text:
    Warren HALL, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    Court of Appeals of Kentucky.
    May 27, 1966.
    Lawrence C. Jenkins, Paul D. Ross, Lexington, for appellant.
    Robert Matthews, Atty. Gen., George F. Rabe, Asst. Atty. Gen., Frankfort, for ap-pellee.
   HILL, Judge.

By this opinion we entertain and dispose of appellant’s motion for appeal from a jury verdict and judgment imposing a $1,000 fine on him for assault and battery charged to have been committed on one Melvin Cheek. (KRS 431.075)

The agreed narrative approved by the trial court pursuant to RCr 12.68 indicates appellant, a deputy constable, and the prosecuting witness, Melvin Cheek, met on Boone Alley, a one-way street in the city of Lexington, and neither wanted to back up. By custom, Cheek was traveling the proper direction; but, due to a mistake in the posting of a one-way sign, appellant was headed in the right direction. But, it is unimportant which party had the right-of-way. After confrontation of the two automobiles, a driver following Cheek sounded his horn, which apparently fanned the flames of anger already existing. Appellant got out of his automobile, and, according to Cheek, asked this question: “Can’t you read the God damned sign?” Cheek testified he threatened to call the law on account of the loud and abusive language used by appellant, whereupon appellant announced, “I am the God damned law.” Appellant denies most of this. He “stated” he was a deputy constable and “was going to give him (Cheek) a break and let him move their illegally positioned car” when Mrs. Cheek and the operator of another car started chanting: “Assault and battery, breach of peace.” Appellant denied he struck Cheek or made any threats or gestures toward him or anyone else. Cheek testified that while he was still seated in his automobile with his wife, appellant struck him in the face bringing some blood about the mouth but did not seriously injure him.

Appellant urges as a ground for reversal that the fine is excessive considering the very slight injury inflicted by the blow.

This court discussed the reasonableness of a fine in an assault and battery case styled Ison v. Commonwealth, 190 Ky. 376, 227 S.W. 480, 482, in the course of which it was said: “If the punishment inflicted is not so excessive in the light of the facts as to invade some constitutional right against ‘cruel and unusual punishment,’ it will not be disturbed.”

The record in the present case discloses no evidence of provocation by Cheek except his insistence on the right-of-way, and it was not associated with threats, demonstrations, or boisterous conduct. Appellant, a peace officer presumed to know and under a duty to uphold the law, took charge of the situation and, from the verdict of the jury, committed an offense “against the peace and dignity of the Commonwealth.” The amount of the fine is not considered excessive. Cf. May v. Commonwealth, Ky., 285 S.W.2d 160 (1955).

The judgment is affirmed.


source: Caselaw Access Project

author: PALMORE, Judge.

license: Public Domain

text:
    Ben HALL, Jr., Movant, v. COMMONWEALTH of Kentucky, Respondent.
    Court of Appeals of Kentucky.
    May 27, 1966.
    Ben Hall, Jr., pro se.
    Robert Matthews, Atty. Gen., David Mur-rell, Asst. Atty. Gen., for respondent.
   PALMORE, Judge.

Ben Hall, Jr., a prisoner in the Kentucky State Penitentiary, appeals from an order of the Laurel Circuit Court overruling his RCr 11.42 motion to vacate the judgment of conviction pursuant to which he is imprisoned. He is without counsel and proceeds in forma pauperis.

One of the grounds stated in the motion is that the movant was deprived of the assistance of counsel at the time he entered a plea of guilty. There was no response to the motion, and it was overruled summarily.

As the Attorney General concedes, an allegation that the prisoner was deprived of counsel at any vital stage of the proceedings charges a constitutional violation and entitles the movant to a hearing with the assistance of counsel. Sipple v. Commonwealth, Ky., 384 S.W.2d 332 (1965).

The cause is reversed with directions to grant the movant a hearing.


author: SMITH, Justice. HAMILTON, Justice POPE, Justice

text:
    Mildred Mitchell JONES et vir, Petitioners, v. S. H. KILLINGSWORTH et al., Respondents.
    No. A-10243.
    Supreme Court of Texas.
    Dec. 8, 1965.
    Rehearing Denied and Dissenting Opinion Filed April 20, 1966.

      John A. Pace, Edward Kliewer, Jr., Dallas, for petitioners.
    Ralph Shank, Prentice Wilson, Dallas, Murph Wilson, F. Wilbert Lasater, Ramey, Brelsford, Hull & Flock, Frank L. Mc-Clendon, with above firm, Tyler, for respondents.
   SMITH, Justice.

ON MOTION FOR REHEARING

Our opinion delivered on June 23, 1965, is withdrawn and the following opinion is substituted therefor.

The question presented for our determination is whether or not the lands owned by the petitioner, Mildred Mitchell Jones, and described in an oil, gas and mineral lease executed by Mildred Mitchell Jones and her husband, Harry C. Jones, as lessors, to S. S. Long, as lessee (later assigned to S. H. Killingsworth), on August 16, 1951, were effectively pooled into what is known as the Hunt Oil Company et al. — West Poynor Unit. The trial court, without a jury, held that Killingsworth effectively pooled the acreage covered by the lease in accordance with authority granted in the lease, and for that reason the lease did not terminate on August 16, 1961, the date of the expiration of the primary term. A take-nothing judgment rendered against the petitioners has been affirmed by the Court of Civil Appeals. 379 S.W.2d 362.

The judgments of both the trial court and the Court of Civil Appeals are reversed and judgment is rendered for the petitioners.

