Untitled Texas Attorney General Opinion ( 1941 )

Railroad Commission of Texas
Austin, Texas
Dear Sirs: Opinion No. O-3181
Re: ,Questions relating to the appli-
cation of spacing rules and the
subdivision rule as appIied to
the Hawkins field.
We have the letter of February 17. 1941, signed by Com-
missioners Sadler and Culberson. asking us thirteen questions with ref-
erence to the application of the spacing rules and the subdivision rule to
the Hawkins field. In your letter you’first set forth the applicable rules
as follows:
‘On January 22, 1941. the Railroad Commission of
Texas, after due notice and hearing, promulgated and adopt-
ed field rules for the Hawkins field, Wood County, Texas,
which was discovered during the month of September, 1940.
Rule 1 of the rules referred to provides as follows:
“‘RULE 1. (A) No well shall be drilled
hereafter fur oil and gas or either of them near-
er than Nine Hundred Thirty-Three (933) feet
to any other completed or drilling well on the
same or adjoining tract or farm, and no well
shall be drilled nearer than Four Hundred
Sixty-Six (466) feet from any property line,
lease line, or subdivision line; provided that,
subject to the further provisions hereof, the
commission, in order to prevent waste or to
prevent the confiscation of property, will~grant
exceptions to permit drilling within shorter
distances than above prescr~ibed whenever the
commission shall determine that such excep-
tions are necessary either to prevent waste or
to prevent the confiscation of property. When
exceptions to this rule are desired, application
therefor shall be filed with the commission,
fully stating the facts, which application shall
be accompanied by a plat drawn to the scale of
One inch equalling Four Hundred (400) feet, ac-
curately showing to scale the property on which
Railroad Commission of Texas, Page 2 (O-3181)
permit is sought to drill a well under an
exception to this rule, and accurately show-
ing to scale all other completed, drilling
and permitted wells on such property; and
accurately showing to scale all adjacent
surrounding properties and wells. Such
application shall be verified by some per-
son acquainted with the facts, stating that
all facts therein stated are within the know-
ledge of the affiant true, and that the accom-
panying plat is accurately drawn to scale
and correctly reflects all pertinent and re-
quired data. Such exceptions shall be grant-
ed only after at least ten days’ notice to all
adjacent lessees, affected thereby, has been
given, and after public hearing at which all
interested parties may appear and be heard~,
and after the commission has determined
that an exception to this rule is necessary
either to prevent waste or to protect the
property belonging to applicants from con-
fiscation. All pending applications shallbe
amended to conform to this rule before, be-
ing acted upon.
“‘(b) In applying this rule, the gener-
al order of the commission with relation to
subdivision of properties shall be observed.’
“On May 29, 1934, the Railroad Commission of Texas duly
entered its order which read as follows:
“‘IT IS ORDERED BY the Railroad Com-
mission of Texas that in applying Rule 37 (Spac-
ing Rule) of statewide application and in apply-
ing every spacing rule with relation to spacing
,.in every field in ,this state. no subdivision of
property,made subsequent to the adoption of the
original spaeing~,rule will be considered in de-
termining whether or not any property is being
confiscated within the terms of such spacing
rule and no subdivision of property will be re-
garded in applying such spacing rule or in de-
termining the matter of confiscation if such sub-
division took place subsequent to the promulga-
tion and adoption of the original spac~ing rule;’
“On January 3, 1940, the Railroad Commission entered an order
which read as follows:
. .
.Railrcad Commission of Texas, Page 3 (O-3181)
“‘IT IS HEREBY ,ORDERED by the Rail-
road Commission of Texas that in all orders,
other than those dealing with strictly depart-
mental affairs, hereinafter promulgated or
adopted by the commission no motion for re-
heaiing shall be entertained unless same is
filed within a period of Fifteen (15) days from
the date of the promulgation and adoption of
any such order by the commission.
“‘All such motions shall be filed in writ-
ing by the applicant for a rehearing specifying
in detail the grounds upon whic’h the rehearing
is sought. In no event shall the commission con-
sider any grounds not specified in such motion
for rehearing in passing upon the merits of
same.’
“All of the rules and orders hereinabove set out are now in
force and effect.”
In your letter you make separate statements and ask sep-
arate questions relating thereto. and we will follow this form in replying
to your questions.
I.
“STATEMENT
“Article 6036a of the Revised Civil Statutes now in
effect provides in part as follows:
“‘No rule, regulation or order shall be
adopted by the commission under the provi-
sions of this act or of Title 102 of the Revised
Civil Statutes of Texas, 1925, as amended, deal-
ing with the confiscation of oil and gas and the
prevention of waste thereof, except after at Ieast
10 days’ notice given in the manner and form pre-
scribed by the commiss~ion * * *’
“Rule 1 of the spacing rules of the Hawkins field, here-
inabove referred to provides in part:
“When exceptions to this rule are desired.
applrcation therefor shall be filed with the commis-
sion fully stating the facts * * * Such exceptions
. .
Railroad Commission of Texas, page 4 (O-3 181)
shall be granted only after at least ten (10)
days’ notice to all adjacent lessees affected
thereby, has been given, and after public hear-
ing at which all interested parties may appear
and be heard and after the c,ommission has
determined that an exception to this rule is
necessary either to prevent waste or to pro-
tect the property belonging to applicant from
confiscation.’
QUESTION NO. 1
“Will you please advise whom the rule contem-
plates as adjacent lessees as would entitle them to no-
tice of a hearing on an application to drill an oil or gas
well in the Hawkins field?”
The proper c,onstruction of the notice provisions of Rule
37, as applied to other fields in this State, has been discussed in a few
cases. In Magnolia Petroleum Company v. Edgar, 62 S.W.(Zd) 359, 361
(writ refused) it was pointed out that Article 6036a. Vernon’s Annotated
Civil Statutes. merely provides that notice shall be given “in the manner
and form prescribed by Commission, ” and the court further observed:
“The statute itself does not undertake to desig-
nate to whom such notice is to be given nor in what form.
