Sterling Ref. Co. v. Walker

• Decision Date: 16 August 1933
• Docket Number: Case Number: 24766
• Citation: 1933 OK 446,165 Okla. 45,25 P.2d 312
• Parties: STERLING REFINING CO. et al. v. WALKER et al.
• Court: Oklahoma Supreme Court

1933 OK 446

25 P.2d 312

165 Okla. 45

STERLING REFINING CO. et al. v. WALKER et al.

Case Number: 24766

Supreme Court of Oklahoma

Decided: August 16, 1933

Syllabus

¶0 1. Oil and Gas--Conservation Act Held Proper Exercise of Police Power.

It is within the proper exercise of the police power of a state to enact laws for the prevention of physical waste in the production of oil and gas. House Bill No. 481 of the Fourteenth Legislature (regular session), when considered in its entirety, is a proper exercise of this power.

2. Statutes--Entire Act not Necessarily Invalidated by Unconstitutionality of Part.

The unconstitutionality of a portion of an act of the Legislature does not defeat or affect the validity of the remaining provisions unless it is evident that the Legislature would not have enacted the valid provisions with the invalid provisions removed if with the invalid provisions removed the rest of the act is fully operative as a law.

3. Same--Effect of Provision in Act to Effect That Invalidity of Part of Act Shall not Affect Remainder.

The effect of a provision in an act to the effect that the invalidity of any part or portion thereof shall not affect the remaining portions is to create a presumption that, omitting unconstitutional portions, the remaining portions would have been enacted by the Legislature.

4. Constitutional Law -- Distribution of Powers of State Government--Provisions of Oil Conservation Act Conferring Upon Supreme Court Legislative and Administrative Powers Held Invalid.

Those portions of sections 29 and 30 of House Bill No. 481, Regular Session of the Fourteen Legislature which undertake to confer upon the Supreme Court of this state the power to promulgate legislative and administrative rules and regulations in connection with the enforcement and administration of the Oil and Gas Conservation Act, are in conflict with section 1 of art. 4 of the Constitution of Oklahoma, providing for the separation of the powers of state government, and are therefore invalid.

5. Oil and Gas--Conservation Act--Price of Oil not to Be Considered by Corporation Commission in Limiting Production.

The Corporation Commission may not, in the exercise of the powers conferred upon it under the Oil Conservation Act, fix or determine prices of oil, nor may it properly consider the price at which oil may profitably be produced in limiting the production from a common source of supply.

6. Prohibition--When Remedy Available.

Prohibition is not an appropriate remedy when the ordinary and usual remedies provided by law are available. Its office is to prevent an inferior judicial or quasi judicial tribunal from exercising jurisdiction which it does not have, or from exceeding the jurisdiction conferred upon it by law.

Original application for a writ of prohibition by Sterling Refining Company and Refiners Production Company to be directed to Paul Walker and others, as members of the Corporation Commission. Petition denied.

Sid White, Harry O. Glasser, and N. Scarritt, for petitioners.

Edwin C. Dabney, Proration Attorney (Hayes, Richardson, Shartel, Gilliland & Jordan, of counsel), for respondents.

BUSBY, J.

¶1 This is an original action commenced in this court on the 8th day of June, 1933. Petitioners, Sterling Refining Company, a corporation, and the Refiners Production Company, a corporation, request a writ of prohibition against the Corporation Commission of the state of Oklahoma and the officials of this state upon whom our statutes impose the duty of administering and enforcing the Oil and Gas Conservation Act. The petitioners also seek injunctive relief against the defendants, to prevent them from enforcing, in an administrative and legislative capacity, House Bill No. 481, passed by the Fourteenth Session of the Legislature in regular session and referred to as the Oil Conservation Act (Sess. Laws 1933, ch. 131, p. 278).

