acres Field rights enjoy far does so formula Henderson correlative com- are concerned since there can be no small tract wells drainage tracts. pensatory to Henderson from small the evidence formula gas Normanna shows 1/3-2/3 drainage quantity result in the tremendous condensate from other leases the field to the .3-acre lease drainage though incapable precise question, ascertainment, amount of drainage and of course such could not be com- drainage by pensated tract from .3-acre other leases The evidence further showed that the order would allow the field. produce at a the .3-acre tract rate of over 200 the well on gas per acre as on the unit estab- times as much well 320-acre spacing pattern. think the evidence here com- We lished adopted Under the order in the parable to that in Normanna. Port hydrocarbons than recovered Acres Field more 90% from drained other leases the field. the Rule 37 wells would be proration adopted formula in Normanna the here of As said compelling production ratable not come close nor does 1/3-2/3 opportunity produce producer an field his to each afford the reservoir. share of fair fully appreciate thorny problem that the Commission We among the hundreds fields matter of under different characteristics supervision with
their diverse opinions, interests, conflicting but views and we confident disposal personnel ap- at their a much nearer trained with giving parties made, an opportunity to all can proximation underlying the minerals field a fair share with nearly equitable appears more than that will be allowables ratable *16 long ago as Brown case us. As 1935 we said before Refining Company case: v. Humble &Oil
“* * * now, recognized however, It that when an oil field is fairly developed, experts determine can has been tested a approximately place in common the amount of oil and pool, equitably and can also determine the amount oil and by tract land under cer- recoverable the owner of each operating tain conditions.” striking appellees’ complaint far a
So as that down of probably heavy formula would entail financial loss to 1/3-2/3 them, may they be said that at their own drilled their wells exception risk. There some is indication in the record bill of prevent were offered unitization that would confisca- tion and proceeds afford to them a fair share of the mineral unitization, compel common source. While the not statute does expressly procedure subject nevertheless it does authorize that to approval 6008b, of the Railroad V.A.C.S. Art. It reemphasized granted is to permits that their were for the purpose avoiding underlying confiscation of the their minerals properties purpose enabling and not for the them to drain underlying adjoining op- minerals pay lands to the cost their plus profits. erations This does not mean we not are to be foreclosing understood power Commission, by proper exception, order or permit to allow the holder of a Rule to recover a repay drilling sufficient amount of oil or production provide profit costs and no reasonable when other recovering means of the minerals which underlie his land problem such available. No us. before foregoing From it follows that the 1/3-2/3 applied by
formula as the Commission in the Port Acres Field is invalid in that it opportunity does not afford an parties and save their fair share of the minerals equivalent. their reasonably supported by hold it is We substantial evidence. judgment the trial judgment court is reversed and appellants.
rendered for
Opinion February delivered 1962. SMITH, JUSTICE, dissenting on Rehearing. Motion for Upon respectfully I dissent. consideration, further I find agree completely incon- majority place with the me in Court, es- position sistent pecially of this with that of former decisions opinions. majority wherein I was the author of the those light de- especially This true when in the considered Pickens, Ryan Corporation cisions in Consolidated Petroleum herein. cases discussed 155 Tex. and other that, majority my opinion out fear Not bears pooling wedge compulsory opening Normanna decision was the Refining Company judicial my dissent in Atlantic decree. See *17 How- 2d 801. Railroad 162 Tex. 346 S.W. ever, expressions lead to majority opinion in that case me in the ap- only holding by majority possibly think the that the announced many plied particular that case. I am inclined to believe to that gas attorneys I of a similar view. When wrote oil and were guard Normanna, purpose my to deliberate the it was dissent against by I compulsory pooling judicial find the Court decree. compulsory pooling pres- following in the now advocates of the although actually deny case, the ent right Normanna case did not the separate development tracts. I am now owners of small of to right effectually denies such that the decision convinced legis- pooling any compulsory apparently without authorizes lative authorization. long right separate development of small tracts has fact, recognized by courts. In it become the Texas
been the rule announced property. rule The fact that was rule settled that cases does not mean such is confined in so-called Rule 37 application to such cases. rigidly past in the fol- of Texas has The Railroad Commission by Ryan and other cases the law announced Court lowed principles adopted the an- rules consistent with of law and has prior Railroad to Normanna. The Commission nounced cases steadfastly the and has awaited action of the adhered to law government Legislature, department has the pooling. legal power compel compulsory to decision, was the Railroad Commission the Normanna After regula adopting rules the difficult task confronted with Railroad ob Fields. The Commission the Normanna tions for decision viously that the Normanna could the conclusion reached September pooling. nothing compulsory On other than mean adopted new rules for the Nor- the Railroad Commission cognizance order took its of two The Commission manna Fields. opinion wherein paragraphs in the Normanna Court short compelling ratable rule close1 said did come 2/3-1/3 upon production responsibility2 the Commission and that would conserve to devise some rule just at fair and question and the same time be in the field in parties. carefully opinion avoid It should be noted that the Normanna adopt directing specifically ed the Railroad Commission fact, encompassing compulsory pooling. gave specific it no rule respect. However, direction in this was of opinion3 compusory pooling Normanna was demanded 3b,4 provisions special is decision. Rule and other in the order compelling 1. “It does production; does not come close to ratable neither an offer each in the field his fair share of producer opportunity from the reservoir.” 