Mildred Mitchell Jones and her husband filed this suit against S. H. Killingsworth and owners of leases in the immediate vicinity of the Mitchell-Long lease. These owners will be referred to as “Hunt Petroleum Corporation.” On July 12, 1961, at a time when the Mitchell-Long lease was in effect and was owned by and the title thereto was vested in S. H. Killingsworth, subject to certain overriding royalty interests, Kill-ingsworth, joined by the above-mentioned owners of other leases, entered into a pooling agreement establishing a unit hereinafter referred to as the “West Poynor Unit.” The two tracts of land described in the Mitchell-Long lease were included within this unit designation. These tracts contained, in the aggregate, 20.55 acres. It was stipulated that the created unit contained 170.86 acres. However, the parties deal with this unit as though it contains only 160 acres.

It was stipulated that the unit owners commenced drilling operations on the West Poynor Unit and completed a producing oil well on or about August 16, 1961, which “unit well” has continued to produce oil in paying quantities. It was agreed that “no well in search of oil, gas or other minerals has been drilled by S. H. Killingsworth and the other defendants on the lands actually described by metes and bounds in the Long lease, and that no oil, gas or other minerals in paying quantities has been produced from any well actually located on the lands actually described in the Long lease.”

Although lessors contend that they are not bound by the terms of the Unit Declaration and the Amended Unit Declaration, it is agreed that Killingsworth and the other unit owners in the unit acted in good faith in forming the unit, in securing a permit to drill and in drilling the well on the unit.

The habendum clause of the Mitchell-Long lease provides that:

“Subject to the other provisions herein contained, this lease shall be for a term of ten (10) years from this date * * and as long thereafter as oil * * * is produced from * * * land with which said land is pooled hereunder.”

The pertinent pooling provisions of the lease are to be found in the first two sentences of paragraph 4 of the Mitchell-Long lease. These sentences read as follows:

“Lessee, at its option, is hereby given the right and power to pool or combine the acreage covered by this lease, or any portion thereof as to oil and gas, or either of them, with other land, lease or leases in the immediate vicinity thereof to the extent, hereinafter stipulated, when in Lessee’s judgment it is necessary or advisable to do so in order properly to develop and operate said leased premises in compliance with the spacing rules of the Railroad Commission of Texas, or other lawful authority, or when to do so would, in the judgment of Lessee, promote the conservation of oil and gas from said premises. Units pooled for oil hereunder shall not substantially exceed 40 acres each in area, and units pooled for gas hereunder shall not substantially exceed in area 640 acres each plus a tolerance of 10% thereof, provided that should governmental authority having jurisdiction prescribe or permit the creation of units larger than those specified, units thereafter created may conform substantially in size with those prescribed by governmental regulations.”

The issue in this case is not whether the pooling clause granted authority to pool the Jones’ land into an oil unit consisting of more than 40 acres. The issue, properly defined, is whether the pooling clause granted authority to pool the Jones’ land into an oil unit containing 170.-86 acres. The lessors take the position that authority to pool their land into an oil unit consisting of 170.86 acres was not granted by the lease, and that the attempt to pool did not effectively extend the term of the lease beyond the terminal date provided therein. We agree with the lessee that the pooling provision confers authority on the lessee to pool the lessors’ land, but, we do not agree that the extent to which the power to pool may be exercised is entrusted solely to the lessee’s judgment. The lessors’ land may be pooled only to the extent stipulated in the lease. The second sentence of the pooling provision provides that “units pooled for oil * * * shall not substantially exceed 40 acres each in area, and units pooled for gas * * * shall not substantially exceed in area 640 acres each plus a tolerance of 10% thereof. * * * ” However, this provision must be construed in the light of the further provisions which is to the effect that in the event a governmental authority having jurisdiction should “prescribe or permit the creation of units larger than those specified units thereafter created may conform substantially in size with those prescribed by governmental regulations.” [Emphasis added.] Absent this proviso, perhaps it could well be said that the lessee was given authority to pool the lessor’s land for oil only in units not substantially exceeding 40 acres in area for either the purpose of complying with spacing rules or to promote the conservation of oil, the two situations mentioned in the first sentence wherein the power to pool is left exclusively to lessee’s judgment. In order to ascertain the true intention of the parties to this lease, the Court should take into consideration all of the pooling provisions contained therein, as well as the rules and regulations governing the Fairway (James Lime) Field in which lessors’ land is located. [The rules adopted by the Railroad Commission governing that field have the express purpose of “permitting only one well to each eighty (80) acre proration unit.” The field rules only encourage larger units by permitting an operator “to assign tolerance of not more than eighty (80) acres of additional unassigned lease acreage to a well on an eighty (80) acre unit and shall in such event receive allowable credit for not more than one hundred sixty (160) acres.”] It is argued that these Railroad Commission rules provide for proration units of not less than 80 acres more than 160 acres, and that by reading the rules into the lease contract, paragraph 4 of the lease would read: “the size of the units thereafter created may not be substantially less than 80 acres nor substantially more than 160 acres.” We disagree with this construction of the lease contract. The lessors did not consent to enlarge an oil proration unit to any size permitted by governmental regulations. They gave their consent to enlarge a unit of substantially 40 acres, but only to the extent of the size of units prescribed by the regulatory authority. The fact that the Railroad Commission may permit a much larger unit cannot be read into the lease contract when, as here, the authority to create larger oil units is expressly limited to units of the size prescribed by the Railroad Commission. The Commission prescribed a unit of 80 acres. [The field rules clearly say that there must be a proration unit of at least 80 acres, and there may be larger units of not more than 160 acres.] It is true that the pooling provision contains the word “permit” as well as the word “prescribe.” It is not unreasonable to assume that the parties to the lease contract intended, by the use of both words, to give each a distinctly different meaning. The parties obviously knew when the lease contract was executed that a permitted oil pro-ration unit could conceivably be much larger in area than one prescribed by governmental authority. To say that a lessee can pool lessors’ land with units of any size permitted by the Railroad Commission would defeat the intention of the parties to restrict the size of the units to the size prescribed by governmental authority. Absent express authority, a lessee has no power to pool interests in the estate retained by the lessor with those of other lessors. See Brown v. Smith, 141 Tex. 425, 174 S.W.2d 43 (1943); Gulf Oil Corporation v. Marathon Oil Co., 137 Tex. 59, 152 S.W.2d 711 (1941); Knight v. Chicago Corporation, 144 Tex. 98, 188 S.W.2d 564 (1945). Since the lands were pooled without authority, the habendum clause in the Mitchell-Long lease cannot be used to extend the term of the lease beyond August 16, 1961, the terminal date of the primary term of the lease.

