Jackson v. Denver Producing & Refining Co., 1598.

• Decision Date: 30 April 1938
• Docket Number: No. 1598.,1598.
• Citation: 96 F.2d 457
• Parties: JACKSON v. DENVER PRODUCING & REFINING CO. et al.
• Court: U.S. Court of Appeals — Tenth Circuit

96 F.2d 457 (1938)

JACKSON v. DENVER PRODUCING & REFINING CO. et al.

No. 1598.

Circuit Court of Appeals, Tenth Circuit.

April 30, 1938.

J. R. Keaton, of Oklahoma City, Okl. (Frank Wells and D. I. Johnston, both of Oklahoma City, Okl., on the brief), for appellant.

Stanley B. Catlett, of Oklahoma City, Okl., for appellee Denver Producing & Refining Co.

Leon Shipp, of Oklahoma City, Okl. (A. L. Jeffrey, of Oklahoma City, Okl., on the brief), for appellee Oklahoma City.

Before LEWIS, PHILLIPS, and BRATTON, Circuit Judges.

BRATTON, Circuit Judge.

Mary C. Jackson, a citizen of Florida, instituted this suit against Denver Producing & Refining Company, a corporation organized under the laws of Oklahoma, and the City of Oklahoma City, a municipality in Oklahoma. The purpose of the suit was to enjoin the Denver Company from drilling wells for oil and gas and from the production of such minerals upon lots B and D, amended plat of property of Oklahoma Cotton Compress Company, Southwestern Cotton Oil Company, and W. W. Bierce, in Oklahoma City; and to enjoin the city from issuing permits authorizing the drilling of wells for oil and gas upon any of the property described in Ordinance No. 4475.

The bill, filed June 29, 1933, alleged that plaintiff owned three lots in Military Addition to Oklahoma City with a two-story brick building thereon in which tenants conducted a wholesale business; that the lots and building were of the aggregate value of $60,000; that there were zoning ordinances in the city; that the property of plaintiff was within a wholesale and industrial zone; that blocks B and D were located a short distance from the property of plaintiff; that the Denver Company owned an oil and gas lease covering such property; that it had been located in a wholesale and industrial zone in which the drilling of wells for oil and gas was not permitted; that on June 9, 1933, the city council of the city purported and attempted to pass and the mayor approved Ordinance No. 4475, which undertook to extend the limits of zone U-7, an oil and gas district, to include blocks B and D; that an attempt to add an emergency clause to such ordinance failed for lack of sufficient votes; that on June 12th, certain citizens, taxpayers, and bona fide residents of the city filed with the clerk of such city a notice in writing of intent to hold a referendum upon such ordinance; that on June 13th, the council voted to reconsider the question of adding the emergency clause, and upon reconsideration voted to affix it; that on the following day the city issued to the Denver Company drilling permits authorizing the drilling of wells on such property; that the Denver Company had begun drilling operations and, unless restrained, it would continue and would secure or attempt to secure the production of oil and gas from such property; that such drilling operations and the production of oil and gas subjected and would in the future subject the property of plaintiff to the constant danger and hazard of destruction through explosion and fire; that because of such hazard, fire insurance companies were threatening to cancel and would cancel policies of insurance upon such property; that companies would refuse to write new policies or would greatly increase the rates; that cancellation of the insurance or inability to secure new insurance except at exorbitant rates would virtually destroy the value of the property for sale, rental, or other purposes; that it was fit exclusively for wholesale and industrial purposes; and that the acts of the Denver Company would render it worthless. The power of the council to add the emergency clause was challenged, and the validity of the ordinance was attacked on other grounds. The amended and supplemental bill, filed August 1, 1933, alleged that on July 10th, and within the time provided by law, a petition in due form and bearing the requisite number of signatures seeking a referendum on Ordinance No. 4475 was duly filed; and that by reason of the filing of the notice and the petition, the city lost jurisdiction of such ordinance and was without power to affix the emergency clause thereto. The validity of the ordinance was again attacked on other grounds.

On July 19, 1933, the defendants filed separate motions to dismiss the bill for the reason that it failed to state facts constituting a cause of action cognizable in equity; and on January 14, 1936, the city filed an amended motion to dismiss the bill and the amended and supplemental bill on substantially the same grounds, and for the additional reason that the cause of action had become moot because (1) on September 14, 1934, the city council passed and enacted Ordinance No. 4578, which was identical in all material respects with Ordinance No. 4475 except that it contained a repealing clause and an emergency provision which complied with the law; (2) the referendum on Ordinance No. 4475 was not submitted to the electors at the next succeeding general municipal election held after the filing of the petition, and by reason of the failure to submit it at that time the proceedings for referendum became void and Ordinance No. 4475 was thereafter valid; and (3) the city issued permits to the Denver Company and others to drill seventeen wells within the territory in question, five of which were on property owned by the city in fee; such wells were allowed to produce and large quantities of oil had been produced from them; the damages of which plaintiff complained had ceased to exist; and the questions involved had become moot.

The court entered an order of April 9, 1937, reciting that Ordinance No. 4578 was enacted on September 14, 1934; that no election had been held on the referendum; that wells had been drilled within the area; that the entire portion of the city in that area was then being developed for oil and gas; and that so far as the relief prayed for was concerned, the questions had become moot. The order concluded with a provision sustaining the motion, and in effect dismissing the action. Plaintiff appealed.

Section 5889, Oklahoma Statutes 1931, 34 Okl.St.Ann. § 53, provides that no ordinance or resolution of a municipality shall become operative until thirty days after its passage and approval unless it is passed over the veto of the executive officer, or unless it carries an emergency clause in a separate section adopted by a three-fourths vote of all members elected to the council taken by ayes and noes. Ordinance No. 4475 did not contain such a clause when it was enacted and approved on June 9th; and it has been expressly held by the Supreme Court of the state that the subsequent action of the council in attempting to fix it was a nullity, that the ordinance was subject to referendum, and that the petition for referendum was seasonably filed. State v. Pulliam, 168 Okl. 632, 37 P.2d 417, 96 A.L.R. 1294.

Article 18, section 4(b), of the Constitution of Oklahoma, provides that a petition for either the initiative or referendum in the government of a municipality shall be signed by qualified electors residing within such municipality equal in number to 25 per cent. of the total number of votes cast at the next preceding election; and section 4(d) provides that when such petition demands a referendum vote upon an ordinance other than the grant, extension, or renewal of a franchise, the chief executive officer shall submit such ordinance to the qualified electors of the municipality at the next succeeding general municipal election. These and other provisions in the Constitution relating to the right of the initiative and referendum are not self-executing; but at its first session after statehood the Legislature enacted a comprehensive statute carrying the reserved powers into effect. Ex parte Wagner, 21 Okl. 33, 95 P. 435, 18 Ann.Cas. 197; Atwater v. Hassett, 27 Okl. 292, 111 P. 802; Ex parte Griggs, 63 Okl. 138, 163 P. 325; Simpson v. Hill, 128 Okl. 269, 263 P. 635, 56 A.L.R. 706. It was alleged in the bill that the petition bore the requisite number of qualified electors, and the motions to dismiss necessarily admitted the allegation. It plainly was the...