Kingwood Oil Co. v. Hall-Jones Oil Corp.

• Decision Date: 27 October 1964
• Docket Number: No. 40563,HALL-JONES,40563
• Citation: 396 P.2d 510,1964 OK 231
• Parties: KINGWOOD OIL COMPANY, a Corporation, Plaintiff in Error, v.OIL CORPORATION, a Corporation, Defendant in Error.
• Court: Oklahoma Supreme Court

Page 510

396 P.2d 510

1964 OK 231

KINGWOOD OIL COMPANY, a Corporation, Plaintiff in Error, v. HALL-JONES OIL CORPORATION, a Corporation, Defendant in Error.

No. 40563.

Supreme Court of Oklahoma.

Oct. 27, 1964.

Syllabus by the Court

1. The District Court has jurisdiction in all cases, civil or criminal, except where exclusive jurisdiction is conferred on some other court by the Constitution or by statute.

2. 52 O.S.1961 § 87.1, does not confer upon the Corporation Commission jurisdiction to try an action for damages sounding in tort.

Appeal from the District Court of Oklahoma County; Clarence Mills, judge.

Action by plaintiff, Kingwood Oil Company, against defendant, Hall-Jones Oil Corporation, for damages resulting from the drilling of an oil or gas well by defendant. From a judgment sustaining the defendant's plea to the jurisdiction and dismissing the case, the plaintiff appeals. Reversed and remanded.

Robinson, Robertson & Barnes, by T. Murray Robinson and William N. Christian, Oklahoma City, for plaintiff in error.

Monnet, Hayes, Bullis, Grubb & Thompson, Oklahoma City, for defendant in error.

JACKSON, Justice.

In the trial court, plaintiff Kingwood Oil Company sued the defendant, Hall-Jones Oil Corporation, for damages resulting from the drilling of a well by Hall-Jones. Hall-Jones filed a Plea to the Jurisdiction which was sustained and the case was dismissed. Kingwood appeals.

From the allegations in the pleadings and undenied statements in the briefs of the parties, it appears that a certain Section 5 in Dewey County, Oklahoma, was included in an ordinary well drilling and spacing order of the Corporation Commission (No. 49779) calling for 640 acre drilling and spacing units for gas and gas condensate, and making each governmental section a separate drilling and spacing unit, with the 'permitted well' to be located within 1250 feet of the center of the unit. Kingwood owned all the leasehold interest on the west half of said section, and Hall-Jones owned a lease or leases on 'other parts' of the section. About 3 months after the spacing order was entered, Hall-Jones, without a voluntary pooling agreement with Kingwood and the other lessees, if any, and without a compulsory pooling order from the Corporation Commission, drilled a well on a 'permitted location' on the west half of the section, which was completed as a dry hole.

After pleading the facts substantially as above, Kingwood alleged in its petition:

'That after drilling said oil or gas well as aforesaid, the said defendant, Hall-Jones Oil Corporation, did publish its report that said well was non-productive of oil or gas, and was dry and abandoned.

'That by reason of the actions of the defendant, Hall-Jones Oil Corporation, hereinabove set forth, the plaintiff, Kingwood Oil Company, has sustained actual damages in the sum of $31,960.00, the same being the amount of the depreciation of the reasonable value of plaintiff's oil and gas leasehold estate in and to said W/2 of Section 5, Township 17 North, Range 17 West, in Dewey County, Oklahoma, resulting from said defendant's acts as aforesaid.'

The petition concluded with a prayer for damages in the amount of $31,960.00, with interest.

The Plea to the Jurisdiction thereafter filed by Hall-Jones was in pertinent part as follows:

'Order No. 49779 of the Oklahoma Corporation Commission specifically provides in part as follows:

"9. That in the event there are divided or undivided interests within any unit and the parties are unable to agree on a plan for the development of the unit, then their rights and equities shall be adjudicated by the Commission as provided for by subsection d, Section 87.1, Title 52, 1951 O.S.A.'

'Under the terms of said order and under the provisions of Title 52, Okla. Stat., 1961, Sec. 87.1, the exclusive jurisdiction to determine the rights and obligations of lessees within the drilling and spacing unit is vested in the Oklahoma Corporation Commission. This Court is without jurisdiction of the subject matter.

'The defendant, therefore, moves the Court to dismiss this action for lack of jurisdiction.'

In his order sustaining this plea and dismissing the case, the trial judge made it clear that he considered exclusive jurisdiction of this matter to lie with the Corporation Commission under 52 O.S.1961 § 87.1.

In the Hall-Jones brief on appeal, the following portion of 52 O.S.1961 § 87.1(d) is quoted in support of the proposition that the Corporation Commission has exclusive jurisdiction of this controversy:

'* * * Where, however, such owners have not agreed to pool their interests, and where one such separate owner has drilled or proposes to drill a well on said unit to the common source of supply, the Commission, to avoid the drilling of unnecessary wells, or to protect correlative rights, shall, upon a proper application therefor and a hearing thereon, require such owners to pool and develop their lands in the spacing unit as a unit. All orders requiring such pooling shall be made after notice and hearing, and shall be upon such terms and conditions as are just and reasonable and will afford to the owner of such tract in the unit opportunity to recover or receive without unnecessary expense his just and fair share of the oil and gas. The portion of the production allocated to the owner of each tract or interests included in a well spacing unit formed by a pooling order shall, when produced, be considered as if produced by such owner from the separately owned tract or interest by a well drilled thereon. Such pooling order of the Commission shall make definite provisions for the payment of cost of the development and operation, which shall be limited to the actual expenditures required for such purpose not in excess of what are reasonable, including a reasonable charge for...