Killingsworth and the Hunt Petroleum Corporation contend that the pooling clause in the Mitchell-Long lease created a relationship of principal and agent, or at least created a relationship similar to that of principal and agent, and that performance by the lessee is to be measured by the standard of good faith. It is true that the lessee acted in good faith. It is true that the lessee was given authority to pool. It is equally true that the permit granted by the Railroad Commission is unquestionably valid. Even so, the acts of the Railroad Commission cannot be said to operate effectively to extend the restrictive terms of the lease. The orders of the Railroad Commission cannot compel pooling agreements that the parties themselves do not agree upon. The Railroad Commission has no power to determine property rights. See Ryan Consolidated Petroleum Corp. v. Pickens, 155 Tex. 221, 285 S.W.2d 201 (1955); Magnolia Petroleum Co. v. Railroad Commission, 141 Tex. 96, 170 S.W.2d 189 (1943); Nale v. Carroll, 155 Tex. 555, 289 S.W.2d 743 (1956).

[The judgments of the trial court and the Court of Civil Appeals are both reversed and judgment is rendered declaring the Mitchell-Long lease terminated as of August 16, 1961, and the title and possession of the lands described in said lease is awarded to Mildred Mitchell Jones. Respondents’ motion for rehearing is overruled. A second motion for rehearing may be filed within fifteen days.]

GRIFFIN, HAMILTON and POPE, JJ., dissenting.

HAMILTON, Justice

(dissenting).

I withdraw the dissenting opinion heretofore filed in this cause on June 23, 1965, and. file the following opinion, respectfully dissenting:

I disagree with the Court’s construction of the pooling agreement in the oil and gas lease under consideration and with the application of the pooling agreement to the rules and regulations adopted by the Railroad Commission. Construing the pooling agreement in its entirety simply means that the lessee was given authority to pool the lessor’s land with other land in units, the size of which are controlled by the rules and regulations of the Railroad Commission.

The applicable rules and regulations for the development of the Fairway (James Lime) Field, in which the pooling unit in question is located, are set out in Railroad Commission Order No. 6-45, 322. Rules 1 and 2 of that order are as follows:

“RULE 1: No well for oil or gas shall hereafter be drilled nearer than eighteen hundred fifty (1850) feet to any well completed in or drilling to the same reservoir on the same lease, unitized tract or farm, and no well shall be drilled nearer than six hundred sixty (660) feet to any property line, lease line or subdivision line; provided, however, that the Commission will, in order to prevent waste or to prevent the confiscation of property grant exceptions to permit drilling within shorter distances than herein prescribed whenever the Commission shall have determined that such exceptions are necessary either to prevent waste or to prevent the confiscation of property. When exception to this rule is desired, application therefor shall be filed and will be acted upon in accordance with the provisions of Commission Statewide Rules 37 and 38, which applicable provisions of said rules are incorporated herein by reference.
“The aforementioned distances in the above rule are minimum distances to allow an operator flexibility in locating a well, and the above spacing rule and the other rules to follow are for the purpose of permitting only one well to each eighty (80) acre proration unit.
“In applying this rule, the general order of the Commission with relation to the subdivision of property shall be observed.
“RULE 2: The acreage assigned to the individual oil well for the purpose of allocating allowable oil production thereto shall be known as a proration unit. No proration unit shall consist of more than eighty (80) acres except 'as hereinafter provided, and the two farthermost points in any proration unit shall not be in excess of forty two hundred (4200) feet removed from each other; provided, however, that in the case of long and narrow leases or in cases where because of the shape of the lease such is necessary to permit the utilization of tolerance acreage the Commission may after proper showing grant exceptions to the limitations as to the shape of proration units as herein contained. All proration units, however, shall consist of continuous and contiguous acreage which can reasonably be considered to be productive of oil.
“Provided, however, that operators may elect to assign tolerance of not more than eighty (80) acres of additional unassigned lease acreage to a well on an eighty (80) acre unit and shall in such event receive allowable credit for not more than one hundred sixty (160) acres.
“Operators shall file with the Commission certified plats of their properties in said field, which plats shall set out distinctly all of those things pertinent to the determination of the acreage credit claimed for each well; provided that if the acreage assigned to any proration unit has been pooled, the operator shall furnish the Commission with such proof as it may require as evidence that interests in and under such proration unit have been so pooled.”

