Mohoma Oil Co. v. Ambassador Oil Corp.

• Decision Date: 08 September 1970
• Docket Number: No. 42559,42559
• Citation: 474 P.2d 950,1970 OK 161
• Parties: MOHOMA OIL COMPANY, a Corporation, Plaintiff in Error, v. AMBASSADOR OIL CORPORATION, a Corporation, Sinclair Oil & Gas Company, a Corporation, Tri-Cities Gas Corporation, a Corporation, and Anadarko Production Company, a Corporation, Defendants in Error.
• Court: Oklahoma Supreme Court

Page 950

474 P.2d 950

MOHOMA OIL COMPANY, a Corporation, Plaintiff in Error, v. AMBASSADOR OIL CORPORATION, a Corporation, Sinclair Oil &amp Gas Company, a Corporation, Tri-Cities Gas Corporation, a Corporation, and Anadarko Production Company, a Corporation Defendants in Error.

No. 42559.

Supreme Court of Oklahoma.

Sept. 8, 1970.

As Corrected Sept. 9, 1970.

Syllabus by the Court

1. Where a pleading is challenged by demurrer, its language, where doubtful, will be construed against the pleader upon the ground that, as he selects the language, he should make his meaning clear.

2. A demurrer to a petition admits all facts well pleaded together with all inferences which may be reasonably drawn therefrom, but the demurrer does not admit facts which are not pleaded, or conclusions of fact or law which are not supported by the allegations of evidentiary facts in the petition.

3. Fraud is never presumed, but it must be affirmatively alleged and proven by the party who relies upon it, and cannot be inferred from facts which may be consistent with honesty of purpose.

4. The requirement, that leave be secured from the appointing court before making a receiver a defendant, may be waived by him by defending in such suit without objection, or by intervening therein in behalf of his trust.

5. Specific statements of facts as the basis of a cause of action control general statements, whether they be or be not regarded as conclusions of law.

6. Adverse possession of minerals must be open, visible, continuous, and exclusive, with claim of ownership, such as will notify persons seeking information upon the subject that the same are not held in subordination to any claim of others, but against all titles and claimants.

Appeal from the District Court of Latimer County; George Windham, Judge.

Action by Mohoma Oil Company, Inc., (formerly Limestone Oil and Gas Company) to establish ownership and to quiet title to oil and gas leases, and in the alternative to recover damages for loss of such leases. Lower court sustained demurrers to plaintiff's four causes of action. Plaintiff appeals. Affirmed.

Leslie L. Conner, James M. Little, Leslie L. Conner, Jr., and Gordon Quilter, Oklahoma City, for plaintiff in error.

C. Harold Thweatt, of Crowe, Dunlevy, Thweatt, Swinford, Johnson & Burdick, Oklahoma City, for defendants in error Ambassador Oil Corp. and Anadarko Production Co.

Rex Short, Ted Foster, Jr., Tulsa, Hicks Epton, of Horsley, Epton & Culp, Wewoka, for defendant in error Sinclair Oil & Gas Company.

J. Jerry Dickman, of Martin, Logan, Moyers Martin & Conway, Tulsa, for defendant in error Tri-Cities Gas Corp.

DAVISON, Justice.

This action was originally commenced in the District Court of Latimer County, on December 31, 1962, by plaintiff, Mohoma Oil Company, Inc., (formerly Limestone Oil and Gas Company) against defendants, Ambassador Oil Corporation, et al. Plaintiff Mohoma filed an amended petition, and later filed a second amended petition, and on January 16, 1967, the court sustained demurrers to the second amended petition.

Plaintiff Mohoma, with permission of the court, then filed a third amended petition against defendants, Ambassador Oil Corporation; Anadarko Production Company (successor to all of the assets of Ambassador); Sinclair Oil and Gas Company, and Tri-Cities Gas Corporation. The court sustained said defendants' general demurrers to this third amended petition and dismissed the action when plaintiff elected to stand upon that amended petition. Plaintiff Mohoma appeals from this order.

We will refer to the parties in accord with their status in the district court, or by name. The plaintiff Mohoma is successor, by change of name, to Limestone Oil and Gas Company, and our use of either name refers to the same corporate entity.

