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. The landowner is privileged to sink as many wells as he desires upon his tract of land and extract therefrom and appropriate all of 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 an action to recover damages resulting from a blowout of a gas well drilled by the oil companies. The trial court entered judgment for the landowners. The appellate court reversed the judgment, and this appeal followed.

ISSUE:

Was the judgment of the appellate court proper?

ANSWER:

No

CONCLUSION:

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. The law of capture did not absolve the oil companies from liability because the negligent waste and destruction of the landowners' gas and distillate was neither a legitimate drainage nor a lawful or reasonable appropriation of them. 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.

Click here to view the full text case and earn your Daily Research Points.