The petitioner does not contend, nor does the opinion say, that the proration unit in question does not comply with the regulations of the Railroad Commission. The opinion simply assumes, without giving a reason why, that the regulations of the Railroad Commission under which the unit in question was created were not prescribed by governmental regulations.

The court, in discussing the provisions of the regulations, does not fully cover all the size units provided in said regulations. Since the authority given by lessor to pool is governed largely by these regulations, it is thought that it will be helpful to more fully analyze them.

At the time the unit in question was formed, Railroad Commission Order No. 6-45, 322 was in effect and governed the Fairway (James Lime) Field. One of the Commission’s preliminary findings set out in the order, preceding the adoption of field rules, was an express finding to the effect that certain observations and calculations made with reference to the discovery well in the field had indicated that the well was producing oil in an area outside the radius of a 160-acre circle around the well. From this and other findings the Commission proceeded to adopt proration rules which established a maximum proration unit of 160 acres for which full acreage allowable credit would be given. Thus, it was implicit that the Commission had determined that the basic drainage pattern for the field was 160 acres or, in other words, that a 160-acre unit would be reasonably drained by a single well.

The Commission order did something more. It expressly recognized that smaller units would also be given full acreage allowable credit, if they met certain requirements. One of the provisions of the rules established, in effect, that if an operator had as much as 80 acres in a single lease, 80 acres would then be considered as the minimum proration unit, the inclusion of additional acreage, up to the total maximum of 160 acres, being optional with the operator. But another provision, relating to distance spacing, also established that, still without the necessity of any hearing or exception, any square tract of 40 acres or more would also serve as an acceptable proration unit, if that were all the acreage the operator possessed in the particular property, and if there had been no illegal subdivision. The 40-acre minimum standard was implicit in the rule that no well be drilled nearer than 660 feet from any property line. Thus, the Commission Order in effect recognized that, without special hearing and exception, the maximum standard proration unit, i.e., the area which could reasonably be drained by a single well, was 160 acres, while the minimum standard unit, i.e., the smallest to be allowed, was 40 acres. Pickens v. Railroad Commission, 387 S.W.2d 35, 38, 39 (Tex.Sup.Ct.1965).

The court’s opinion says “The Commission prescribed a unit of 80 acres”, inferring that all other size units provided for in said regulations were permitted by the Railroad Commission or permitted by the regulations, I am not sure which. To be sure, an 80-acre unit is prescribed by the regulations. But I do not agree that it is the only unit prescribed. As shown above, the regulations provide for units from 40 acres to 160 acres in size.

The pooling unit in question comes squarely within the limits as to size with the provisions of the governmental regulations just as much so as does the 80-acre unit referred to above.

This brings us to a discussion of the interpretation to be given the proviso of the pooling unit, which we here quote:

“ * * * provided that should governmental authority having jurisdiction prescribe or permit the creation of units larger than those specified, units thereafter created may conform substantially in size with those prescribed by governmental regulations.”

The first clause of the proviso governs the condition under which the lessee may create units larger than those specified, (40 acres), that is, when government authority has prescribed rules and regulations for the creation of larger units or when governmental authority has permitted the creation of larger units. Under the facts of this case the governmental authority has prescribed rules and regulations providing for the creation of larger units, but it has not permitted the creation of larger units. No permit was requested nor was one needed. As a general rule the Railroad Commission permits the creation of units only as exceptions to established rules and regulations. The last clause of the proviso governs the size of units created under either prescribed regulations or governmental authority permission. As said above, it is not questioned but that this unit was created in compliance with the established regulations and not by permission of the Railroad Commission as an exception to the regulation.

It has been argued before this court that since the first clause in said proviso uses the term “permit” and the second clause does not use the term, that “prescribed” must necessarily have a special meaning of “required” in order to leave room for permissive units to be formed, and since the last clause did not establish a size for permissive units, no authority was given to form any permissive units. This reasoning seems to be the basis of the court’s holding. Under this line of reasoning we wonder why the parties used the term “permit” at all in the first clause of the proviso. It is fundamental that in contracts all the terms used should be given meaning if possible. Should a governmental authority lay down rules and regulations for the creation of larger units, it is reasonable to say the governmental authority has prescribed. If the governmental authority allows the creation of a larger unit as an exception to the prescribed rules and regulations it can be said the governmental authority has permitted the creation of larger units. In fact, the term “permit” is the universal term applied to authority granted as an exception to regular rules and regulations governing the development of oil and gas fields. The fact that the word “permit” is not used in the second clause of the proviso does not destroy the import of the word “permit” in the first clause.

This construction of the proviso allows us to give the usual and ordinary meaning to the word “prescribe” as defined by Webster:

“prescribe (L. praescribere, prae-scriptum, fr.prae before — scribere to write, see scribere.) * * *
“2. To lay down authoritatively as a guide direction or rule of action; to impose as a peremptory order; to dictate; direct; ordain; as, to prescribe regular hours of study. 3. To keep within limits or bounds; to restrain; to confine * * *.
“Syn. — Limit, control, order, guide.”

I think that the authority granted by the lessor for pooling necessarily had to be stated in broad and general terms because it could not be foreseen what the circumstances in the future might be, what the regulations of the Railroad Commission might be nor in what terms they might be stated. For that reason a liberal interpretation should be given to the pooling provision to accomplish the purpose for which it was intended, that is, to promote conservation beneficial both to the lessor and the lessee. It can be reasonably concluded that from said pooling provision the parties intended for the authority to pool to extend to any unit size substantially conforming to any unit standard officially established by the Railroad Commission in the exercise of its spacing pro-ration function.

