Blackwell Oil & Gas Co. v. Whitesides
| Decision Date | 05 September 1918 |
| Docket Number | 7902. |
| Citation | 174 P. 573,71 Okla. 41,1918 OK 511 |
| Parties | BLACKWELL OIL & GAS CO. v. WHITESIDES. |
| Court | Oklahoma Supreme Court |
Syllabus by the Court.
A court of equity has jurisdiction to decree the forfeiture of an oil and gas lease on account of the breach of an implied covenant to diligently operate and develop the property, when such forfeiture will effectuate justice, and the lessor is not limited to an action for damages because of such breach where the measure thereof is uncertain, vague, and indefinite.
The same relief will be applied in equity for the cancellation of an oil and gas lease on land in a gas field, where the initial well drilled on the plaintiff's premises produced gas only, and the payment for the gas was the stipulated sum of $50 per annum for each well.
Where a general demurrer is filed to a petition as a whole, if any paragraph of the pleading is good, and states a cause of action, the demurrer should be overrulled.
In an action to cancel an oil and gas lease for failure to diligently operate and develop the property, the trial court found that the leased premises were not being sufficiently operated and developed. The judgment will not be disturbed by the Supreme Court on the ground of the insufficiency of the evidence, since it is not clearly against the weight of the evidence.
The judgment in favor of the plaintiff in an action to cancel an oil and gas lease for failure to operate and develop was, in effect, that the defendant would be required to drill two additional wells or pay $50 per annum each in lieu of the drilling of said wells, and that if neither of these things were done that the lease be canceled. In its answer filed in the cause, and in the opening statement of its counsel defendant offered to abide by the decision of the court as to the amount of development that should be made on the lease. Held, that the judgment rendered, if erroneous, was in the defendant's favor, that it invited the same, and was not prejudiced thereby.
Error from District Court, Kay County; Wm. M. Bowles, Judge.
Action by J. R. Whitesides against the Blackwell Oil & Gas Company. Judgment for plaintiff, and defendant brings error. Affirmed.
Dale & Bierer, of Guthrie, and H. S. Gurley, of Blackwell, for plaintiff in error.
W. S. Cline, of Newkirk, and C. Robert Bellatti, of Blackwell, for defendant in error.
This action was commenced in the district court of Kay county, by the defendant in error, hereinafter called the plaintiff, against the plaintiff in error, hereinafter called the defendant, to cancel an oil and gas lease upon a quarter section of land in Kay county, Okl., for failure to develop the land for oil and gas. The lease was originally made to the Union Gas & Oil Company, a corporation, and by it assigned to the defendant. The trial court entered a judgment requiring the defendant to drill two additional wells upon the land in controversy, or to pay to the plaintiff the sum of $50 per annum as royalty upon such contemplated wells, in lieu of the actual drilling thereof. The judgment further provided, in effect, that if the defendant did not either drill the two additional wells or pay the $50 per annum as royalties in lieu thereof that the lease be canceled. The defendant's motion for a new trial was overruled, and it has brought the case here to reverse the judgment of the district court.
Counsel for defendant have assigned as error the overruling of their general demurrer to the plaintiff's petition, and in support of this assignment of error contend, first, that the petition was insufficient, for the reason that the remedy of the plaintiff for a breach by the defendant of the implied conditions in the lease to fully develop the land for oil and gas purposes is an action for damages for the amount which would be due the plaintiff as royalties, had the land been fully developed; and, second, for the reason that the petition does not state facts showing that the land had not been fully developed.
The question presented by the first proposition was before this court in the case of Indiana Oil, Gas & Development Co. v. McCrory et al., 42 Okl. 136, 140 P. 610, wherein the court, in an opinion by Mr. Commissioner Galbraith, stated that the reason and weight of the argument in support of the line of authorities that courts of equity will cancel oil and gas leases for breach of the implied covenants to skillfully operate and develop the leased premises, met the approval of this court, for the reasons given by Mr. Justice Van Devanter, in the case of Brewster v. Lanyon Zinc Co., 140 F. 801, 77 C. C. A. 213. These reasons will not be set out in this opinion, since they are incorporated in the opinion prepared by Commissioner Galbraith.
Counsel for the defendant, however, contend that the rule adopted by this court is not applicable to the instant case, for the reason that the pleadings show that the well drilled on plaintiff's land produced gas only, and that since the lease provided for a stipulated royalty of $50 per annum for each gas well that the damages suffered by the plaintiff, if any, were ascertainable with reasonable certainty. It is urged that the testimony of witnesses of experience, acquainted with the gas field, could be readily adduced to establish with reasonable accuracy the number of wells necessary to sufficiently develop the leased premises by obtaining the gas underneath the land covered by the lease, and protecting the same from drainage by development of contiguous properties, and if the lessor were awarded the sum of $50 per year for each well adjudged to be necessary to develop the property from the time it should have been drilled that he would be adequately compensated in damages. It is further contended that in cases like the one under consideration the burden is upon the plaintiff to show by proper evidence that such damages could not be ascertained with any reasonable certainty before the plaintiff would be entitled to a cancellation of the lease. In support of this proposition counsel cited the case of Howerton v. Kansas Natural Gas Co., 82 Kan. 367, 108 P. 813, 34 L. R. A. (N. S.) 46. That case seems to...
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