Case Name: Eliff v. Texon Drilling Co.
Defendant: Texon Drilling Co.
Citation: 210 S.W.2d 558 (Tex. 1948)
Issue: Whether under the law of capture the plaintiff can recover for the damages resulting from the wrongful drainage of the gas from beneath their land.
Key Facts: The landowners owned the surface and certain royalty interest of land upon which a producing well was located, as well as the mineral estate underlying the land. While the oil companies were engaged in drilling an offset well, the offset well blew out, caught fire, and cratered. The blowout resulted in the destruction of the landowners’ well and drained large quantities of gas and distillate from under their land. The landowners filed suit.
Applicable Law: In Texas, the landowner is regarded as having absolute title in severalty to the oil and gas in place beneath the land. However, this law must be in connection with the law of capture and is subject to police regulations. Scientific research has determined that oil and gas will migrate across property lines towards any low pressure area created by production from the common pool.
This migratory character of oil and gas has given rise to the so-called rule or law of capture. That rule simply is that the owner of a tract of land acquires title to the oil or gas which he produces from wells on his land, though part of the oil or gas may have migrated from adjoining lands. He does not need consent and does not incur liability. The nonliability is based upon the theory that after the drainage the title or property interest of the former owned is gone. Each owner whose land overlies the basin has a like interest, and each must of necessity exercise his right with some regard to the rights of others. No owner should be permitted to carry on his operations in reckless or lawless irresponsibility, but must submit to such limitations as are necessary to enable each to get his own.
The court did not think the non-liability rule should apply to negligent waste and destruction of the oil.
Procedural Posture: Petitioner land owners appealed the judgment of the Court of Civil Appeals (Texas), which reversed the trial court’s judgment for the land owners in their action to recover damages resulting from a blowout of a gas well drilled by respondent oil companies.
Overview: The trial court entered judgment for the landowners. The appellate court reversed the judgment, and this appeal followed. The court reversed the appellate court’s judgment. The appellate court was without authority to pass upon the propriety of the measure of damages adopted by the trial court because no such assignment was presented to it. The law of capture did not absolve the oil companies from liability because the negligent waste and destruction of the landowners’ gas and distillate was neither a legitimate drainage nor a lawful or reasonable appropriation of them. Under the common law, the oil companies were legally bound to use due care to avoid the negligent waste or destruction of the minerals, and they failed to discharge this duty.
Judgment: The court reversed the judgment of the appellate court, and the case was remanded to the appellate court for further proceedings.