Texas Pipe Line v. Burton Drilling , 54 S.W.2d 190 ( 1932 )

Unable to agree to the conclusion of the majority of this court, that the trial court was warranted in decreeing to appellee full, complete, and final relief, as to the subject-matter of this appeal, on an ex parte hearing of which appellant had neither notice nor knowledge, I herewith enter my dissent and the reasons therefor.

It is not questioned that conditions may arise in which there may be presented to the trial court such an immediate and pressing necessity for relief, that would warrant the giving of full relief to the complaining party by means of a temporary injunction, either prohibitive or mandatory, even where the relief granted may be in fact all the relief that could be decreed on a trial of the case upon its merits. The authorities cited and commented upon in the majority opinion sustain such view. This court, speaking through the late Associate Justice Talbot, in the case of Cartwright v. Warren, 177 S.W. 197, 199, stated the general rule in this respect as follows: "An application for a preliminary mandatory injunction is required to show a clear right and a case of necessity or extreme hardship, and the court will seldom grant a mandatory injunction pendente lite unless the plaintiff's right is so clear that the denial of the right must be either captious or unconscionable." 32 C.J. p. 25 lays down the rule in reference to preliminary mandatory injunctions in this language: "The invasion of the right must be material and substantial; the right of complainant must be clear and unmistakable on the law and the facts; and there must exist an urgent and paramount necessity for the issuing of the writ, in order to prevent extreme or other serious damage which would ensue from withholding it. If the issuance on preliminary application of an injunction mandatory in nature will have the effect of granting to the complainant all the relief that he could obtain upon a final hearing, the application should he refused except in very rare cases, and then only where complainant's right to the relief is clear and certain."

Do the facts alleged in appellee's petition bring appellee within the rule above announced? These facts show that appellee had purchased 65,000 barrels Of crude petroleum oil, had stored it in tanks from which shipment could be made over appellant's pipe line to the destination named by appellee; that shipment of this oil was tendered to appellant on August 11, 1932, and declined for the reason that appellee had not complied with Railroad Commission Order No. 120, designed to show that the oil had been legally produced and legally acquired by appellee; that appellee claimed it was impossible for it to comply with said Order No. 120, for it had purchased the oil prior to the passage of such order by the railroad commission, and could not now compel the owner of the oil to furnish the required information; that it later secured a waiver of such order by the railroad commission as to the 65,000 barrels of oil, and again on August 26th tendered the oil to appellant for shipment; that shipment was again refused by appellant, in effect, on the ground that the waiver of such order by the railroad commission did not permit appellant to ship the oil, unless proof similar to that required by Order No. 120, as to the production and sale of this oil, was tendered to the pipe line company. Appellee refused to accede to this request and refused to make any proof as to the legal production of the oil, other than its statement that it bought the oil in good faith and honestly believed it to have been legally produced. Appellee also alleged, and it must be considered as a fact in this case, that its oil was subject to deterioration and to loss by evaporation in the storage tanks, that it had contracted to sell 25,000 barrels of the oil for August delivery, and would suffer damage by reason thereof, if an immediate shipment of the oil was not had.

The above facts constitute all the showing made by appellee as to its having a clear right to have the oil received and shipped in its pipe line by appellant, and also as to the extreme hardship it would suffer in the three or four days' time necessary to notify appellant, to appear and answer the application. This writer does not believe that the petition discloses any such condition as, under the rule of law above announced, or the rule of law stated by any decision, cited and relied upon in the majority opinion, warranted the drastic relief granted by the trial court.

The production, purchase, and transportation of petroleum oil is controlled by statute in this state, and the duty rests upon every producer of oil, on every purchaser of oil, and on the owner of every pipe line which transports oil, to comply with the law in this respect. The majority opinion apparently proceeds upon the theory that Railroad Commission Order No. 120 was the only impediment to the immediate shipment of the oil, and when this impediment was removed on August 25, 1932, by the waiver order of the railroad commission, no reason existed for a refusal to accept the 65,000 barrels for shipment. Such opinion overlooks the act of the First Called Session of the 42d Legislature, enacted to conserve the natural resources of this state, to prevent waste, and to authorize the proration of oil producing wells in the various oil fields of this state. One section of this act is chapter 26, page 46, of the General Laws of the First Called Session of the 42d Legislature, which became effective August 12, 1931 (Vernon's Ann.Civ.St. art. 6049c, § 14), prior to the production of this oil.