2. “The responsibility rests with the Commission to devise some rule of will proration which conserve field in and at the same question just depriving time fair to all them of his parties without property;” hearing, 3. “WHEREAS, From a at study the full record said adduced legal which included technical reservoir data and submitted briefs the several acreage interested parties, opinion and finds an allocation formula would each reasonably provide an party opportunity pro- *18 gas duce its fair of reservoir, share the in a but because of the additional re- sponsibility the placed upon Commission, is, that to arrive at a pre- means of venting allowing confiscation of a small tract’s reserves while each to operator gas its the in fair share of a reservoir, as a as knotty problem ever the placed been before must that such solved, solution in through all encourage is best probability resolved the use of a allowable would special that negotiate neighbors just a small tract owner to with his for fair and treatment, encourage but would a provide also sufficient allowable to such small tract to neighbors a reasonable attitude in such so that endeavor * * to out work this common problem; having right gas 4. “Rule 3b. Any operator the to drill a well upon a containing tract hearing acres, less than 100 after application, notice and prior drilling judgment well, to the the in may, of if the of the Commission facts the justify, given so a definite fixed and special allowable, provided the well producing higher as a completed well, than the allowable that would be fixed any for well such completed upon tract by reference to said allocation formula (1) drilling the upon proof to that the and a completion of well (2) said tract is not upon economically and feasible; that each and owner every right acreage adjacent of drill the to upon to immediately tract said of less than pooling 100 acres has refused to allow the enough of said tract with of said acreage adjacent drilling immediately to create a unit of least at 100 acres fair and terms, reasonable that such upon is, upon terms as would allow the to and the drill, complete operate owners well to be drilled thereon and as would that all income received 7/8ths of provide the production from said well drilling, completing operating of expense said well should be shared working among the of owners the interest in said acreage drill-site unit upon an shall Such allowable control the special production basis. of from said well during producing life, that except its said allowable shall be related properly as the same may to total field fluctuate production and said special allowable, granted, in shall no event exceed the allowable if of a well completed on 'a containing acres; 100 productive provided tract further, however, that adoption before of this rule will well drilled be treated, for purposes of though it had not been yet as drilled.” rule, September 27, strongly on that the Commis sued indicate released sion felt that this had the Normanna decision Court following rules duty the well-settled Commission from property in firmly this Court which had been announced the decisions hereinafter cited. Halbouty The action of Commis- decision confirms the said, words, Halbouty ef- September,
sion of 1961. other fect, concluded, adopting correctly that September, rules, authority under that it had the small tracts Normanna decision to fix an allowable for wells on providing compulsory pooling. absence of statutes of com- Halbouty pooling line decision with advocates falls litigants to pulsory and for the first time informs majority really However, the Normanna what the had in mind when it wrote Normanna, point decision. out that even after I wish recognized compulsory the Texas pooling the advocates of that separate develop- definitely right courts had established digress May say have us here ment. I that we do before property prevailing in question of whether or not the rule gross going inequities. question is: Are we caused Texas has depart the rule that from the consistent adherence to Court’s tract, small, as a one matter a no matter how is entitled to well subdivision, right voluntary part a a unless the tract is Legislature bring only body that the is the that can about com- recognized pooling? pulsory the Texas rule It well proposition Texas the owner of property stands for the right small as matter of tract is entitled one well a figure limit to a commensurate with the allowable for well place oil and beneath the tract would the recoverable make unprofitable right a well his the well an one and his to drill thing. property rule has been com- tract would be futile This decision, destroyed by particularly pletely when this Court said: *19 striking complaint appellees’ far as the that a down
“So heavy probably would entail financial formula 1/3-2/3 them, may they it at loss to be said that drilled their wells their risk. There is some record own indication bill exception were offered unitization would prevent afford to them fair share of confiscation ” * * * proceeds from the common source. mineral
Clearly, standards, statutory without the Railroad Commis- adequately power compulsory pooling cannot exercise the sion Halbouty. hand, given the owners of to it the other now On mercy by the are left at the of the standards fixed small tracts — this, occupying position Halbouty and Henderson owners wealthy, regard the small tract owners are without whether class, poor. or middle case, pool by Halbouty and Hender- In this offers to made legislative indefinite, no
son most this because there exists determining guide fixing expenses and the standards for how enough operator revenue is to Each is fortunate be shared. who gotten together have several small is left his tracts to make own ground case, example, rules. This cannot be in this sound. For Halbouty others, pool and offered to unitize his with leases but subject expenses Halbouty his offer said was that “pay drilling his will bear ratable share the cost of argument operating particular costs”. I think Dillon’s on this phase quote: of the case is sound and I acreage?
