Marrs v. City of Oxford

• Decision Date: 27 February 1928
• Docket Number: 478.,No. 477,477
• Citation: 24 F.2d 541
• Parties: MARRS et al. v. CITY OF OXFORD et al. RAMSEY et al. v. SAME.
• Court: U.S. District Court — Panama Canal Zone

24 F.2d 541 (1928)

MARRS et al. v. CITY OF OXFORD et al.

RAMSEY et al. v. SAME.

Nos. 477, 478.

District Court, D. Kansas, Second Division.

February 27, 1928.

COPYRIGHT MATERIAL OMITTED

Amidon, Hart, Porter & Hook, of Wichita, Kan., for plaintiffs Marrs and others.

John J. Jones, of Chanute, Kan., and B. R. Leydig and K. M. Geddes, both of El Dorado, Kan., for plaintiffs Ramsey and others.

Noble, Ayres, McCorkle & Fair, of Wichita, Kan., for defendants.

McDERMOTT, District Judge.

These are bills in equity to enjoin the enforcement of a certain ordinance of the city of Oxford, Kan., and to adjudge and decree that said ordinance is unconstitutional and void. The ordinance was passed on June 20, 1927, and was published and effective on June 23, 1927. The bill in the Marrs Case was filed on September 8, 1927, and in the Ramsey Case on September 9, 1927. The plaintiffs in the Marrs Case allege that they are and have been for many years owners in fee simple of two lots in the city of Oxford, a tract of land 50 by 140 feet; that on June 29, 1927, they executed a lease on said property for the purpose of mining and operating such real estate for oil and gas. The plaintiffs in the Ramsey Case allege that they are owners of a tract of land in the city of Oxford, 20 feet by 170 feet, on which they have themselves drilled and completed a producing oil well at an expense of more than $20,000. The bill does not disclose whether such oil well was commenced before or after the passage of the ordinance whose validity is questioned. If such well was commenced, and a substantial expenditure made, prior to the passage of the ordinance, the plaintiffs as to this particular tract would stand in a different stead. The plaintiffs further allege that they are owners of block 24 in the city of Oxford, upon which they executed, on the 12th day of August, 1927, an oil and gas lease giving to the lessee the right to use said premises for the purpose of mining, operating for, and producing oil and gas.

The bills allege that the city of Oxford is a third-class city; that underlying the city is a valuable oil pool; that the value of the oil rights of the two 25-foot lots is approximately $100,000; that the oil in such pool is of a migratory character, and that one producing well will extract the oil within a distance of 400 or 500 feet from such well; that there were at the time of the filing of the bill more than 30 wells, either producing or drilling in the city of Oxford, or its immediate vicinity; that some of the wells producing or drilling would draw the oil from the premises of the plaintiffs, unless the enforcement of said ordinance was enjoined; that practically all of the blocks in the city are approximately 300 feet square; that the depth of the oil sand is from 2,000 to 2,100 feet; and that the cost of a single well is in excess of $20,000. In the Ramsey case it is alleged that other wells surround block 24, which will draw the oil from that block, unless a well is drilled upon such block. It is not alleged that any of the plaintiffs asked for a permit to drill as provided by the ordinance hereafter referred to.

It is alleged that the Roxana Petroleum Company, prior to the passage of the ordinance, procured an oil and gas lease executed by many persons who owned various lots and tracts in the city of Oxford, such lease providing that, regardless of the location of any well or wells that might be drilled upon any of the property covered by the community lease, each landowner should participate in all royalty payments in proportion to the acreage owned by him. It is alleged that the Roxana Petroleum Company, and its officers and agents, proposed the plan as set forth in Ordinance 512, and induced the officials of the city of Oxford to pass such ordinance. The bills allege that the drilling rigs in use are from 75 to 80 feet in height. It is also alleged that in the drilling of said wells, the plaintiffs are using and propose to use every available means to safe-guard against the hazard of fire and the care and disposition of refuse matter, and that the oil produced in such wells is transported beyond the city limits.

The ordinance in question, summarized, provides:

(1) That it shall be unlawful for any person to drill for oil or gas in certain described parts of the city without securing a permit from the city authorities.

