Prowant v. Sealy
| Decision Date | 28 October 1919 |
| Docket Number | Case Number: 10095,Case Number: 9046 |
| Citation | 187 P. 235,77 Okla. 244,1919 OK 304 |
| Parties | PROWANT et al. v. SEALY et al. |
| Court | Oklahoma Supreme Court |
¶0 1. Oil and Gas--Lease--Construction.
The paramount rule in the interpretation of contracts, which is to ascertain the intention of the parties and give effect to the same, if it can be done consistently with legal principles, is applicable to an oil and gas lease.
2. Contracts--Construction.
The intention of the parties must be deduced from the entire agreement, not from any part or parts of it, and where a contract has several stipulations, the intention of the contracting parties is not expressed by any single clause or stipulation, but by every part and provision in it, which must all be considered together, and so construed as to be consistent with every other part.
3. Same.
Where a contract is ambiguous, the true intention of the parties, if it can be ascertained therefrom, prevails over verbal inaccuracies, inapt expressions, and the dry words of the stipulation.
4. Same.
The court must place itself, as far as possible, in the position of the parties when the contract was entered into, and consider the instrument itself as drawn, its purpose and the circumstances surrounding the transaction, and, from a consideration of all these elements, determine upon what sense or meaning of the terms used the minds of the contracting parties actually met.
5. Same.
Under section 951, Rev. Laws 1910, providing that the whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the others, an interpretation of a clause, even if not clearly obvious, must be adopted in preference to a construction which would not give ally effect to it.
6. Same--Ambiguity.
If the contract is ambiguous or uncertain, and the intention of the parties is not clearly ascertainable from the instrument itself, the court may determine its proper interpretation and the construction from evidence adduced at the nearing showing the circumstances under which it was made, and the subject-matter to which it relates may be considered, and with these aids. the court should so interpret the contract as to give effect to the mutual intention of the parties as it existed at the time of contracting so far as that intention is ascertainable and lawful.
7. Same--Practical Construction.
Where a contract, or any clause thereof, is uncertain and indefinite and the parties thereto, by their subsequent conduit or acts, have construed it, and such construction is within the purview of the language used, the courts will ordinarily adopt as controlling the construction made by the parties themselves.
8. Appeal and Error -- Evidence -- Sufficiency.
In an equitable action the findings of fact of the trial court will be sustained unless they are clearly against the weight of the evidence.
9. Same.
Evidence in this case examined and the weight thereof held to support the judgment of the trial court.
10. Judges--Change of--Disqualification.
Where parties seeking to disqualify a trial judge had knowledge of the alleged grounds for disqualification for more than three days prior to the trial and did not avail themselves of the procedure prescribed by section 5816, Rev. Laws 1910, they cannot urge the question of disqualification on appeal.
Error from District Court, Payne County; John P. Hickman, Judge.
Action by John Sealy and others against Charles M. Prowant and others. From judgment for plaintiffs, the defendants bring error. Affirmed.
West, Sherman, Davidson & Moore. Everest, Vaught & Brewer, C. B. Ames, W. D. Abbott, and J. P. O'Meara, for plaintiffs in error.
B. B. Blakeney, Cottingham & Hayes, Embry, Crockett & Johnson, and George C. Greer, for defendants in error.
¶1 This action was commenced by the defendants in error, John Sealy, E. R. Brown, R. Waverly Smith, E. E. Plumly, and George C. Greet, as trustees for the Magnolia Petroleum Company, hereinafter called the plaintiffs, against the plaintiffs in error, Chas. M. Prowant, Eva S. Prowant, Walter Brown, Earle T. Miller, Henry N. Greis and Burke-Hoffeld Oil Company, hereinafter called defendants, seeking to enjoin the defendants from interfering with plaintiffs' possession of the land in controversy under an oil and gas mining lease. At the same time a similar action was commenced by the Fortuna Oil Company, as plaintiff, against Morton G. Custer et al., as defendants.