A section of this chapter provides: "The purchase, transportation or handling of crude petroleum oil or natural gas produced from any property in excess of the amount allowed by any statute or any rule, regulation or order of the [Railroad] Commission is hereby prohibited, and the Commission shall have power to enjoin any violation of this section." (section 14)

Chapter 28, p. 58, of the same Session of the 42d Legislature (Vernon's Ann.Civ.St. art. 6049a, § 1 et seq.), is also a part of the law, and section 8c of such chapter (Vernon's Ann.Civ.St. art. 6049a, § 8c) reads as follows: "No person, association of persons or corporation, whether a common carrier or otherwise, shall be permitted to transport crude oil or petroleum in this State, unless such crude oil or petroleum has been produced * * * or purchased in accordance with the laws of the State of Texas * * * or any order, rule or regulation of the Railroad Commission made in pursuance thereof."

"Sec. 9. The Railroad Commission of Texas shall have authority to make rules and regulations for the enforcement of the provisions of this Act." (Vernon's Ann.Civ.St. art. 6049a, § 9).

Section 11 of such chapter provides heavy penalties for the violation of any provision of this act. Section 11a provides penalties by way of forfeiture of charter of any domestic corporation violating such law.

In so far as this legislative enactment applies to appellant, it is prohibited from transporting any crude petroleum oil unless such oil was produced within the legally allowable production under the proration regulation of this state. In so far as such enactment applies to appellee, it is prohibited from purchasing crude petroleum oil unless the oil was likewise legally produced. Railroad Commission Order No. 120 added nothing to, nor took anything from, the effectiveness of this enactment. Such order manifestly was entered in obedience to section 9, above quoted, giving to the commission authority to make rules and regulations for the enforcement of the provisions of such enactment. Such order only prescribed the manner in which proof could be made that the petroleum oil was produced in accordance with the laws of this state, or a rule or regulation of the railroad commission in pursuance of such laws. The binding effect of this enactment on purchasers or shippers of crude petroleum oil is not conditioned on the railroad commission's having first promulgated rules or regulations for its enforcement. When the commission waived Order No. 120, it merely waived the manner of proof, such order required, to establish the fact that the oil had been legally produced or legally purchased.

When appellee accepted delivery of the 65,000 barrels of oil on its contract of purchase, it did so charged with the knowledge that the duty rested on it to require the seller to show that the oil had been legally produced. When appellee tendered the oil to appellant for transportation, it did so with the knowledge that such oil could not be accepted for transportation unless it made a proper showing that the oil had been legally produced and legally purchased. When, on August 26, 1932, appellant declined to accept the oil for shipment without evidence that same had been legally produced and legally purchased, it was doing no more than it was required to do under the provisions of this solemn legal enactment. If appellee is unable to make satisfactory proof as to the legality of the production of the oil tendered for shipment, it is solely to blame, for it was under the legal duty to require its seller to furnish such proof at the time it accepted the oil on its contract of purchase; and that notwithstanding Railroad Commission Order No. 120 had not been promulgated when the delivery of the oil was accepted.

This is not a case in which a court is authorized to balance the equities of the interested parties; for, until appellee complies with the law, by showing that the oil was legally produced and legally purchased, it can make no complaint that it is suffering damages by reason of the delay in shipments

It necessarily follows, from what has been said, that, in the opinion of the writer, when the allegations in appellee's petition for a mandatory injunction are read in the light of the above-quoted statutes, there is no case made which would permit a court of equity to grant the relief awarded in this case, and that the trial court erred in entering the judgment.