Croxton v. State, Case Number: 28863

• Decision Date: 21 November 1939
• Docket Number: Case Number: 28863
• Citation: 1939 OK 504,186 Okla. 249,97 P.2d 11
• Parties: CROXTON et al. v. STATE et al.
• Court: Oklahoma Supreme Court

1939 OK 504

97 P.2d 11

186 Okla. 249

CROXTON et al. v. STATE et al.

Case Number: 28863

Supreme Court of Oklahoma

Decided: November 21, 1939

Syllabus

¶0 1. OIL AND GAS--Proceedings in Corporation Commission under well-spacing act--Evidence held to sustain finding that requisite number of lessees had agreed to 20-acre drilling units in Noble area.

Record examined, and held, that the finding of the Corporation Commission in the within cause "that 80 per cent or more of the lessees of record as of the date of the bringing in of the first well" in the Noble Pool "and owning at least 80 per cent. of all the acreage embraced within" the Noble Area "have agreed to the establishment of 20-acre drilling units" in said area, is supported by the evidence.

2. SAME--Statutory provision for agreement for drilling units exceeding ten acres by 80 percent of lessees held not to include owners of royalty or unleased mineral rights.

The provision of section 3, art. 1, chap. 59, S. L. 1935, requiring the consent of 80 per cent. of the lessees of record as of the date of the bringing in of the first well as a condition prerequisite to the establishment of drilling units consisting of more than ten acres does not require the agreement of the owners of royalty or unleased mineral rights to such a project.

3. SAME--Corporation Commission authorized to establish triangular spacing units in common source of supply.

Under the provisions of section 3, art. 1, chap. 59, S. L. 1935, the Corporation Commission may, under proper circumstances, establish triangular spacing units in a common source of supply.

4. SAME--CONSTITUTIONAL LAW-Burden on appellant in Supreme Court to show order of Corporation Commission impairs contract obligations or violates due process clause--Appellants held not to have discharged burden.

As the establishment of well-spacing or drilling units for a common source of supply by order of the Corporation Commission as prescribed by section 3, art. 1, chap. 59, S. L. 1935, is within the lawful scope of the state's police power, such an order regularly entered in conformity with said section will not be set aside on appeal to the Supreme Court as violative of the provisions of the State and Federal Constitutions prohibiting the impairment of contract obligations and the taking of property without due process of law, if said order appears to be a reasonable exercise of said power; and the burden of showing that such an order is not a reasonable exercise of said power is upon those appealing therefrom. Held, that the appellants in the present case have failed to discharge said burden.

5.SAME--Well-spacing order not discriminatory against owners of mineral rights affected merely because it places in operation over common source of supply statutory provisions regulating production of wells.

Where well spacing is established for a common source of supply by order of the Corporation Commission under section 3, art. 1, chap. 59, S. L. 1935, said order is not discriminatory and does not deny equal protection of the laws to the owners of mineral rights thereby affected merely because it places in operation over said common source of supply the provisions of said statute regulating the production of wells drilled therein.

6. SAME--Provisions of act relative to hearings on certain questions concerning contribution of owners of mineral rights in drilling units to cost of drilling wells held not delegation of judicial power to commission.

The provision of section 3, art. 1, chap. 59, S. L. 1935, relative to the holding of hearings by the Corporation Commission upon certain questions concerning the contribution of the owners of mineral rights in drilling units to the cost of drilling wells thereon, is a delegation of administrative authority involving discretion, rather than delegation of judicial power to said commission.

7. SAME--Supreme Court will not resort to inference or speculation to discover ambiguity in order of Corporation Commission.

On appeal from an order of the Corporation Commission that appears to be unambiguous on its face, the Supreme Court will not resort to inference or speculation to dissover an ambiguity therein.

Appeal by E. V. Croxton et al. from order of the Corporation Commission entered in connection with the administration of the "Well-Spacing Act." Affirmed.

J. D. Holland and Vic Croxton, of Norman, and R. G. Stevens and Roy M. Glasco, of Purcell, for plaintiffs in error.

Earl Foster, Conservation Attorney, and James C. Hamill, Ass't Conservation Attorney, for defendants in error.

Anglin & Stevenson and Vernon Roberts, all of Holdenville, of counsel.

