WOTTON v. BUSH

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District Court of Appeal, Second District, Division 2, California.

WOTTON et al. v. BUSH et al.*

Civ. 19012.

Decided: December 15, 1952

Dolley, Knight, Woods & Hightower, Los Angeles and James M. Hall, Torrance, for appellants. Edmund G. Brown, Atty. Gen., John F. Hassler, Jr., Deputy Atty. Gen., for respondents. William Kinley and Simpson & Wise, Long Beach, for amici curiae John C. Hunter, Marjorie M. Davis, Elizabeth Capobianco, Ruth Seeberg, Charles Burck, Ada Burck and Lidwina S. Seeberg.

From a judgment in favor of defendants in an action for declaratory relief to have section 3605 of the Public Resources Code of the State of California declared unconstitutional as far as applicable to the facts of the present case, plaintiffs appeal.

Facts: Plaintiffs own a parcel of land less than an acre in size which they contend lies within the boundaries of the Rosecrans oil field in Los Angeles County, and that since the Rosecrans oil field was a field producing oil or gas on August 14, 1931, they are entitled to drill for oil or gas without complying with the spacing provisions of Chapter 3, of Division 3 of the Public Resources Code1 because section 3605, Chapter 3 of the Public Resources Code provides: ‘The provisions of this chapter do not apply to any field producing oil or gas on August 14, 1931.’

However, plaintiffs further contend that if their property is not within the Rosecrans field then section 3605 of Chapter 3, Public Resources Code, supra, is unconstitutional and being so the entire Spacing Act, Chapter 3, Public Resources Code, is unconstitutional.

There being a conflict in the experts' testimony the evidence supports the trial court's finding that plaintiffs' property was not located in the Rosecrans oil field but within a new field known as the Howard Townsite field, the discovery of which was completed in 1947.

We are thus confronted with the question: Is section 3605, Chapter 3 of the Public Resources Code, to wit, ‘The provisions of this chapter do not apply to any field producing oil or gas on August 14, 1931,’ unconstitutional?

This question must be answered in the affirmative for two reasons:

(1) The section in question is void for uncertainty.

It is a settled doctrine of constitutional law that ‘a statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application violates the first essential of due process of law.’ (Connally v. General Construction Co., 269 U.S. 385, 391, 46 S.Ct. 126, 127, 70 L.Ed. 322.)

In the present case Dr. Robin Willis testifying as an expert witness for defendants said: ‘The term ‘oil field’ is used in practically the same sense by laymen and by technical men. A layman understands an oil field, as a general rule, to be all of a contiguous area, a general area, from which oil is produced. A technical man would be inclined to amplify that to say all of that area from which oil is, has been, or may in the future be produced from a single major causal geological feature.'

Mr. John R. Pemberton, former Oil Umpire for the petroleum industry, defined an ‘oil field’, for defendants, as follows:

‘My understanding of an oil field is that it comprises a distinct and isolated structural uplift of the type in which oil will accumulate. It is a recognizable unit, may contain a great many oil pools, may be all split up and chopped up, broken by faults of all kinds, thinning and thickening of sands, so that the resultant picture, after the field is completely developed, will be found to consist of a great many separate and distinct pools. An oil field, as such, is not entirely, but it is more or less, a geographical term. It refers to an area. Most oil fields you will find are named after some town or topographic feature, and they are usually fairly large areas. We have many very small oil fields, but generally speaking, an oil field is to an oil man a considerable area.’

Mr. E. H. Musser testified for defendants thus: ‘For the purposes of our work, however we have taken an oil field to mean, in general, a producing area as it existed in 1931.’

Mr. Luis E. Kemnitzer also for defendants testified: ‘In my estimation, the term ‘oil field’ should be governed by the economics of the situation, and that it should be considered as an area in which continuous and contiguous production is obtained, and that the limits of this oil field are those established by the dry holes or uneconomic production. The dry holes and the uneconomic production can be governed by the geologic conditions that are found underground.'

Finally, Mr. John H. Wents, Jr. testifying on behalf of defendants, said, ‘I define an oil field as simply the surface area used in the exploitation of an underground pool or pools of oil. An oil field is bounded by an uneconomic production or dry holes.’

In certain maps and publications of the Division of Oil and Gas, plaintiffs' property was included as part of the Rosecrans oil field. After plaintiffs' complaint was filed, the Division of Oil and Gas issued a map which did not include plaintiffs' property within the boundaries of the Rosecrans field.