This court, in construing an oil and gas lease in the recent case of Grady L. Fox et al. v. Julia Thoreson, 9 Tex.Sup.Ct.J. 26 (1965), used the following language:

“ * * * Another sound rule of interpretation is that language used by the parties to an oil and gas lease will not be held to impose a special limitation on the grant unless it is clear and precise and so unequivocal in nature that it can reasonably be given no other meaning”

The court’s opinion in the instant case has given a narrow and restricted meaning to the pooling provision in question when there is no language in said pooling provision which compels such construction to be placed thereon. So long as the lessor’s pooling unit is confined to the size of the pooling units authorized by the rules and regulations of the Railroad Commission, it can reasonably be said that the unit complies in size with the prescribed regulations. This would be a reasonable construction of the pooling provision rather than a strained one.

In Texaco, Inc. v. Letterman, 343 S.W.2d 726, 732 (Tex.Civ.App.1961), the court in construing a pooling provision in an oil and gas leasr said:

“That pooling or unitizing of oil and gas leases is a standard practice in the industry can not be questioned. It is equally recognized that unitization is often a more feasible method of operation from an engineering and scientific point of view. Unitization can be said to be advantageous to both lessors and lessees. We think these facts lead to the conclusion that in the absence of clear language to the contrary, pooling clauses should not be construed in a narrow or limited sense.”

And in Tiller v. Fields, 301 S.W.2d 185, 187 (Tex.Civ.App.1957), the court said:

“Anticipatory provisions in leases for the committment by the lessee of such leases to unitization, of necessity must be in general terms. Neither the lessor nor the lessee has any way of knowing at the time the lease is taken the facts with respect to which it will be necessary for the lessee to apply his power. It is not practicable for the lessee to await the ascertainment of such facts. He knows from experience that because of the possibility of many changes in ownership of the lessor’s interest as time goes on, it may be difficult to effect an agreement if the right to unitize is not included in the lease itself. Phillips Petroleum Co. v. Peterson, 10 Cir., 218 F.2d 926. The Texas courts, as well as other courts, have recognized these basic facts, and have consistently sustained the basic validity of lease pooling provisions and units formed under their authority.”

In Phillips Petroleum Co. v. Peterson, 218 F.2d 926, 933, (10th Cir. 1954), the court reasoned as follows:

“Thus, it will be seen that unitization is a conservation measure which benefits both lessor and lessee and tends to prevent waste of a natural resource. * * *
“The practice of unitization by a power granted the lessee in advance, if faithfully carried out, will be fair and profitable both to the lessor and lessee, and is vital to the oil and gas industry in the interests of the conservation of both natural and material resources. It should be upheld, although the grant of power is in general terms, because it is subject to implied terms that will prevent arbitrary and unfair dealing, will require compliance with the implied covenants in the lease for the benefit of the lessor and will impose a rigid standard of good faith on the part of the lessee.”

In construing this pooling provision of the oil and gas lease we should recognize that this does not only affect the litigants involved here, but affects the oil industry as a whole for the simple reason that the form of the pooling unit used is in wide use in Texas and has been for many years.

The pooling clause which we have before us for construction has been in use in Texas for many years. Tolerance type proration units have been prescribed for various oil and gas fields in Texas for many years. The result has been the creation of many pooled units in numerous fields which are now shadowed. The confusion, uncertainty, and possible title failure is not limited to the lessee who may have formed the unit. It extends to royalty owners in the unit, overriding royalty owners, and to some extent to the purchasers of production and the financial institutions which furnish capital for the development and enjoyment of the mineral resources. Furthermore, there is affected by the court’s opinion the new Texas Compulsory Pooling Act by the Legislature, Art. 6008c, Rev.Civ.Stat.Ann. (1965). See discussion by Ernest E. Smith, Tex.Law Rev. Vol. 43 pp. 1003-1021.

I think a reasonable construction of the pooling clause does not require that we strike it down, and I would affirm the judgments of the trial court and Court of Civil Appeals.

GRIFFIN, J., joins in this dissent.

POPE, Justice

(dissenting).

The fault that I find with our holding in this case is that we are trying to fit the meaning of terms used by private parties to a lease into a supposed technical terminology used by the Railroad Commission in making its rules and orders. This is the sequence of events. First the parties made the oil and gas lease and in it they provided:

“Units pooled for oil hereunder shall not substantially exceed 40 acres each in area, and units pooled for gas hereunder shall not substantially exceed in area 640 acres plus a tolerance of 10% thereof, provided that should governmental authority having jurisdiction prescribe or permit the creation of units larger than those specified, units thereafter created may conform sub- . stantially in size with those prescribed by governmental regulations.”

Several years later the Commission order was passed which stated:

“ * * * No proration unit shall consist of more than eighty (80) acres except as hereinafter provided, * * * “Provided, however, that operators may elect to assign tolerance of not more than eighty (80) acres of additional unassigned lease acreage to a well on an eighty (80) acre unit and shall in such event receive allowable credit for not more than one hundred sixty (160) acres.”

