Gypsy Oil Co. v. Cover
| Decision Date | 02 March 1920 |
| Docket Number | Case Number: 10916 |
| Citation | 1920 OK 94,78 Okla. 158,189 P. 540 |
| Parties | GYPSY OIL CO. v. COVER et al. |
| Court | Oklahoma Supreme Court |
¶0 1. Oil and Gas--Lease--Covering Separate Tracts--Construction--Production on One Tract--Effect.
Where an oil and gas mining lease covers 160 acres of land, and 120 acres thereof are contiguous and the other 40-acre tract is located one-half mile therefrom, and the lessee assigns the 40-acre tract and the assignee brings in a producing well producing oil and gas in paying quantities within the one-year period stipulated for in the lease and pays the royalties reserved to the owner of the land, which are accepted by such owner according to the terms of the lease, and the lease contains the stipulation "that this lease shall remain in full force for the term of five years from this date, and as long thereafter as oil and gas or either of them is produced therefrom by the party of the second part, successors or assigns," these facts do not make the lease a separate lease upon each tract of land, but the same remains a lease upon the entire 160 acres, and the drilling of such well on any portion thereof and the payment of the royalties extend the life of the lease upon the entire 160 acres.
2. Same--Estate of Lessee in Premises for Further Operations After Five-Year Term.
After gas was found upon the leased premises within five years from the date of the lease in paying quantities, the lessee thereby became vested with a limited estate in the leased premises for further operations in accordance with the terms of the lease.
3. Judgment--Persons Concluded -- Grantee of Land Not a Party.
A grantee of land is not bound by a judgment in an action, to which he is not a party, commenced against his grantor subsequent to the grant.
4. Oil and Gas--Suit to Cancel Lease--Trust Relation Between Lessee and Assignee.
Where a trust relation existed between the lessee in an oil and gas mining lease and a third person, as to one of the two tracts of land covered by the lease at the time the lease was executed by the lessors, and some time thereafter the lessee, upon the payment to it by the person for whose benefit the trust existed, of the bonus agreed upon, and at his request the lessor assigned the lease to such other, covering said tract, which assignment has been treated as valid by the lessee and the purchasers of the fee in the land covered by the lease, held, that such trust relation is not available to the purchasers of the fee as a ground for suit for the cancellation of the lease covering the other tract.
5. Same--Sufficiency of Evidence to Cancel Lease.
Where an oil and gas mining lease gave the lessee, his successors, or assigns, one year from date thereof to complete a well or pay at the rate of $ 160 in advance for each additional 12 months such completion was delayed, and providing that the completion of such well should operate as a full liquidation of all rent, during the remainder of the terra of the lease, which was for five years, and where the assignee of the lessee to a portion of the leased premises completed a well upon such portion within one year and such well continued to produce oil and gas in paying quantities and assignee continued to operate said well and pay the landowners the royalties reserved to them for the full term, and where the lessee neither drilled on the unassigned portion of the lease, nor paid delay money during the term, and some time after the term expired the landowner's brought suit to quiet the title to the unassigned portion of the premises, and asked that the lease as to such portion be forfeited for failure to drill and operate and develop the same, and where, upon the trial of the cause, the court announced as his findings "that the plaintiffs are the owners of the land and went in possession of the premises at the time of taking their deed, and have retained possession since that date," and entered a judgment in favor of the plaintiffs quieting their title to the premises and canceling the lease of the defendant, held, that from an examination of the record it clearly appeared that the plaintiffs alleged no facts nor offered proof of facts such as would be sufficient to authorize the court to cancel the lease for a breach of the implied covenants to diligently operate and develop the premises; that the demurrer of the defendant to the evidence of the plaintiffs should have been sustained; that the judgment of the trial court should be reversed and the cause remanded.
Error from District Court, Okmulgee County; Mark L. Bozarth, Judge.