Volume 2, 34th Annual Report, California Oil Fields, July–December, 1948 issue, published by the Division of Oil and Gas, says:

‘In the Rosecrans oil field and the Northwest Rosecrans area, sixteen notices of intention to drill new wells were filed during the year. Of this number, eleven were for wells to be drilled in the area west of Vermont Avenue. Activity in this area was started by the successful completion of Shell Oil Company, Incorporated, well No. ‘Union-Poindexter’ 1, Sec. 12, T. 3 N., R. 14 W. It was completed in September, 1947, for approximately 200 barrels per day of 31.8-degree gravity oil. The next completion was in February, 1948. This well, Shell Oil Company, Incorporated, well No. ‘Moser Community’ 1, was completed for 435 barrels per day of 31.8-degree gravity oil and 190 Mef. of gas.

‘Production is coming from the ‘O'Dea,’ or 7th zone, the top of which is at a depth of approximately 8,050 feet. The structure appears to be a faulted anticline with the accumulation against a NW-SE fault system. The accumulation is further controlled by cross-faulting.

‘Inasmuch as several good producers were completed in the area during the year and development operations were still continuing at the close of the year, it is contemplated that the limits of the Rosecrans field will be extended to Western Avenue in order to include this area for statistical purposes.’

On July 18, 1949, Mr. E. H. Musser wrote a letter to Mr. R. D. Bush in which he referred to Howard Townsite Area as part of the Rosecrans oil field. His letter read in part thus: ‘* * * The proposed location falls on two lots comprising less than one acre which are located in the northwest extension of the Rosecrans field. * * *

‘In many respects this case is similar to the recent Lawndale case. Geological and paleontological data indicate that the zone being produced in the northwest extension is the 7th or O'Dea zone which is being produced in the main field. Mr. Hunter stated to Engineer Barton that Shell Oil Company, Incorporated, petroleum engineers testified before the Regional Planning Commission that their subsurface data shows that this area is a part of the Rosecrans field. He has a copy of these proceedings. In the event of a court action, Mr. Robin Willis would probably again testify that the area was a part of the same ‘causal structure’ as the main Rosecrans field. * * *.'

In reply Mr. Bush said: ‘* * * You may approve the proposal as to casing program and method of drilling, with the usual provisions, and add the following note: ‘This Division considers this portion of the Rosecrans field a separate structure similar to the area south of Rosecrans Avenue, which was deemed a separate structure by the Court and subject to the spacing law Consequently, this location may be in violation of Section 3600 of the Public Resources Code.’

‘I wish you would discuss the situation with Mr. Bowlby or Mr. Masters of Shell Oil Company, Inc., as an aid in deciding what action, if any, we could take in canceling the blanketing in of this parcel in case the well is drilled.’

From the foregoing evidence it is clear that the word ‘field’ as used in section 3605, Chapter 3 of the Public Resources Code is so vague and uncertain that not alone men of common intelligence must necessarily guess at its meaning and differ as to its application, but even experts are placed in the same position.

(2) The questioned section is void as an attempt, unconstitutionally, to delegate the legislative power.

It needs no citation of authority that the legislature alone has the power to make law, and that it may not delegate its power to a board or officer. (Art. III, sec. 1, California Constitution.)

Justice Marshall in Wayman v. Southard, 10 Wheat. 1, 43, 6 L.Ed. 253, 262, stated that for administrative discretion to be valid, the legislature must determine the primary standards and leave to the executive agents the ‘filling in the details.’ In other words, the legislative policy must be manifested in a clearly understood statute which sets up definite standards of action and which leaves to the executive officers only the discretion of determining its application to particular factual situations. (In re Kinney, 53 Cal.App. 792, 794, 200 P. 966.)

In American Distilling Co. v. State Board of Equalization, 55 Cal.App.2d 799, at page 805, 131 P.2d 609, at page 612, the court said, ‘Clearly, the legislative body must declare the policy of the law and fix some kind of legal principles which are to control in given cases. It must provide an adequate yardstick for the guidance of the executive or administrative body or officer empowered to execute the law. * * *’ (See also People v. Kuder, 93 Cal.App. 42, 51, 269 P. 198, 630, to the same effect.)

