# Abella v. Knight Oil Tools

> Texas Court of Appeals, 1st District (Houston) · April 10, 1997 · 945 S.W.2d 847

URL: https://www.frixlaw.com/law-library/cases/9770620

## Case

- **Full name:** Alberto Bernhard ABELLA, Jeff Armstrong; Stephen J. Beck; William L. Bell; Terri Bugh; Cabec Energy Corp.; Brian Campbell; Joe F. Canterbury; Milton R. Copeland and L. Annelle Copeland; Conrad Coppedge; Daniel L. Crouch; William L. Crouch; Diamon F. Enterprise, Inc.; Donnell Pipe and Supply Co.; S. Gale Doty; William R. Ealey; Mike Faulkner; Ferrell & Moore; Full Boar Oil Tools, Inc.; Connie L. Gadt; Geological Exploration; Paul A. Gray, Jr.; Mary L. Hagan; Mary C. Harris; Robert F. Harris; A.E. Hassell and Wilma v. Hassell; Clifton L. Holmes; William D. Hughes; Roger Irons; E.M. Key; J.W. King; L & D Properties; Laird Oil & Gas Partnership; Tom W. Landers; William L. Lane; Glen MacConnell or Sandra MacConnell; Dorothy N. Manziel; Nolan Manziel; Eugene M. Massad, M.D.; McLennan Resources; Margaret B. Merritt; Midgap Energy Partnership; Mojo Oil and Gas Co., Ltd.; Dewey Moore; Johnny Moore; Waylon Morgan; Harold L. Myers, III; Donald R. Neumeyer; Peregrine Financial Corp.; Pinwheel, Inc.; David K. Rainey; B.K. Read and Bill v. Read; Ina May Reed and Lloyd A. Reed; Randy Renshaw; L.P. Rigel, III; Ro-Jo, Inc.; Scott Roloff; John B. Seastrum; Keith R. Smith; Lonn R. Spradlin; Robert Keith Stone; Jeffrey W. Streeter; A.R. Sweeney; Tommy Terry; Texavia International, Inc.; Jeffery D. Thomas; Susey Toombs; Tunis Land Venture; Harry Vowell; Scott Vowell; Mat Vansickle; Ronald Weaver; John C. Wessling; And George G. Wight, Appellants, v. KNIGHT OIL TOOLS, Appellee; Richard W. ANDERSON; Stephen J. Beck; Michael Jake Browning; C. Reagan Cassity; Bill Clark; Milton Copeland; Conrad Coppedge; O.W. Craven; William R. Ealey; David R. Erwin; Full Boar Oil Tools, Inc.; Thomas S. Gay; Geological Exploration, Co.; Paul A. Gray, Jr.; Henry Gritter; Mary L. Hagan; Sam A. Hankla; A.E. Hassell; Wilma v. Hassell; Kilgore Tire Center, Inc.; J.W. King; Hilary A. Kruce; Edwin Dureska; L & D Properties; William Lane; Glen MacConnell; Eugene M. Massad, M.D.; Margaret B. Merritt; Merritt Brothers, Inc.; Mojo Oil and Gas Co., Ltd.; Dewey Moore; Johnny Moore; Waylon Morgan; Morgan Exploration Company, Inc.; Stephen C. Nethery; Michael Pavliska; E. Hunt Powell; James A. Powell, Jr.; B.K. Read; Reserve Exploration, Inc.; Donald W. Rhea; Roy B. Sanders; Roy F. Sanders; Scandrill Inc.; Pam Seegers; Robert Keith Stone; Swenke Energy, Ltd.; Duke Turner; Hank Wade; Daniel L. Crouch; Caldwell Hagan; Linda Wade; Henry H. Wade; Charles M. Wilcox; Dick Randell Wood; Woolley Fishing Tool, Inc.; Larry Sanders Trustee; And Texas National Bank, Appellants, v. BAKER OIL TOOLS, a Division of Baker-Hughes Co.; Knight Oil Tools, Inc.; Consolidated Pipe and Supply Company, Inc.; And Beka Drilling Fluids, Inc., Appellee; Michael Jake BROWNING; Bill Clark; Milton R. Copeland and L. Annelle Copeland; Conrad Coppedge; Full Boar Oil Tools, Inc.; Geological Exploration Co.; Kilgore Tire Center, Inc.; J.W. King; L & D Properties; William L. Lane; Eugene M. Massad, M.D.; Mojo Oil and Gas Co., Ltd.; Johnny Moore; Waylon Morgan; Morgan Exploration Company, Inc.; B.K. Read and Bill v. Read; Reserve Exploration, Inc.; Donald W. Rhea; Dave Sanders; Scandrill Inc.; And Jeffery D. Thomas, Appellants. v. BAKER OIL TOOLS, a Division of Baker-Hughes Co. & Knight Oil Tools, Inc., Appellee
- **Court:** Texas Court of Appeals, 1st District (Houston)
- **Decided:** April 10, 1997
- **Citations:** 945 S.W.2d 847; 1997 Tex. App. LEXIS 2074; 1997 WL 189780
- **Precedential status:** Published
- **Opinion:** Dissent by Hutson-Dunn1
- **Judges:** Mirabal, Hedges, Hutson-Dunn
- **Cited by:** 20 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9770620

