Elliff v. Texon Drilling Co.

210 S.W.2d 558 (1948)

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Nature of the Case

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Facts

Elliff (P) owned the surface and certain royalty interests in 3,054.9 acres of land. P owned all the interests in the west 1,500 acres and an undivided one-half interest in the east 1,554.9 acres, and both tracts were subject to oil and gas leases. P’s royalty interest was 1/8^th for the west 1,500 acres and 1/16^th for the east 1,554.9 acres. P had a producing well on the land. P's lands overlaid a huge reservoir of gas and crude, and the remainder of that reservoir was under lands owned by Driscoll to the east. D was engaged in drilling an offset well on Driscoll's property when disaster struck, and a large amount of oil and gas was released into the atmosphere. Eventually, the blowout destroyed the well on P’s property, and after burning for several years, it also destroyed two water wells. The cratering of the land along with the toxic emissions caused great damage to P’s land. Emissions continued even up to the trial date eight years later. P sued D in negligence. There was expert testimony from engineers showing the extent of the loss in the underground reservoir of oil. It was indicated that it was not feasible to calculate the losses subsequent thereto. All the evidence with reference to the damages included all losses from the reservoir beneath P’s land without regard to whether they were wasted and dissipated from above the neighbor’s land or from P’s land. The jury found D negligent for improper use of drilling mud and that was the proximate cause of the blowout. P was awarded $148,548.19 for gas and crude, and $5970 for damages to land and cattle. The court of appeals reversed and remanded the case; under the law of capture, P could not recover. The court reasoned that since substantially all of the gas and distillate which was drained from under P’s land was lost through D’s blowout, P could not recover because P had lost all property rights in the gas that has migrated from their lands. This appeal resulted.