This for the obvious reason that it would be impossible
to designate specifically who are the interested parties.”
In Rabbit Creek Oil Co. v. Shell Petroleum Corporation,
66 SW. (2d) 737,739 the question was raised as to whether Rule 37 was
valid. in that it provided merely for notice to “adjacent lessees,” and did
not provide for notice to other adjacent owners. In holding the rule to be
valid, the c~ourt said:
” * * * But rule 37 is not unconstitutional because
it failed to provide for notice to adjacent landowners. The
rule deals with the practical matter of giving notice to the
party most vitally interested in the drilling of a well as an
exception to the rule. Exceptions are only necessary after
the particular field has been proved. The adjacent lessees
have the control and the respons~ibility of developing their
respective leases. They are charged with the obligation of
drilling offset wells. Their interest also requires them to
procure all the oil possible under their leases, and the les-
sees’ interest in the oil is greater than that of the owner of
the fee, who usually receives only one-eighth of the oil as
royalty. Royalty interests are often sold by the owners of
Railroad Commission of Texas, page 5 (O-3181)
the fee to numerous ,purchasers, resident as well as non-
res,ident. and to whom in many instances notice of an ap-
plication and hearing for the permit could,not be given.
If it should occur that an adjacent owner has developed or
intends to develop his own land, then the commission can
give him notice. The commission is required to permit
the development of proven,fields in accordance with the
conservation laws, and’as a pra~ctical proposition notice
to the adjacent lessees in most cas,es should be and is suf-
ficient.-
Compare Humble Oil & Refining Company v. Railroad Com-
mission, 68 SW. (2d) 622, 624 (affirmed, sub non, Brown v. Humble Oil &I
Refining Company. 126 Tex. 296, 83 S.W.Tm)m, 87 S,m ) 106’9) in
whic,h the court said:
“While the statute (Vemon*s Ann. Civ. St. art. 6036a)
does not undertake to define who are interested parties, it
does provide that hearing must be held before the commis-
sion shall adopt a rule or regulation, after notice given in
the manner and form prescribed by the commission itself.
This we think clearly implies notice to those interested in
or to be affected by the rule or regulation contemplated.
***-
From the foregoing authorities. we c,onclude that the words,
“adjacent lessees,.” are generally to be given their ordinary meaning, that
is, owners of oil and gas leases c~overing tracts of land adjoining or bor-
dering on the tract of land on which the application for an exception is filed.
The usual situation presented to the Commission will be one where all of
the land in question has been leased for oil and gas purposes,, and in such
cases the ‘lesseesa are the persons owning the working interest in each
lease. If cases should arise in which an oil and gas lease has not been ex-
ecuted, the owner or owners of the land should be given notice.
II.
“STATEMENT
“As lessee ‘A’ owns a lease of 160 acres
the size and shape of which admits of develop-
ment in accordance with the spacing regulations
adopted for the field. Less,ee also owns all con-
tiguous and adjacent leases to that of his 160-
acre tract.
“QUESTION NO; 2
‘In view of the provisions of the spacing rule adopted
for the field and that lessee owns the lbO-acr~e tract and all
. .
Railroad Commission of Texas, page’ 6 (O-3181)
contiguous and adjacent leases, is it necessary when ap-
plication for a permit to drill is filed by the owner of the
160-acre tract for the commission to give notice to the
owner of the 160-acre tract who is also the owner of the
contiguous and adjacent leases of his intention to drill?”
Although it is not explicitly so stated. we assume from your
question that, while the tract in question could be developed without excep-
tions to Rule 37, a permit is applied for to drill a well as an exception to
Rule 37 at a closer distance to a lease line or another well than is allowed
by the rule. Under our answer to question No. 3. infra, if the well is to be
drilled under the general provisions of the rule, a-not as an exception,
no notice to adjacent lessees is required.
Under the facts stated, where the applicant owns all con-
tiguous and adjacent leases~, we see no necessity of giving notice to him,
as adjacent lessee, that he, as applicant, has applied for a permit. Of
course such applicant, in his capacity as applicant, should be notified of
the time and place of the hearing on his application, but, in his capacity
as an adjacent lessee, there is no necessity of giving him another notice
to the same effect.
III.
“STATEMENT
“Lessee owns a tract of 160 acres which is suscep-
tible to development under the spacing rule applicable to
the field and desires to drill a well which is not nearer than
Nine Hundred Thirty-three (933) feet to any other completed
or drilling well on the same or adjoining tract or farm and
not nearer than Four Hundred Sixty-six (466) feet from any
property line, lease line or subdivision line.
“QUESTION NO. 3
“Please advise ,whether under any spacing rule or
the statutes of this state it is necessary for said lessee to
obtain a permit from the commission authorizing the drill-
ing of said well and whether, if such permit is necessary,
any notices are required to be issued to any adjace’nt lessee
or interested parties.”
Under the facts stated, the well may be drilled under the
general terms of Rule 37, and no permit to drill as an exception to Rule
?7 need be obtained. See~Gulf land Co. v. Atlantic Refining Company,
134 Tex. 59, 70, 131 S.W.Tm) 73. 80. in which the Supreme Court said.
in construing Rule 37:
. .
Railr~oad Commission of Texas, page 7 (o-3181)
“,* * * In order to accomplish orderly drilling,
the Commission has s~imply promulgated a rule fixing
minimum spacing distances at which wells may be
drilled without application, notice or hearing. * + * w
We also direct your attention to the Railroad Commission
Statewide Rule No. 9, as amended effective January 1. 1940, which reads
in part as follows:
“* * * No permit to drill any well or wells for
oil or gas shall be required by the Commission except
for such wells as may be drilled unde~r exceptions to
Rule 37 of statewide application or as exceptions under
special field rules governing the drilling of any well or
wells which have been or may hereafter be adopted by
the Railroad Commission.”
