Jackson v. Twin State Oil Co.

• Decision Date: 24 July 1923
• Docket Number: Case Number: 12047
• Parties: JACKSON et al. v. TWIN STATE OIL CO. et al.
• Court: Oklahoma Supreme Court

1923 OK 542

218 P. 324

95 Okla. 96

JACKSON et al. v. TWIN STATE OIL CO. et al.

Case Number: 12047

Supreme Court of Oklahoma

Decided: July 24, 1923

Syllabus

¶0 1. Contracts--Time as of the Essence.

Section 5061, Comp. Stat. 1921, provides:

"Time is never considered as of the essence of a contract, unless by its terms expressly so provided."

Held, while no particular form of expression is required, nevertheless it must appear from the expressed provisions contained in such contract, independent of all extraneous matter or circumstances, that it was the intention of the parties thereto that time should be of the essence thereof.

2. Oil and Gas--Oil Lease--Forfeiture--Slight Delay in Paying Rental.

An oil and gas lease providing if no well be commenced on the land before the 1st day of March, 1918, the lessee on or before said date shall pay or tender to the lessor $ 60 a month in advance till royalty exceeds rental, which shall operate as rental for one month thereafter, and shall continue to pay a like sum each month in advance until a well is commenced on said premises, but containing no forfeiture, held, time is not of the essence, and that a slight delay in making the fourth monthly payment due under the contract did not forfeit or terminate the contract.

3. Courts--Stare Decisis--Forfeiture of Oil Leases.

Where the decisions of the court of last resort have been accepted and acted upon as the correct interpretation of the law for a long period of time, courts are slow to interfere with principles announced in the former decisions, and often uphold them even though they would decide otherwise were the question a new one.

But a party who obtains an oil and gas lease, with notice of an existing lease, cannot successfully invoke the doctrine of stare decisis on the assumption that the lessors in the existing lease had the right to declare a forfeiture, under a rule of construction adopted by the Supreme Court construing the provisions of a lease contract in some respects, but not in all, similar to the one which the lessors attempted to declare forfeited, in order to execute another lease to such party.

4. Constitutional Law--Due Process of Law--Impairment of Contract--Change in Judicial Decisions.

The obligation of a contract must have been impaired by some constitutional or statutory provision to be within the prohibition of section 1 of the 14th Amendment of the Constitution of the United States. A change of judicial decisions is not violative of this constitutional provision.

5. Estoppel--Estoppel by Conduct--Right to Invoke.

The doctrine of estoppel by conduct is an equitable doctrine and is not available to a party guilty of inequitable conduct in reference to the transaction in which he invokes its application.

Record examined and held, that the judgment of the trial court be reversed.

Error from District Court, Pawnee County; Redmond S. Cole, Judge.

Action by S. G. Jackson et al. against the Twin State Oil Company, a corporation, et al., for cancellation of oil and gas lease and accounting. Judgment for defendants, and plaintiffs bring error. Reversed and remanded, with directions.

C. L. Pinkham, W. S. Cline, and William H. Cline, for plaintiffs in error.

J. A. McCollum, C. C. McCollum, and W. J. Gregg, for defendants in error.

KENNAMER, J.

¶1 This is an action brought by the plaintiffs against the defendants, A. J. Moore and Maggie Moore, Twin State Oil Company, a corporation, and Carl D. Smith, in the district court of Pawnee county, for the cancellation of a lease given by the said Moores to the Twin State Oil Company, a corporation, on the 3rd day of June, 1918, for an accounting with the Twin State Oil Company for production on said land, and for a confirmation of the plaintiffs' said lease as against all of the defendants. The plaintiffs in error were the plaintiffs below, and the defendants in error the defendants below.

¶2 The court found all of the issues made by the pleadings in favor of the defendants and entered judgment denying the plaintiffs any relief. This appeal is prosecuted by S. G. Jackson et al., plaintiffs in the trial court, to reverse the judgment therein entered.

¶3 This case was before the Supreme Court of this state in the same styled case, No. 10901, 79 Okla. 59, 191 P. 590, on an appeal taken by the plaintiffs against the defendants from a judgment of the district court of Pawnee county sustaining the demurrer to the plaintiffs' petition and dismissing plaintiffs' cause of action, wherein this court held that the plaintiffs' petition stated a cause of action and that the district court committed reversible error in sustaining the general demurrer to the petition.

