Barquin v. Hall Oil Co.
| Decision Date | 25 October 1921 |
| Docket Number | 994 |
| Citation | 28 Wyo. 164,201 P. 352 |
| Parties | BARQUIN v. HALL OIL CO |
| Court | Wyoming Supreme Court |
Rehearing Denied January 10, 1922, Reported at: 28 Wyo. 164 at 180.
ERROR to the District Court of Fremont County; HON. CHAS.E. WINTER Judge.
Action by James Barquin and another against the Hall Oil Company for the cancellation of two oil and gas leases and for damages for failure to cancel said leases of record following forfeiture of rights thereunder by failure to drill.
Opinion denying rehearing follows the original opinion.
Affirmed.
John J Spriggs, for plaintiffs in error.
The court erred in sustaining the demurrer to the original petition and in sustaining the motion to strike from the amended petition all allegations of damages; the court erred in sustaining the demurer to the third and fourth causes of action and in entering judgment of dismissal. (Kleiner v. Okelley, 167 P. 1.) Plaintiffs were denied substantial rights by the order of the court below in striking out all allegations of damage, as only redundant, irrelevant and scurrilious matter may be stricken. (See 4407 Comp. Stats. 1910.) This ruling confined plaintiff to his remedy of review on appeal from final judgment. (Hutchinson Co. v. Fahey, 168 P. 1139; Methew v. Barton, 128 P. 627; Doolittle v. McConnell, 174 P. 307; Virtue v. Stanley, 139 P. 764.) The sufficiency of the pleading could not be tested by motion to strike. The action resembled one for injunction and damages, both being properly included in one count. (Rogers v. Milliken Oil Co., 161 P. 800; Keppner v. Lemon, 35 A. 109.) The allegations were proper as a basis for damages. (Howerton v. Kansas Gas Co., 34 L. R. A. N. S. 40.) Motion to strike included all allegations properly pleaded. (Turk v. Page, 174 P. 1081.) The law permits no wrong without a remedy. Action for damages lies for a pecuniary loss. (City v. High, 175 P. 229. Am. Jur. 143.) Refusal to cancel a forfeited lease justifies action for damages. Rules of construction peculiar to oil and gas leases differ from general rules. (Archer O. & G. 148.)
Covenants for development and protection are implied in instruments of this class. (Parrafine Co. v. Cruse, 162 P. 716; New State Co. v. Dunn, 182 P. 514; Core v. New York Co., 52 W.Va. 276; Brewster v. Lanyon Co., 140 F. 801; Harris v. Oil Co. 57 Ohio St. 118; 48 N.E. 502; Phillips v. Hamilton, 95 P. 846.) Failure to perform covenants in an oil and gas lease from fraudulent motives justifies punitive damages. (Colgan v. Forest Co. 194 Pa. 234; 45 A. 119; Young v. Oil Co. 194 Pa. 234; Howerton v. Gas Co. 34 L. R. A. (NS) 40; Brewster v. Lanyon Co. 140 F. 801; Blackwell Co. v. Whitesides, 174 P. 573.) Failure to cancel forfeited lease is actionable where damage is shown. (Flood v. Von Marcard, 172 P. 885.) The petition alleges that the uncancelled leases prevented a sale; this was a slander of title. (525 Cyc.) It is alleged that failure to cancel the forfeited leases was malicious and entitled plaintiff to damage, actual and exemplary.
Hagens and Murane, for defendant in error.
There is no statute in Wyoming making it the duty of a lessee to discharge or cancel a recorded lease; the Oklahoma case of Rogers v. Milliken does not sustain plaintiff in error and an abandoned oil and gas lease may be cancelled in equity. (Thorton's Law 3rd Edition, 1155.) A declaration of forfeiture is inconsistent with an action for damages. (27 Cyc. 1423.) Ward v. Triple Co. was an action to recover rentals and not for damages. Keppner v. Lemon differs from the facts involved, but that case was overruled in Colgan v. Oil Co.; Archer L. and P. 444.) (See also Brown v. Producers Co., 64 So. 674; Indiana Oil Co. v. McCrory, 140 P. 610; Brewster v. Lanyon Co., 140 F. 801; Blackwell Co. v. Whitesides, 174 P. 573.) The rulings upon motions are not in the record. This court has repeatedly held that it will not consider motions not brought into the record by bill of exceptions. (David v. Whitehead, 13 Wyo. 189; Syndicate Co. v. Bradley, 6 Wyo. 171; Perkins v. McDowell, 3 Wyo. 328; Keffer v. State, 12 Wyo. 49; Littleton v. Burgess, 16 Wyo. 58.) The ruling of the lower court sustaining the demurrer to third and fourth causes of action and the judgment of said court should be sustained.