In re Peppers, 189 Cal. 682, 209 P. 896, 897, it was held that section 10 of the California Fruit and Vegetable Standardization Act is unconstitutional insofar as the legislature authorized the Director of Agriculture to investigate and certify to shippers the quality and condition of the fruit under such rules and regulations as he might prescribe to carry out the provisions of the act, which stated in part, ‘oranges shall be considered unfit for shipment when frosted to the extent of endangering the reputation of the citrus industry, if shipped.’ St.1921, p. 1239, § 10. The court held that the act was an unconstitutional delegation of power. It said, 189 Cal. at page 688, 209 P. at page 898: ‘Conceding for the sake of argument, but not deciding, that the foregoing provisions of said act do embody a legislative attempt to confer upon the department of agriculture the power to make more certain the clause of said act declaring that ‘oranges shall be [considered] unfit for shipment when frosted to the extent of endangering the reputation of the citrus industry, if shipped,’ it is our conclusion that the Legislature had no power to thus delegate to an administrative board or officer its exclusive power and function of determining what acts or omissions on the part of an individual are unlawful.' A similar decision was reached in the United States Supreme Court in A. L. A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570.

The foregoing rules as applied to the present situation lead to the inevitable conclusion that the provision in question is void. The legislature has laid down no rules for determining ‘what is a field,’ nor has it given any definition thereof. That there was no guide provided by the legislature was further corroborated by the testimony of Mr. Musser on behalf of defendants. He said:

‘When the law was first passed, we were faced with the problem of trying to decide what the legislature meant by the word ‘field’ since there was no definition. It appeared to us that the entire purpose for the Spacing Act was to prevent town lot drilling and to prevent the waste attendant thereupon. * * *

‘* * * At the time the law was enacted, obviously there were certain producing areas, or fields, if you want to call them as such, but they were not defined in any way except by the actual productive limits of those fields at that time. We felt that the purpose of the exception to the law was to prevent inequities between vested rights of property owners, and therefore we tried insofar as it was possible to confine the fields to the area productive in 1931. However, as a practical matter, it was found necessary to expand those areas as the fields developed outward from the original producing area at that time. When the fields then reached their limits as we decided the fields were limited, we then, if a well were drilled beyond the productive area, applied the Spacing Act. The distance out from an area is not exact. It might be one or two or perhaps, in some cases, more locations away, which might, in some instances, be a few hundred feet, or it might be as much as six or seven hundred feet. There is no exact measure. There are cases where fields have overlapped. We have one very good example in the Los Angeles Basin, the Montebello field. The old field was pretty well defined at the time the Spacing Act was passed. Subsequently, however, a field underlying the Montebello field was discovered which only touched a very small portion of that old field. In effect, it is a new field, really, but because of the fact that the new field partially underlaid the old field, we were unable to apply the Spacing Act in that instance. We felt that the Court would probably not uphold us if we tried to set forth that new area as a new field in that case. * * *

‘The administration of the Spacing Act has been a very difficult thing because of the fact that the word ‘field’ is not defined, and we have tried to prevent inequities between properties. The matter of drainage has been definitely considered. We feel in the case here at Rosecrans, that the Howard Townsite area is in no way connected structurally or by drainage with the old Rosecrans field, and therefore that no property rights have in any way been infringed. The subject property was never drained and could never be drained by any of the wells in the old field, or main portion of the Rosecrans field. Therefore, we believe that it was our duty to call that a new field, simply because the town lot drilling is a bad thing. Anyone conversant with the industry will tell you that. Any geologist or engineer will tell you town lot drilling is wasteful, that it is a bad method of drilling, and we feel that that is the thing, in a nutshell.' (Italics added.)

In view of our conclusion we must determine this additional question: Since section 3605 is void, does is render the entire spacing act unconstitutional so far as plaintiffs are concerned?

The answer is yes. It is obvious the legislature could not have intended that the Well Spacing Act, (Chapter 3, Public Resources Code) should remain in effect under conditions such as presented here if section 3605 were to be declared unconstitutional. This is true even though section 18 of the Public Resources Code declares that if any provision of the Code is held invalid the remainder will not be affected thereby. Such provisions are only an aid to the courts in construing the statute.

It is the general rule that even where there is a separation clause parts of a statute cannot be held separable unless it appears that ‘standing alone, legal effect can be given to it and that the Legislature intended the provision to stand, in case others included in the act and held bad should fall.’ (Williams v. Standard Oil Co., 278 U.S. 235, 241, 49 S.Ct. 115, 117, 73 L.Ed. 287, 309.) Section 3605 is a qualifying clause inserted in the act in order to insure validity to the well spacing provisions. It is apparent that if the provisions of Chapter 3 of the Public Resources Code were to be applied to fields producing oil or gas prior to August 14, 1931, grave questions of due process of law and the impairment of contractual obligations might arise. Apart from the legality of such construction, it would be manifestly inequitable to give the act a retroactive application, and such a specific intention should not be imputed to the legislature as a result of the statement of general intention in section 18.