¶4 Upon the trial of this case the material facts shown of record are, briefly, as follows: On the 12th day of October, 1917, the lessors, A. J. Moore and wife, were the owners of 80 acres of land in Pawnee county, state of Oklahoma, and on said date the said Moores executed to S. G. Jackson, one of the plaintiffs in error, an oil and gas lease on the said 80 acres of land in consideration of a bonus of $ 1,200; and said oil and gas lease was deposited in escrow in the First State Bank of Terlton, Okla., until the said bonus was paid. The said oil and gas lease was prepared by one Wesley Jackson, an employe of the said First State Bank of Terlton, and acting at the time for the defendants Moore and Moore, and at the request of Moore and Moore, the said Wesley Jackson being in no way related to the said S. G. Jackson, one of the plaintiffs in error.

¶5 At the time of the execution of the said lease (October 12, 1917) the lessee paid the lessors $ 100 and agreed to pay the balance of the $ 1,200 in 60 days. At the expiration of the said 60 days the lessee secured an extension of 30 days and paid the lessors at the same time another $ 100, leaving a balance of $ 1,000 to be paid lessors on or before January 12, 1918. The lessee on January 18, 1918, six days after the 30 days had expired, secured a further extension until March 1, 1918, paying the lessors at the time another $ 100, leaving a balance to be paid lessors of $ 900.

¶6 On the 28th day of February, 1918, the lessee paid the lessors the balance due on the bonus of $ 900 and at the same time paid the lessors the March rental of $ 60. At the same time, February 28, 1918, and for the first time, the said lease, which had remained in the custody of the bank at Terlton until the total of the bonus was paid, was delivered to the lessee (Jackson). The first rental due under the terms of the lease was paid, as before stated, on February 28, 1918, as and for the month of March, 1918. The monthly rentals for April and May, 1918, were deposited in the post office for remittance to the Pawnee County State Bank, designated in the lease contract as the depository bank, on the 1st day of each month, reaching the bank on the next day, or the 2nd of the month. The fourth payment for the month of June was mailed to the bank at Drumright on the 3rd day of June, 1918, and reached the bank on the 4th day of said month. The cashier of the bank, Mr. E. L. Epperson, notified Mr. Jackson that the Moores would not accept the payment for June and had declared said lease forfeited, and made and executed another lease to other parties.

¶7 The material provisions of the Jackson lease involved in the action are as follows:

"It is agreed that this lease shall remain in force for a term of five years from this date, and as long thereafter as oil or gas, or either of them, is produced from said land by the lessee, unless the same is sooner surrendered by lessee, and that the consideration above stated is paid and accepted as a good and sufficient consideration for each and every right or privilege granted to lessee herein, including the right to pay rental in lieu of drilling wells and the right to surrender this lease as hereinafter provided.

"If no well be commenced on said land on or before the 1st day of March, 1918, the lessee on or before said date shall pay or tender to the lessor, or deposit to the lessor's credit in the First State Bank at Terlton, Oklahoma, or its successors, which shall continue as the depository regardless of changes in the ownership of said land, the sum of sixty dollars a month in advance till royalty exceeds rental, which shall operate as rental for one month thereafter, and shall continue to pay a like sum each month in advance until a well is commenced on said premises. * * *

"Lessor hereby agrees that the deposit by lessee of a valid bank check or draft in any United States post office duly registered and addressed to the lessor, heirs, assigns or legal representatives, or the bank above named, shall be and constitute a good and sufficient tender of any sum which may become due under this lease. * * *

"The lessee shall have the right at any time, on the payment of a sum equal to one-fourth of the annual rental as hereinabove provided to the lessor, to surrender this lease for cancellation, after which all payments and liabilities thereafter to accrue under and by virtue of its terms shall cease and determine; provided, this surrender clause and the option therein granted to the lessee shall cease and become absolutely inoperative immediately and concurrently with the institution of any suit in any court of law or equity by the lessee to enforce this lease, or any part of its terms or to recover possession of the leased land, or any part thereof, against or from the lessor, their heirs, executors, administrators, successors or assigns or any other person or persons."

¶8 It appears from the findings of fact made by the court that the plaintiffs learned of the execution of the lease by the Moores to the Twin State Oil Company on or about the 6th day of June, 1918. The Twin State Oil Company took possession of the leased premises in February, 1919, and was developing the lease by drilling for oil and gas, and by said operations it was ascertained some time...