IV.
“STATEMENT
“Lessee owns a lot in the unincorporated town of
Hawkins, in the Hawkins field, same being of such size
and shape as not to be susceptible to development without
an exception to the spacing rule adopted for the field, and
files application with the commission in accordance with
the rule for a special permit to drill a well on such lot,
after which notices are issued to all owners of adjacent
leases and interested parties. Subsequent to the filing of
such application and the issuance of notices to all adja-
cent lessees and intereste,d parties and before the hear-
ing on such application, one or more of such adjacent les-
sees or interested parties conveys his or her interest in
such adjacent leases to a party or parties not served with
notice.
“QUESTION NO. 4
“Is the commission required to postpone the date
of the hearing theretofore set in order that such addition-
al adjacent lessees or interested parties may be notified
of the application and hear~ing, or are such purchasers of
the interest of the adjacent leases or interested parties
charged with notice of the filing of the application and the
time of hearing by reason of the notice served on the pre-
decessor in title?”
Where the interests of adjacent lessees were conveyed
after the notice of the hearing had been given to such lessees, the grantees
of such adjacent lessees would be charged with notice of the hearing on
. .
Railroad Commission of Texas,, page 8 (O-3181)
the application, and it would not be necessary to issue notices to such
grantees. In our opinion, the analogy of the common law doctrine of lis
pendens would be applied, and the purchasers from the adjacent less=
would be placed in the same position as purchasers pendente lite. Com-
pare 28 Texas Jurisprudence 339. “Lis Pendens.” $24.
V.
“STATEMENT
“Subsequent to the discovery of oil in the Hawkins
field, a 400-acre tract was subdivided into twenty 20-acre
tracts, each being susceptible to development under the
spacing rule applicable to the field and without exception
to same. A purchaser of one of the interior tracts filed
an application to drill a well on same as an exception to
Rule 37 in order to meet offsets and to prevent undue
drainage, such well being applied for less than 466 feet
from the property line.
“QUESTION NO. 5
“Please advise whether the owners of the leases
contiguous to the original 400-acre tract are entitled to
notice of the application and hearing as provided in said
rule, or whether, such subdivision not being in contra-
vention to the rule, notices are required to be given only
to the owners of the leases adjoining or contiguous to the
20-acre tract.”
The 20-acre tract, not being of such shape or area as to re-
quire development by drilling of wells as exceptions to Rule 37 is not a sub-
division in violation of the subdivision rule of May 29, 1934. It therefore
may be treated as a separate tract in determining whether a well may be
drilled on it as an exception to Rule 37 in order to prevent confiscation of
property, See Gulf Land Company v. Atlantic Refining Company, 134 Tex.
59, 71. 131 S.W. (2d) 73, 81, in which the Supreme Court said:
” * * 8 The Rule of May 29th, supra, uses the
term ‘subdivision’ in defining tracts of land that have no
protection from confiscation. The Commission has not
seen fit to define such term and ordinarily it would not
require a definition, because any tract of land segregated
from a larger tract would constitute a subdivision. It is
obvious that the term ‘subdivision.’ as used in the order
or rule under discussion, has no such’general meaning.
If such a meaning should be given the term. a partition
or division of a lOOO-acre tract of land into two 500-
acre trac’ts would c’onstitute a subdivision of the land
under the rule. Manifestly, such a construction of the
Railroad Commiss~ion of Texas, page 9 (0-3i81)
rule would be absurd, because the tw-o 500-acre tracts
would come under its ban against subdivision, while
tracts of much smaller area which do not constitute
subdivisions after the effective date of Rule 37 would
not. As we construe the rule pertaining to ‘subdivision’
subsequent to the effective date of Rule 37, it means
that where a tract of land is of such size and shape that
it is necessary to obtain a permit as a special exception
to the spacing provision of Rule 37 before a well can be
drilled thereon, such a tract will be regarded as a sub-
division within the meaning of the Rule of May 29th,
supra, if it was subdivided out of a large~r trac~t after
Rule 37 became effective. Humble Oil & Refining Co.
v. Railroad Commission (Tex.Civ:App., writ refused),
94 S.W. (2d) 1197; Falvey v. Simms Oil Co. (Tex.Civ.
App.). 92 S.W.(2d) 292.”
Since the 20-acre tract is of such size and shape that it
can be developed without obtaining an exception to the spac~ing rule. it is
not a subdivision and may be treated as a separate tract. and notices need
be issued only to the lessee of tracts adjacent to the 20-acre tract.
VI.
‘STATEMENT
“Prior to the adoption of the spacing regulations in
the Hawkins field and the discovery of oil. lesse~e obtained
a lease on a 4-acre tract, same being a separate fee owner-
ship. Subsequent thereto lessee assigned the West two acres
of said tract to another party. Lessee, as the owner of the
remaining two acres, applied for a permit to drill a well
for oil as an exception to the spacing regulation on the ground
that same was necessary to prevent the confiscation of his
property by r~eason of the fact that other lessees had drilled
wells on the property contiguous to his which were admitted-
ly draining his oil. No well had been drilled on either of the
Z-acre tracts at the time the application was filed nor at the
time of the hearing thereof. The application was filed for a
special permit authorizing lessee to drill a well on the two
acres mentioned above and no mention was made in the ap-
plication or in the notice issued thereon of the west 2 acres
or of the 4 acres as a whole.
-QUESTION NO. 6
“(A) Was the application and notice of hearing on such
application sufficient to authorize the commission to hear evi-
dence on the issue of c,onfiscation and to grant the permit as
.
