# Petitioners Brief — Southern Minerals Corp. v. Simmons

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petitioners Brief
- **Published:** January 1, 1940
- **Citation:** 311 U.S. 688

## Text

SORIA Da AR Dg Rh AK La ota a ee ere nea

eMart)

IN THE

SUPREME COURT OF THE
UNITED STATES

OCTOBER TERM, 1940

SOUTHERN MINERALS CorporaTION, Petitioner,

v. 2

Jay SIMMONS, ET AL., Respondents :

BRIEF IN SUPPORT OF PETITION FOR WRIT :

OF CERTIORARI Ps

To THE HoNorRABLE, THE SUPREME COURT OF THE UNITED L

| STATES: #

I.

Opinions of the Courts Below

The opinion of the United States Circuit Court of Appeals
for the Fifth Circuit (R. 455), is reported in 111 F. (2d)
333. The judge before whom this cause was tried in the United
States District Court for the Southern District of Texas,
wrote no formal opinion but filed findings of fact and con-
clusions of law (R. 33-46).

II.

Jurisdiction

A statement of the grounds on which the jurisdiction of
this Honorable Court is invoked is set forth in the preceding
Petition under heading II (pp. 8-9) and are hereby adopted
and made a part of this brief.

: III.

Statement of the Case

A statement of the case has been made in the preceding
Petition under heading I (pp. 2-8) and is hereby adopted
and made a part of this brief.

$Y.

Specifications of Error

1. The Court of Appeals erred, particularly upon Pe-
titioner’s timely request therefor in its Petition for re-
hearing, in failing specifically and expressly (a) to find, as a
fact essential to a full and correct determination of the case
and the property rights of the parties in issue (instead of as-
suming as a fact for the purpose of disposing of the questions
of law expressly considered by it) that the well in question
is a gas well as described in the assignment from Houston
Oil Company to Southern Alkali, or (b) to set out its con-
clusions with respect to the rights and titles of Petitioner and
Respondents in gas from such well in the event it assumed or
found, as did the District Court, that the well in question was
an oil well as defined in such assignment.

2. The Court of Appeals erred in holding, inferentially,
that if the well in question be an oil well, Respondents

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29

Simmons and Webb are vested with title to gas produced
from such well.

3. The Court of Appeals erred in holding that Petitioner
was precluded from contending that Respondents had not
complied with conditions of the contract provisions in the
assignment from Houston to Southern Alkali under which
the title to products of five gas wells might be forfeited
to Houston, simply because Petitioner had alleged that the
well was drilled by Respondents “in an unsuccessful effort to
produce oil.”

4. The Court of Appeals erred in holding that Respond-
ents Simmons and Webb, by “drilling” the well in ques-
tion “beyond the gas strata,” in which it was completed, “in
a search of oil still lower,” complied with the condition of
the contract provisions of the assignment from Houston to
Southern Alkali giving Houston the right to complete a gas
well and take the products thereof upon failure of Southern
Alkali, or its assigns, to take the well over.

SADR GOT SE

GEER LOLOL D HEE LEIP

5. The Court of Appeals erred in holding that the contract
rights of Houston Oil Company under the assignment from
it to Southern Alkali Corporation, dated April 5, 1932, with
respect to five gas wells were assignable by Houston Oil Com-
pany.

6. The majority of the Court of Appeals erred in hold-
ing that the contract rights of Houston Oil Company under
the assignment from it to Southern Alkali Corporation, dated
April 5, 1932, with respect to five gas wells were intended
to be, and were, assigned by Houston Oil Company to Re-
spondents Simmons and Webb by the assignment dated Jan-
uary 6, 1938.

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7. The Court of Appeals erred in holding that the rights
of Petitioner under the contract provisions of the assignment

—— en

30

by Houston to Southern Alkali defining Petitioner’s right to
take over a gas well drilled by Houston to be governed by
rules relating to simple options of which time is the essence,
placing upon Petitioner the burden of showing that it had
exercised the option within the time provided rather than
in accordance with the rules relating to forfeitures under
which the burden is placed upon Respondents of showing
strict compliance with all prerequisites to accomplish such for-
feiture.

V.

ARGUMENT

Summary of Argument

PoInT 1. Since Petitioner’s right to the gas from the well,
whether it be an oil well or a gas well, was in issue and before
the court, it was the duty of the Court of Appeals, par-
ticularly upon timely request of Petitioner in its Petition for
Rehearing, to find as a fact whether the well is an oil well or
a gas well and declare the rights of the parties upon the basis
of such finding. Or, if the court proposed to dispose of the
case on the basis of assumptions of fact, as distinguished from
findings of fact, then the court should have declared the
rights of the parties not only upon the hypothesis that the
well is a gas well but also upon the hypothesis that the well is
an oil well. Anything less, as for example the court’s attempt
to decide the case upon the one hypothesis that it is a gas well,
results in failure fully to adjudicate the rights of the parties
and leaves such rights in confusion and doubt and deprives
the parties of specific findings and conclusions to which they
may assign error upon appeal to this Court for review.

Point 2. Petitioner owns the leasehold gas rights; Re-
spondents own only the leasehold oil rights. Respondents, as

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31

owners of the leasehold oil rights only, do not own gas pro-
duced from a well completed by them producing both oil and
gas, but have, at most, only a usufructuary right in the gas
from such a well, that is the right to make reasonable use of
such gas as a lift of the oil therefrom. In appropriating and
selling the gas off the premises Respondents are far exceeding
their rights of reasonable user.

Point 3. Respondent Webb testified that the discovery of
gas in the well in question was not the result of ‘an unsuc-
cessful effort to complete a commercial oil well” but that a
good producing oil well could have been completed in any
one of three or four shallower sands. In view of this testi-
mony and the express provisions of Rules 15(b) and 54(c)
of the FeperaL RuLEs oF Crvit Procepure, under which
this case was filed and tried, Petitioner was not precluded, by
its pleading, from contending that in respect to the well in
question Respondents had not complied with the contractual
provisions of the assignment from Houston to Southern Al-
kali giving Houston the right to complete a gas well and own
the products therefrom in the event Southern Alkali failed
to take the same over.

Pornt 4. Respondents did not, simply by drilling in search
of oil to lower depths than that in which the well in ques-
tion was completed, comply with the conditions of the con-
tract provision of the assignment from Houston to Southern
Alkali giving Houston the right to complete such well as a
gas well and take the products therefrom in the event South-
ern Alkali, or its assigns, failed to take the well over. Such
contract provisions do not give Houston the alternate right
to complete any well drilled by it as either a gas well or an oil
well but gives it the right to complete a well drilled by it as a
gas well only in the event such well cannot be completed as a
commercial oil well.