“Does mean ‘ratable’ on the basis of surface If so, obviously it pooling an be unfair basis of or unitiza- tion, if thin leases on the east unitized were having very with tracts in the center of field thick and productive Or, hand, sands. on the other does ‘ratable’ mean the costs and revenue would be divided on the basis of productive so, estimated acre feet of net sand? If whose esti- mate is to taken as the criterion? Must the Railroad Com- up feet, mission set resolving a schedule of acre the tremen- experts dous many conflicts between as to how acre feet are beneath various tracts? may
“To difficulties, pointed illustrate the out that with Unit, reference to the Henderson-Doornbos 2No. Hal- bouty’s expert feet, estimated that it had 420 acre whereas expert 1,760 Henderson’s feet, estimated that it had acre an increase Similarly, Halbouty’s over the estimate of witness. 319% Unit, as to the Henderson-Doornbos No. 1 Hen- expert gave derson’s 2,165 his client’s lease an estimated acre feet, compared Halbouty’s witness’s estimate of 768 acre feet, Similarly, or an increase of about as to the Hender- 180%. Unit, Halbouty’s expert son-Montrose estimated that it had only 7,764 feet, acre whereas expert Henderson’s estimated 14,300 words, that it had expert acre feet. In other Mr. Henderson’s Halbouty’s expert
increased the estimate of by 84%. assume, said, from what the “We Court has that the Rail- acreage, road must decide whether feet, or acre *20 440 will standard place, or estimates of or some other reserves among allocating expenses
the basis for revenues unitize the Commis- owners tracts which are forced to estimating any experts in sion must conflicts between resolve productive acreage place. Even feet reserves in or acre or though or feet that their acre the owners of small tracts feel being grossly underestimated, to simi- in relation reserves are to ac- adjoining tracts, they have lar estimates still they cept if whatever decides the Railroad Commission large Presumably, also, pool unit share or unit. operators under the accept decision must the Commission’s that, not, they threat if owners will be do the small tract enough gas plus pay some allowed to back costs large event, ask, profit. respectfully unit In that if the we accept operators not pool either or or will refuse to unitize regarding their share decision the Railroad Commission unit, proposed legal authority is Railroad what small empowered owners of Commission then to authorize the go separately develop tracts and tracts to their ahead permit them to drain more receive an allowable will legal originally ? test place than had in Is the something than the ‘confiscation’ in such other cases large right to recover the denial to the owners of tracts place beneath their tracts?” right tracts, separate development of small where voluntarily tracts, pool owners did never not with been other though Legislature questioned in former decisions. Even gave Statutes, 6014, the Rail- Article Vernon’s Annotated Civil authority prevent road waste, Commission broad to enact orders Legislature paragraph (g) very of this was careful expressly intention of the statute to declare that Legislature require repressuring pool an oil or separately properties any pool under one oiuned be unitized ownership. management, control The Normanna decision now being express Supreme authority used as from the Court of Texas ignore Ryan to the Railroad Commission to such cases as Con- Corporation supra; Pickens, solidated Ryan v. Petroleum v. Pickens Corporation, App., Consolidated Petroleum Tex. Civ. 219 n.r.e.; Darsey, 150, App., 2d ref. Tex. wr. v. Civ. S.W. 528, 532, Carroll, n.r.e.; 326 2d Tex. S.W. wr. ref. Nale v. Civ. 555, App., 2d 2d 289 affirmed 155 Tex. S.W. S.W. Gracia, 691, 694; 743; App., v. De Tex. Civ. Coates S.W. Statutes; 6008b, 1 of Article Annotated Civil Section Vernon’s Commission, Dailey App., v. Railroad Civ. ref.; Company Railroad & Gas wr. Stanolind Oil *21 hist.; Petrol- 664, v. Shell Nash App., no wr. 96 2d Civ. S.W. dism.; 522, Rail- wr. App., 2d Corporation, eum Tex. Civ. S.W. App., Corporation, Tex. Delhi-Taylor Civ. road Oil Commission v. Darsey, Tex. Civ. n.r.e.; Halbouty v. 302 App., 2d wr. ref. S.W. Refining Company hist.; wr. Atlantic no S.W. 494, wr. ref. App., 330 S.W. Railroad Tex. Civ. Refining Company, n.r.e.; & Railroad v. Humble Oil Commission 151 Tex. 2d 488. do in effect
My simply statutes now this: The contention is compel Therefore, Railroad Commission unitization. the of effect legal have the authority no to enter orders which per- argument was very requiring compelling unitization. This adopt Ryan case to the suasive and no caused this doubt Court majority opinion that without expressed the view as in the final power legislation no requiring pooling, had compulsory the Court separate the legislation. Thus, to to enact adhered such the Court property. development theory rule of tract under the well-settled Mis- Ryan case, of In the fact that the State we discussed the pooling sissippi adopted and and states had unitization other statutes, capture expressly “has become but held that the rule of right” “Legislature has not property Texas vested the legislation the Railroad seen fit to enact authorize which would the adopt promulgate would have Commission to rules which recognized capture rendering