Railroad Commiss~ion of Texas, page 10 (O-3181)
applied for on the 2-acre tract, provided~notices were
issued to the owners of all leases adjacent and dontigu-
ous to the original 4-acre tract and other interested
parties, and provided the evidence at the hear,ing justi-
fied the commission in granting same to prevent the con-
fiscati~on of the applicant’s property?
“(B) The location applied for on the East 2-acre
tract is admittedly necessar’y to prevent drainage of oil
from the entire 4-acre lease by reason of the density of
drilling in the close proximity to the location applied for,
and the owner of the West 2-acre tract did not protest
the application. May the commission on such application
to drill a well on the East two acres, issue a permit to
drill a well at a location different from that applied for
and on the West two acres and at a place where protec-
tion will not be afforded against drainage from wells on
adjacent leases ?”
.
(A) Under the facts stated. the assignment of the lease on
2 acres out of the 4-acre tract constituted a subdivision under the provi-
sions of the Railroad Commission’s rule of May 29. 1934. A subdivision
by an oil and gas lease is held to be within such rule regardless of when
it was made. Sun Oil Co. v. Railroad Commission, 68 S.W. (2d) 609. af-
firmed 126 T-39 84 SW (2d) 693 Shell Petroleum Corporation v. Rail-
road Commission: 133 S,W. (2d) 19d. And an assignment of an oil and gas
lease on a portion of the leased premises would come within the same rule
and would constitute a subdivision. Compare Humble Oil & Re fining Com-
pany v. Railroad Commission, 68 SW. (2d) 625. Each of the L-acre tracts
would be too small to be developed separately except by wells granted as
exceptions to Rule 37, since under the statewide rule prior to January 25.
1940, the minimum area was 2.07 acres, and under the statewide rule in
force thereafter and the special rule for the Hawkins field promulgated
January 22, 1941, the minimum area is 20 acres. Being subdivisions,
neither tract as such, would be entitled to a permit to prevent confisca-
tion. In Gulf Land Co. v. Atlantic Refining Co,, 134 Tex. 59, 71. 131 SW.
(2d) 73. 81, the court said:
u * * * An examination of the order or rule of
May 29, 1934, hereinafter referred to as the Rule of
May 29th. will show that subdivisions of land, as such,
which have or hereafter may come into existence after
Rule 37 becameeffective are not protected at all against
confiscation. When Rule 37 and the Rule of May 29th are
read together. it is evident that exception permits may be
issued to protect such tracts from waste; but such exceP-
tion permits cannot be issued to protect such tracts, as
such, from confiscation. * * *”
Railroad Commission of Texas, page 11 (O-3181)
Furthermore, since the 2-acre tract is a subdivision, the
Railroad Commission could validly grant the permit only on the basis of
the Z-acre tract when considered as a part of the 4-acre tract. from which
it was subdivided. Railroad Commission v. Magnolia Petroleum Co., 130
Tex. 484, 109 S.W.7m) 967 .
Your question assumes that the application was made for
a permit to drill a well on the 2-acre tract, considered as a separate tract,
and that the notice so stated. In our opinion the notice would not be suf-
ficient to justify the granting of a permit to drill a well on the 2-acre tract,
considered as a part of the 4-acre tract. Persons receiving the notice
would be entitled to rely on the notice as stating the matter to be consid-
ered by the Commission. A notice that a hear.ing was to be held on wheth-
er a permit should be granted to drill a well on the 2-acre tract consid-
ered as a separate unit would not apprise the person receiving the notice
that the Commission was going to consider the matter of granting a per-
mit to drill a well on the 2-acre tract considered as a part of the 4-acre
tract. The issues, on the question of confiscation. would be substantially
different if the 2-acre tract were considered as a part of the 4-acre tract
instead of as a separate tract.
It is well settled that the notice issued by the Railroad Com-
mission must give fair notice of the matter to be passed on by the Rail-
road Commission, and conversely, that the order must c~ome fairly within
the terms of the notice. State v. Blue Diamond Oil Corp.. 76 S.W. (2d)852.
(B) Under the facts assumed in your question the applica-
tion is for a permit to drill a well on the east 2-acre tract, considered as
a separate tract. to prevent confiscation. Clearly it would be unreason-
able and arbitrary for the Railroad Commission on such application to
grant the permit on an entirely different tract, and such order would not
be valid.
VII.
“Oil was discovered in the Hawkins field during
the month of September, 1940. In 1937 ‘A’ owned a tract
of land of approximately 40 acres, his home being on five
acres thereof. In 1937, prior to the discovery of oil in
said fields, he executed a lease on all of the 40 acres, ex-
cept the five acres upon which his home was located. Said
lease is now at this time in force and effect and ‘A’ desi~res
to drill a well on the five acres which he has not leased and
makes application therefor.
Railroad Commission of Texas, page 12 (O-3181)
.
“QUESTION NO. 7
“Is “A’ entitled to a permit to drill one well on
said 5-acre tract as a matter of law to prevent the con-
fiscation of the property, there being no well on same
at the time of the filing of the application as an excep-
tion to the spacing rule in effect in the field?”
In 1937, the statewide Rule 37, providing for spacing dis-
tances of 150 feet from property lines and 300 feet from other producing
wells, was in effect. The area covered by a regular location under this
spacing pattern is 2.07 acres. The 5 acres retained by “A” would there-
fore be sufficient to justify the drilling of a well. under the spacing rule
then in effect. without obtaining a special per,mit. unless by reason of its
shape a well could not be drflled on the tract without being less than I50
feet from one or more property lines. The spacing rule in effect at the
time of the subdivision controls in determining whether a special permit
is required. Humble Oil and R,efining Company vs. Railroad Commission,
94 SW. (2d) 1197 (writ refused). Gulf Land Company v. Atlantic Refining
Company, 134 Tex. 59, 131 S.W. (2d) 73. If the 5-acre tract is of such
shape that a well can be drilled on it more than 150 feet fr~om the nearest
property line and more than 300 feet from the nearest producing well. then
“A” is entitled to drill one well on his 5-acre tract as a matter of law to
prevent confiscation of property.