32

Point 5. The rights of Houston with respect to gas wells
which it might complete (up to five in number), under the
contract provisions of its assignment to Southern Alkali, were
not assignable by Houston to Respondents Simmons and
Webb.

Point 6. The assignment from Houston to Respondents
Simmons and Webb, dated July 6, 1938, did not assign or
convey the rights of Houston under the contract provisions
of its assignment to Southern Alkali with respect to gas wells
(up to five in number) drilled and completed by Houston.

Pornt 7. The contract provisions as to taking over gas
wells by Petitioner provide a forfeiture and the rights of
the parties should have been determined in the light of the
rules governing forfeiture rather than the rules governing
simple options.

POINT 1

Court of Appeals’ Decision Based Upon
Assumption Rather Than Finding of
Fact Made by District Court

As Petitioner has pointed out in its Petition for Writ of
Certiorari (Reason 1, p. 11), it was the duty of the Court
of Appeals to find as a fact that the well in question is an oil
well or a gas well; or, if it intended to dispose of the case
upon questions of law, to announce its legal conclusions as to
Petitioner’s rights in gas therefrom not only upon the hy-
pothesis that it is a gas well but also upon the opposite hy-
pothesis that it is an oil well. The Court of Appeals announced
its conclusions upon the single asswmption that the well is a
gas well. It did not consider Petitioner’s rights in gas from
such well upon the opposite hypothesis that the well is an oil
well nor express its reasons for not considering such rights;
or, if it did consider such rights it failed to set out its con-

33

clusions with respect thereto. The Court of Appeals’ failure
in this regard could have been justified only upon the ground
that such rights were not in issue or before the court.

By its complaint, upon which the case was tried, Petitioner,
without alleging whether the well is a gas well or an oil well,
but alleging its ownership of the gas in place, sought to en-
join the appropriation and sale of gas therefrom by Respond-
ents as a continuing trespass upon its real property right and
estate therein and to recover damages for gas and liquid prod-
ucts of gas theretofore taken and converted by Respondents 2
(R. 15-21); it sought such relief whether the well be an oil %
well or a gas well. s

To this Respondents answered (R. 23), (1) that the well c
is an oil well and that Respondents own and accordingly have :

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the right to appropriate and sell gas produced therefrom with
oil; (2) but in the alternative, if the well is a gas well, Re-
spondents are entitled to all the products thereof (R. 24, 25).

The rights of Petitioner in gas from the well in question,
if it be an oil well, were therefore clearly in issue. That such
rights were properly before and considered by the District
Court is shown by the announced legal conclusions of that
court with respect to Petitioner’s right to the relief it sought
not only (1) upon the assumption that the well is a gas well,
but (2) also upon the finding of fact that it is an oil well. No
claim has ever been made by Respondents that if Petitioner
were entitled, upon the facts proven, to injunction and dam-
ages, it should be denied such relief because of any deficiency
in the pleading. This being true, Petitioner was entitled to
such judgment as the proof warranted, regardless of the state
of the pleading. Rules 15(b) and 54(c), FEDERAL RULES OF
Crvit PROCEDURE.

Such rights were likewise properly before and presented
to the Court of Appeals by appropriate specification and
proposition (Petitioner’s Brief, Court of Appeals, pp. 150,
et seq.) , to which Respondents replied by counter-propositions

Paenannr

34

(Respondents’ Brief, Court of Appeals, pp. 148-204), with-
out the remotest suggestion that Petitioner was changing the
theory from that upon which it has proceeded in the court
below or that its rights to gas from the well in question if
it be an oil well were not in issue or properly before the Court
of Appeals.

In this state of the case, it was clearly the duty of the
Court of Appeals to consider Petitioner’s rights with refer-
ence to gas from the well in question, though it be an oil well
and to set out its conclusions with respect thereto, or ex-
pressly to state why it had not considered such rights. Only
by so discharging its duty could the Court of Appeals avoid
the uncertainties resulting from the judgment rendered by
it or protect Petitioner in its right of full review before this
Honorable Court of the holdings of the Court of Appeals
upon vital and material questions in issue and properly pre-
sented to that court for its consideration. RAILROAD CoM-
MISSION v. Maxcy, 281 U.S. 82, 83; PaNaMa Maiz SS. Co.
v. VarGas, 281 U.S. 670, 671; PuBLic SERVICE COMMISSION
v. WISCONSIN TELEGRAPH Co., 289 U.S. 67, 69, 70; UNITED
States v. Macnouia Pet. Co., 276 U.S. 160, 165; OKLa-
Homa REF. Co. v. SEVENRNS Pavinc Co., 251 U.S. 104, 107;
MARYLAND Casuatty Co. v. Jones, 279 U.S. 792; LITTLE
Mirai Cot. & S. R. Co. v. Unrrep States, 108 U.S. 277;
LuTCHER & Moore Lprr. Co. v. KNIGHT, 217 U.S. 257.

POINT 2

Even If Well Is an Oil Well, Respond-

ents Do Not Have Title to Gas There-

from But Only Usufructuary Right in
Such Gas

The District Court found as a fact that the well in ques-
tion is an oil well (R. 41, 42, 45 and 46). Upon such finding

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35

the court held that Respondents were owners of gas produced
from such well with oil, basing such holding upon the fol-
lowing conclusions:

ERR LOR RED

(1) That Houston in its assignment to Southern Alkali
“reserved” the gas rights “appurtenant” to the right to drill
and produce oil and the gas coming from said oil well is
appurtenant and necessary to the production of oil
(FF (11), R. 43) and consequently the gas produced and
sold by Respondents was “appurtenant to the oil rights”
and a part of the gas rights retained by Houston and as-
signed to Respondents; that accordingly Respondents
owned the gas from such well (Concl. V, R. 45), and

(2) That in its assignment to Southern Alkali, Houston
“reserved the gas rights appurtenant to the right to drill
and produce oil and reserved the gas rights appurtenant to
the ownership of the oil rights as expressly provided for in
the original lease from Harrell and wife to Kelly, which
provides:

SENSE eA i 2 SU

* T essee shall have free use of oil, gas, wood and water
from said land except water from Lessor’s wells for all
operations hereunder, and the royalty on oil and gas shall
be in the net quantity after deducting any so used for
operation’ (Ex. ‘A,’ R. 388) ;”

ng A isk Deedee

and that such appurtenant rights were assigned by Hous-
ton to Respondents Simmons and Webb and that they
owned the gas produced from such well (Concl. VI, R. 45,
46).