## Opinion text

HUTSON-DUNN 1 , Justice,
dissenting.
I respectfully dissent.
First I note that the appellees state in their first amended petition that the “security for its debt [are] the oil and gas leases.” The court’s order provided that the receiver collect the “net proceeds” from the sale of the oil and gas produced from the well. The wording of section 56.003, creating the statutory lien under which appellees claim, does not include oil and gas produced from the well or the proceeds from its sale. A lien attaches only to property specifically mentioned in the statute. Wilkins v. Fecht, 356 S.W.2d 855, 855 (Tex.Civ.App.—San Antonio 1962, writ ref d). A lien specifically allowed by statute on a lease for oil and gas purposes does not give a lien upon the oil and gas produced or the proceeds derived therefrom. Leroy Jeffers, Statutory Lien on Current Production of Oil and Gas, 13 Tex.L.Rev. 180, 194-95 (1934); see also Wilkins, 356 S.W.2d at 855 ; United States v. Texas E. Transmission Corp., 254 F.Supp. 114 , 119 n. 13 (W.D.La.1965).
I disagree with the majority’s conclusion that the appellees’ M & M liens attach not *852 only to the materials furnished, but also to the production and the proceeds. The statutory mineral lien extends only to the property of the person under whose auspices the labor, material, or supplies are furnished. Therefore, the supplies furnished to a leaseholder attach to the leaseholder’s right to withdraw oil and gas from the land. Bethlehem Supply Corp. v. Wotola Royalty Corp., 140 Tex. 9 , 165 S.W.2d 443, 445 (1942); Tex. Prop.Code Ann. § 56.003(b) (Vernon 1995). If the legislature had intended that the statutory lien attach to the production proceeds created by the withdrawal of the oil and gas from the land, it would have provided such in the statute. It is interesting to note that the appellees did not ask for an injunction to prevent production or depletion of the leasehold.
To succeed in the appointment of a receiver under section 64.002(a)(1), the party seeking a receiver must have a probable interest in or right to the property or fund, and the property or fund must be in danger of being lost, removed, or materially injured. Tex. Civ.Prac. & Rem.Code Ann. § 64.001(b) (Vernon 1986). Since appellees’ liens do not extend to the “proceeds of production,” they have no interest in, or right to, the proceeds. Therefore, subsection (a)(2) of section 64.001 does not apply in this case.
As to appellees’ right to have a receiver appointed under section 64.001(a)(6), initially I note that in this case, foreclosure of the section 56.002 liens is appellees’ remedy at law. Additionally, appellees sought appointment of a receiver to protect “their interest” in property — proceeds from production — on which I would hold that they have no statutory lien. Appellees assert that the appellants may deplete the reservón- and misapply the proceeds before appellees’ foreclosure action is complete. There is no evidence that appellants are rapidly depleting reserves. Appel-lees did not contract for additional security. They were well aware that the appellants would be engaging in the normal production of oil and gas. They have security through section 56.003 statutory liens in the material, machinery, supplies, leasehold, well, and other properly specifically listed in the statute. Equity should not step in to further secure creditors who are already secured by statutory liens. Rogers v. Daniel Oil & Royalty Co., 110 S.W.2d 891, 894 (Tex.1937) (where adequate and complete remedy at law is provided, court will not grant equitable relief). I would hold that the trial court abused its discretion in appointing a receiver to collect and hold such proceeds under the circumstances in this case.
I would sustain point of error one.
MIRABAL and HEDGES, JJ., also participating.
. Justice Hutson-Dunn retired from the First Court of Appeals after submission of the case, but before the opinion issued. Justice Hutson-Dunn continues to sit on this case by assignment.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9770620. Public record. Not legal advice.