If, however, the 5-acre tract is of such irregular shape
that a well on it cannot be drilled except at less than 150 feet to the near-
est property line or less than 300 feet to the nearest producing well, then
the 5-acre tract is a subdivision within the meaning of the rule of May 29,
1934. Gulf Land Co, v. Atlantic Refining Co., 134 Tex. 59, 131 S.W.(2d)
73. In such a case, the Railroad Commission would have to consider the
small tract as a part of the larger tract from which it was subdivided, in
order to determine whether the lessee of this tract is entitled to a special
permit in order to prevent confiscation of property. Humble Oil and Re-
fining Co, v. Potter 143 SW. (2d) 135; Shell Petroleum Corporation Y.
Railroad Commission, 133 Saw. (2d) 194. Under the facts assumed, “A”
would not be entitled as a matter of law to a well on his 5-acre tract in
order to prevent confiscation, but he would be entitled to such well if the
facts show that the original 40-acre tract is entitled to such well. Rail-
road Commission v. Magnolia Petroleum Co.,, 130 Tex. 484, 109 S&w
967; Atlantic Refining Co. v. Buckley, 146 SW. (2d) 1082 (writ dismissed).
VIII.
‘“STATEMENT
“In 1920 ‘A’ and ‘B’ purchased a lo-acre tract
of land in the Hawkins field and each held an undivided
one-half interest therein until approximately 1935, which
was prior to the discovery of oil in the Hawkins field.
During the year 1935, ‘A’ and ‘B’ orally agreed to parti-
tion such IO-acre tract and did orally partition same and
thereafter each exercised complete dominion over the
. .
Railr.oad Commission of Texas, page 13 (O-3181)
part set aside to each of them. No deed of conveyance
or written agreement of partition was ever executed or
recorded of doing same, but the fact of partition as set
out above was established without dispute at the hearing
on application for a permit to dr.ill wells on each of said
tracts filed by the owners thereof;
‘QUE,STION NO. 8
“May an oral partition be effected and established
as set out above and, if so, is the commission required
as a matter of law to grant at least one permit on each
5-acre tract on the application of the owners thereof in
order to prevent c’onfiscation of property?”
Under the facts stated, the oral partition together with the
actual division of possession and dominion over the property, was legally
effective to acc.omplish a partition as the parties intended, and, since the
partition took place prior to the discovery of oil, the partition would not
be a subdivision within the contemplation of the rule of May 29, 1934.
Therefore, “A” and “33” would each be entitled to a permit as a matter
of law on his 5-acre tract in order to prevent confiscation of property.
Shell Petroleum Corporation v. Railroad Commission, 116 S.W.(Zd) 439
writ dismissed).
M.
‘STATEMENT
“‘A’ owns and has owned for many years prior to
the discovery of oil in the Hawkins field, two lots in the
unincorporated town of Hawkins in said field. Said lots
are separated by a public street or road dedicated as
such many yea’rs prior to the discovery of oil in the field.
The two lots owned by ‘A’ face each other across said
street or road. Said road or street is 100 feet wide. ‘A’
owns no other property in the unincorporated town of Haw-
kins except the two lots mentioned above.
“QUESTION 9
“Is ‘A’ entitled as a matter of law to drill at least
one well on each of said lots in order to prevent the con-
fiscation of his property?A
‘Aw is not entitled as a matter of law to drill at least one
well on each of his lots in order to prevent the confiscation of his prop-
erty. The dedication of a street does not operate to pass the fee title to
Railroad Commission of Texas, page 14 (O-3 181)
the public authority, but merely creates an easement in favor of the pub-
lic. O’Neal v. City of Sherman. 77Tex. 182, 14 SW. 31; 14 Tex. Jur. 722.
A conveyance of a lot bordering on a street or alley ordinarily passes ti-
tle to the center of the street or alley. subject to the public’s easement,
unless a contrar,y intention is expressed in plain and unequivocal terms.
Cantley Y. Gulf Production Co., 135 Tex. 339, 143 S,W. (2d) 912; 60x v.
Campbell. 135 Tex. 428 143 S-W. (2d) 361. Exceptional cases maye
where the erantor did n’ot own any interest in the land covered bv the road
or street, and in such cases. of cburse. the purchaser of the 10t~would not
by such conveyance acquire any title in the land covered by the street or
,road. Day v. Chambers. 62 Tex. 190. In the usual situation, however,
‘A”. in the case assumed by your question. would be the owner of the min-
erals under the street or road, as well as under the two lots bordering on
it. Since the two lots and the street together constitute one continuous
tract, so far as the ownership of the minerals is c~oncerned, the street and
the two lots must be c,onsidered together in determining whether “A” is
entitled to a permit to drill a well to prevent the confiscation of his prop-
erty. Compare Railroad Commission v. Wood, 95 SW. (2d) 1328 (writ
refused); Humble Oil & Refining Company v. Railroad Commission, 99
SW. (2d) 1052, (writ refused).
X.
“STATEMENT
“The commission’s statewide 20-acre spacing rule
became effective January 25, 1940. Subsequent to that date
and prior to the discovery of oil in the Hawkins field and the
adoption of field rules for the Hawkins field, “A’ as the own-
er in fee of a IO-acre tract in said field, executed a lease
to “B’ on four acres out of such tract.
‘“QUESTION NO. 10
“(A) May the commission grant ‘B’S application for
a permit to drill a well on his 4-acre tract in order to pre-
vent confiscation of property?
