Garr-Woolley v. Martin

• Decision Date: 14 February 1978
• Docket Number: No. 50020,GARR-WOOLLEY,No. 1,50020,1
• Parties: , a partnership, Appellant, v. James W. MARTIN and Judy K. Martin, Appellees
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

Page 206

579 P.2d 206

GARR-WOOLLEY, a partnership, Appellant, v. James W. MARTIN and Judy K. Martin, Appellees.

No. 50020.

Court of Appeals of Oklahoma, Division No. 1.

Feb. 14, 1978.

Rehearing Denied March 7, 1978.

Certiorari Denied April 12, 1978.

Released for Publication by Order of Court of Appeals April 17, 1978.

Appeal from the District Court of Payne County; John R. Couch, Jr., judge.

AFFIRMED.

Bloodworth, Smith & Biscone by Robert B. Smith, Oklahoma City, for appellant.

Fitzgerald, Houston & Worthington by Donald L. Worthington, Stillwater, for appellees.

BOX, Presiding Judge.

An appeal from a replevin cause of action in which appellant, the partnership of Garr-Woolley, sought to recover equipment and machinery used in the production of oil and gas located upon the land of James and Judy Martin, appellees. The parties will be referred to as appellant and appellees.

Appellant, as lessee, entered into an oil and gas lease with appellees' predecessor in title on February 7, 1958. The lease term was for three years and as long thereafter as oil or gas was produced. Under the terms of the lease, appellant was given the right to remove all machinery and fixtures placed upon the leasehold at any time, including the right to draw and remove casing. Appellant did obtain production of oil during the primary term of the lease; however, all production had ceased prior to January 1, 1970. On December 31, 1969, appellees acquired title to the land.

The property which is the subject of this action consists of a pumping unit, casing, tubing and other oil well machinery and equipment which was placed upon the land by appellant during the time the lease was productive of oil and gas. The machinery and equipment has remained upon the site since production ceased sometime during the latter part of 1969.

Since 1969 until early 1976, there has been no direct communication between appellant and appellees in regard to the equipment located on appellees' land. The only contact in the interim was made in 1974 by a man who approached both parties about buying the machinery for scrap. After the man talked to appellees, appellees placed a chain across the cattle guard to bar access to the well. In early 1976, appellant requested permission to remove the machinery but appellees denied appellant access to the well site.

Appellant filed a replevin cause of action in March, 1976 to recover the oil and gas equipment. Appellees answered and cross-petitioned claiming ownership by virtue of abandonment and failure to remove the equipment within a reasonable time after termination of the lease, which occurred when production ceased in the latter part of 1969. Appellees amended their answer to include the defense that the pertinent statute of limitations, 12 O.S.1971, § 95 Third, barred appellant's recovery of the property.

After trial of this controversy, the trial court made the following findings:

In this case there was no contact between the parties about further development and to all intents and purposes the machinery and casing were merely stored by the plaintiff (appellant) on the defendants' (appellees') property for a period of 6 years without defendants' consent. The access road was blocked for a period of 1 year prior to the plaintiff's demand for the property. Under these facts it must be held that the plaintiff did not exercise his contractual right to remove the machinery and casing within a reasonable time and that the right has now lapsed. (Citation omitted.)

For these reasons judgment will be entered for the defendants . . . .

Although appellant was given the right under the terms of the lease to remove equipment and machinery used in the production of oil or gas at any time, appellant did not have an unlimited time to remove the equipment. Clauses which state that machinery and fixtures placed upon the leasehold may be removed at any time have been consistently construed as meaning within a reasonable time. As stated by the Supreme Court in Stevens v. Iverson, 179 Okl. 401, 66 P.2d 12:

Syllabus by the Court.

1. Where an oil and gas lease authorizes the lessee to remove his fixtures "at any time," such right is not unlimited as to time, but the lessee is entitled to remove same within a reasonable time after expiration of the lease; and what is a reasonable time is to be determined from all the facts and circumstances of each particular case.

See also Luttrell v. Parker Drilling Co., 341 P.2d 244; Stephens v. Lundy, 172 Okl. 79, 44 P.2d 843.

The question then becomes what happens to the equipment if the lessee fails to remove within a reasonable time. This court has been unable to find any Oklahoma cases, and none were cited by the parties, on this particular point of law. However, the well-settled rule appears to be that if the machinery is not removed within a reasonable time after the termination of the lease, the equipment becomes the property of the landowner. See 4 E. Kuntz, A Treatise on the Law of Oil and Gas § 50.3 at p. 282 (1972); 3 W. Summers, The Law of Oil and Gas § 526 (1958). See also Pratt v. Gerstner, 188 Kan. 148, 360 P.2d 1101 (1961); Davis v. Howard, 276 S.W.2d 460 (Ky.1955); Wilson v. Wilson, 280 Ky. 461, 133 S.W.2d 722 (1939); Bain v. Graber, 271 Ky. 393, 112 S.W.2d 66 (1937).

There is, however, a split of authority on what legal theory to rely upon as the basis to transfer title from the lessee to the landowner when the lessee fails to remove equipment within a reasonable time. Some cases state that by failure to remove the equipment within a reasonable time, the lessee abandons such property. The abandoned property does not become the property of the person who is first to seize it. Rather, it becomes the property of the owner of the land which was covered by the lease and on which the equipment was located. Michaels v. Pontius, 83 Ind.App. 66, 137 N.E. 579 (Ind.1922); Spies v. DeMayo, 396 Ill. 255, 72 N.E.2d 316 (1947); R. Hemingway, The Law of Oil and Gas § 7.10 (1971).

However, casing in wells, derricks, engines and other machinery placed...