Elliff v. Texon Drilling Co.

146 Tex. 575, 210 S.W.2d 558 (1948)

 

RULE:

Under the law of capture there is no liability for reasonable and legitimate drainage from the common pool. A landowner is privileged to sink as many wells as he desires upon his tract of land and extract therefrom and appropriate all the oil and gas that he may produce, so long as he operates within the spirit and purpose of conservation statutes. These laws and regulations are designed to afford each owner a reasonable opportunity to produce his proportionate part of the oil and gas from the entire pool and to prevent operating practices injurious to the common reservoir. In this manner, if all operators exercise the same degree of skill and diligence, each owner will recover in most instances his fair share of the oil and gas. This reasonable opportunity to produce his fair share of the oil and gas is the landowner's common law right under the theory of absolute ownership of the minerals in place. But, from the very nature of this theory, the right of each land holder is qualified and is limited to legitimate operations. Each owner whose land overlies the basin has a like interest, and each must, of necessity, exercise his right with some regard to the rights of others. No owner should be permitted to carry on his operations in reckless or lawless irresponsibility, but must submit to such limitations as are necessary to enable each to get his own.

FACTS:

The landowners owned the surface and certain royalty interest of land upon which a producing well was located, as well as the mineral estate underlying the land. While the oil companies were engaged in drilling an offset well, the offset well blew out, caught fire, and cratered. The blowout resulted in the destruction of the landowners' well and drained large quantities of gas and distillate from under their land. The landowners filed suit. The trial court entered judgment for the landowners. 

ISSUE:

Does the law of capture absolve respondents of any liability for the negligent waste or destruction of petitioners' gas and distillate, though substantially all of such waste or destruction occurred after the minerals had been drained from beneath petitioners' lands?

ANSWER:

No.

CONCLUSION:

The appellate court reversed the judgment, and this appeal followed. The court reversed the appellate court's judgment. The appellate court was without authority to pass upon the propriety of the measure of damages adopted by the trial court because no such assignment was presented to it. However, the law of capture did not absolve the oil company from liability. Under the common law, the oil companies were legally bound to use due care to avoid the negligent waste or destruction of the minerals, and they failed to discharge this duty.

The petitioners did not lose their right, title and interest in them under the law of capture. At the time of the removal, they belonged to petitioner, and their wrongful dissipation deprived these owners of the right and opportunity to produce them. That right is forever lost, the same cannot be restored; petitioners are without an adequate legal remedy unless recovery is allowed under the same common law that governs other actions for damages and under which the property rights in oil and gas are vested. This remedy should not be denied.

Thus, the court held that Court of Civil Appeals erred in holding that the petitioners cannot recover for the damage resulting from the wrongful drainage of the gas and distillate from beneath their lands under the law of capture. However, the court cannot affirm the judgment of the trial court because there is an assignment of error in the Court of Civil Appeals challenging the sufficiency of the evidence to support the findings of the jury on the amount of the damages, and another charging that the verdict was excessive.

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