¶2 The request for injunctive relief as an incident to the writ of prohibition arises out of a recognition by the petitioners of the limited purpose of the writ of prohibition. While the restricted scope of the remedy has not always been recognized, it is peculiarly appropriate for the purpose of preventing an inferior court, board, commission, or official which is exercising judicial or quasi judicial powers, from exceeding its jurisdiction. It is not ordinarily appropriate for the purpose of controlling or preventing an official, or board, from exercising ministerial, administrative, or legislative functions. Since it has been held that the Corporation Commission is, in the enforcement and administration of the Oil and Gas Conservation Act, exercising administrative and legislative powers as well as judicial authority ( Russell et al. v. Walker et al., 160 Okla. 145, 15 P.2d 114; H. F. Wilcox O. & G. Co. v.. State, 162 Okla. 89, 19 P.2d 347), the petitioners request that the attempted judicial act of the Corporation Commission be prevented by writ of prohibition, and that the Commission be restrained by injunctive process from exercising administrative and legislative powers.

¶3 Petitioners assert that they may rightfully claim both classes of relief under the authority of State ex rel. Trapp v. Chambers, 96 Okla. 78, 220 P. 890. It is not claimed that the incidental request for injunctive relief enlarges the scope of inquiry by this court, nor do we think such a claim would be tenable if made. The inquiry in this case will, therefore, be limited to matters properly cognizable by this court on application for a writ of prohibition.

¶4 This proceeding, in effect, resolves itself into a controversy between the petitioners, who own an integrated system for the producing, transporting, refining, and marketing of crude petroleum and its products, and who assert the right to the unrestricted use thereof, on the one hand, and the Corporation Commission, a regulatory body, on the other hand, which, under the Oil Conservation Act, supra, is undertaking to impose restrictions and limitations on the use of the producing property belonging to the petitioners.

¶5 The petitioners plead that they are interrelated and completely integrated companies; that they have the same president, same board of directors, and approximately the same stockholders; that the stockholders of the Refiners Production Company own 70 per cent. of the stock of the Sterling Refining Company, and, further, that the Refiners Production Company owns two producing wells in the Oklahoma City field, which wells have a combined daily potential production of 22,000 barrels. They plead that the Sterling Refining Company owns and operates a refinery situated near said wells; that the two companies have a selling and marketing organization which conduct a large business throughout various sections of the United States, supplying customers with the products of said refinery; that the purpose of the organization of the two companies was to produce, refine, and market oil and its by-products. That by reason of an order of the Corporation Commission the allowable production of their wells has been reduced to about 11,000 barrels per month, and that they are now only permitted to actually run about 450 barrels of oil a day to their refinery; that this amount is insufficient to operate their refinery and to supply their marketing system already built up. That the Corporation Commission, acting under and by virtue of House Bill No. 481, is destroying their business, and that said bill violates both the provision of the state and federal Constitutions.

¶6 They further contend that the orders promulgated by the Corporation Commission under and by virtue of the terms of said act were for the purpose of price-fixing. In support of the averments contained in their petition, the petitioners have filed in this court as exhibits to their petition transcripts of testimony introduced before the Corporation Commission on various hearings held before that body.

¶7 Before discussing the legal questions involved, however, we deem it advisable to review briefly the history of the proceedings that were had before the Corporation Commission previous to the time that the application for a writ of prohibition was filed in this court. After House Bill No. 481 became effective under the laws of this state, the Corporation Commission, after proper notices, conducted a hearing for the purpose of determining the amount of oil that could be produced from the Oklahoma City field without waste. Gauges of wells in the Oklahoma City field, including petitioners', were taken, and an order made determining the allowable production of each well. The petitioners did not take any appeal from the orders made in connection with these previous hearings, but on the 7th day of June, 1933, they appeared before the Corporation Commission with an application styled by them an "Application for Emergency Relief." This application in substance pleaded the interrelation of the two petitioners, incorporated, the establishment of an integrated system of producing, transporting, refining, and marketing of oil and the products thereof, and stated that the orders theretofore made by the Commission had limited the amount of their allowable production from a producing property to such an extent that it would not supply the capacity of their refinery, or the demands of their marketing system. They further asserted that the other operators in the field would not sell them oil and that they were willing and wished to make a nomination for oil sufficiently to supply their sales. They demanded that in the event they could not procure the oil elsewhere, they be permitted to overproduce their wells to the extent of the demand created by their refinery and their marketing facilities, notwithstanding any unratable taking of oil from the source of common supply that might result from such overproduction. They did not, however, suggest a willingness later to produce the wells at less than the allowable rate in...