(2) Within such territory, there shall only be one permit issued for one well in each block, unless more than one producing sand is found, in which case a permit may be granted for one well to each of the sands.

(3) Section 3 is as follows: "That in case a permit for the drilling of a well be issued to a person, persons, or corporation not holding oil and gas leases or drilling contracts with the owners of all the lots in the block, it shall be a condition of the permit that the permittee, its successors and assigns, shall deliver to the credit of each of such owners whose land shall not be under lease, free of cost, in the pipe line to which the well may be connected, a share of all oil produced and saved from such well, equal to one-eighth of the proportion of the whole production that the square feet of ground so owned bears to the square feet contained in such block, exclusive of the streets and alleys, and a like proportion of the proceeds of gas and casing head gas produced from the well and used off the premises."

(4) The drilling of any well within 150 feet of any street or railway track is prohibited.

(5) In case two parties apply for a permit to drill in a single block, both of whom are qualified, the permit shall go to that person who holds leases covering the greater area in the block; in case a permit is issued to persons who do not hold a lease or drilling contract from the owners of all of the land within the block, the owner of any unleased land and any person holding an oil and gas lease in such block shall have the right to share in the ownership and benefits of such oil or gas well in the proportion that the area of his land bears to the area in the block, by filing with the city clerk his election in writing to pay to the holders of the permit a proportion (based on land owned) of the total cost and expense of completing and operating said well, such election to be accompanied by a surety company bond guaranteeing the payment of his proportion of the cost of the operation of the well, in which case the landowner is entitled to his proportionate share of all the oil produced.

(6) No person shall drill in any street or alley of the city, or block or incumber any street or alley, without special permit from the city council.

(7) Procedural steps leading up to the permit are provided; the applicant shall provide copies of his leases and abstracts of title of the realty covered, pay an application fee of $100, and furnish a bond that the well will be promptly commenced and diligently prosecuted, and damage paid to the city or residents occasioned by the work. Power is reserved to refuse any application for a permit where, by reason of the location of the proposed well and the character and value of the permanent improvements already erected, on the block in question, or adjacent thereto, and the use to which the land and surroundings are adapted for civic purposes, or for sanitary reasons the drilling of a well would be a serious disadvantage to the city or its inhabitants as a whole.

(8) Provision is made for inclosing drilling rigs and equipping the same with fire extinguishers, where the rig is within 300 feet of a building. Storage of oil, except in a limited amount, is prohibited within the prescribed area.

(9) A permit shall terminate unless within 30 days of the date of the issue actual drilling operations shall commence, and the cessation of drilling operations for 30 days shall terminate it permanently.

(10) The permit shall not be construed as granting a right to occupy any property for the purpose of drilling, unless with the written consent of the owner of the land; the ordinance shall not limit or prevent any lot owner from contracting for any amount of royalty to be paid with reference to his own land, or for damages, rights, or privileges with respect thereto.

(11) All oil, gas, and water produced in the drilling operations shall be conveyed beyond the boundaries of the area described in section 1, excepting for temporary slush ponds.

(12) No permit shall extend for a period longer than 20 years.

(13) The violation of any of the terms of the ordinance, "whether herein denominated as unlawful or not," is made a misdemeanor, and upon conviction a fine is imposed, not exceeding $100. Each day of the continuance of any such violation shall be considered a separate offense, and be punishable separately, and any person, agent, or employee engaged in any such violation shall on conviction be so punished therefor.

The bills allege that the plaintiffs proceeded in disregard of such ordinance and that they and their employees were arrested and subjected to fines, and that, because of the provision that each day's violation was a separate offense, their remedy at law is inadequate, and that the only practical way of testing the validity of the ordinance is by the aid of a court of equity.

The bills further allege that the drilling of said wells does not and will not occasion any injury, damage, or inconvenience to any person or property, and that the plaintiffs are exercising all proper care in guarding against injury, damage, or expense to other property in the vicinity. It is alleged that the drilling of such wells is not detrimental to the health of the inhabitants of the city of Oxford, is not detrimental to the comfort of the inhabitants in the vicinity of said wells, and that such drilling is a lawful occupation and is not a nuisance.

The bills allege that the ordinance is void for uncertainty; because it creates an unlawful monopoly in favor of the Roxana...