Cruce v. Pierce Oil Corp.
| Citation | 279 F. 728 |
| Decision Date | 04 March 1922 |
| Docket Number | 5942. |
| Parties | CRUCE v. PIERCE OIL CORPORATION et al. |
| Court | United States Courts of Appeals. United States Court of Appeals (8th Circuit) |
C. B Stuart, of Oklahoma City, Okl. (J. F. Sharp and M. K. Cruce both of Oklahoma City, Okl., on the brief), for plaintiff in error.
A. A Davidson, of Tulsa, Okl. (Preston C. West, Roger S. Sherman and Grey Moore, all of Tulsa, Okl., on the brief), for defendants in error.
Before CARLAND and STONE, Circuit Judges, and TRIEBER, District Judge.
The suit was originally instituted in a state court against the defendant Pierce Oil Corporation, the purchaser of and the owner of the pipe line to which the oil was delivered. The corporation was to pay to the plaintiff the royalties he was entitled to under the lease. The oil was delivered to it merely as a purchaser from the Kewanee Oil & Gas Company (hereafter referred to as the Kewanee Company), the lessee of the plaintiff. The Pierce Oil Corporation filed an answer in the nature of an interplea, setting up that fact, and that it held the difference between the sum paid to the plaintiff and that claimed by him, as a stakeholder for the plaintiff and the Kewanee Company, brought the money into court and asked that the Kewanee Company be made a party defendant, and it be discharged. The Kewanee Company thereupon was made a defendant in the cause, entered its appearance, and upon its petition the cause was removed to the District Court of The united States. There was a stipulation in writing waiving a jury, and after a hearing the court rendered judgment for the defendants.
The royalties on the basis of one-eighth had been paid to the plaintiff by the Pierce Corporation, who accepted it under protest, and an agreement that the acceptance was without prejudice to his claim for the difference between the one-eighth and one-sixth royalty, he claiming to be entitled to a royalty of one-sixth. He based his claim on the ground that a correct construction of the lease entitled him to it, unless each of the wells on the leased ground produced less than 50 barrels of oil daily, while the contention of the defendant was that under the lease the plaintiff was only entitled to a royalty of one-eighth of the oil produced, unless each of the wells produced 50 barrels or more daily. The provision in the lease material to a determination of this cause is: 'To deliver to the credit of the first party, his heirs or assigns, free of cost in the pipe line to which it may connect its wells, the equal one-sixth (1/6) part of all oil produced and saved from the leased premises when said wells produce each per day of twenty-four hours fifty (50) barrels or more, and when said wells produce less than fifty (50) barrels per day each then and in that event the lessee shall deliver in said pipe line the equal one-eighth (1/8) part of all oil produced and saved, and party of the second part agrees to pay the first party a sum of money equal to one-sixth (1/6) of the net proceeds arising from the sale of gas from each and every well on said premises when the same is sold from the lands herein leased.'
The court found and 'concluded that the lease contract is not ambiguous, and that the plain construction of it, without extrinsic evidence, is that the plaintiff is not entitled to recover, as the test or standard upon which the price of the oil was to be paid is clear by the terms of the contract, viz. that in order to entitle the plaintiff to a one-sixth royalty each of the wells must have reached the capacity of fifty barrels or more daily and that there is no claim that they had that capacity,' and thereupon rendered judgment for defendants.
There were 10 wells on the 160 acres, constituting the leased premises. The undisputed evidence shows that during the entire time involved in this controversy the 10 wells on the leased premises produced daily considerably less than 500 barrels of oil, nor is there any evidence that any of the wells produced as much as 50 barrels on any one day.
The contention of the plaintiff in the court below, as well as this court, is set out in...
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