Shannon v. Shaffer Oil & Refining Co.

• Decision Date: 13 July 1931
• Docket Number: No. 292.,292.
• Citation: 78 ALR 851,51 F.2d 878
• Parties: SHANNON v. SHAFFER OIL & REFINING CO. et al.
• Court: U.S. Court of Appeals — Tenth Circuit

78 ALR 851, 51 F.2d 878 (1931)

SHANNON v. SHAFFER OIL & REFINING CO. et al.

No. 292.

Circuit Court of Appeals, Tenth Circuit.

July 13, 1931.

J. M. Springer, of Tulsa, Okl., and C. G. Horner, of Guthrie, Okl., for appellant.

Streeter B. Flynn, of Oklahoma City, Okl. (Frank G. Anderson, of Oklahoma City, Okl., G. Earl Shaffer, of Tulsa, Okl., and R. M. Rainey and Rainey, Flynn, Green & Anderson, all of Oklahoma City, Okl., on the brief), for appellees.

Before LEWIS, PHILLIPS, and McDERMOTT, Circuit Judges.

McDERMOTT, Circuit Judge.

The plaintiff (appellant) owned an eighty-acre tract of land in Oklahoma, upon which defendants held an oil and gas lease. Four wells were drilled thereon in 1925 and 1926 in an effort to produce oil. The land was underlain, in part at least, with two oil and gas bearing sands, the upper being known as the "Bartlesville" and the lower as the "Wilcox." The Wilcox sand was supposedly the more valuable, and the wells were drilled through the Bartlesville sand to get to the Wilcox. This action is for damages for the value of gas which plaintiff alleges the defendants permitted to escape and waste. The jury returned a verdict for the defendants.

The lease is in ordinary form, granting the lessee the right to use gas produced for its operations, and the lessee agreeing to pay to the lessor or his assigns one-eighth of the net proceeds of any gas produced and used off the premises. Chapter 197, Session Laws of Oklahoma of 1915, prohibits waste; waste is defined to include "escape of natural gas * * * into the open air"; and it is further provided that, when a gas sand is encountered, the gas shall be confined therein until it is utilized. Violations of the act are punishable by fine and imprisonment. The Corporation Commission enacted certain regulations designed to carry out these statutory mandates.

In view of the narrow scope of the errors properly preserved for review, no extended analysis of the evidence is necessary. The plaintiff testified he was about the wells frequently, but knew little of the business; he saw gas escaping into the air, but he did not know how much gas was produced as he "had a man hired to gauge those wells." He knew large quantities of gas were saved and sold, for which he received his royalties; he testified that "they might have attempted to shut in the gas by the mudding off or lubricating process but that they did not stop it." There was a gas pipe line into the field, and the pressure of the wells was sufficient to overcome the pipe line pressure; there was no evidence of the amount of gas from this lease which the pipe line was in position to handle. A gauger testified he had gauged the gas pressure on this lease, and that the company kept a record of the gauges so made. The defendants produced the record of such gauges and tendered them to the plaintiff, who declined to use them. The gauger did testify to the pressure on certain dates, which would show what the well was capable of producing. He testified that the gas from the Bartlesville sand was bradenheaded and allowed to flow into the slush pond; that, if oil and gas are coming from the same stratum, you cannot take the oil and save the gas; that defendants ran iron oxide and mud and slush into one well to stop the gas. Other witnesses testified that gas escaped, and no effort was made to stop it. There was also evidence, introduced by plaintiff, of tests of one of the wells for its open flow on various dates; that "On this well No. 1 we the defendants held the back pressure on the well putting a flow plug in the well to hold this back pressure and conserve this gas and let it flow enough to produce its production and held the maximum pressure on the well. The gas escaped from the lead line to the well through what is known as the separator, and the oil stripped from the gas. The remainder of the gas being sold as much as we could possibly sell."