Plaintiff's lengthy petition with numerous exhibits, is divided into four causes of action in which plaintiff attempts to allege facts and circumstances sufficient to sustain its claim that it was the owner of oil and gas lease rights in certain lands in Latimer County, or that it was entitled to be compensated for the loss thereof resulting from claimed illegal acts on the part of certain of the defendants. The circumstances common to all four causes of action began with the execution of an oil and gas lease dated February 18, 1927, herein referred to as the McMurray lease. This lease was acquired by Limestone Oil and Gas Company in 1927. It covered 920 acres located in parts of Sections 10, 11, 14 and 15 (including the Southwest Quarter of Sec. 15), all in Township 5 North, Range 18 East of I.M., in Latimer County, Oklahoma. The lease provided that a well would be commenced within 120 days and pursued with diligence, and that it would remain in force for a term of five years, and as long thereafter as oil and gas, 'or either of them, is produced from said land by the lessee.' Limestone commenced and drilled a gas well in the SW 1/4 of SW 1/4 of Sec. 15, under authority of the lease. Thereafter, on November 25, 1933, in an action brought by Oklahoma Pipe & Steel Company in the District Court of Hughes County, the court appointed a receiver for Limestone with instructions to collect, control, and manage the assets of Limestone.

With the situation in this status and by reason of alleged subsequent events the plaintiff then undertakes to allege four causes of action, which are in effect requests for alternative relief. However, it is obvious from our later discussion that there is considerable conflict, both as to theory and controlling facts, between the causes of action. In the first cause of action the plaintiff asserts ownership of an oil and gas lease on the West Half of the Southwest Quarter of Section 15 by virtue of an alleged subsequent lease known as the 'Wood's lease.' In its second cause of action plaintiff asserts it owns the oil and gas lease rights under the original McMurray lease to the extent of a described 740 acres, including the Southwest Quarter of Section 15. In the third cause of action the plaintiff claims to own oil and gas lease rights in the same 740 acres, based on the theory of acquisition by adverse possession of such mineral interests. In a fourth cause of action the plaintiff alternatively seeks a money judgment against the defendants on the ground that they conspired and prevented plaintiff from protecting and preserving its interests in the above described oil and gas leases.

Plaintiff's first cause of action, relative to owning the Wood's oil and gas lease on the W 1/2 of SE 1/4 of Sec. 15, alleges that this lease was the result of a contract, duly approved by the District Court of Hughes County, dated July 13, 1936, between Limestone and the receiver (first party) and Roy Wood (second party), and that 'the lease was executed and delivered to Limestone and is referred to as the Wood lease.' A copy of the contract is attached as an exhibit. No copy of this Wood's lease is attached as an exhibit and there is no allegation that it was recorded in Latimer County. The only provisions of the Wood's lease disclosed by the allegations and the contract are that, after Limestone and the receiver perform certain conditions, Wood will execute to Limestone a 10 year commercial oil and gas lease with the usual one-eighth royalty and $1.00 per acre delay rental on the W 1/4 of the SW 1/4 of Sec. 15, and a similar lease upon 110 acres in Sec. 11.

The contract reflects that the 'conditions,' preliminary to Wood executing the leases, require that Limestone and the receiver will first assign the McMurray lease to Wood, in so far as it covers a described 730 acres thereof (not including the W 1/2 of SW 1/4 of Sec. 15), and also procure assignments of all unit holders' interests therein, and also an assignment to Wood of interests in the McMurray lease that had been previously assigned to Limestone. The contract also provides that, upon execution of the leases by Wood, the first party (Limestone and the receiver) will release the McMurray lease covering the W 1/4 of SW 1/4 of Sec. 15 (80A) and also the 110 acres in Sec. 11.

At this point we comment, in view of the allegation that Wood executed and delivered the lease to Limestone on the W 1/2 of SW 1/4 of Sec. 15, that it must be concluded that the other terms of the contract were performed, and therefore the McMurray lease was assigned to Wood to the extent described, and further that the McMurray lease was released as to the W 1/2 of SW 1/4 of Sec. 15. We further comment that this state of affairs conflicts with plaintiff's claim in its second cause of action that it owns oil and gas lease rights in 740 acres of the McMurray lease, including the W 1/2 of SW 1/4 of Section 15.

Plaintiff further alleges in its first cause of action that from prior to 1946 and until May 15, 1962, some party in behalf of plaintiff has been in possession of the Wood's lease and has produced gas from the well located thereon; and that its receiver was in possession until March 22, 1954, when the receivership was terminated and an order was made in the Hughes County receivership action whereby the 'Wood lease,' to the extent of the SW 1/4 of SW 1/4 of Sec. 15, was 'sub-leased' to the defendant Tri-Cities Gas Corporation, subject to the provisions of said order. A copy of this order is attached as an exhibit to the third amended petition. The order reflects that Tri-Cities had intervened in the receivership action for the purpose of presenting or collecting some 'claims and demands' from Limestone, that while the matter was being tried Limestone and the receiver and Tri-Cities agreed to a settlement of these claims and demands, and that the court made an order describing and directing the terms and manner in which the claims of Tri-Cities were to be satisfied.

The order decreed that Tri-Cities '* * * shall take as its sole and separate property, the gas well known as the McMurray Well, together with that portion of the oil...