Barnsdall Oil Co. v. Leahy

• Decision Date: 01 April 1912
• Docket Number: 3,682.
• Parties: BARNSDALL OIL CO. v. LEAHY et al.
• Court: U.S. Court of Appeals — Eighth Circuit

195 F. 731

BARNSDALL OIL CO. v. LEAHY et al.

No. 3,682.

United States Court of Appeals, Eighth Circuit.

April 1, 1912

(Syllabus by the Court.)

The purpose of a written agreement is to record the intention of the parties.

The object of all construction is to ascertain and enforce the intention of the parties, the sense and meaning of the words they used upon which their minds met when they made it, and the court should, so far as possible, put itself in the place of the parties to find this intention.

Where the language of a contract is obscure or ambiguous, or its meaning doubtful, so that it is susceptible of two constructions, that interpretation which is the more natural probable, and reasonable should be adopted.

The term 'cultivated inclosure' in the clause of the mining lease made by the Osage Nation on March 16, 1896, to Foster, which prohibits boring wells on the Osage Indian reservation for oil and gas on such inclosures includes those made after as well as those which were in existence at the date of the lease.

An inclosure which contains a cultivated tract and an uncultivated tract is a cultivated inclosure, and the lessee may not prospect or bore wells on the former, but he may do so on the latter if his operations do not unnecessarily interfere with the use of the cultivated tract for agricultural purposes.

Between the cultivator of the land and the lessee of the mining privilege, he who first, by an open and notorious act in good faith commences, and with diligence, proceeds to subject an uncultivated tract to his use, has the superior right to it. His subsequent acts relate back to the initiation of his proceeding.

James W. Zevely (John L. Hays and James M. Givens, on the brief) for appellant.

T. J Leahy (E. E. Grinstead and Paul B. Mason, on the brief), for appellees.

Before SANBORN, ADAMS, and CARLAND, Circuit Judges.

SANBORN Circuit Judge.

The Barnsdall Oil Company, a corporation, appeals from a decree of dismissal of its bill against Edward A. Leahy, an Indian allottee, and J. W. Rodgers, his tenant, of 120 acres in the Osage Indian reservation, brought to enjoin them from preventing the Oil Company from boring or drilling wells for the production of oil on this land which the defendants insist was a 'cultivated inclosure.' The Oil Company had, by virtue of mesne conveyances, the same rights to prospect for, drill, and bore wells upon this real estate that Edwin B. Foster would have had under the lease made by the Osage Nation to him on March 16, 1896, and its subsequent extension, if he had not parted with any of his rights thereunder.

The congressional authority to make the lease to him provided:

'That where lands are occupied by Indians who have bought and paid for the same and which lands are not needed for farming or agricultural purposes and are not desired for individual allotments, the same may be leased by authority of the Council, speaking for such Indians, for a period of not to exceed five years, for grazing, or ten years for mining, purposes, in such quantities and upon such terms and conditions as the agent in charge of such reservation may recommend, subject to the approval of the Secretary of the Interior. ' Act Feb. 28, 1891, c. 383, 26 Stat. 794.

The resolution of the National Council of the Osage Nation, which empowered its chief to make the lease, recites that Foster--

'has made application to the Osage National Council for the privilege of prospecting and boring for petroleum and natural gas upon the Osage reservation and proposes to enter into a contract for that purpose upon terms that will not be detrimental to the agricultural interests of the country and which would increase the revenue and enhance the value of our common property should such prospecting result in the discovery of said petroleum or natural gas.'

The Osage Nation by its contract of March 16, 1896, leased to Foster for the term of 10 years, and, as to the land here involved this term was extended 10 years by Act March 3, 1905, c. 1479, 33 Stat. 1061, all the land in Osage Indian reservation for the purpose of prospecting for, boring, or drilling wells for mining and producing petroleum and natural gas.

'And it is further mutually agreed and understood by and between the parties hereto that the Osage Nation reserves all right it hath, and its citizens have, to cultivate, graze, and improve, and to lease for farming, grazing, and mining purposes, other than for the mining purpose herein named, all and every part of the lands contained in said reservation, subject to the limitation herein contained, and such right shall not be interfered with or disturbed by the party of the second part, his heirs, executors, administrators or assigns, except to such an extent as may be actually and absolutely necessary in prospecting for and in conducting and marketing the products herein named; and said second party and those acting under, through or by him shall not prospect for or drill or bore any wells for the production of the substances herein mentioned within or upon any cultivated enclosure on said reservation without the written consent of the person occupying such premises, duly acknowledged before the U.S. Indian agent of the Osage agency.'

The controversy in this case springs out of the last clause of this quotation. Prior to January, 1911, but long after March 16, 1896, the defendants had inclosed their 120 acres with a fence and had cultivated about 60 acres of the southern and eastern part of it, and they had built a house upon it in which the tenant was living. In the early part of the year 1911 the defendants cleared, grubbed, and plowed some of the northwestern part of the land, and the complainants surveyed and staked some of this land for wells and placed timber upon it for the purpose of drilling or boring wells thereon for the production of oil. The defendants removed this timber from the land, and forbade and prevented the complainant from sinking any wells upon or producing any oil from it. After a final hearing of this suit upon the merits, the court below was of the opinion that the land was a cultivated inclosure, and that the complainant was without right to prospect for or bore wells upon it under the lease. Complaint is made of this ruling upon two grounds: That the inclosures that were cultivated at the time the lease was made on March 16, 1896, only, are excepted from the grant of the lessee's right to sink wells for oil and gas, and this land was not cultivated until years after that date, and that the evidence does not sustain the finding of the court below that the part of the land on which the complainant located and endeavored to bore its wells was a cultivated inclosure, or any part of such an inclosure.

Whether or not inclosures brought under cultivation subsequent to the date of the lease are excepted from its grant to Foster of the right to bore and operate wells for oil and gas must be determined by a consideration of the terms of the contract the circumstances of the parties when it was made, and the comparative...