Elliott v. The Crystal Springs Oil Company

• Decision Date: 07 February 1920
• Docket Number: 22,301
• Citation: 106 Kan. 248,187 P. 692
• Parties: SAM H. ELLIOTT, Appellant and Appellee, v. THE CRYSTAL SPRINGS OIL COMPANY, et al., (THE CRYSTAL SPRINGS OIL COMPANY and THE CARTER OIL COMPANY, Appellees and Appellants)
• Court: Kansas Supreme Court

187 P. 692

106 Kan. 248

SAM H. ELLIOTT, Appellant and Appellee, v. THE CRYSTAL SPRINGS OIL COMPANY, et al., (THE CRYSTAL SPRINGS OIL COMPANY and THE CARTER OIL COMPANY, Appellees and Appellants)

No. 22,301

Supreme Court of Kansas

February 7, 1920

Decided January, 1920.

Appeal from Cowley district court; OLIVER P. FULLER, judge.

Judgment reversed.

SYLLABUS

SYLLABUS BY THE COURT.

1. OIL AND GAS LEASE--Action for Cancellation--Attorney's Fees and Statutory Damages. In an action to obtain cancellation of record of an oil and gas lease, a plaintiff is entitled to attorney's fees and to statutory damages of $ 100, under section 4994 of the General Statutes of 1915, where it was the duty of the holder of the lease to discharge it of record and he failed to do so, if the plaintiff lessor, at least twenty days before beginning the action, made a demand upon the holder of the lease to discharge it of record as provided by section 4995 of the General Statutes of 1915.

2. CANCELLATION OF OIL AND GAS LEASE--Procedure Optional. It is not necessary for the lessor of a gas and oil lease to follow the procedure permitted by section 4992 of the General Statutes of 1915 to clear his record title of a gas and oil lease before beginning his statutory action (§ 4994) to obtain a judgment cancelling the lease, nor is compliance with that procedure a prerequisite to the allowance of attorney's fees and statutory damages.

3. SAME--Value of Attorney's Services--Proof. Where attorney's fees are allowed by statute to the prevailing party, the trial court should make a reasonable allowance therefor; and if no formal proof of the value of such service is presented, the court should allow a reasonable sum based upon its judicial notice of the services performed and upon its own general knowledge of the value of such services.

4. SAME--Terms of Lease--Cancellation Ordered. A lease which was to endure as long as gas or oil was produced on the premises and which also provided that "sixty days after both producing and drilling operations cease this lease to be void and surrendered for cancellation," is terminated by its specific terms, and the lessor is entitled to judgment cancelling it when it is admitted that production and drilling on the leased property have ceased for over seven months because no market was available, nor in prospect within a reasonable time, for the sale of gas developed in wells already drilled on the property by the lessee.

W. P. Hackney, and L. D. Moore, both of Winfield, for the appellant.

Charles W. Roberts, of Winfield, William H. England, and Felix C. Duvall, both of Ponca City, Okla., for the appellees.

OPINION

DAWSON, J.:

The plaintiff brought this action to cancel an oil and gas lease on his property. He charged the defendants with failure to pay rent, with nonproduction, abandonment of producing operations, and failure of defendants to drill "offset wells" as provided in the lease. Plaintiff prayed also for an attorney's fee and $ 100 as statutory damages.

Issues were joined, and the cause came on for trial, but after hearing the opening statements of counsel for plaintiff and defendants and the evidence of one witness for defendant who explained why the gas contained in one well on the property was not marketed, the court gave judgment for plaintiff cancelling the lease; but denied to plaintiff the statutory damages and attorney's fee because of his noncompliance with the provisions of section 4992 of the General Statutes of 1915.

Both parties appeal. Plaintiff's grievance is the nonallowance of his fees and damages. Defendants' grievance is the cancellation of their lease.

First, as to plaintiff's appeal: The first statute relating to the release of oil and gas leases was enacted in 1905. (ch. 314.) It merely made it the duty of a lessee of a forfeited lease to cause it to be released of record, and gave the lessor a right of action (which he already possessed in law or equity) to obtain such a release, if the lessee failed to comply with that statute.

In 1909, a new statute was enacted (ch. 179) which repealed the act of 1905, and provided (§ 1) that it should be the duty of the lessee of a forfeited lease to discharge it of record without cost to the lessor. The act also provided (§ 2) that if the lessee failed to execute a release, the lessor might sue to obtain such release, and in such action he would be entitled also to attorney's fees and damages in the sum of $ 100. This section also provided for additional damages, (but see Grain Co. v. Railway Co., 105 Kan. 272, 275, 276, 182 P. 405.) Section 3 provided that at least twenty days before this statutory action to obtain a release should be instituted, the lessor should make a demand upon the lessee to discharge the lease of record.

Section 2 and section 3 of the act of 1909 are still in force and appear in the General Statutes of 1915 as sections 4994 and 4995.

Section 1 of the act of 1909 (Gen. Stat. 1909, § 3921) was amended and elaborated in 1915 (ch. 228) by an act of two sections which cover the subject of forfeitures of leases, notice of forfeitures, duties of the register of deeds in relation to the record, and the legal effect of affidavits, etc., filed in his office. These two sections of the act of 1915 appear in the General Statutes of 1915 as sections 4992 and 4993. Neither of them confers a cause of action to have a lease discharged of record. That cause of action is conferred by the still existent section 2 of the act of 1909 (Gen. Stat. 1915, § 4994), and as a condition precedent to the statutory right to attorney's fees and $ 100 damages in such action a demand upon the holder of the lease for its discharge of record must be made twenty days before the action is begun.

It is conceded that this demand was made upon the defendants before the action was begun, but the trial court ruled that the act of 1915 imposed an additional prerequisite to the granting of attorney's fees and damages.

Counsel for plaintiff: "We now offer to prove our right to attorney fees."

By the Court: "I think prior to the 1915 statute you would have been entitled to attorney fees, but after the 1915 statute Mr. Elliott has to follow that statute in order to be allowed such fees. I think it is immaterial. Of course, if you want to make your offer go ahead, but I think the whole thing is immaterial."

Counsel for Plaintiff: "The plaintiff offers to prove . . . the value of the legal services rendered plaintiff in this case to be worth $ 1500.00." . . . [Objection.]

By the Court: "The objection is sustained for the reason that it is immaterial under the issues."

Counsel for Plaintiff: "The plaintiff now asks for $ 100.00 statutory damages." . . . [Objection.]

By the Court: "It is clear enough to me that the 1915 statute is supplemental to the 1909 statute, and in order to get within the 1909 statute you must comply with the 1915 statute, I will render judgment for plaintiff on the statements and pleadings cancelling the lease, and refuse damages and attorney fees."

We are constrained to differ with the learned trial court on this proposition. The first section of the act of 1915 (Gen. Stat. 1915, § 4992), like the act of 1905, and the first section of the act of 1909, made it the duty of the holder of a forfeited lease to release it of record. But as to all else in the act of 1915 (Gen. Stat. 1915, §§ 4992, 4993) the subject covered has to do with a permissive procedure to show the status of the lease on the records of the register of deeds, and for clearing the lessor's title of the apparent cloud or encumbrance of such lease. The act of 1915 does not confer the cause of action, nor does it affect the cause of action. The statutory cause of action...