The thrust of our opinion is that the Commission “prescribes” certain things, and it also “permits” certain things. The majority then tries to determine which the Commission did in this instance and holds that the Commission “prescribed” eighty acres but did not “prescribe” 160 acres. The fact is that the Commission passed its rules without regard to whether it was “prescribing” or “permitting,” as those terms are used by the private contracting parties. The term “permitted” actually does two things: It permits but it also prohibits all that is beyond that which is permitted. Every permit carries an inherent prescription, proscription, and prohibition of things beyond the permit. What the Commission did in passing its Rule 2 was to authorize certain units. Those units could be formed without any further recourse to the Commission. To the extent that Rule 2 was complied with, a unit was authorized. To the extent that it was beyond what Rule 2 authorized, it was prohibited. To the extent that it was prohibited, it was “prescribed,” if we want to squeeze the Commission order into the contractual mold. In my opinion the word “prescribed” is more applicable to the 160-acre unit than the 80-acre unit because the only prohibition or direction is against creating a unit of more than 160 acres.

I respectfully dissent.

      . The form of pooling provision is in lease forms in Walker, Cases on Oil and Gas, Yol. 2, Second form following page 895, publication 1948, lease form dated April, 1946; Stayton Texas Forms, 1960, Sec. 4026, Vol. 7, p. 254; Huie, Walker and Woodward, Oil & Gas, American Casebook Series, 1960, first form in the Appendix, p. 807, offered by the authors as a form “selected for the purpose of acquainting the student with the general nature of the instruments discussed in the cases,” and printed by permission of Pound Printing & Stationery Co., Houston; Williams, Oil & Gas Law, 1962, Vol. 4, p. 635, Sec. 699.7.


author: PER CURIAM.

text:
    Claborn NEWSOM et al., Petitioners, v. Bessie NEWSOM et al., Respondents.
    No. A-11296.
    Supreme Court of Texas.
    May 25, 1966.
    George A. Day, Brownwood, Webb & Stokes, San Angelo, Yates & Yates, Abilene, for petitioners.
    Darrell Shelton, E. P. Woodruff, Jr., Brownwood, for respondents.
   ON APPLICATION FOR WRIT OF ERROR

PER CURIAM.

The opinion of the Court of Civil Appeals is published in 398 S.W.2d 329. The application for writ of error is refused, no reversible error. Rule 483, Texas Rules of Civil Procedure. This action is not, however, to be taken as an approval of the holding of the Court of Civil Appeals that the surety on the bond was a necessary party to the appeal from the probate court to the district court and that the petition for certiorari attacking the decree of the probate court was, therefore, a collateral attack. The Court of Civil Appeals judgment can be upheld on its holding that there was no showing that the decree entered by the probate court should be set aside.

SMITH, J., not sitting.


author: HAMILTON, Justice. SMITH, Justice

text:
    E. A. QUILTER, Petitioner, v. Patrick M. WENDLAND et al., Respondents.
    No. A-10727.
    Supreme Court of Texas.
    May 25, 1966.
    Rehearing Denied June 22, 1966.
    Fred Parks, Ruby Sondock, Houston, for petitioner.
    Hinds & Meyer, Norman W. Black, Holman, Saccomanno, Clegg & Martin, Houston, for respondents.
   HAMILTON, Justice.

This is a suit for a declaratory judgment brought by the respondents Patrick M. Wendland, Thomas A. Wendland, and by E. W. Quilter, intervenor, against the petitioner E. A. Quilter, the independent executor of the estate of Mrs. E. J. Lutz. Respondents sought a judgment declaring that they were the owners of certain funds in savings accounts held by Gibraltar Savings Association. The trial court without a jury entered judgment favorable to the respondents. The Court of Civil Appeals affirmed the judgment of the trial court, holding that the contract between Mrs. Lutz and Gibraltar was complete prior to her death despite the failure of the respondents to sign the application (signature) cards and the failure of Mrs. Lutz to return them to Gibraltar. The Court of Civil Appeals also concluded that the recitations in the passbooks and in the signature cards expressed an intention to vest the absolute right to ownership of the funds in the survivor and that such was the intention of Mrs. Lutz. The Court of Civil Appeals was of the opinion that the respondents were entitled to recover on a third party beneficiary contract theory. 387 S.W.2d 440. We agree that there was evidence to support a theory of recovery on a third party beneficiary contract.

Petitioner contends that the Court of Civil Appeals was in error in holding that there was evidence of a completed contract between Mrs. Lutz and the Savings Association to establish a joint account with the right of survivorship.

The facts are as follows: On September IS, 1961, Mrs. Lutz called Mr. King, vice-president of Gibraltar Savings Association in charge of opening new savings accounts and the handling of customer relations. She told him that her health was not good and that she could not come down to open three new savings accounts. Although this was unusual, Mr. King agreed to open the accounts and then come out to her home with the passbooks and pick up her check. The transaction that occurred over the telephone was essentially that there were to be three savings accounts of $5,000 each with the name of Patrick M. Wendland on one account, Father Thomas A. Wendland and Sister Michael Wendland on another, and E. W. Quilter on the third account. Mr. King explained that there were two types of accounts that were best suited for her purpose. He told her that with a trustee account the niece and nephews could not draw out any of the money during her lifetime and need not be told of - the accounts. Mr. King explained that with a joint account with the right of survivor-ship, either of the parties named as an owner of the account could draw the money on presentation of the passbook and that the money would belong to the surviving owner, as was true of the trustee account. Mrs. Lutz chose the joint account with the right of survivorship and Mr. King opened the accounts, giving his own I.O.U. for $15,000. He then took the passbooks and the signature cards to the home of Mrs. Lutz and received from her a check for $15,000. Mr. King testified that he told Mrs. Lutz that it was necessary that the signature cards be signed by her and also by the other named owners and the cards returned to Gibraltar. Mrs. Lutz signed all three cards, but not in his presence. She directed that the dividend checks be sent to her and Mr. King testified that several dividend checks were mailed to her before her death.