In Wills v. Austin, 53 Cal. 152, the constitutionality of section 3696 of the Political Code, which authorized the State Board of Equalization to determine the rate of taxes was in question. This section provided that the board should make an allowance for delinquency in the collection of taxes. The delinquency clause was declared void in Houghton v. Austin, 47 Cal. 646. In Wills v. Austin, supra, the Houghton case was held to render the whole of section 3696 unconstitutional. The court held the power of the board was to be exercised only on an invalid condition, and the condition having failed the power to determine the rate also failed, the court stating at page 179 of 53 Cal.:

‘The rule applicable to this point is forcibly stated by Chief Justice Shaw in Warren v. Mayor [and Aldermen] of Charlestown, 2 Gray [Mass.], [84], 98, who, after stating the general proposition that some portions of a statute may be held to be constitutional, while another portion may be pronounced void, and that in certain cases the valid portion may stand and the other be rejected, proceeds to say that ‘this must be taken with this limitation, that the parts, so held respectively constitutional and unconstitutional, must be wholly independent of each other. But if they are so mutually connected with and dependent on each other, as conditions, considerations, or compensations for each other, as to warrant a belief that the Legislature intended them as a whole, and that, if all could not be carried into effect, the Legislature would not pass the residue independently, and some parts are unconstitutional, all the provisions which are thus dependent, conditional, or connected, must fall with them.’ This case was quoted with approval in French v. Teschemaker, 24 Cal. [518], 548; and doubtless states the law correctly.'

In the instant case section 3605 is a conditional clause. It is a qualification upon which the whole Well Spacing Act, so far as plaintiffs are concerned, depends for legality and certainly for equitableness. If it were held otherwise the act would apply to wells producing oil or gas before August 14, 1931, which is directly opposite to the express intention of the legislature.

An analogous result was reached in Mordecai v. Board of Supervisors, 183 Cal. 434, 192 P. 40. The Irrigation Act of 1919 provided for the formation of water districts and irrigation boards. It especially provided the act should not apply to any irrigation district situated wholly or in part within any county which adopted a charter pursuant to Article 11 of the Constitution prior to June 4, 1915. The Supreme Court held this saving clause was unconstitutional because it made an unreasonable distinction between counties with and without charters. The whole act was declared to be invalid as a result of the invalidity of the saving clause, the court saying, 183 Cal. at page 443, 192 P. at page 43:

‘To put it concretely, for the courts to strike out from the California Irrigation Act the exception of the counties of Los Angeles and San Bernardino, for that is what the exception really is, would be for the courts themselves to extend the operation of the act to those counties, although the Legislature has expressly said that they shall not come within its operation.’

Again in Re Wong Hane, 108 Cal. 680, 41 P. 693, a city ordinance which provided that ‘It shall be unlawful for any person to have in his possession, unless it be shown that such possession is innocent or for a lawful purpose, any lottery ticket * * *’, was held unconstitutional because the qualifying clause shifted that burden of proof to defendant to prove himself innocent. The court held that it would not have been passed without enacting the condition thereto. At page 683 of 108 Cal. at page 694 of 41 P., it is said:

‘The same court also said in Spraigue v. Thompson, 118 U.S. [90], 94, 6 S.Ct. 988 [30 L.Ed. 115], where it was sought to apply the rule to certain illegal exceptions in a statute of the state of Georgia: ‘The insuperable difficulty with the application of that principle of construction to the present instance is that, by rejecting the exceptions intended by the legislature of Georgia, the statute is made to enact what confessedly the legislature never meant. It forces upon the statute a positive operation beyond the legislative intent, and beyond what any one can say it would have enacted, in view of the illegality of the exceptions.’ See, also, Cooley's Const.Lim. pp. 209–212; Warren v. [Mayor and Aldermen of] Charlestown, 2 Gray [Mass.], 84.' (Cf. County of Los Angeles v. Jessup, 11 Cal.2d 273, 78 P.2d 1131.)

Judgment reversed.

FOOTNOTES

1.  Division 3, Chapter 3 of the Public Resources Code contains sections 3600 to 3608 inclusive, and was passed by the Legislature effective July 18, 1947.

McCOMB, Justice.

MOORE, P. J., and FOX, J., concur.