‘“(B) May the commission grant ‘B’s’ application to
drill a well on his 4-acre tract in order to prevent physical
waste ?*
(A) The Railroad Commission may not grant “‘B”s” appli-
cation for a permit to drill on his 4-acre tract, considered as a separate
tract, in order to prevent confiscation of property. As we have already
pointed out in answer to your 6th question, a subdivision by an oil and
gas lease falls within the rule of May 29, 1934. even though such lease is
made before the discovery of oil. Sun Oil Company v. Railroad Commis-
sion, 68 S.W. (2d) 609. affirmed, 126 Tex. 269, 84 S. W. (2d) 693~O- Shell
. .
Railroad Commission of Texas, page 15 (O-3181)
Petroleum Corporation v. Railroad Commission, 133 SW. (2d) 194. It
follows that “B’s” 4-acre tract must be considered with the tract from
which it was subdivided in determining whether lB” is entitled to drill
a well on it in order to prevent confiscation of property. Humble Oil &
Refining Company v. Potter, 143 SW. (2d) 135; Shell Petroleum Corpora-
tion v. Railroad Commission, 133 S.W. (2d) 194.
(B) The question of subdivision relates only to the issue of
confiscation, and the fact that such subdivision has taken place does not
prevent the granting of a permit to ‘B” on his 4-acre tract in order to
prevent waste. In Gulf land Co. v. Atlantic Refining Company, 134 Tex.
59, 76, 131 S.W. (2d) 73, 83, the Supreme Court said:
”
. . . As we interpret Rule 37 and the Rule of
May 29th, the fact that a tract.of land is a subdivision
within the meaning of the rule last mentioned is no im-
pediment to the granting of a well permit thereon as an
exception under Rule 37 to prevent waste. In other words,
the rule pertaining to subdivisions has no application to
well permits granted to prevent waste . . . -”
XI.
“STATEMENT
‘The commission’s statewide 20-acre spacing rule
became effective January 25. 1940. Subsequent to such date
and prior to the discovery of oil in the Hawkins field and the
adoption of the special rules applicable to said field. ‘A’ as
the owner of a 4-acre tract, exec,ut.ed a lease on two acres
to one person and on two acres to another person, and each
has applied f~or a permit to drill on his respective 2-acre
tract.
“QUESTION NO. 11
“(A) Can the commission grant to each of said ap-
plicants a special permit authorizing the drilling of a well
on each respective tract in order to prevent confiscation
of property?
“(B) Can the commission grant to each of said ap-
plicants special permit authorizing the drilling of a well
on each respective tract in order to prevent physical waste ?R
(A) Under our answer to subdivision MA” under question
No. 10, supra, we have pointed out that a subdivision by oil and gas lease
comes within the provisions of the rule of May 29, 1934, regardless of
Railroad Commission of Texas, page 16 (o-3181)
whether it was before or after the discovery of oil. Sun Oil Company v.
Railroad Commission, 68 SW. (2d) 1609, affirmed. 126 T ~ Lb9 84 S W
2d 693 Sh 11 P etroleum Corporation v. Railroad Commi%on, ;33 S.“W,
{2d{ 194; S’ mce each of the 2-acre leases would constrtute a subdivision
within the meaning of the rule, neither of the applicants would be entitled
to the well of his 2-acre tract considered as a separate tract to prevent
confiscation of property. Gulf Land Co. v. Atlantic Refining Co.., 134 Tex.
59, 131 S.W. (2d) 73.
(B) As we have pointed out in answering subdivision “B”
of question No. 10, the question of subdivision does not affect the author-
ity of the Railroad Commission to grant a special permit to prevent waste.
Gulf Land Company v. Atlantic Refining Co., 134 Tex. 59. 131 S.W. (2d) 73.
Ther,efore, rf the Commrssron fmds upon substantial evidence that waste
will be prevented by the drilling of a well on each tract, it may grant a
special permit to each applicant.
‘XII.
“STATEMENT
“The commission’s statewide spacing rule became
effective January 25. 1940. Prior to the discovery of oil
in the Hawkins field and the promulgation of the special
rules applicable to the field, ‘A’ as the owner of a separate
fee ownership of a lo-acre tract executed a lease on four
acres of same to ‘B’.
‘QUESTION NO. 12
“Should it be held by you, in answer to the previous
questions that ‘B’ as the lessee of such 4-acre tract is not
entitled to a special permit authorizing the drilling of a well
on such 4-acre tract in order to prevent confiscation of
property and/or physical waste, please advise whether, if
the commission should refuse a permit to drill on such 4-
acre tract on the application “B’ and “B’ surrenders his
lease to the fee owner, the fee owner would then be entit-
led to make application for and receive the permit to drilLm
As we have already stated, the Commission would not be
prevented by the fact of subdivision from granting a special permit to
“BR to drill a well on the 4-acre tr.act in order to prevent waste, but it
would be prevented from granting a special permit to ““Bm to drill upon
the 4-acre tract, considered as a separate tract in order to prevent con-
fiscation of property. If “B’ surrenders his lease to the fee owner’, and
the IO-acre tract is not itself a subdivision from a larger tract, the fee
owner would be entitled to one well on his IO-acre tract in order to pre-
vent confiscation of property. Dailey v. Railroad Commission, 133 SW.
(2d) 219 (writ refused); Nash v. Shell Petr,oleum C orp00 LO S.W, (2d) 522
(wr,it dismissed).
Railroad Commission of Texas, page 17 (O-3181)
XIII.
“STATEMENT
“The Cemetery Association within the town of
Hawkins owns a 2-acre burial plot, having acquired same
long prior to the adoption of the original statewide spac-
ing rule in 1919. One and one&half acres of the 2-acre
tract is used for burial purposes and is separated by a
fence from the other one-half-acre and has been so sep-
arated for a number of years. The one-half-acre portion
d the 2-acre tract has never been used for* burial purposes.
The Cemetery Association prior to the discovery of oil in
the Hawkins field executed an oil and gas lease on the en-,
tire Iwo acres. The owner of the oil and gas lease then
applied for a permit to drill a well on the unused portion
of the cemetery as an exception to the spacing rules in
the Hawkins field. No wells are now located either on the
one and one-half-acre portion of the tract or the one-half-
acre portion of the tract.