A simple question should be sufficient to demonstrate that
the trial court was in error and that Respondents do not own
gas produced with the oil from an oil well. The question is: If
Petitioner, as owner of the gas rights, should drill a well cap-

Se ee

36

able of producing large quantities of gas and relatively small
quantities of oil, would Petitioner thereby, under the terms
of its assignment, acquire title to the oil produced with the gas
as against Respondents, the owners of theoil rights? Obviously,
the answer is no. Petitioner owns the gas rights by assignment
under the original lease; Respondents own the oil rights by as-
signment under the original lease. Respondents do not hold
any title in Petitioner’s property, as Petitioner does not own
any title in Respondents’ property. The oil belongs to Re-
spondents, whoever may produce it; the gas belongs to Peti-
tioner, whoever may produce it.

By the oil and gas lease from Harrell and wife to Kelly,
the latter, as lessee, under the law as established in Texas,
became vested with title to oil and gas in place, as real
estate, in the Harrell land. (SicLER Om Co. v. W. T. Wac-
GONER Est., 118 Tex. 509, 19 S.W. (2d) 27; STEPHENS
County v. Mw-Kansas Om & Gas Co., 113 Tex. 160, 254
S.W. 290; SHEFFIELD v. Hoa, 124 Tex. 290, 77 S.W. (2d)
1021.) No change in such vested title results from the act of
producing or because of change of form from gas to liquid as
a result of production (LoNE Star Gas Co. v. STINE (Tex.
Com. App.), 41 S.W. (2d) 48; Humsie Om & Rer. Co. v.
Por (Tex. Com. App.), 29 S.W. (2d) 1019-1020; Rey-
NOLDs v. McMaNN Om & Gas Co. (Tex. Com. App.), 11
S.W. (2d) 778; AMERICAN RerF. Co. v. TiaL WESTERN Om
Corp. (Tex. Civ. App., w. e. ref.) , 264 S.W. 335). Such estate
as to gas was assigned and conveyed by Houston to Southern
Alkali and by Southern Alkali to Petitioner and Petitioner
thereby was vested with title to gas in place in the land.

From neither of such assignments was any portion of the
gas in and under the land and that might be produced there-
from excepted or reserved, except perhaps gas from five gas
wells which Houston might complete under the terms of the
contract provisions of the assignment from it to Southern Al-

37

kali and which Southern Alkali, or its assigns, failed to take
over. Such exception or reservation, if such it be, cannot be
extended by implication to gas from oil wells which Southern
Alkali and its assigns had no right to take over; nor implied
to defeat in whole or in part the express grant of gas to Peti-
tioner. (KOENIGHEIM V. MILEs, 67 Tex. 213, 2 S.W. 81;
SETTEGAST V. FoLEY Bros., 114 Tex. 452, 270 S.W. 1014;
Jones v. SUN Om Co. (Tex. Civ. App.), 110 S.W. (2d) 80,
w. e. ref.) It follows, therefore, that if the well is an oil
well as defined in the contractual provisions of the assignment
from Houston to Southern Alkali, Petitioner being vested
with title to gas in place and when produced at the surface
from such well, Respondents do not own or have title to gas
produced therefrom with oil, and a decision of the case is not
dependent upon a construction of instruments but upon
established local law.

Since no right, title or interest in the gas was by express
or implied reservation, exception or limitation retained by
Houston nor assigned by it to Respondents, any right Re-
spondents may have in the gas arises of necessity by implica-
tion as an appurtenant to their leasehold estate in the oil. Since
gas associated or blended with oil in production of an oil well is
a propelling agency of the oil, Respondents have by impli-
cation, and as an appurtenant to their estate in the oil, the
right (in the nature of an easement) of user of such gas
as a lift of the oil just as they have the implied and ap-
purtenant right of user of the surface, water an soil. How-
ever, Respondents clearly are not, by virtue of such right of
user, vested with title to gas produced from a well also pro-
ducing oil, no more than they are vested with title to the
surface and soil simply because of their implied right of user
thereof as an incident or appurtenant to their enjoyment of
their oil estate.

This was the holding of the Texas Commission of Appeals,

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with the approval of the Texas Supreme Court, in the case of
GuFFeEy v. Stroup, 16 §.W. (2d) 527, 64 A.L.R. 730. In
that case ‘the court had before it the respective rights of the
owners of an oil lease and the owner of a gas lease on the same
tract.of land. There the leasehold estates in the gas and in the
oil were established by two separate leases. The Harrell lease
under which the rights of both Petitioner and Respondents
are derived was assignable in whole or in part, and the estate
of Petitioner in the gas and of Respondents in the oil was ac-
complished by assignment of leasehold gas rights to the one
and leasehold oil rights to the other, in consequence of which,
just as in the case of GUFFEY Vv. STROUD, Petitioner owned the
leasehold estate in the gas and gas rights in the land and Re-
spondents the leasehold estate in the oil and oil rights in the
land, each holding as appurtenances to their respective estates
such rights of user as were reasonably necessary for them re-
spectively to enjoy the.estates owned by them.

In that case the court defined the rights of the owner of the
leasehold oil rights in the gas as follows:

“The right to take oil carried with it by implication
the right to tap gas pockets and ¢o bring to the surface
so much of the gas as was necessary in the proper drill-
ing for oil. The grant of the oil carried with it a grant
of the way, surface, soil, gas and the like essential to the
enjoyment of the actual grant of the oil. It cannot be said
that all use of or interference with the gas in place was
wrongful as against defendant in error.

“But the well having been a failure as an oil well, plain-
tiffs in error have no right to use it as a means or permit
it as an occasion for the taking of defendant in error’s
gas.” (Emphasis ours. )

That the court in GuFFEY v. Stroup did not intend to and
did not hold that the grant of the oil carried with it ownership
of gas produced with oil but only the right of user thereof,

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39

is clearly shown by its holding (1) that the right to take the
oil carried with it, “by implication,” the right to tap gas
pockets and to “bring to the surface” only “so much of the
gas as was necessary in the proper drilling for oil” and (2) by
its defining the oil owner’s right in the “gas” to be of the
same character as its right of “way, surface, soil and water
* * * and other like essential to the enjoyment of the actual
grant of the oil.” In other words the.court’s opinion is subject
only to the interpretation that the owner of the oil had a right
in the nature of an easement in:such amount of gas as was
essential to the enjoyment of the oil estate, i. e., as “was neces-
sary in the proper drilling for” and, by implication, pro-
ducing of oil. The case has been so interpreted by SUMMERS,
“Oil & Gas,” Perm. Ed., Sec. 652, in which ‘the author states:

“And if the lease grants only the oil, the lessee may not
market gas which he discovers, although he has an im-
plied right to use such gas for drilling purposes despite
the fact that another has a gas lease covering the same
land * * * ” (Emphasis ours. )

The right of user of gas as a lift must upon elemental prin-
ciple be reasonably and properly exercised just as the right of
user of surface, water and other appurtenant rights must be
so exercised with due regard for the title and estate of the Pe-
titioner in such gas (SUMMERS, “Oil & Gas,” Perm. Ed., Vol.
4, p. 2, Sec. 652; CoZART v. CRENSHAW (Tex. Civ. App.),
299 §.W. 499; SHELL Per. Corp’N v. LIBERTY GRAVEL &
SAND Co. (Tex. Civ. App.)., 128 S.W. (2d) 471.