Action by Charles Cover and George James against the Gypsy Oil Company. Judgment for plaintiffs, and defendant brings error. Reversed and remanded.
James B. Diggs and William C. Liedtke, for plaintiff in error.
W. W. Calhoun and George James, for defendants in error.
¶1 This is an appeal from the district court of Okmulgee county. On the 19th day of September, 1918, the defendants in error, Charles Cover and George James, as plaintiffs, commenced an action in the district court of Okmulgee county against the plaintiff in error, the Gypsy Oil Company, a corporation, as defendant, to quiet title to certain real estate situated in said county. For convenience, the parties will hereinafter be referred to as plaintiffs and defendant, respectively, as they appeared in the trial court.
¶2 The essential allegations of the plaintiffs' petition are as follows:
¶3 The defendant answered, claiming a valid oil and gas lease upon the premises, and deraigned title thereto from the heirs of Mary Harjo, deceased, the original allottee. The allegations of the defendant were, in effect, that said allottee died intestate leaving as her sole heirs her five children, three of whom, Ben Harjo, Cinda Harjo, and Saline Harjo, were adults; that Buzzy Harjo and Sarah Harjo, were minors; that each inherited an undivided one-fifth interest in said allotment; that prior to the execution of the defendant's lease to the entire allotment of 160 acres, said adult heirs had conveyed their interest in said allotment to Lewis Adams, Thomas Adams, Jr., and Wash Adams; and that thereafter on January 28, 1910, the Adamses, together with Thomas Adams, as guardian of Sarah Harjo and Buzzy Harjo, minors, and as administrator of the estate of Mary Harjo, deceased, executed to the defendant an oil and gas lease to the entire 160-acre allotment, which was duly approved by the county court of Okmulgee county on said date; and that thereafter defendant executed and delivered to George S. Davis a deed of assignment to the SE 1/4 of the SE 1/4 of section 5, township 14 north, range 12 east; and that thereafter the said George S. Davis assigned a three-fourths interest in said tract to the Producers Oil Company, which, in turn, afterward assigned the same to the Texas Company; and that prior to the expiration of one year from the date of said oil and gas lease, a producing well was completed upon the said tract by the Producers Oil Company and G. S. Davis, which had ever since been producing oil and gas in paying quantities, and had been operated for the production of oil and gas, and that the royalty reserved by said lease to the lessors upon the oil and gas produced upon said land had been paid to the plaintiffs and their predecessors according to the terms of the said oil and gas lease, and accepted by them, and that said assignees had paid, kept, and performed all of the conditions, covenants, and agreements provided in said lease, and that the defendant had a valid and subsisting leasehold estate covering the remaining 120 acres of said allotment, and that the same was in full force and effect. The defendant made copies of said conveyances exhibits to its answer.
¶4 The plaintiffs replied to said answer, admitting the allegations of the defendant except as to the validity of the lease upon the 120 acres sued for herein, alleging that the same was invalid, because (1) the defendant took title under its lease to the 40-acre tract as trustee only and in trust for one John J. McCrory, and when the defendant assigned the same to George S. Davis the trust and the purpose for which it was created ceased and terminated all the rights and interest held by the defendant, and on account thereof the defendant is estopped to claim any right, title, or interest to said 40 acre tract; and (2) the deeds from the adult heirs to the Adamses had been canceled by the district court of Okmulgee county in a certain action brought by said adult heirs against the Adamses for that purpose and alleging that no well had been completed on the 120 acres nor rentals paid thereon by the defendant.
¶5 Plaintiffs prayed that their title be quieted. To which reply the defendant interposed a demurrer, which being overruled, the defendant moved for a judgment upon the pleadings, which was overruled by the court, to each of which rulings the defendant saved exceptions.
¶6 Upon the issues thus joined, the cause was tried to the court. At the conclusion of the plaintiffs' testimony the defendant interposed a demurrer to the evidence, which demurrer was overruled by the court and exception saved by the defendant, whereupon the court made the following finding:
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