Prior to October 5, 1961, when Mrs. Lutz was admitted to the hospital, only one of the signature cards had been signed by someone other than herself. This occurred when Patrick M. Wendland signed the wrong card by mistake. All of the respondents visited Mrs. Lutz in the hospital before her death on December 5, 1961, but the cards were never signed except as mentioned previously. The signature cards were never returned to Gibraltar. After her death, Gibraltar, at the request of E. W. Quilter, canceled the account in the names of himself and Mrs. Lutz and issued a new account in the names of Mr. and Mrs. E. W. Quilter.

Petitioner contends that the agreement between Mrs. Lutz and Gibraltar was not a completed contract and, therefore, the respondents were not entitled to recover on the basis of a third party beneficiary contract theory. Petitioner places much reliance upon the failure of the beneficiaries to sign the signature cards and the failure of Mrs. Lutz to return these cards to Gibraltar as evidence that the contract was not complete. We disagree.

In Krueger v. Williams, 163 Tex. 545, 359 S.W.2d 48 (1962), W. T. Williams bought a $10,000 investment share account from a savings and loan association. The certificate was issued in his name and that of his daughter, Mrs. Ila Mae Krueger, but was not placed in evidence. Williams signed both his name and hers to the receipt card, which read: “W. T. Williams and/or Ila Mae Krueger or payable to the survivor of either.” It was not shown whether Mrs. Krueger knew of the certificate’s existence prior to the death of Williams. We held that this recitation in the receipt card created a rebuttable presumption because it did vest in Mrs. Krueger some present interest in the certificate and control over it. In the absence of any evidence to the contrary, we held that Mrs. Williams was entitled to recover as a third party beneficiary of the contract between the savings ac-sociation and Williams.

In this case, Mrs. Lutz contacted Mr. King of Gibraltar Savings Association and after an explanation by him of the types of accounts available, orally requested him to open three savings accounts of $5-,000 each in the names of herself and the other beneficiaries as joint tenants with the right of survivorship. Later that day Mrs. Lutz gave Mr. King her personal check for $15,000 and she accepted three Gibraltar passbooks naming herself and the respondents as joint tenants with the right of survivorship. It was at this time that the contract between Mrs. Lutz and Gibraltar was completed. The record shows that Gibraltar paid Mrs. Lutz dividends on these accounts several times before her death, which confirms the fact that the contract between Mrs. Lutz and Gibraltar had been completed. In addition, Mr. King testified that a person could withdraw funds without the signature card being returned under certain circumstances. The trial court found this to be the case in its findings of fact. Although Mrs. Lutz never returned the signature cards which she signed to Gibraltar, we hold that the contract was completed when she deposited her check with the savings association and accepted the passbooks. In making this holding it is not necessary to rely upon any recitations contained in the signature cards. Rhorbacker v. Citizens Building Association, 138 Ohio St. 273, 34 N.E.2d 751, 135 A.L.R. 988 (1941). See also Barbour v. First Citizens National Bank of Watertown, 77 S.D. 106. 86 N.W.2d 526, 529 (1957).

It was not necessary for the respondents, in order to recover upon such a theory as mentioned above, to sign the signature cards. A person who is not a party to a contract made for his benefit may enforce it. Krueger v. Williams, supra; Knoxv. Ball, 144 Tex. 402, 191 S.W.2d 17, 164 A.L.R. 1453 (1946); 149 A.L.R. 879, 897 (1944).

Petitioner argues that Mrs. Lutz retained control over the passbooks and received the dividends; consequently, there is an absence of a complete divesting of her control so as to make this an enforceable gift. As we said in Krueger v. Williams, supra:

“While we agree that the transaction did not constitute a present gift to Mrs. Krueger of either half or all of the certificate proceeds nevertheless we are concerned with Mrs. Krueger’s claim of a survivorship right to the entire proceeds.” 359 S.W. at page 50.

We will assume without deciding that there is an incompleted gift here, but even so, the respondents are entitled to recover as third party beneficiaries to the contract that was completed between Mrs. Lutz and the savings association. The evidence that we have set out above supports the conclusion that Mrs. Lutz intended to set up these three joint savings accounts with the right of survivorship and she carried out this intention. Krueger v. Williams, supra; Kelberger v. First Federal Savings and Loan Association of La Crosse, 270 Wis. 434, 71 N.W.2d 257 (1955); 149 A.L.R. 879, 897 (1944). The retention by Mrs. Lutz of the passbooks under these circumstances is not controlling. See Kelberger v. First Federal Savings and Loan Association of La Crosse, supra, at page 260, and the cases cited therein.

Petitioner relies upon the cases of Olive v. Olive, Tex.Civ.App., 231 S.W.2d 480, no writ history, and Ottjes v. Littlejohn, Tex.Civ.App., 285 S.W.2d 243, error refused, no reversible error. Both of these cases were tried upon the theory of a completed present gift and did not involve the third party beneficiary contract theory with which we are concerned in this case.

