Robert H. Jackson

“ We certainly cannot rule as matter of law that the 4¢ price paid for 10 per cent of such royalty gas is not a factor to be considered by a fact-finding tribunal in fixing the market value, and is, or may be, some evidence to sustain plaintiffs' contentions. ”

“ Unfortunately, this rule requires that the price for royalty purposes be ascertained at a place and time at which few commercial sales of gas occur. The lessees who market this royalty gas along with their own production do not customarily make their deliveries at the wellhead but transmit gas from the several wells some distance in gathering lines, turning it over to large buyers at points somewhat removed, and under conditions of delivery different from wellhead deliveries. The price producers receive at these delivery stations often is substantially above the 3¢ price to the landowner. ”

“ Where the undisputed facts leave the existence of a cause of action depending on questions of damage which the rule has reserved from the summary judgment process, it is doubtful whether summary judgment is warranted on any showing. But at least a summary disposition of issues of damage should be on evidence which a jury would not be at liberty to disbelieve and which would require a directed verdict for the moving party.
The defendant undertook to establish the absence of a triable issue by the affidavits of eight persons. ”

“ The only issue relates to market price or value of plaintiffs' gas at the time and place of delivery. If there has been no damage in the sense of failure to pay the full market price, then there is no cause of action, and if there has been damage in such sense, there is a cause of action. ”

“ By that law, in order to recover further royalty payments in excess of the 3 cents per 1,000 cubic feet of gas, which petitioners have already received, they must sustain the burden of showing that during the relevant period, the market price or value of the gas at the wellhead exceeded 3 cents. By Louisiana law also and upon principles of proof which it is also not denied that the courts below correclty applied, the 'pipe line' price of gas, without qualifications and supplementary proof wholly lacking in this case, is not evidence of market price or value at the wellhead. ”

“ Defendant uses these contracts only to explain their prices away by showing differences in market conditions. They do not establish the claim that there is a wellhead market price. The stipulation also recites that about one-third of the leases in this area specify the royalty in substantially the same terms as the lease in suit, the rest providing for a fixed royalty of 3 per m.c.f. About 90 per cent of the payments to be based on market price have been made on the basis of 3¢, and the remaining 10 per cent at 4¢ per m.c.f. ”

“ McGowan v. American Pressed Tan Bark Co., 121 U.S. 575, 609, 7 S.Ct. 1315, 1334, 30 L.Ed. 1027; Quock Ting v. United States, 140 U.S. 417, 420, 11 S.Ct. 733, 734, 851, 35 L.Ed. 501; Head v. Hargrave, 105 U.S. 45, 50, 26 L.Ed. 1028 ”