When the plaintiff rested, defendants' motion for a directed verdict was denied; thereupon defendants rested; the plaintiff did not ask that the court instruct the jury that the plaintiff was entitled to recover in such amount as the jury might determine. In Gasoline Products Co. v. Champlin Refining Company, 283 U. S. 494, 51 S. Ct. 513, 75 L. Ed. 1188, it was held that all the issues in a case need not be submitted to a jury, because one must be. Thereupon the court submitted the case to the jury, charging them, in substance, that, if they found that defendants had failed to use diligence in performing the obligations imposed upon them by law and by their lease, the plaintiff should recover; but that neither the law nor the lease required defendants to do the impossible, nor deprived them of the right to drill to the sand which in their judgment justified the drilling operations; that if the defendants, in endeavoring to conserve the gas, used those means recognized as proper in modern oil and gas development, and exercised their best judgment as to the method of conserving said gas, they would not be liable if, nevertheless, some gas escaped.

Many errors are assigned, among them that the "court erred in excluding testimony offered by said plaintiff." This presents nothing for review. Rule 11 of this court provides: "When the error alleged is to the admission or rejection of evidence the assignment thereon shall quote the full substance of the evidence admitted or rejected."

At the conclusion of the charge the plaintiff excepted to this instruction: "You are further instructed that in open court the defendant tendered the plaintiff all records relative to said wells, and if the plaintiff failed to avail himself of such records and such information as he could have produced from the records of the defendant, and you further find that from the evidence introduced you are not able to arrive at an intelligent and logical conclusion, then your verdict must be for the defendant."

The exception is without merit. The substance of the instruction is that, if there is not sufficient evidence to enable the jury to arrive at an intelligent conclusion, the plaintiff must fail. The objection stressed is not so much to this elementary statement, but to the reference to the records. The reference to the record was not uncalled for. The records were in court. The plaintiff was not required to use them; but if, without them, his evidence was so sketchy that there was no reasonable basis for estimating his loss, he could not recover. The national courts are not foreclosed from any mention of evidence or lack of evidence, or incidents of the trial.

The plaintiff further excepted to the following instruction: "You are further instructed that the drilling of oil and gas wells is a hazardous enterprise; that there is much risk and chance involved; that there is danger of losing the hole and tools, and the defendant would have the right as a driller to go to the sand which in its judgment would justify the drilling operation which it had undertaken, and if gas escaped at a higher sand, the flow of which could not be stopped and it could not complete the drilling of the well without permitting the gas to escape, then the defendant would not be chargeable for the gas so wasted."

Considering this instruction with the rest of the charge, we see no objection to it. The statutes and the regulations of the Corporation Commission are not intended to stop exploration for oil, nor to require the abandonment of producing oil wells; neither do they require the operator to pay for gas that unavoidably escapes. The statutes and regulations are designed to stop the reckless waste of a natural resource formerly incident to oil production, and to require operators to take every reasonable precaution known to the industry to prevent a wastage of gas when drilling for oil. They do not require the impossible. The charge of the court, considered in its entirety, is in accord with these views.

The plaintiff filed a motion for a new trial, which was denied. The first seven points are general — that the court erred in excluding testimony, and in its instructions to the jury; that errors of law occurred at the trial; and that the verdict and judgment are contrary to the law and evidence. The next twelve points are detailed exceptions to the charge. Much of the brief is devoted to points raised, for the first time, by the motion for new trial.

The whole plan of jury trials in the national courts would be thwarted if points could be reviewed which are first raised upon a motion for a new trial. The underlying theory of jury trials is that errors must be sharply called to the attention of the court while the trial is in progress, so that the trial court may have the opportunity to correct the error, and save the necessity of a new trial. The burden is squarely placed on counsel of detecting errors promptly, pointing them out, and excepting to the rulings made. Errors in the admission or exclusion of evidence, errors in submitting a case to the jury on insufficient evidence, errors in the charge to the jury, and all errors occurring at the trial, fall within the scope of this rule. And yet the major part of the motion for a new trial in this case flies fairly in the face of these settled principles and also of Rule 10 of this court, which reads: "The party excepting to the charge of the court to the jury in trials at common law must state distinctly the several matters of law in such charge to which he excepts before the jury retires; and no other exceptions, nor general exceptions, to the charge shall be allowed by the district courts or inserted in a bill of exceptions."

This has been the law since a very early day. In Pennsylvania R. R. Co. v. Minds, 250 U. S. 368, 375, 39 S. Ct. 531, 533, 63 L. Ed. 1039, the court said: "This court has repeatedly held that objections to the charge of a trial judge must be specifically made in order that he may be given an opportunity to correct...