McClure v. Watson, 3973
| Decision Date | 22 November 1971 |
| Docket Number | No. 3973,3973 |
| Parties | John H. McCLURE et al., Appellants (Defendants below), v. Murray C. WATSON and Louise Maxine Watson, Appellees (Plaintiffs below). |
| Court | Wyoming Supreme Court |
Harry E. Leimback, and Ronald W. Hofer, of Leimback, Aspinwall & Hofer, Casper, for appellants.
B. J. Baker, of Brown, Drew, Apostolos, Barton & Massey, Casper, for appellees.
Before McINTYRE, C. J., PARKER and McEWAN, JJ., and GUTHRIE, District Judge.
This case arises on an appeal by the defendants below, appellants here, from the granting of a summary judgment in favor of the plaintiffs below, the appellees here. These parties will be hereinafter referred to as they appeared in the original proceeding.
Plaintiffs filed an action to quiet title to certain lands in Natrona County on March 16, 1970. Thereafter the defendants filed an answer therein asserting an ownership and claim to the oil and gas upon said premises by virtue of and pursuant to an oil and gas lease dated March 1, 1967. It appears, however, that the oil and gas lease under which the answer asserted the claim was superseded by an oil and gas lease bearing date of June 1, 1967, and for the purposes of the argument on this motion it was the later lease and extensions under which defendants asserted their rights.
Inasmuch as the disposal of this matter is dependent upon the term of this lease and its extensions, the operative portions thereof are set out verbatim as follows:
The reference to the above-mentioned extension appears in the following clause:
'Anything herein contained to the contrary, is expressly agreed by the parties that if lessees drill an oil and gas well to the Tensleep formation within the primary term herein, this lease will extend to one (1) year from the date herein, it being understood that the Tensleep is approximately 4600 feet.'
The term of this lease, however, was extended and the conditions thereof changed by virtue of that certain instrument entitled 'THIRD EXTENSION AGREEMENT FOR OIL AND GAS LEASE,' being dated January 16, 1968, wherein it is recited as follows:
'* * * the Lessors hereby grant to the Lessees another extension of time from January 15, 1968 to May 1, 1968 and they shall have the opportunity to drill a second well provided the first well is drilled as contained in the lease herein, shall be extended from June 1, 1968 to September 1, 1968.'
The following facts are undisputed as they appear in the record: A well for oil was begun on said premises on or about April 10, 1968, and on May 3, 1968, was logged in the Phosphoria formation. An attempt was made to complete said well and put it on production in August of 1968. Some oil was produced and sold to the Rock Island Oil Company. There is nothing in the record showing the amount or the value thereof. The purchaser of said oil, Rock Island, required a ratification from the plaintiffs before payment could be made. Plaintiffs refused to execute such ratification. Thereafter defendants sought permission to deepen this first well through the Tensleep formation. Plaintiffs refused permission so to do on May 7, 1969. At the date of the filing of this suit the well was not in operation nor was oil being produced; nor were there any facilities to produce oil therefrom. On February 27, 1970, all pumps, tanks, and other personal property of the defendants at the well site were sold to satisfy liens which had been foreclosed. Plaintiffs received no payment for any oil by way of royalty, nor were they ever tendered a division order.
Defendants seek to avoid the termination of this lease upon two grounds, asserting that by reason of the refusal of the plainriffs to allow the deepening of said well through the Tensleep sand that they were deprived of an opportunity to develop the same to their profit. They further contend that by reason of the failure of the plaintiffs to execute the ratification required by the purchaser of the oil that the plaintiffs had violated certain express or implied covenants in said lease.
The defendants insist that there is a conflict of material fact in connection with these contentions which makes the granting of the summary judgment erroneous.
The affidavit of plaintiff Murray C. Watson states that he did nothing to prevent defendants from drilling to the Tensleep sand during the term of this lease. Defendants seek to counter this by the following which appears in the affidavit of John...
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