The plaintiffs in error, plaintiffs below, bring this action against the defendant in error, defendant below, to cancel of record two oil and gas leases held by defendants on 80 acres of land in Fremont County, and for damage in the sum of $ 400,000 for failure to cancel said leases of record and for failure to drill. A demurrer was sustained to the original petition. An amended petition was filed. From this, on motion, were stricken all matters relating to damage. The plaintiffs complain of this action here. However, they filed a second amended petition, asking in the first two causes of action for the cancellation of the lease, and in the third and fourth causes of action for damages. The leases were cancelled by decree in the court below. A demurrer was sustained to the causes asking damages and this action of the lower court is here for review. The material facts, as shown by the petition, are as follows: The first lease, executed by the predecessors in interest of plaintiffs, is dated June 9, 1914, is for the term of 10 years and contains the usual clauses, without however, containing special covenants on the part of the lessee. Nothing was done under the lease, but on July 11th, 1916, it was by plaintiffs, who had bought the land in the meantime, "ratified" in consideration of $ 500.00 paid to them. In this ratification agreement defendants agree to erect a standard rig on the premises within 90 days in order to drill a well of 3000 feet, unless oil or gas is reached at a shallower depth, and further to drill offset wells. In case that no oil was found in the first well, defendants agree to drill other wells, or deliver the lease up for cancellation; no other forfeiture clause is contained in the lease. Plaintiffs charge in substance that nothing was done thereunder by defendants; that immediately after the expiration of the 90 days they considered the lease as void, and refused to grant an extension or to give another lease; that they thereupon "elected to and did rescind the same," and notified the defendant in writing among other things that "by reason of the defaults in the terms of said lease by said lessee and his assigns, the same has become and is null and void, forfeited, of no force and effect and not binding on the undersigned who have elected to and have declared the same forfeited;" and that thereupon defendants admitted that it had no further rights in said lease or said premises and that it had forfeited the lease, but maliciously refused to cancel it of record. The second lease in question, given originally to G. H. Paul, finally assigned to defendants, was dated Sept. 11, 1915, and plaintiffs charge that it was executed by mistake and in ignorance of the existence of the first lease, that it was null and void ab initio; that defendants, upon demand, failed and refused to cancel this lease of record; that this refusal was "malicious;" that in the meantime defendants were drilling and developing wells on adjoining premises, thereby fraudulently draining oil from plaintiff's land without paying royalty therefor; that plaintiffs, not being able to develop the land themselves, and with the lease as a cloud on their title, were compelled to sell the land for $ 10,000, which is less than its value; that they have a binding contract with Martel and Lee for the sale of the land, and agreed to convey a good and marketable title, but they cannot consummate the sale until the cloud is removed. For how much more the land could have been sold, in the absence of said cloud of title, is not stated. Plaintiffs also claim in general terms that they have been compelled to go to expense and trouble and pay attorneys fees in order to cancel said lease and remove the cloud from the title. $ 200,000 is claimed for actual and $ 200,000 for punitive damages.
1. We are cited to Vaught v. Pettyjohn & Co., 104 Kan 174, 178 P. 623; Kelly v. First State Bank, 145 Minn. 331, 177 N.W. 347; A. L. R. 929 and other cases which hold that where a party maliciously puts of record a void instrument affecting title to property, he is guilty of slander or defamation of title and liable for special damages arising therefrom. Counsel for plaintiffs desire us to extend that rule to a case of a mere failure to release an instrument which was rightfully recorded, but should have been cancelled of record by reason of subsequent events. They call our attention to no authority where that has been done; and despite the fact that questions of like kind must naturally have arisen time and again in some of the older states, we have found no case holding such rule. In order to constitute defamation of title it is essential that it be published. ( Arnold v. Producers' Oil Co. (Tex. Civ. App.) 196 S.W. 735; Potosi Zinc Co. v. Mahoney, 36 Nev. 390, 135 P. 1078; Coffman v. Henderson, 9 Ala.App. 553, 63 So. 808; Schoen v. Casualty Co., 147 Ga. 151, 93 S.E. 82, 25 Cyc. 559.) The leases in this case were in the first instance rightfully recorded; that act constituted the publication; and we fail to see how by the failure thereafter to execute a release an additional publication can be said to have been made. The point herein raised was mooted, but not decided in Rogers v. Milliken Oil Co., 62 Okla....
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