That the oil owner’s right of user of gas is not an unquali-
fied one is clearly held in GUFFEY v. STROUD, when due con-
sideration is given to the following language of the court:

“The right to take oil carried with it by implication
the right to tap gas pockets and bring to the surface so
much of the gas as was necessary in the proper drilling
for,” and by implication, production of oil.

*
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40
And further:

“But the well having been a failure as an oil well,
plaintiff in error has no right to use it as a means or per-
mit it as an occasion for taking defendant in error’s gas.”
(Emphasis ours. )

The court does not further define the word “proper.” It
may be said with confidence, however, that a “proper” amount
of gas could not exceed that which might be legally used as
a lift in the production of oil.

The classification of the well as a gas well by the Railroad
Commission of Texas established as a matter of law that the
gas from such well could not be used as a Jift of the oil. In-
stead, the well being so classified could be operated only
for the production of gas which was required to be util-
ized for light, fuel or other permitted purposes to which
gas from gas wells might be put (Tex. Rev. Civ. STATS.
Art. 6008, Secs. 3 and 7, Appendix A and Art. 6014, Ap-
pendix B; CLyMoreE Pro. Co. v. THOMPSON, 11 Fed. Sup.
791, 13 Fed. Supp. 469; F. C. HENDERSON, INc., v. RAILROAD
CoMMISSION OF TEXAS, 56 F. (2d) 218). The liquid ob-
tained from the well was but incidental to the production of
gas. Accordingly, Respondents in operating the well in ques-
tion as a gas well were taking therefrom more gas than might
be legally taken and, hence, reasonably used, as against the
right of Petitioner, as a lift of the liquid products of the well.

Nor can Respondents operate the well as a gas well and ap-
propriate, sell and dispose of the gas upon the ground that
since they cannot operate their well as an oil well (because
of its high gas-liquid ratio) it is “necessary” for them to
operate it as a gas well and sell and dispose of the gas in
order to obtain their oil. It would indeed be the assertion of
a strange doctrine that one owner has the right to destroy the
property and estate of another in order to recover his own,

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41

particularly where his estate has been acquired subsequent
and subject to the estate of the other.

In the words of GuFFEY v. STROUD, supra, “the well having
been a failure as an oil well,” Respondents “have no right ¢o
use it as a means or permit it as an occasion for taking” Pe-
titioner’s gas.

Nor was a “reservation” of “ownership of the gas” pro-
duced from such well accomplished by the socalled “free use”
clause in the original lease, under the terms of which the lessee
was given the right as against the lessor to use on the premises
free of cost, gas, oil and water produced on said land for its op-
erations thereunder. It was the express purpose of this clause,
which is a customary one in the usual form of oil and gas lease,
to give the lessee the right to use gas in well and lease operations
upon the leased land without the necessity of paying royalty
on the gas so used in such operations. Upon the severance, by as-
signment, of the leasehold gas estate from the oil estate,
the owner of the gas estate and the owner of the oil estate
each was entitled to the benefits of such provision. Such
clause does not seek to provide for the respective rights
of the owner of the leasehold oil rights and the owner of the
leasehold gas rights, between themselves, in the use of gas. It
may be said with certainty, therefore, that Respondents, as
owners of the oil rights, if they have the right to use of gas
in conducting operations under the lease and on the land in
question, do not have such right, as against Petitioner, by virtue
of such clause but as an appurtenant right to the enjoyment
of the estate in the oil owned by them. It is unnecessary, how-
ever to determine this question here, for even if the defend-
ants, as owners of the oil rights, were entitled, under such free
use clause, to use gas produced by them from such land for
operations they might properly conduct on the leased prem-
ises under said lease, the gas is not being so used for any such
permitted operation but is being transported from the prem-

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42

ises and used and sold for fuel and jetting of wells in Corpus
Christi Field. To such use and sale and operation the free use
clause clearly has no application. ARMSTRONG, ET AL., V.
SKELLEY Om Co., 55 F. (2d) 1066.

As heretofore stated, gas in place is real property in Texas.
Petitioner is owner of the gas in place, subject alone to Re-
spondents’ implied right to use such amount of gas as might
be legally used as a lift of oil. Respondents, as heretofore
shown, were, therefore, without right as against Petitioner
to operate the well as a gas well and use and dispose of the gas
therefrom for jetting of wells or fuel purposes in Corpus
Christi Field, an entirely different field, for the reason that
such exceeded their right of user as against the Petitioner.
It accordingly constituted a trespass upon Petitioner’s real
property right in gas, because of which Petitioner was en-
titled upon equitable principles (14 R. C. L. 443-445; 32 C.
J. 139, 140), as well as by Statute in Texas (Art. 4642, REv-
Civ. Srats., 1925, Appendix C) to have such operation
of the well and appropriation, use and sale of its gas restrained
by injunction. GuFFEY v. Srroup (Tex. Com. App.), 16
§.W. (2d) 527; Miter Link LuMBER Co. v. STEPHENSON
(Tex. Com. App.), 265 S.W. 215, affirmed (Tex. Sup. Ct.)
277 S.W. 1039; ERHARDT v. Boaro, ET AL., 113 U.S. 537;
Houston Om CoMPANY OF TEXAS v. VILLAGE MILLs Co.,
109 Tex. 169, 202 S.W. 725. As stated in SUMMERS’ “OIL
AND Gas,” Perm. Ed., Vol. 1, p. 70, Sec. 28:

“I andowners or persons having separate estate in oil
and gas have been allowed in numerous cases injunctive
relief against trespassers actually taking or threatening
to take oil and gas.” (Citing numerous cases, Note 92.)

