Cont'l Supply Co. v. Dickson Oil Co.

• Decision Date: 10 October 1944
• Docket Number: Case Number: 31231
• Parties: CONTINENTAL SUPPLY CO. v. DICKSON OIL CO.
• Court: Oklahoma Supreme Court

1944 OK 266

153 P.2d 1017

194 Okla. 660

CONTINENTAL SUPPLY CO. v. DICKSON OIL CO.

Case Number: 31231

Supreme Court of Oklahoma

Decided: October 10, 1944

Syllabus

¶0 1. OIL AND GAS--Essentials of mining partnership in development of lease.

A mere community of interest as owners of specific property or the profits from a particular adventure or business does not necessarily, of itself, constitute the co-owners partners.

2. APPEAL AND ERROR--Sufficiency of evidence to support judgment in jurywaived case.

Where a law action is tried without a jury, judgment will be given same effect as verdict of properly instructed jury and same will not be reversed if there is any evidence reasonably supporting the judgment.

Appeal from District Court, Pontotoc County; Tal Crawford Judge.

Action by the Continental Supply Company against the Dickson Oil Company et al., seeking to establish liability of alleged mining partner for account. From an adverse judgment, plaintiff appeals. Affirmed.

Martin, Logan, Williams & Boesche, Robert J. Stanton, and Richard P. Ryan, all of Tulsa, for plaintiff in error.

Butler & Rinehart, of Oklahoma City, for defendant in error.

ARNOLD, J.

¶1 J.W. Criswell was the owner of certain oil and gas leases covering land located in Pontotoc county, Okla. On August 10, 1940, he wrote a letter to C. C. Harwell, one of the defendants, agreeing to assign said leases to him if he commenced a test well for oil and gas thereon on or before September 5, 1940. He reserved a 1/16th of the 7/8ths as an overriding interest.

¶2 On August 14, 1940, Harwell wrote the following letter to John E. Dickson:

"Oklahoma City, Oklahoma:

August 14, 1940.

"Mr. John E. Dickson,

"First National Building,

"Oklahoma City, Oklahoma.

"Dear sir:

"Attached hereto is a letter directed to me, signed by J. W. Criswell, and accepted by me, by the terms of which letter I am to acquire commerical oil and gas leases on one hundred acres of land located in Sections 28 and 33, Township 5 North, Range 5 East, Pontotoc County, Oklahoma; and by the terms of which letter I am to commence, or cause to be commenced, the drilling of a test well on said premises on or before September 5, 1940, and to continue, or cause to be continued, such drilling operations with due diligence until said test well is completed.

"You will note there is an overriding one-sixteenth interest to be reserved out of and from said leasehold estate.

"In consideration of your executing a bottom-hole letter to Phil A. Cornell of Oklahoma City, Oklahoma, in the amount of $2,000.00 cash, I hereby contract and agree, and by the terms of this letter do bind myself to assign to you a one-half interest in and to 13/16ths of the gross production from said premises, your interest to be proportionately subject to the $5,000.00 oil payment made in favor of Phil A. Cornell. You are to pay your one-half of the cost of a flow string of pipe and the setting thereof, and your proportionate part of the cost of operation of said premises.

"Should we obtain commercial production, you and I will jointly, operate the property until a more satisfactory arrangement can be worked out.

"Yours very truly,

(Signed) "C. C. Harwell

"C. C. Harwell."

¶3 On the same day the Dickson Oil Company wrote a letter to Phil A. Cornell wherein it was stated that the company would pay to Cornell the sum of $2,000 when he had completed his part of the drilling contract entered into on the 14th day of August, 1940, with C. C. Harwell. It was also stated therein that said payment was in consideration of the assignment unto the company of an undivided 1/2 interest in the oil and gas leases and was subject to a showing of merchantable title in said leases. On September 6, 1940, the Dickson Oil Company notified Mr. Cornell that the title to the leases had been approved and that he could consider the bottom-hole letter of August 14th binding.

¶4 On August 14, 1940, Phil A. Cornell, as contractor, and C. C. Harwell, as owner, entered into a drilling contract whereby the contractor was to drill the well on the above referred to leases. As a part of the consideration for the drilling of the well it was provided that the owner would furnish the contractor a bottom-hole letter from John E. Dickson in the amount of $2,000 to be paid when the contractor drilled the well into the Viola lime at least 50 feet. The owner also agreed to pay the contractor the sum of $2,000 when the same depth was reached. For further consideration the contractor was to receive an oil payment in the amount of $5,000 payable out of 1/4th of 13/16ths of the gross production free and clear of all costs.

¶5 On September 5, 1940, the above referred to leases were assigned to C. C. Harwell. On September 19, 1940, C. C. Harwell assigned an undivided 1/2 interest in and to the 13/16ths interest of Harwell in said leases to the Dickson Oil Company.

¶6 On November 2, 1940, the Dickson Oil Company and C. C. Harwell executed an oil payment in the amount of $5,000 in favor of Phil A. Cornell.

¶7 The well was commenced on or about September 5, 1940, and completed in the early part of November, 1940. During October and November certain materials were furnished by the Continental Supply Company which were charged to Harwell and Dickson. The bill therefor was not paid and the supply company filed a materialman's lien against the lease.

¶8 A suit was filed by another party to foreclose a materialman's lien against the lease. The Continental Supply Company intervened setting up its materialman's lien and asked for a personal judgment against C. C. Harwell and the Dickson Oil Company. The Dickson Oil Company denied that it was personally liable for the bill.

¶9 The testimony in behalf of the supply company was that it refused to sell material placed on the lease to C. C. Harwell alone; that it billed the material out to Harwell and Dickson; that the field superintendent of the Dickson Oil Company ordered some of the material and accepted delivery of same; that said field superintendent advised it that such material should be charged to Harwell alone, which it refused to do; that the superintendent ordered and accepted material; that it was notified by Mr. Dickson that the material should not be charged to the Dickson Oil Company, but that such notification was received after a large amount of the material had been delivered; that Mr. Dickson was seen around the well a number of times.

¶10 Mr. Dickson testified that he was at the well only once and had nothing to do with the drilling of same; that his field superintendent worked at the well only after it was ready to be brought in; that Harwell had no authority to charge anything to him or purchase anything in his name; that he was to pay...