Preston v. Kaw Pipe Line Co.
| Citation | 113 F.2d 311 |
| Decision Date | 09 August 1940 |
| Docket Number | No. 2142.,2142. |
| Parties | PRESTON v. KAW PIPE LINE CO. et al. |
| Court | U.S. Court of Appeals — Tenth Circuit |
O. B. Martin, of Blackwell, Okl., and W. N. Stokes, of Oklahoma City, Okl. (Albert L. Orr, of Medicine Lodge, Kan., on the brief), for appellant.
A. W. Hershberger and George Stallwitz, both of Wichita, Kan. ( , for appellees.
Before PHILLIPS, BRATTON, and HUXMAN, Circuit Judges.
Ben Preston filed this action in the District Court of the United States for the District of Kansas, December 30, 1938, against two hundred eight defendants, seeking to be declared the equitable owner of certain oil and gas leases covering approximately four townships of land in Russell County, Kansas. The defendants include the owners of the real estate covered by the leases, certain owners of subsequent leases, and oil companies owning and operating producing wells on some of the property. The essential allegations of the petition are: That prior to June 25, 1921, the defendant land owners induced the Focks Drilling and Manufacturing Company to agree to drill an oil and gas well on this block of acreage; that the leases were executed by the defendant land owners to the Focks Drilling and Manufacturing Company and were placed in escrow in the Bunker Hill State Bank; that by the terms of the escrow agreement the leases were to be retained in the bank until the Focks Drilling and Manufacturing Company had erected a derrick, placed machinery on the premises, and spudded in a test well, at which time they were to be delivered to it; that the leases and the drilling agreement were assigned to plaintiff; that a well was spudded in while the escrow agreement was in full force; that the bank refused to deliver the leases to plaintiff but returned them to the land owners, who thereafter gave leases to other persons; that the action of the land owners and the escrow agent has prevented plaintiff from completing the test well.
The prayer of the complaint was that plaintiff be decreed to be the equitable owner of the oil and gas rights under all of the original oil and gas leases on all the real estate covered thereby; that the defendant owners be required to execute new leases to plaintiff; that the defendants now holding leases on the land be decreed to be trustees for plaintiff; and that the defendants who have produced oil or gas from any of the premises be required to account to plaintiff for the same.
Motions were filed to dismiss the bill of complaint on the ground that it failed to state a cause of action, because the alleged cause of action was barred by the Statute of Limitations. The motions to dismiss were sustained on the ground that the cause of action was barred by the Statute of Limitations and by laches, and judgment was entered for defendants and against plaintiff, from which judgment this appeal is taken. The parties will be referred to as they appeared in the court below.
The admitted facts show that prior to January 25, 1921, a large block of oil and gas leases was assembled in Russell County, Kansas, covering approximately four townships. The leases were five year leases, providing by their terms that they were to expire five years from date unless oil and gas was then being produced on the premises. The Focks Drilling and Manufacturing Company was grantee in the leases. An escrow agreement was executed by the Focks Drilling and Manufacturing Corporation, and the Bunker Hill State Bank, wherein it was provided that the leases should be placed in escrow with the bank, that drilling operations should be undertaken within ninety days from the time the block was completed and should be continued until the completion of the well; that the escrow agent was to keep possession of the leases until a derrick was erected, machinery placed on the premises, and a well spudded in, when the leases were to be delivered to the Focks Drilling and Manufacturing Company. March 4, 1924, the Focks Drilling and Manufacturing Company assigned all its interest in the escrow agreement to plaintiff, Ben Preston. April 2, 1924, the Bunker Hill State Bank filed its petition in the District Court of Russell County, Kansas, against the Focks Drilling and Manufacturing Company and other defendants. This case was removed to the District Court of the United States and was dismissed on the 22nd day of June, 1926. It does not appear from the record what the nature of this suit was or who all the...
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