Cheesman v. Amerada Petroleum Corporation

On Appellee’s Motion for Rehearing.

PER CURIAM.

Amerada, pointing out that lessor Akarda is not a party to this suit, questions,our authority to determine the validity of the pooling agreement in its lease.

It must be remembered that the Commission granted the permit which Amerada attacked by filing suit in the court below. The permit carried a prima -facie presumption of validity. 31a Tex.Jur., p. 630. The burden was on Amerada to overcome this presumption. It attempted to do so, in part, by fully alleging and relying upon the validity and effect of the pooling agreement.

Amerada’s first -point in.its brief filed in this court is based uipon the pooling agreement and in the first paragraph of: the statement made under this point, the pooling agreement is copied.

We realize that the Commission cannot adjudicate the validity of this agreement any more than it can adjudicate title, hut we ¡believe it -has the same power to appraise objections made to the issuance of a permit as it has to appraise the title upon which an application ifor a permit is ¡based. The rule as to title is that the applicant must make a “ * * * reasonably satisfactory showing of a good-faith claim of ownership * * Magnolia Petroleum Co. v. Railroad Commission, 141 Tex. 96, 170 S.W.2d 189, 191.

Applying the principle of this rule to this case we are convinced that a “reasonably satisfactory showing of a good-faith” objection to the application is not made when the objection is founded upon what we consider to be a void agreement.

With this explanation of what was said in our original opinion, Amerada’s motion for rehearing is overruled.

Overruled.