Petitioners, of course, are entitled to damages for gas and
condensates of gas heretofore converted and appropriated by
them from such well.

Siti eases,
a NSS ae ee

RL ROL AT Rm MAE tS RE ALPL ES AEE REE ALLOA

43

Nor is the question here one of regulation of which the
Railroad Commission of Texas would have jurisdiction as con-
cluded by the District Court. The basic substantive question
presented is whether Respondents own the gas from such
well or have only the right of reasonable user. This question is
obviously one of title over which clearly the Railroad Commis-
sion of Texas is utterly without jurisdiction. ALTGELT V.
Texas Co. (Tex. Civ. App.), 101 S.W. (2d) 1104 (w. of e.
dis.) ; RAILROAD COMMISSION V. LAMB (Tex. Civ. App.), 81
$.W. (2d) 161; Tie Water Or Co. v. RaiLRoaD Com-
MISSION (Tex. Civ. App.), 76 S.W. (2d) 553; Ramroap
ComMISSION v. Rau (Tex. Civ. App.), 45 S.W. (2d) 413.
No question of conservation is raised.

POINT 3

Petitioner Not Precluded by Pleading

From Contending Respondents Had Not

Complied With Condition Giving Hous-
ton Right to Drill Gas Well

The Court of Appeals held (R. 461):

“Southern’s State court suit, and also that before us,
alleged that Simmons and Webb completed the well
‘in an unsuccessful effort to produce oil.’ This being true,
the second part of the working agreement, * * * required
that the well be completed by them as a gas well.”

Actually Petitioner alleged “that defendants, Jay Simmons
and J. E. Webb, in an unsuccessful effort to produce oil from
said land, drilled, and on or about July 5, 1938, completed a
well thereon producing, and capable of producing, great
quantities of gas” (R. 15, 16).

Respondent, J. E. Webb, a partner of his corespondent,
Jay Simmons, testified:

F
i

essai 5G AR GL ERE ATOR

he

NASR, OT OM

44

. Well, you couldn’t drill that hole any further than
your 6600 where you twisted off, could you?

. I made up my mind that I didn’t want to try to get
any deeper after having so much trouble.

Then you concluded to abandon that and bring the
well in at the depth which you did bring it in?
There are three or four sands you can make a good
producing well at. ae

. What kind of well?

Oil wells.

. Ata shallower depth than the 5800 horizon?

Yes.

+ + %

re)

Did you discover gas in this well in an unsuccessful
effort to complete a commercial oil well?
I did not” (R. 231-234).

> O PAPO P O P

and:

“We topped that sand around 5784 and went out of
it below 5800, and after we had encountered the first
three or four feet of the sand it was completely saturated
from the gasoline, and upon removing some above the
core barrel, which I had taken out to a tool shed I had
on the lease for that purpose, I took samples of the core
and squeezed them between my hands and gasoline ran
out of the cores, and I left them in the core house and
it remained in that condition several days until the at-
mosphere completely dried the sand out” (R. 233).

That testimony stands uncontradicted and proves that it
is not “true” that this well was completed in compliance with
the contract right of Houston Oil Company to complete
not exceeding five gas wells, and proves that it is “true” that
Respondents knew the 5800-foot sand at which the well was
completed to be a gas sand, and “knew” the well could have
been completed as an oil well at a shallower sand, but never-
theless deliberately completed it in the gas sand.

45

The holding by the Court of Appeals that solely because
of its pleading and regardless of the uncontradicted proof
in the case Petitioner is precluded from insisting upon de-
cision by the court whether the well is such gas well as Hous-
tion Oil Company was given the right to complete, and that
Petitioner has, therefore, because of such pleading, forfeited
any right in gas from the well in question, is directly contrary
to the theory of pleading on which the FEDERAL RULES OF
Civ Procepure were designed and adopted. (Proceedings
of the American Bar Association Institute at Cleveland, pp.
219-224.)

Such holding is in direct contravention of Rule 15 (b):

*“AMENDMENTS TO CONFORM TO THE EVIDENCE.
When issues not raised by the pleadings are tried by ex-
press or implied consent of the parties, they shall be
treated in all respects as if they had been raised in the
pleadings. Such amendment of the pleadings as may be
necessary to cause them to conform to the evidence and
to raise these issues may be made upon motion of any
party at any time, even after judgment; but failure so
to amend does not affect the result of the trial of these
eS. F

me

ae eee PNR RR NIT RET RTS ESS REESE BE

and Rule 54(c):

*« * % % every final judgment shall grant the relief to
which the party in whose favor it is rendered is entitled,
even if the party has not demanded such relief in his
pleadings.”

Such holding also is in conflict with other decisions of other
Circuit Courts and District Courts with respect thereto.
(NEsTER v. WESTERN UNION TELEGRAPH Co. (Dist. Ct.
So. Dist. Cal.), 25 F. Supp. 478, and authorities cited; FreLp
v. WATERMAN STEAMSHIP CorPorATION (C.C.A., Sth Cir.),
104 F. (2d) 849; Swirt & Co. v. Youne (C.C.A. 4th Cir.),

ee ee

/ Me ete ae, a a eae oer oes Eee ‘
ys Ld a OEE tha RE GE EE PI PN OR PRE EP IIL TE EAE AL TAURI PI ph a Ba OY EO pel a
5 Beebe NE Pp A ME OR RIEL

46

107 F. (2d) 170, 172; CoLtins v. MerRo-GoLDwYN-MAYER
Pictures Corp’N (C.C.A. 2nd Cir.), 106 F. (2d) 83, 86;
ATWATER v. NortH AMERICAN Coat Corp’N (C.C.A. 2nd
Cir.), 111 F. (2d) 125; BartiIn v. CONNECTICUT GENERAL
Lire INsuRANCE Co. (Dist. Ct., Neb. Dist.), 25 F. Supp.
579).

The Court of Appeals, therefore, having erroneously de-
prived Petitioner of very substantial property rights upon a
technical construction of pleading, and in disregard of the
uncontradicted proof, in justice such decision should be re-
versed and the holding should be made in accordance with
the uncontradicted proof that the well is not such gas well
as was required to be completed by the owner of the oil rights
in said land.