DAVISON J.

¶1 This is an appeal from an order of the Corporation Commission entered in connection with its administration of the provisions of article 1, ch. 59, of the Session Laws of 1935, which is commonly known as "the well-spacing act," and deals with the drilling of wells into a single pool or common source of supply.

¶2 The area defined by said order as overlying a common source of supply designated therein as "the Noble Pool" consists of twelve entire sections of land in Cleveland and McClain counties.

¶3 The hearing which resulted in the order was had upon the application of one W. A. Delaney, Jr., who with his associates owns leases in the area and upon one of them on May 22, 1938, completed the first and only producing well that has been drilled into that pool.

¶4 According to the plan incorporated in the order appealed from, the wells in the Noble Pool are to be located "as nearly as practicable * * *" in the center of triangular units containing 20 acres each as outlined upon a map attached to the order. From an examination of said map, it appears that each 40-acre tract in the twelve sections is divided into two of these right-angle triangles with the dividing line between both of said triangles forming the hypotenuse of each and extending diagonally from northeast to southwest or vice versa. The order also provides that "in event a producing well is completed in an area owned by two or more persons, firms, or corporations, the rights of those interested therein shall be determined, adjusted, and controlled by section 3, art. 1, chap. 59, Session Laws of Oklahoma, 1935."

¶5 At the hearing before the Corporation Commission, the signed protests of many persons to Delaney's application were introduced. Several of these persons have prosecuted the present appeal, and will hereinafter be referred to merely as "the protestants." The appellees are the Corporation Commission and the State of Oklahoma. The former will hereinafter be referred to merely as "the commission," and since its argument on appeal is presented as that of both appellees, we will make no further reference to the state as a separate party herein.

¶6 The argument of the protestants attacking the present order is submitted under two principal propositions set forth in their brief. The first of these is as follows:

"The Corporation Commission was without jurisdiction or authority to make any order providing for a greater spacing than 10 acres for the reason that not 80% of the lessees of record as of the date of bringing in of the first well and owning at least 80% of all acreage embraced within the probable area of the common source of supply agreed to a larger unit."

¶7 The above proposition is based upon the contention that the evidence introduced before the Corporation Commission does not show the area in question to be a proper one for 20-acre spacing under the prerequisite set forth in section 3, art. 1, ch. 59, Session Laws 1935, as follows:

"The drilling unit shall not exceed ten (10) acres in size, unless eighty per cent. (80%) or more of the lessees of record as of the date of bringing in the first well and owning at least eighty per cent. (80%) of all the acreage embraced within the probable producing area of the common source of supply agree to a larger unit, but in no event shall such a drilling unit exceed forty (40) acres

¶8 To show a compliance with the above provisions of the statutes, the applicant (Delaney) took the witness stand and read the names of 33 individuals, firms, and corporations from a tabulation compiled by his associate, Mr. Sledge, which he said reflected "the ownership of the acreage in that territory as of the date of the completion of the well." Of this number, the signed letters, telegrams, and written statements giving the consent of 28 to the establishment of 20-acre drilling units were introduced. The oral consent of three more of the 33 lessees named by Delaney was given at the hearing. According to the statements themselves and the testimony on behalf of the applicant, the consenting lessees comprise more than 80% of the lessees of land in the area and their leases cover more than 80% of the acreage therein. To refute this evidence, the protestants introduced the written protests of many "landowners and owners of mineral interests" within the area, and testimony tending to show that some of them were lessees of record as of the date of the completion of the well. At the close of the evidence, the commission, in connection with the rendition of its order, made the following specific finding (among others), to wit:

"That 80 per cent. or more of the lessees of record as of the date of the bringing in of the first well in said common source of supply and owning at least 80 per cent. of all the acreage embraced within the probable producing area as above described have agreed to the establishment of 20-acre drilling units."

¶9 Without discussing, in detail, the evidence introduced on behalf of the protestants, it is sufficient to say that, after a thorough examination of same, we find it inadequate to overcome the presumption which has so often been recognized in favor of the findings of the Corporation Commission on appeal to this court. See St. Louis & S. F. R. Co. v. Williams, 25 Okla. 662, 107 P. 428; Kansas City, M. & O. Ry. Co. v. State, 25...