effect of ineffective the rule majority opinion all the decisions in this State.” The case, present nullifying Acres the in the Port order Field, Legislature exactly Ryan does what the case said authorizes, Texas has not but even seen fit to do. It not promulgate requires adopt rules Railroad to rendering ineffective rule which would have the effect of capture recognized previous cannot in Texas. It in all decisions regard Ryan be said that the case was decided without due argued problems It presented present case. was we have Ryan permitted majority opinion that case in the case that the belonging of minerals confiscation Pickens & Coffield Ryan. dissenting opinion contention that stressed the capture majority opinion primarily rule was on the based strongly urged Ryan equitable relief to the entitled ownership produced extent of all oil it should share in the to allow the rule of from Pickens and Coffield’s land and capture prevail an unconstitutional confis- would amount to being Ryan’s property, theory “under our law cation of right simply capture property has a of someone no one theory. rejected that said: else”. This Court We [Ryan] “Petitioner’s contention that this cause is one for equitable relief should not reason be sustained for further position that its capture, is inconsistent with the law of ais property well-settled rule jurisdiction. rule this — capture simply that the owner of a tract of land acquires produces title to the oil and which he from wells thereon, though drilled part may of such have mi- oil or grated adjoining from land. The Railroad is with- * ** n * * * power Legislature out anything .” to do rejected Mississippi primarily We the State of authorities ground Legislature the guard, protect adopted that our “safe- had not statutes to *22 rights co-equal
and enforce the and correlative gas owners in a pool common source or of oil the end that and each such owner in pool supply a common or source of of oil and gas may just obtain his equitable production and share of there- * * say, Legislature I still Ryan, as we said in that the of Texas has legislation not seen fit to enact which would authorize Railroad adopt promulgate Commission to rules which would rendering have the recog- effect of capture ineffective the rule of nized in all the majority, decisions this State. The other on the hand, regard now physical refuses to consider the facts with peculiar “the gas”, characteristics of oil and which has been Refining Company, established. See Brown v. Humble Oil & Wilson, S.W. 1096. Justice writer Ryan, principles geology dissent in said that the dynamics upheld reservoir then his known view and would eventually acceptance judicial thought meet “with the same they thinking”. that rejected are accorded in business financial We thinking agree
such then and should do so now. I with say, Dillon they et al when rehearing, in their motion for present the plex problems and, immediately decision many in this case creates com- legislation subject, in the absence of on the proper leaves the Railroad Commission without a standard to discharging gas used its duties so far oil and con- points problems, cerned. The motion out some of these such as: example, exactly “For what does the mean when Court says opinion (page 16) in its not re- ‘the landowner is particular gas may property stricted to the underlie his originally may legally but is the owner ? of which he recover’ ‘legally test What of what an owner can recover’? Is it equivalent gas place originally which beneath so, stop producing his tract? If must he his he well when though reservoir be- gas, recovered such amount of even again by gas refilled neath his tract has that time been properties? has been drained from other in this case said example, every testified
“For witness who present appellant, Halbouty, that proration recover under substantially of the recover- formula more than 100% lease, admitted originally place his and it was able in beneath Halbouty’s that he will recover main in this brief Court reserves, his is estimated that over of the field whereas it 26% them. Must leases have Halbouty original the field reserves under 22% producing stop has recovered when he 100% produces place units? If he reserves in beneath his this, more than is he to Henderson for excessive drain- liable age, drainage since Hal- Henderson will suffer excessive bouty’s exceeding (meaning by tracts an amount ‘excessive’ gas originally Halbouty leases) ?” beneath the [Emphasis added.] agree
I say: with Dillon et al when knowledge engineering geological “Increased facts changed about oil and reservoirs has the fundamental nature of oil and as fluid which move in the substances reservoir, regard lines, response property without *23 pressure differentials, by established either natural or artificial forces. extent such move- Where how and to what place certainty ments predicted will take even cannot with be now, apart only particularly spaced widely where wells are intelligent guesses estimates or made as to the condition can be large the wells. reservoir in undrilled areas between opinion apply, apparently in To has done in the Court case, property this which are same rules of to oil applied minerals, only es- to is an abandonment of solid ignore attempt property an funda- tablished rules of but also physical mental facts.”