¶2 This controversy arose out of the following circumstances: On March 12, 1914, Chas. M. Prowant and wife executed to A. P. Crockett, an attorney of Oklahoma City, an oil and gas lease on the premises involved in the action first above mentioned, which was subsequently assigned by Crockett to the Magnolia Petroleum Company. This company made a location for well No. 1 on this lease in December, 1916. On the same date the Prowant lease was executed Morton G. Custer and wife gave Crockett a similar lease on the premises involved in the second action. This lease was subsequently assigned to the Fortuna Oil Company, which, at the time of the institution of this suit, had made its location for well No. 1 on said lease. Later these companies made additional locations on the leases, so that on March 12, 1917, there were two drilling wells on each lease. On December 27, 1916, Chas. M. Prowant and wife executed an option contract to Walter Brown, for a cash consideration of $ 1,000, giving the said Brown an option to purchase an oil and gas lease on his land on or before March 12, 1917, for a bonus of $ 20,000. On January 31, 1917, Morton G. Custer and wife made a similar contract with the said Brown and Earle T. Miller for a bonus of $ 25,000. It was upon receiving notice of the execution of these option contracts that the plaintiffs in each of the above cases, who were at the time engaged in drilling on both said leases, brought their actions to enjoin the lessors and Brown and Miller from interfering with the plaintiffs' possession of the premises and to cancel the option contracts as clouds on plaintiffs' titles. The trial court rendered judgment for plaintiffs, from which the defendants have appealed to this court.
¶3 The material facts in the cases are substantially the same, but they involve different tracts of land and different parties. During the trial, by agreement, the evidence in one case was considered evidence in the other case so far as applicable, so the decision of the first named case will be controlling in the second.
¶4 The material facts covering the negotiations between the original parties to the lease are that sometime in February or March, 1914, Crockett began negotiations with the defendants in these cases and other landowners in what is hereinafter designated as the Yale field, which negotiations resulted in Crockett and fifteen of such landowners reaching an agreement by which oil and gas leases were to be given Crockett on their lands in this field in consideration of Crockett's proceeding to drill a test: well to a depth of three thousand feet, unless oil or gas was found, or the Bartlesville sand reached, at a lesser depth. At the time of the negotiations the territory in which the lands were situated was approximately fifteen miles from the nearest producing well and was what is commonly denominated "wild-cat" territory. Prior to this time shallow wells had been drilled in the Yale field, but without discovering oil or gas in paying quantities, and all other prospectors who had secured leases on these particular lands had abandoned them. Several dry holes had been drilled in the immediate vicinity of the leases taken by Crockett, which had, in a measure, apparently condemned that section for oil and gas purposes. Under these circumstances there had been discussion among the landowners, who subsequently joined in executing the block of leases to Crockett leading to an implied understanding between them, if not an express agreement, to the effect that they would not lease again without receiving guarantees of the drilling of a well that would test the field. Crockett appears to have had an abiding faith that oil would be discovered in the field and the prospective lessors, being impressed with his earnestness in this respect, entered into an agreement with him for the drilling of a test well. Under this agreement Crockett executed his bond in the sum of $2,500, which was to be forfeited to the lessors as liquidated damages in the event he failed to drill such test well in accordance with his agreement. The leases executed by the fifteen lessors, who entered into the contract with Crockett for the drilling of the test well, were deposited in escrow in the First National Bank of Yale, to be delivered to Crockett upon the commencement of the test well. In the briefs this contract is denominated the "escrow agreement." Under it Crockett further obligated himself, and the parties whom he represented, to commence within sixty days from the 20th day of February, 1914, the drilling of a test well upon some one of the tracts of the fifteen lessors, and to prosecute the drilling continuously in good faith until the test reached three thousand feet, unless paying sand was found at a lessor depth. It was further stipulated in the agreement that the test well was to be completed within one year from the date of its commencement. This well was begun within the specified time, and, in accordance with the terms of the escrow agreement, the leases executed by the fifteen lessors, among which were the two involved in these cases, were delivered by the bank to Crockett. The well was completed within the year prescribed, oil in paying quantities being found at a depth slightly in excess of three thousand feet. All the leases are substantially identical, the material parts of the Prowant lease being as follows:
To continue reading
Request your trial