Finally, petitioner argues that these joint savings accounts with the right of survivorship failed to comply with the requirements of Section 46 of the Probate Code, Vernon’s Annotated Texas Statutes, because both parties did not sign the written instrument (signature cards). We held in Krueger v. Williams, supra, at page 51, that the contract between Krueger and the savings association for the benefit of a third party was not controlled by Section 46, supra. That section covers contracts between joint owners of property to establish the right of survivorship.

The judgments of the Court of Civil Appeals and the trial court are affirmed.

SMITH and POPE, JJ., dissenting.

SMITH, Justice

(dissenting).

I respectfully dissent. I cannot agree that the evidence supports a theory of recovery on a third party beneficiary contract. The evidence fails to show a completed contract between Mrs. Lutz and the Gibraltar Savings Association. Mrs. Lutz, no doubt, when she called Mr. King over the telephone, had a desire to open three savings accounts of $5,000 each, one in the name of Patrick M. Wendland, one in the name of Father Thomas A. Wendland and one in the name of E. W. Quilter. No doubt, Mrs. Lutz intended to give these parties $5,000 each at her death. Mr. King testified when asked to tell the Court what she said she wanted, as follows:

“Yes. She said she had some money and she wanted to open three new accounts. She wanted to put her niece and three nephews on these accounts. She wanted $5,000 in each account. She wanted to be able to get the dividends on it just like she did on her others until her death. At that time she wanted the money in these accounts to go to her niece and nephews.” [Emphasis added.]

Whether Mrs. Lutz changed her mind or not, the fact remains that she knew from information obtained from Mr. King that her niece and nephews could not get the funds and that the joint account would not be recognized by the Savings Association as long as she kept control of the passbooks and the signature cards. Mrs. Lutz chose to establish a joint account but she did not complete the contract with the Savings Association. She never at any time relinquished control of the funds. Her acts prevented the respondents from withdrawing the funds during her lifetime. The respondents never acquired any title to the funds in the Savings Association during her lifetime, hence, at her death the funds belonged to the Estate of Mrs. Lutz. Mrs. Lutz was informed by Mr. King as to what was necessary to complete the contract with the Savings Association. Mr. King testified that he told Mrs. Lutz that it was necessary that the signature cards be signed by her and also by the other named parties and the cards returned to Gibraltar. Mrs. Lutz, one of the parties to the so-called contract, stopped short of completing her plans to leave the money as she first intended. The respondents are no more entitled to the money than if Mrs. Lutz had said she intended to provide in her will that her niece and nephews should receive $5,000 each, and then failed to make such provision. Mr. King testified to additional facts showing that the respondents are without an enforceable contract and that Mrs. Lutz never relinquished control of the funds. He testified that if the respondents had, prior to Mrs. Lutz’s death, come to him asking to withdraw funds from any of the accounts in question without the passbook they would not have paid any of the funds to them; that Gibraltar Savings Association requires that a signature card be signed by a person who attempts to withdraw funds from that Association; that the Association also requires that a holder of an account with the Association have a passbook before they will pay out funds to them; and that when a person identifies himself as a joint tenant but is without a passbook Gibraltar will not pay over funds to that person. This is a policy Gibraltar stands firm on. The fact that the recitations in the passbooks and the signature cards clearly express an intention to vest absolute right to ownership of the funds is no evidence that title vested, since Mrs. Lutz did not complete the contract by delivering the passbooks and signature cards. In view of the fact that Mrs. Lutz was led to believe that the contract would not be complete until the passbooks and signature cards were delivered, this Court should not hold that Mrs. Lutz had completed a contract with the Savings Association.

The Court is extending the Krueger doctrine entirely too far in this case. The result in the Krueger case was reached because of its particular facts. In that case this Court held that the evidence “here does not embrace the terms of such a contract as the one made with the government in Edds v. Mitchell [143 Tex. 307, 184 S.W.2d 823, 158 A.L.R. 470] nor that made with the savings and loan association in Davis v. East Texas [163 Tex. 361, 354 S.W.2d 926], nor does it lie within the provisions of § 46 of the Probate Code.” In speaking of the certificate in Krueger, the Court went on to say “[i]n our opinion the recitation falls short of expressing a clear intention to vest absolute right of the ownership of the funds in the survivor.” The Court continued, saying that “[t]he phrase ‘payable to the survivor’ is not tantamount to the provision that ‘the certificate is held by them as joint tenants with the right of survivorship’.” There can be no doubt that the Court was of the belief that the evidence discussed up to that point in the opinion did not of itself show a completed contract. However, in Krueger, there was the additional fact that a receipt card was delivered to the savings association, whereas in the present case the passbooks and signature cards were not delivered. In Krueger, this Court gave great weight to the language appearing on the receipt card. The Court said:

“However, the language appearing on this receipt card does serve to vest in Mrs. Krueger some present interest in and control over the certificate as well as the contractual right to possession of the proceeds as survivor.” [Emphasis added.]

I can understand the holding in Krueger because the “receipt card” upon which the Court relied was actually delivered to the savings association. Therefore, it was not illogical to conclude that all of the evidence, including the “receipt card,” proved a completed contract. As I read the Krueger opinion, if the “receipt card” had not been delivered, this Court would have reached a different result. In the present case, the signature cards were not delivered to the Savings Association, nor were the passbooks delivered to the niece and nephews. In Krueger, without the delivery of the “receipt card,” this Court would not have held that a presumption had been created that there was an intention on the part of the purchaser of the certificate to vest in Mrs. Krueger a present interest in and control over the certificate.

I would reverse the judgments of the courts below and render judgment for the petitioner.

CALVERT, C. J., and POPE, J., join in this dissent.