There the rules is no sound reason for the abandonment of long pre- property which have established in Texas. No been deny vious decision has held that the Railroad must living separate to a first well on a tract. The Dillons allowable Field, al., producers et and other small tract in the Port Acres spent drilling de- have millions of dollars costs alone. If this permitted people possibly stand recover cision is these cannot such their costs because the allowables for wells will be limited so capacity they producing only far below their that can recover equivalent place previous beneath each tract. No decision, including intimated, decision, the Normanna much held, less required that the Railroad Commission would to cut be many point allowables of the Port Acres wells to the where only very could recover small fraction of their cash invest- case, ment. In predicted high. only the Normanna the Court indicated profit Bright unreasonably net to the & Schiff well was everyone agree I think will the Normanna case was revolutionary, but, time, nothing at the same there was even in indicating that case the Railroad re- be quired destroy lawfully the investments of owners of wells upon separate connection, drilled tracts. In this I concurred in the result reached in the of Railroad case Commission of Texas Williams, et al v. Murel concurring opinion for the stated in a reasons April
delivered on 1962. I concurred in that, my opinion, the result for the reason Court lending encouragement the Williams case was to the advocates of compulsory pooling destroy effectively in their effort to the rules property Supreme heretofore announced and followed Court of Texas. my opinion the allocation formula attacked in this case reasonably supported by substantial evidence. The District correctly testimony Murray.
Court excluded the of Commissioner agree they say: I with Dillon al. et when legislative proration “The orders attacked in case are orders, they apply generally producers in that in the operation. prospective Port Acres Field and are Therefore apply judicial quasi-judicial tests which would decisions properly applied cannot orders involved^ Certainly this case. no that a could one would contend statute ground legislators voting attacked on the agreements themselves, by previously statute had committed among otherwise, policy themselves or to a embodied in the statute, passed. only question before would be Court, statute, whether the based on evidence heard *24 So, conformity requirements. or is not in with constitutional submitted, case, legislative it is this where order concerned, Railroad should not in- Commission is the Court motives, quire policies, into the methods Commission adopt caused it to this formula rather than other.” some helpful scope judicial A oil and discussion of the review of opinion orders of the Railroad is contained in the Commission
445 Company, Magnolia 130 Petroleum in Railroad v. Commission quotes 484, from That case refers to Tex. 109 967. S.W. opinion in Railroad Commission v. Galveston Chamber Commerce, 101, Tex. 145 573. S.W. recently was more announced in the cases
The same rule above Houston Natural v. in Railroad Commission stated Court Corporation, 573: S.W. Gas at- opinion pointed that where the “Earlier in this we out legislative upon the Railroad tack act of Commission confiscatory, we would it violates the because it Constitution ‘investigate adopted by not fixing the methods Commission rates, prompted purposes which nor motives or
its such action’. Railroad v. Galveston Chamber Commission 573, 580. The Commerce. 105 Tex.
may altogether erroneous methods and an have used erroneous — conception a correct rate of the law if it arrived at but — against finding the court test this rate of fact will its own then the rate should sustained.” simply validity in- courts should test the of the order supported
volved here on the of whether it is substantial basis logical why evidence. There is no the Railroad reason continuing for- the allocation should be restrained effect adopted August 18, 1958, Field. I would mula for the Port Acres judgment affirm the of the trial court.
Opinion May 23, delivered 1962. al,
Miles et Relators Strickland Secretary Respondent Hon. P. Frank Lake, Texas, of State of May 23, 1962 No. A-8670. Decided 2d 383 357 S-W.