“QUESTION NO. 13
“(A) In the absence of any protest on the part of
the families or relatives of people who are buried in the
cemetery, may the c,ommission. in order to prevent con-
fiscation of property or physical waste, grant a permit to
drill a well as an exception to the spacing rule on the un-
used portion of the entire cemetery lot.
“(B) Over the protest on the part of the families
or relatives of people who are buried in the cemetery, may
the commission, in order to prevent confiscation of prop-
erty or physical waste, grant a permit to drill a well as an
exception to the spacing rule on the unused portion of the
entire cemetery lot? *
For convenience, we shall answer subdivision (B) before
answering subdivision (A).
(B) From the facts stated, we assume that the entire 2-
acre tract was acquired by the Cemetery Association for burial purposes,
but that only one and one-half acres of this tract is actually occupied by
graves. the remaining one-half acre being reserved for such use when it
may be needed at some future time. Based on this assumption, it is our
opinion that if the families or relatives of persons who are buried in the
cemetery pr~otest, the Cemetery Association would have no lawful author-
ity to permit the use of any part of the cemetery for uses other than bur-
ials. In Oakland Cemetery Company v. Peoples Cemetery Association, 93
Tex. 569, 5 14~, 5 I S.W. 27, 28, the Supreme Court said:
Railroad Commission of Texas, page 18 (O-3181)
“After the dedication of the land. then legal title
remained in the~c’orporation only for the purpose of con-
veying the lots to those who desired to use them for the
purpose of burying the dead. No power is given by the
statute to such corporations to c,onvey the property for
any other purpose, and the, fact that the lots and ‘subdivi- ”
sions are made ‘unchangeable and that the power to con-
vey is restricted to the conveyance of ‘any lot or lots * * *
for purposes of sepulture’ operates as a limitation upon
the power of the corporation to convey the land to “a lot
or lots’ and for the uses named. Upon dedications the doe-
minion of the corporation over the land as owner in fee
simple was surrendered and the corporation became in
effect a trustee to Sell and convey’the ,lots for the purposes
specified and to carry out the purposes enumerated in the
statute, with the right to appropriate the pr~oceeds of the
sale to itself in payment of the land’.” ‘~
,‘~
InHouston Or1 Co.,vi, Williams:; 57 S.Wa (2~d) 380, 384,
(writ refused) the court sard: ,”
‘- It appears to be the rule that,.where.‘prop-
I
o e
erty hasbeen actually ippiopriated either as a private fam-
ily burying ground or was a publi cemetery, it cannot in
either instance,be inherited’or’conveyed’as~other property’
is done so as to interfere with the use and purposes to which
it has been devoted. Peterson v. Stoltz (Tex.Civ.App.) 269
SW. 113; Stewart v. Ga,rrettr’119:.Ga:386:,~ 46.S.E. ,427, 64
L.R. R. A. 99,‘,100 Am,St.Rep.’ 1,79; Hines ,v; State; 126.Tenna
1, 149 S.W. 1058, 1059, 42 L.R.A. (N.S.) 1138, and other cases.
Quoting, as very aptly stated, fi~bm the Hines Case, supra:
‘When once dedicated to.bur’ial.purposeS, and interments have
there been made;the then cAvnir holds ,the’ti,tle, to some ex-
tent in tiust for,the’benefit of those entitled to burial in it,
and the heir at iaw,‘devisee, or; vendee takes. the property
subject to this trust.‘m
: ,: I
The relatives of persons buried innthe cemetery would be
entitled to raise objections to the use of the cemeter,y for purposes ‘other
than as a place of burial. v D7-Iazel;Fain
In ‘Barker ~’ Oil Co;; 2,19 SW. 874,
879 (writ refused) tbe’court said:
” * D e They have, as we think, a r’ight to protect
the graves of ‘their ‘dead;, not only ,as against~the’~origina1
donor and the trustees of ;the Pleasant Grove Church, but
also as against all persons so long as the graveyard main-
tains its lawful existence., ,‘* ‘O2’ ”
The right of the’family and relatives of persons buried ‘in
a cemetery to object to the drilling of an oil well in the cemetery extends
’ ‘Railroad Commission of Texas, page 19 (O-3181)
to all of the cemetery. and not merely to the part of the cemetery that is
actually occupied by graves. In Cochran v. Hill, 255 S.W. 768, 770, the
c,ourt said:
“We believe this equity power extends to the pro-
tection of the entire lot owned’by the Cemetery Associa-
tion, irrespective of whether there are any graves in any
certain part of it or not. Those who have loved ones buried
there are entitled to have the hallowed spots protected from
the heedless search for hidden wealth and from the rapacious
hands who would~convert its sacred confines into a place of
money getting.”
In White v. Williams, 57 S.W. (2d) 395, 386, the court said:
“* * * therefore the only question to ba determined
on this appeal is whether under the facts,, in this case Mrs.
White was entitled to apply to a court of ‘equity for a re-
straining order to prevent the drilling of an oil well on this
plot of ground. We think she had such right. This was the
effect of the holding in the case of Barker et al v. Haeel-
Fain Oil Co., et al. (Tex.Civ.App.) 219 SW. 874, 875, and
that this right extends to the whole plot of ground and not
just to that portion of the same where inter’ments had al-
ready been made, Cochran et al v. Hill et al. (Tex.Civ.
App.) 255 SW. 768.”