POINT 4

Well in Question Not Drilled by Re-

spondents in Compliance With Condi-

tions Giving Right to Houston to Drill
Gas Well and Take Products

Assuming the well in question to be a gas well the Court of
Appeals held that Petitioner having failed to exercise its
option to take the well over, Respondents had the implied
right under the contract provisions of the assignment from
Houston Oil to Southern Alkali to take all the products
therefrom. Since Petitioner was vested with title to gas in
place and upon production, it is clear that the effect of the
court’s holding was that Petitioner, by failure to exercise its
option, had forfeited to Respondents its title to so much of the
gas as might be produced from the well in question. Such be-
ing the case it was necessary for Respondents strictly to
comply with the conditions of the contract provision giving
Houston the right to drill gas wells before they could com-
plete the well in question as a gas well, and take the gas there-

47 a

from for failure of Petitioner to take it over. (JONES V.
Gress, 133 Tex. 627, 130 S.W. (2d) 265, 268; GLoyp Vv. Mip
West REF. Co., 62 F. (2d) 483). Stated differently Respond-
ents had no right to complete the well in question as a gas well F
and force Petitioner to take it over under penalty of for-
feiture of all its products until compliance with all the con-
ditions giving rise to such right were plainly shown.

ore

The contract provision of the assignment from Houston *
to Southern Alkali gave the former the right to complete a

gas well only in the event Houston, “as a result of its opera-
tions, discovered gas in any well drilled” by it “in an wnsuc-
cessful effort to complete a commercial oil well” (R. 389,
395). In other words, Respondents were permitted to com-
plete a gas well only if the well could not be completed as an
oil well. That the right was to be a limited and special right and
privilege is sufficiently indicated by the following stipulation
of the contract:

“Provided, however, it is distinctly understood and
agreed that the Houston Oil Company of Texas shall
not have the right or privilege of completing more than
five (5) such gas wells” (R. 395).

By their own confession Respondents (1) could have com-
pleted a good oil well in three or four shallower sands (R. 231-
234), and (2) they did not complete the well “in an unsuc-
cessful effort to complete a commercial oil well” (R. 231-4).
Having failed to comply with the conditions giving them the
right to complete the well in question as a gas well—they had
no right to take its products upon Petitioner’s failure to take
it over. This being true it is manifest that Petitioner was en-
titled to injunction and damages. The decision of the Court
of Appeals to the contrary is clearly wrong.

48
POINT 5

Rights of Houston to Gas Wells Com-
pleted By It Not Assignable

The terms of the agreement as to completing five gas wells
evidence the intention of the parties that such right should
be personal to Houston Oil Company and not assignable.
Burck v. TAYLorR, 152 U.S. 634.

The contract provision of the assignment by Houston Oil
Company to Southern Alkali Corporation dated April 5,
1932, with respect to oil wells expressly extends to Southern
Alkali Corporation, or its assigns, but the use of the word
“assigns” is wholly absent from the provision as to gas wells
not exceeding five in number that could be completed by
Houston Oil Company.

The use of the word “assigns” has been held by the Texas
courts to indicate an intention that the contract may be
assigned. Puituirs v. Om, Inc. (Tex. Civ. App.), 104 S.W.
(2d) 576; GoopLor & MEREDITH v. Harris, 127 Tex. 583,
94 $.W. (2d) 1141, Tex. Civ. App. 58 S.W. (2d) 156.

Conversely, the absence of the word “assigns” evidences
the intention that the contract not be assignable. HI1LMAN
v. SHANNAHAN, 18 Am. Rep. 281; 4 AM. Jur. 236.

Furthermore, the contract provision with regard to com-
pleting gas wells, not exceeding five in number, necessarily
involved the skill, integrity, credit and responsibility of Hous-
ton Oil Company and personal trust and confidence in that
company. Such a contract is not assignable. ARKANSAS
SMELTING COMPANY v. BELDING MINING CoMPANY, 127
U.S. 379; Amsco Pire Line Company v. Donico Propuc-
TION Co. (Tex. Civ. App.), 112 S.W. (2d) 483, writ dis-
missed; MENGER v. Warp (Tex. Sup.) , 30 S.W. 853; SMITH V.
Pitts (Tex. Civ. App.), 122 S.W. 46; DiTTMAN Vv. MopDEL
BaKiNc Company (Tex. Com. App.), 271 S.W. 75; Mac-

ae:

SF OO eee eee % . % a
; SNR aE NRC nares rast peemNR sommes: —

4
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4
;
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"3
*

49

NOLIA PETROLEUM CoMPANY v. HavoLiINne AUTO SUPPLY
Co. (Tex. Civ. App.), 172 S.W. 759; FosTER v. CALLAHAN
& Co., 248 F. 944; Demarest v. DUNTON Lp. Co., 161 F.
264; 6 Corpus JuRIs SECUNDUM, p. 1076.

Factors of such personal trust and confidence reposed in
the skill, integrity, credit and responsibility of Houston Oil
Company include: provision for actual cost to the produc-
ing horizon exclusive of overhead and drilling costs below
the producing horizon, and keeping record thereof; reliance
upon Houston Oil Company to use machinery and drilling
equipment adequate to safely complete and equip a gas well,
gas being an inflammable, explosive and dangerous element;
confidence in the integrity and reliability of Houston Oil
Company not to complete a gas well unless such well could
not be completed as an oil well; and willingness to pay to
Houston Oil Company its actual cost of drilling and equip-
ping a gas well because of reliance on the skill and ability
of Houston Oil Company to drill and equip such well at an
actual cost that would be the proper cost of such an operation.

POINT 6

Right of Houston Oil Company to Com-
plete Gas Wells Not in Fact Assigned By
It to Respondents Simmons and Webb

The right of Houston under the contract provisions of its
assignment to Southern Alkali to complete five gas wells was
clearly not a right appurtenant to, nor essential to the enjoy-
ment of, the oil estate retained by it nor a covenant which
without express words of grant would ordinarily pass by an
assignment of such oil estate. It is a special contract provision
relating alone to five gas wells and to the products thereof. It
follows of course, therefore, that the granting clause of the
assignment covering only “oil rights under said existing

SANE SR ERG TIOGA LLL NEIL DE IEEE ES fae

50

leases,” was a limited and special grant and would not pass
the rights of Houston under such contract provisions unless
some other language of the assignment required such con-
struction (BRITTON v. CoTTON SraTEs Pet. Co. (Tex. Civ.
App.) , 283 S.W. 887; Dorris v. SULLIVAN, 90 Cal. 27, 27 Pac.
216; Prrer v. UNION Paciric Ry. Co., 14 Kan. 568).

