Rennie v. Red Star Oil Co.

• Decision Date: 04 May 1920
• Docket Number: 9684.
• Citation: 190 P. 391,78 Okla. 208,1920 OK 202
• Parties: RENNIE v. RED STAR OIL CO. ET AL.
• Court: Oklahoma Supreme Court

190 P. 391

78 Okla. 208, 1920 OK 202

RENNIE v. RED STAR OIL CO. ET AL.

No. 9684.

Supreme Court of Oklahoma

May 4, 1920

Syllabus by the Court.

In an oil and gas lease, the lessee is entitled to the possession of the lands so leased to the extent reasonably necessary to perform the obligations imposed on the lessee by the terms of the lease.

Where the lessee ceases operations under a lease, such cesser alone is not sufficient to establish abandonment. As to whether or not the lessee has abandoned the premises depends upon all the circumstances of the particular case. If the lessor acquiesces in the cesser of operations or fails to act in a manner indicating he considered the leased premises abandoned, he may be restrained from interfering with the lessee in removing casing, pipes, and other improvements erected by the lessee upon the premises, where the lease specifically gives the lessee the right to remove such casing, pipes, and other improvements at any time.

Additional Syllabus by Editorial Staff.

A demurrer to plaintiff's evidence admits the truth thereof, and all reasonable inferences to be drawn therefrom.

Error from Superior Court, Tulsa County; M. A. Breckenridge, Judge.

Action for injunction by the Red Star Oil Company and others against H. C. Rennie. Judgment for plaintiffs, and defendant brings error. Affirmed.

Samuel A. Boorstin and C. R. Thurwell, both of Tulsa (Carl M. Beren of Tulsa, of counsel), for plaintiff in error.

H. B Martin and R. A. Reynolds, both of Tulsa, for defendants in error.

PITCHFORD J.

The defendant in error was lessee in an oil and gas lease executed by W. E. Chastain on the 19th day of July, 1913, the lease containing the following provisions:

"That the lessor, in consideration of the sum of $1 in hand paid, the receipt of which is hereby acknowledged, and the payment of the sum of $5,000, payable as hereinafter stated, and of the covenants, agreements, stipulations, and conditions herein contained, does hereby grant, demise lease, and let unto the lessee all of the oil and gas in and under the following described tract of land, and also the said tract of land, for the purpose and exclusive right of entering upon and operating thereon and removing therefrom said oil and gas, with the right to use oil, gas, and water therefrom and all rights and privileges necessary or convenient for such operations; also the right to remove at any time all property, pipes, and improvements placed or erected in or upon said land by the lessee; said land being all of that certain tract of land situate in Tulsa county, Okl."

It was further provided that--

"The lessee agrees and binds himself to forthwith commence drilling operations upon said premises, and, unless delayed by court proceedings or the act of God, to complete on said premises within 60 days from the date hereof a test for oil or gas to a depth of 1,500 feet, unless oil or gas is found at a lesser depth in paying quantities, and to complete a second test to said depth within 120 days and a third test to said depth within 180 days, unless oil or gas is found in paying quantities at a lesser depth.

It is agreed that in the event oil or gas is found on said land in paying quantities, developed as aforesaid, that the balance of the consideration named in this contract in the sum of $5,000 may be paid by the lessee to the lessor in one-half of the gross oil or gas less royalty; proper division orders to be executed and suitable books to be kept by the lessee, so as to disclose the amount of oil or gas sold from the said premises.

It is agreed that if the lessee shall fail to drill the three test wells above described within the time aforesaid, unless delayed by court proceedings or the act of God, or shall fail to diligently drill said wells when the excusable cause of delay shall end, this lease shall terminate and the consideration of $5,000 shall become immediately due and payable and shall draw interest from the date the same becomes due at the rate of 10 per cent. per annum until paid. Completion of said three wells and payment of said bonus shall of itself give full force and effect to this instrument.

It is agreed that the drilling period of 180 days above set forth shall be extended in the event the lessee is delayed in drilling said premises on account of court proceedings or act of God."

It appears that the lessee entered into possession of the lands described in the lease and drilled the three wells within the specified time. The wells produced a small quantity of oil for a time, but did not prove profitable, and the lessee ceased operations. The total amount expended in developing the lease was approximately $15,000. Some time thereafter the buildings erected by the lessee upon the leased premises, together with the tanks, were destroyed by fire.

A short time prior to the institution of this action the lessor sold the land covered by the lease to plaintiff in error. After the purchase of the lands by plaintiff in error the lessee arranged to draw the casings and remove the pipes and other improvements placed on the land by the lessee, but when...