The same holding is found in Smallwood v. Midfield Oil Com-
pany, 89 SW. (2d) 1086, 1090, (writ dismissed) where the court sard:
” * 8 * The dedication of Mt. &Aoriah Cemetery
had been effected by actual interment and inclosure many
years prior to the Martin deed. Such dedication extended
to all that portion of the ground thus set apart for the grave-
yard, whether actually occupied by graves or not. * * * *
See also Smith v. Merrill. 81 F. (2d) 609. and Rairr’road Com-
mis~sion v. Wood, 95 S;W. (Ld) 13~8 (writ refused). Zn,each of these cases,
a cemetery was involved and an order of the Railroad Commission refus-
ing to grant a permit to drill an oil well was sustained. However, each
case was decided on points which did not involve the right to drill an oil‘
well in a cemetery.
(A) Althou.gh the, law has not been settled,by any court de-
cision, we are of the opinion that where the Cemetery A,ssociation by its
proper officers hasexecuted aia oil and gas..,lease and all owners of lots
in the cemetery and a11 of the~,familiea and, re:lativ+s ~pf persons buried in
the cemetery consentto the drilling ofa well on a .portion of the. ceme-
tery snot actually used f.or graves, the Railroad,,Gommission would be
Railroad Commission of Texas; Rage ‘26 (O-3181)”
,
.I ,.i
,C?
authorized to grant a permit to. drill! a, we.11 on ,such, portion of the ceme-
tery.
Article 922a,‘Vernon’s Annotated Civil, Statutes, provides
as folIows:
“After such property is so dedicated to ceme-
tery purposes, neither the dedication nor the title of a
plot owner shall ever be affected by the dissolution of
the association or bynon-user ,on its part, or by aliena-
tions of the property. or by any encumbrances thereon,
or by forced sale under execution or otherwise, and such
dedication shall ,not be,deemed or, held invalid as violat-
ing any existing laws against perpetuities or the suspen-
sion of the power of alienation of title to or use of prop-
.
erty. but such dedicatron is hereby expressly permitted,
and shall be and shall~be deemed to be in~respect for the
dead, a provision for the disposition of the bodies of de-
ceased persons, and a ,duty to, and for the benefit of, the
general public, and said property shall be held and used
exclusively for cemetery purposes unless and until the
dedication shall be, removed by an order and decree of
the District Court of the county in which the same is sit-
uated, in a proceeding brought therefor by the governing
body of the city, if said cemetery is within, or within five
(5) miles’from the city limits of, any city or more than
twenty-five thousand (25,090) inhabitants according to the
last preceding Federal Census.,, or.by the District Attor-
ney, if said cemetery is not within, or within five (5)
miles of the city limits of,. a city of, more than twenty-
five thousand (25,OOO),inhabilnnts~, according to the last ‘i
preceding FedeiaJ Census..or by. the owne,r of property
so situated that its value is a,ffected, by said cemetery,
upon notice and proof s,atisfactory ,to the Court that all
bodies have been re~moved therefrom, or that no inter-
ments were made therein, or that,the same is no longer
used or reguired for interment purposes. or until the
maintenance of said cemeter,y is enjoined or abated as
a nuisance’,as he~reinafter provided for. After. such~dedi-
cation and as long as said property shall remain,dedicated
to cemetery purposes, no railroads, street, road, alley,
pipe line, pole line, telephone, telegraph, or electric line,
or other public utility o.r thoroughfare; whatsoeve’r shall
ever be laid out through, over , or across any part thereof,
without the consent~of, the directors. offthe cemetery asso-
ciation owning or .pperating.the same, or ofnot:less than
two-thirds (2/3.) of the, owners of burial, plots therein. bnd
all of such property, .includingroads;;alLeys;and walks
therein, shall be exempt from public improvement assess-
ments and all public taxation. and shall not be liable to be
Railroad Commission of Texas, page 21 (O-3181)
sold on execution or applied in payment of debts due from
individual owners of burial plots therein. (Acts 1934, 43rd
Leg., 2nd C-S., p. 146, ch. 66, § 1.)~”
It will be noted that this statute provides in part that the
dedication of property for cemetery purposes shall not be affected “by
alienations of the property”, but it is further provided that for certain
specified purposes, rights of way may be granted across part of the prem-
ises by the consent of the directors or of two-thirds of the owners of
burial plots therein. Article 923a. Vernon’s Annotated Civil Statutes, also
provides that a vested right of interment may be waived. While these stat-
utes do not relate to the spec,ific problem here involved, they do indicate a
policy that rights in a cemetery or a part thereof may be waived or aban-
doned. Compare Meadows v. Edwards. 116 S.W. (2d) 831. 834 (writ re-
fused), in which the court said, with reference to a private cemetery:
“These undisputed facts and circumstances com-
ing in the main from appellees, show in our opinion, con-
clusively that only that part of this tract of land inclosed
by the fence as it has existed since 1931 is impressed with
and devoted to a cemetery. Houston Oil Co. of Tex. v. Wil-
liams, Tex.Civ.App.. 57 S.W.(2d) 380, writ refused. And
the oil and gas leases given by these appellees and their
joint owners covering this tract of land, so long as operations
thereunder were confined to the land outside the inclosed cem-
etery and no desecration thereof occurred, were not illegal,
immoral, or against any phase of our public policy . . e R
We believes, therefore. that public policy would not prohibit
an agreement which in effect constituted an abandonment by all interested
parties of their rights to insist that a certain portion of the premises be
used for cemetery purposes, where the portion of the premises so aban-
doned are not actually occupied by graves or sepulchers. We further be-
lieve that the Railroad Commission would be authorized to require the ap-
plicant to make proof that all persons owning burial plots and all of the
families and relatives of pers’ons buried in the cemetery had been given
adequate notice and had failed to protest or had consented to the granting
of such permit.
Yours very truly
APPROVED MAR 24, 1941
ATTORNEY GENERAL OF TEXAS
/s/ Grover Sellers
FIRST ASSISTANT By /s/ James P. Hart
ATTORNEY GENERAL James P. Hart
Assistant
JPH:EP/cm APPROVED OPINION
COMMITTEE
By /s/ BWB
Chairman