Godfrey v. McArthur
| Decision Date | 26 September 1939 |
| Docket Number | 28576. |
| Citation | 96 P.2d 322,186 Okla. 144,1939 OK 335 |
| Parties | GODFREY v. McARTHUR et al. |
| Court | Oklahoma Supreme Court |
Rehearing Denied Dec. 5, 1939.
Syllabus by the Court.
1. Oil and gas leases on lands located in Oklahoma City are made subject to the delegated police powers of the city to regulate and control the manner in which the same shall be operated, and all valid ordinances become a part of the lease contract as if written therein.
2. Where an oil and gas lease upon land located in Oklahoma City provides that the same shall remain in force as long as oil or gas is produced from the leased premises, and thereafter by order of the city authorities a portion of said land is annexed to a drilling block and production is had from said block and is participated in by the lessor, the lease on the entire tract therein described will be preserved throughout the period of such production, subject to the covenants contained in the lease.
3. A contract to perform an act which is not per se of evil design but which is prohibited by an existing statute, and by its terms contemplates the future legalization of such act, is not of that illegal character which renders it unenforceable in the courts after the act aforesaid is made legal.
4. Record examined. Held: there was ample evidence to show breach of contract to drill oil and gas well and resulting damages.
Appeal from District Court, Oklahoma County; Clarence Mills, Judge.
Action by D. V. Godfrey against R. A. McArthur and others, for breach of contract to drill oil and gas well. From a judgment for defendants, plaintiff appeals.
Reversed and remanded with directions.
J. D Lydick, R. F. Barry, and W. F. Collins, all of Oklahoma City for plaintiff in error.
Everest McKenzie & Gibbens and J. Forrest McCutcheon, all of Oklahoma City for defendants in error.
Plaintiff in error brought this action in the district court of Oklahoma county against defendants in error to recover damages for breach of contract to drill an oil and gas well. The parties in error will be designated as plaintiff and defendants, respectively, or by name.
Demurrers to plaintiff's evidence were sustained and judgment rendered for defendants dismissing the action.
The evidence as produced under the issues discloses that on May 1, 1930, J. C. Pearson executed an oil and gas lease covering two parcels of land in Oklahoma City to one Holmes who soon thereafter assigned to the plaintiff. For convenience the parcels are referred to as tracts No. 1 and No. 2.
On January 5, 1931, the plaintiff and his lessor Pearson joined in a contract with other parties whereby tract No. 1 was communized with other parcels for the purpose of drilling a well. By assignment the defendant McArthur became lessee of this community block and on June 9, 1931, completed a producing oil well thereon. Tract No. 2 was not included in this block and did not participate in the production from the well.
Under written contract of September 9, 1931, plaintiff agreed to assign to McArthur his lease on tract No. 2, along with leases on certain adjacent parcels, for a consideration of $7,500 to be paid when the particular area should be zoned by city authorities for oil and gas development and permit to drill thereon issued, and the further consideration of $32,500 to be paid out of one-fourth of the oil as produced. McArthur agreed to use due diligence in having the land brought into a drilling zone and in obtaining a permit as aforesaid. This contract is the subject of the present controversy.
Under date of June 9, 1933, the city passed ordinance No. 4475 zoning the territory in question for oil and gas. The emergency clause in the ordinance failed of passage and certain parties sought a referendum. Considerable legal controversy arose over the sufficiency of the referendum petition. The action of the city clerk in sustaining a protest of said petition found its way to this court where the matter was pending at the time of trial of this case. However, an ordinance, No. 4578, bearing the emergency and embodying the same provisions as No. 4475, was enacted September 14, 1934.
In 1933, subsequent to the passage of ordinance No. 4475 and prior to the enactment of No. 4578, McArthur procured a drilling permit from the city board of adjustment, but, dissatisfied with the action of the board in annexing certain adjacent parcels to his block, he appealed to the district court in due course where his contentions were sustained and permit ordered to issue to him. That judgment became final in January 1934, and the defendants thereupon paid plaintiff the $7,500 above mentioned.
The contract provided that McArthur commence drilling operations on the block of leases within sixty days after permit was issued, and complete the same with due diligence. In event McArthur was unable to secure a permit from the city or from the district court he was given the privilege of appealing to the Supreme Court or to reassign the leases to the plaintiff, in which event the parties were to be released from the contract.
Plaintiff made numerous demands upon defendants to commence the well and defendants promised to commence operations. Defendants failed, however, to drill, and retained the leases until January 15, 1936, when they were reassigned to plaintiff.
Large quantities of oil had been taken by defendants and others from the lands adjacent to the tract in question but by 1936 the sand was no longer productive.
Plaintiff charges breach of the contract and seeks damages in the sum of $32,500.
Defendants say the demurrers were properly sustained for the reason first, that plaintiff's lease on...
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