Downey v. Gooch

• Decision Date: 15 May 1914
• Docket Number: 2055.
• Citation: 240 F. 527
• Parties: DOWNEY v. GOOCH et al.
• Court: U.S. District Court — Eastern District of Oklahoma

240 F. 527

DOWNEY v. GOOCH et al.

No. 2055.

United States District Court, E.D. Oklahoma.

May 15, 1914

Haskell B. Talley, of Tulsa, Okl., for complainant.

James C. Denton, of Muskogee, Okl., and John Q. Adams and Richard H. Wills, both of Claremore, Okl., for defendants.

CAMPBELL District Judge.

This matter now comes before the court upon complainant's application for a temporary injunction against the defendants. On January 22, 1914, Charles A. Bates, owner of the land in controversy, executed to H. B. De Ford an oil and gas lease thereon for the term of one year and as long thereafter as oil or gas should be produced. The consideration for the lease was $1 paid at the execution thereof, one-eighth of the oil produced, and $200 per year in advance for each gas well. The lessee agreed to complete a well on said premises within 4 months from the date of execution, and, if oil was found in paying quantities to continue development. A further provision of the lease was:

'The party of the second part (lessee) further covenants and agrees to commence operations within 45 days from the date of this lease, and drill to a depth of 2,800 feet, unless oil or gas is found in paying quantities at a lesser depth. Otherwise this lease becomes null and void.'

Another provision of the lease was:

'The party of the second part, its successors or assigns, shall have the right at any time on the payment of . . . dollars to the party of the first part, his heirs, or assigns, to surrender this lease for cancellation, after which all payments and liabilities thereafter to accrue under and by virtue of its terms shall cease and determine: Provided this surrender clause and the option therein reserved to the lessees shall cease and become absolutely inoperative immediately and concurrently with the institution of any suit in any court of law or equity by the lessee to enforce this lease or any of its terms, or to recover possession of the leased land or any part thereof against or from the lessor, his heirs, executors, administrators, successors, or assigns, or any person or persons.'

On the same date that the above-mentioned lease was entered into, the lessor's wife made a similar lease to the said De Ford, covering her lands adjoining those covered by her husband's lease; this latter lease being in all respects similar in its term to the former, except that operations were to begin within 60 days and the first well was to be completed within 6 months. Operations were not commenced under the first-mentioned lease within 45 days from its execution, that time expiring on March 8th; but on March 21st De Ford and Bates went upon the land and agreed upon a location for a well, which location was made, and on the 23d of March Bates in writing agreed to an extension of the time within which to begin operations, reading as follows:

'Contract entered into this 23d day of March, 1914, between Charles A. Bates, of Catoosa, Oklahoma, and H. B. De Ford: That the time to commence operations specified in a certain oil and gas lease, made in favor of H. B. De Ford, of which this is made a part thereof, shall be extended for a term of six months from the 23d day of March, 1914.

'(Signed) Charles A. Bates.'

As a consideration for this extension De Ford paid Bates $1 at the time of its execution. He also testifies, as do several other witnesses, that a further consideration for this extension was the agreement on his part to immediately put down a second well upon the land covered by the lease of Mrs. Bates before beginning operations upon Bates' lands; the first well having already been completed on her land. This second well on Mrs. Bates' land was completed on April 28th, and on the same day De Ford moved some casing upon Bates' land, placing it at the point where the location was previously made on March 21st; it being, as he claimed, his intention to proceed immediately with a well on Bates' land. On April 27th, however, Bates executed an oil and gas lease, covering the same land, to the defendants, who, shortly after De Ford had moved the casing upon the land, entered thereon and threw the casing off the land, and undertook by force to hold it for themselves. De Ford secured a restraining order against them in the state court, but within a few days dismissed that suit, and immediately thereafter this action was commenced; Downing having acquired the lease by assignment. Bates, while admitting that he signed the 6-months extension above quoted, contends that it was the verbal understanding that the extension was to be but 30 days, instead of 6 months, and that he signed it believing that it so provided, and it was on the theory that this 30-day extension had expired that he made the lease to the defendants on April 27th. It appears from a preponderance of the evidence, however, that his contention in this respect must fail. It also appears that, while he may have told the defendants, at the time they took their lease, that his understanding was that the extension of the De Ford lease was only for 30 days, they at the time knew that as written it provided for an extension of 6 months' time.

It is held by the Supreme Court of this...