The assignment by Houston Oil Company to Respondents
Simmons and Webb, dated January 6, 1938 (R. 399), con-
veyed only oil rights under portions of the Harrell and Law-
rence leases, which in turn, were two of six leases covering
1300 acres in which Houston had theretofore, on April 5,
1932 (R. 389), assigned to Southern Alkali and its assigns, the
gas rights. The controlling terms of the assignment to Sim-
mons and Webb (R. 399, 464) are these:

“Whereas, First Party is the owner of the oil rights
under an oil and gas lease from Dr. T. M. Harrell and
wife to R. D. Kelley, * * * ; and, Whereas, First Party
is the owner of the ol rights under an oil and gas lease
from L. S. Lawrence and wife, R. M. Lawrence and wife,
and T. M. Harrell and wife, to R. D. Kelley, * * * ”;
it is the intention “of this instrument for First Party
to assign to Second Parties the oil rights under said
existing leases in so far as they cover a portion of the
above described lots, in consideration of the drilling of
certain wells and the payment of the overriding royalty,
as hereinafter provided; * * * Houston Oil Company of
Texas, * * * does hereby bargain, sell, transfer and as-
sign, subject to the performance of the obligations herein
imposed, unto Jay Simmons and J. E. Webb, their heirs
and assigns, all of its rights under said existing leases
* * * in so far as same cover a thirteen-sixteenths
(13/16) working interest in the oil rights in and to Lots
23, 24 and 27, except the East 20 acres of each of said
Lots 23, 24 and 27 * * *, all of Lot 20, and all of Lot 13
less 10 acres * * *. It is understood that it is the intention

Rekey ee ag% OL TRE SERIE TIRES EEE EET TREES OLE _—

51

of First Party that this assignment of the oil rights shall
assign to Second Parties all of the rights under the
original oil and gas leases, except the rights of the South-
ern Alkali Corporation and/or the Southern Minerals
Corporation, as evidenced by the contract and assign-
ment of gas rights of April 5, 1932, by and between
the Houston Oil Company of Texas and the Southern
Alkali Corporation affecting, among other property, the
above described property, * * *, to which instrument
and all of the terms thereof reference is hereby made,
as if same were fully copied herein. Second Parties, by the
acceptance hereof, agree, for themselves, * * *, to com-
mence within ten (10) days from such acceptance drill-
ing operations * * *, Second Parties will continue drill-
ing the premises herein assigned with not more than
thirty (30) days elapsing between the completion of one
well and the commencing of another well, * * * until the
premises herein assigned are completely drilled, * * *, in
the event said Second Parties, * * *, should fail or refuse
to comply with the terms and conditions hereof, * * *
revert to First Party, * * *. As further consideration
for this assignment, the Houston Oil Company of Texas
reserves unto itself, its successors or assigns, an over-
riding royalty of one-eighth (Y%) in oil—that is, / of
8/8 of the value or proceeds of the oil which shall be
actually produced, * * * First Party, * * *, shall have
the preferential right to purchase the oi produced * * af
Second Parties agree and obligate themselves, * * *, to
furnish First Party with cuttings and core samples from
any and all wells drilled on the premises * * *. Second
Parties also agree to furnish First Party a copy of the
Schlumberger record of any and all wells; and First
Party shall at all reasonable times have access to the
premises where the well or wells are being drilled, and
First Party shall be permitted to have a representative

present to inspect any test made of any such well
+ % % 99

t
:

52

Clearly, Houston Oil Company did not assign to Re-
spondents Simmons and Webb any of its rights as to comple-
tion of gas wells, limited to five in number. As expressed by
the minority opinion of the Court of Appeals.

“Not only in the granting clause of this assignment
but throughout, the thing assigned is declared to be, the
oil rights under the Harrell lease. Nowhere in the as-
signment is there a reference to gas rights of any kind.
It is quite plain therefore, that the parties had in mind,
transferring not gas but oil rights, * * * ” (R. 465).

Additionally indicative of the absence of any intention by
Houston Oil Company to assign to Simmons and Webb its
rights to complete gas wells are the following points:

(1) Houston’s contract right to complete five gas wells
applied to six leases (R. 389) covering 1300 acres of land
(R. 207), but it only assigned to Respondents Simmons and
Webb (R. 400) “the oil rights” in portions of two of said :
leases. |

(2) The expression of intention “that this assignment of
the oil rights shall assign to second parties all of the rights
under the original oil and gas leases, except the rights of the
Southern Alkali Corporation and/or the Southern Minerals
Corporation, as evidenced by the contract and assignment of
gas rights of April 5, 1932” (R. 465), cannot be taken as
an enlargement of the granting clause which is limited to
“oil rights,” and negatives any intention to assign any por-
tion of Houston’s right to complete five gas wells; Houston’s
right to complete five gas wells was not a right under “the
original oil and gas leases” but was a right provided to Hous-
ton under the contract provision of the mentioned assign-

see ae POE STIS BRITA) ARAMA OY 2 RN aay PELLET BALL LEN NII EERE RACER OT DO yO Ey ph SEN PY Rt Ip COL a :

53

ment to Southern Alkali Corporation. Such contract right
was not assigned.

(3) Houston’s reservation of an overriding royalty of %
of 8/8 “of the value or proceeds of the oil which shall be
actually produced” negatives any intention to assign its right
to complete gas wells; otherwise, its overriding royalty would
have been made to apply to gas as well as to oil.

(4) Houston reserved the right to purchase production of
oil but not gas.

(5) Simmons and Webb were obligated to furnish Houston
with cores and cuttings and Schlumberger records, and to
permit Houston’s representative to inspect any test of any
such well; thereby clearly indicating intention that the
rights of Simmons and Webb were confined to oil wells.

(6) Such construction deprives Houston of a valuable
property right without any compensation, and without its
day in court.

(7) No reference is made to the rights of Houston Oil
Company under the contract and assignment of gas rights
dated April 5, 1932, and the only purpose of the reference
to the rights of Southern Alkali Corporation was to call to
the attention of Simmons and Webb that the assignment of
the oil rights was subject to the right of Southern Alkali to
complete oil wells as provided in said previous assignment.

(8) The contract right to drill five gas wells applied to
1300 acres. It cannot be supposed that Houston Oil Company
intended to convey to Simmons and Webb the right to drill
all five wells on the portions of the two leases assigned, and
no words were used indicative of any intention to assign the
right to drill a proportionate number of gas wells or what
such proportion should be.

EAE EN RS EMR TCR ES

54
POINT 7

The Court of Appeals Erroneously Con-
strued the Contract Provision as to Gas
Wells as Affording a Simple Option
Rather Than as Providing a Forfeiture.

The Court of Appeals, in its opinion (R. 459), holds:

“Jt is well settled that in the exercise of options the
time limited is generally of the essence of the contract.
Campbell v. Fetty, 271 Fed. 621, 17 C.J.S., p. 1072. Es-
pecially is this true when a thing so uncertain and fluctu-
ating as a new gas well is the subject of the option. 17
C.J.S., p. 1071. The option to take over this well, which
was limited to forty days from its completion, could not
be exercised four months after its completion. It is unnec-
essary to enquire whether the further finding of the dis-
trict court was correct, that the option right was waived
by Southern and the waiver was converted into an estop-
pel because Simmons and Webb made contracts and sub-
stantial expenditures on the faith of Southern’s statement
that it did not wish the well.”

In so holding the Court of Appeals construed the contract
provision of the assignment as being a simple option rather
than a forfeiture provision. CAMPBELL V. Fetty, 271 F. 921,
the only case cited by the Court in its opinion in this connec-
tion, was a suit to recover on a simple guaranty letter in words
as follows:

“In consideration of this subscription, as I stated to
you, should you carry this stock for 24 months, and then
desire to dispose of it, I will take it off your hands and al-
low you 8 per cent. carrying charge. You understand
that, should any dividends be paid in the meantime, they
would, of course, be deducted from the carrying charge.”

The Court in that case held that time was the essence of the

os

55

agreement, and since demand was not made at expiration of the
24-month period the option to require defendant to pay for i
the stock was lost. 3

The construction by the Court of Appeals of the contract
provision of the assignment as being a simple option and not a
forfeiture provision is wrong because title to all gas in place in
and under the land when the well was drilled having been for
a large consideration, vested in Petitioner, loss of the right to
“take over” the well necessarily results in forfeiture of Peti-
tioners’ title to gas. Such construction and holding is contrary
to the weight of authority and in direct conflict with the es-
tablished law in Texas as announced by the Supreme Court of
Texas in Jones v. Gress, 133 Tex. 627, 130 S.W. (2d) 268,
and is at variance with and contrary to the decision of the Cir-
cuit Court of Appeals for the Tenth Circuit in GLoyp v. Mip-
wEst REFINING CoMPANY, 62 F. (2d) 483.

In Jones v. Grpss, 133 Tex. 627, 130 S.W. (2d) 268,
Jones conveyed to Gibbs all the merchantable pine timber
on 1981.2 acres of land with the right for a period of 10 years
to remove the same and with the additional right to extend
such time an additional 5 years by the payment of 15 cents
per acre per year, which

ETAL ERIC TARE I oT

reer

+
®
:
+
:
Pa
RS
e
;
a
3;

“shall be paid for as much as one year in advance.”

The Court, in holding that such contract right was not a
simple option but a conveyance on valuable consideration and
therefore to be construed as a forfeiture provision against the
heirs of Jones seeking to declare the contract right to renew the
contract terminated by the failure of Gibb’s successors to
strictly comply with the provision for payment of 15 cents
per acre, said:

“Since the privilege to extend the time for removal of
the timber is given in the deed itself and is supported by

—_—_—_ OREM REI ANOS ESSEC PREP ARN THAI SHEER UBER I ATEN

LALA RL RN

56

the consideration paid at the execution of the deed, the
agreed value of the timber, and inasmuch as the deed is
treated, upon the exercising of the privilege, as a present
grant for the full term, including the period of the ex-
tension, a judgment decreeing that such deed became no
longer operative at the end of the primary term upon the
grantee’s failure to comply strictly with the terms of the
provision for extension, while technically but an adjud-
ication that the grant terminated by its own terms, would,
practically considered, and certainly from the viewpoint
of the grantees, amount to a forfeiture of a valuable prop-
erty right for which they had fully paid. In view of these
differences between the option for extension granted by
the deed to defendants in error and the ordinary option
to buy land, it is our opinion that, in determining whether
defendants in error did those things necessary under the
deed to extend the right to cut the timber, a too exactly
strict compliance with the terms of the option should not
be required and that the equities in favor of defendants in
error, on account of their having paid the purchase price
for all of the timber and having removed less than one-

third of it, should not be disregarded.”

The case of GLoyp v. Mipwest REFINING CoMPANY, 62
Fed. (2d) 483, in construing the nature of the rental payment
clause of an oil and gas lease, held that in determining whether
the lease had terminated such clause was to be construed as a
forfeiture provision and not as a simple option provision, hold-
ing:

“If the lease creates an option to explore, which the
lessee may continue and extend by the payment of rental,
that option right is forfeited. This, therefore, is esentially
a suit to establish a forfeiture as a matter of record and to
obtain the cancellation of the thing forfeited. Equity
will only give its aid to enforcement of a forfeiture where
to do so is more cognizant with the principles of right,
justice, and morality than to withhold it.”

a a Ne nC eas ee eee

57
Had the Court considered the rights of the parties under the

rules governing forfeitures rather than the rules governing
failure to exercise a simple option, we confidently assert the
Court would have held that Petitioner, under the facts and
circumstances of this case, did not waive its right and is not
estopped to take over the well at “cost to the producing hor-
izon;” and that Petitioner is now entitled to take over the
well as of the date of completion and to an accounting for
production therefrom.

In seeking to establish a forfeiture the burden of proof is al-
ways on the party asserting the forfeiture and claiming the
benefits thereof. 19 AM. JuR., pp. 96-99.

“Where a litigant, by the terms of his contract, is
made liable at law for a penalty or is subject to loss in
the nature of a forfeiture, owing to the nonperform-
ance by him of a condition or covenant therein con-
tained, the situation is viewed by equity with extreme
disfavor, and the contractual provision will be con-
strued strictly against the interest of the party who
claims the benefit thereof. * * * A party who seeks to
enforce a forfeiture must show that he has done every-
thing on his part to be entitled to claim enforcement.
The burden of proof is cast upon him; and if he fails to
establish the necessary facts, his right to insist upon the
forfeiture will be deemed to have been waived.”

Petitioner’s right to take over the well, if it be a gas well,
should be reéxamined in the light of the equitable rules gov-
erning forfeitures.

WHEREFORE, Petitioner respectfully submits that this ;
case is one over which this Honorable Court has jurisdiction %
and one calling for the exercise by this Court of its supervisory
powers, by granting a Writ of Certiorari and thereafter re-

58

viewing and reversing said decision, granting to Petitioner

the relief to which it is entitled.

SOUTHERN MINERALS CORPORATION,

By Birce Ho tt,
Corpus Christi, Texas;
By Dan Moopy,
Austin, Texas;
By RatrpH R. Woon,
Houston, Texas.
Counsel for Petitioner

Of Counsel

ose

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386415_0155%3A2. Public record. Not legal advice.
