Tex. Co. v. State ex rel. Coryell

• Decision Date: 18 February 1947
• Docket Number: Case Number: 31827
• Citation: 198 Okla. 565,180 P.2d 631,1947 OK 53
• Parties: TEXAS CO. v. STATE ex rel. CORYELL
• Court: Oklahoma Supreme Court

1947 OK 53

180 P.2d 631

198 Okla. 565

TEXAS CO. v. STATE ex rel. CORYELL

Case Number: 31827

Supreme Court of Oklahoma

Decided: February 18, 1947

Syllabus

¶0 1. CORPORATION - Constitutional inhibition against corporations owning or trading in real estate except such as is "necessary and proper" for carrying on their licensed business.

Section 2, art. 22, of the Constitution prohibits any corporation doing business in this state from buying, acquiring, or trading in real estate except such as shall be necessary and proper for carrying on the business for which it was chartered or licensed.

2. SAME - Phrase "necessary and proper" defined.

The words "necessary and proper," used in the Constitution as expressive of the extent of the right of a corporation to acquire and hold land, do not import that which is indispensably necessary, but do import that which is proper, useful and suitable and thus conducive to the accomplishment of the purposes of the corporation, which implies actual need therefor in contradistinction to mere preference.

3. SAME - ESCHEAT - Burden of proof on plaintiff in action against corporation to escheat lands and interests in lands.

In an action against a corporation to escheat lands, and interests or rights in lands, which the corporation holds, and which under the law it is entitled to hold if the facts warrant, the burden of proof on the issue of unlawful holding is upon the plaintiff.

4. SAME - Exclusion of oil and gas rights from judgment escheating land owned by corporation where ownership of such rights is property within corporate power.

The estate of the grantee under a grant of oil and gas rights is severable from the fee to the land. And where the fee to the land inclusive of such oil and gas rights is vested in a corporation and it appears from the facts that the land, except to the extent of such oil and gas rights, is subject to escheat and that the ownership of such rights independently of such fee is properly within the corporate power, it is proper for the court, on directing escheat, to exclude therefrom such oil and gas rights and the incidental rights necessary to the enjoyment thereof.

5. SAME - Mere right to explore and produce oil and gas vests in holder thereof no right to acquire title to land.

The mere right to explore and produce oil and gas, without more, vests in the holder thereof no right to acquire the title to the land.

6. SAME - Showing of necessity for ownership of fee by corporation which owns oil and gas interest in land.

While ownership of the oil and gas interest or a lease thereon is or may be necessary to acquire the right to produce oil and gas, the ownership of the fee is not invariably necessary thereto. Such being true, more is required in law than mere ownership of the oil and gas rights to give rise to a necessity for ownership of the fee by a corporation. That fact, however, does not militate against the right of the corporation to acquire the fee to a tract of land where under the specific facts such ownership, in contemplation of law, is necessary and proper for specifically authorized corporate purposes.

Appeal from Superior Court, Creek County; Herbert L. Arthurs, Judge.

Action by the State ex rel. G.B. (Chuck) Coryell, County Attorney of Creek County, against the Texas Company for escheat of land and oil and gas rights. Judgment for plaintiff, from which defendant appeals. Reversed and remanded, with instructions.

Y.A. Land, J.H. Hill, John R. Ramsey, B.W. Griffith, S.H. Kaufman, all of Tulsa (Richardson, Shartel, Cochran & Pruet, of Oklahoma City, and Oscar John Dorwin, of New York, N.Y., of counsel), for plaintiff in error.

G.B. (Chuck) Coryell, County Atty. of Creek County, Don Walker, Everett S. Collins, T.L. Blakemore, and C.J. Davenport, all of Sapulpa, L.L. Jones and Fletcher Johnson, both of Bristow, O.A. Cargill, of Oklahoma City, and Don Lewis, of Washington, D.C., for defendant in error.

John Embry, Charles Edward Johnson, V.P. Crowe, Raymond A. Tolbert, Troy Shelton, Calvin Boxley and F.C. Love, all of Oklahoma City, amici curiae.

J.D. Cofield, of Pauls Valley, J.O. Counts, of Frederick, and Victor C. Phillips, of Durant, Committee appointed by Association of County Attorneys of Oklahoma, amici curiae.

Randell S. Cobb, Atty. Gen., and James W. Bounds, Asst. Atty. Gen., for State of Oklahoma.

WELCH, J.

¶1 This is an appeal from judgment escheating lands and oil and gas rights in lands described in 15 separate tracts located in Creek county, acquired and held by the Texas Company, a Delaware corporation, licensed and doing business in the State of Oklahoma. The corporation is authorized by its charter to engage in mining, the production, storage, transportation, refining, manufacture, purchase and sale of mineral products, and oil and gas, and to acquire real and personal property for its use.

¶2 The issues before the trial court involved construction and application of section 2, art. 22, Constitution, and section 1636, O.S. 1931. That section of the statute was in effect at commencement of this action, but has since been repealed. The court made specific findings of fact concerning the property involved in each of the causes of action. But having reached a legal conclusion whereby all the properties involved were escheatable, the court so held without consideration of the separate status of the several properties involved. We shall later refer to the fact situation as to each cause of action.

¶3 The constitutional provision is in part as follows:

"No corporation shall be created or licensed in this State for the purpose of buying, acquiring, trading, or dealing in real estate other than real estate located in incorporated cities and towns and as additions thereto; nor shall any corporation doing business in this State buy, acquire, trade, or deal in real estate for any purpose except such as may be located in such towns and cities and as additions to such towns and cities, and further expect such as shall be necessary and proper for carrying on the business for which it was chartered or licensed; . . ."

¶4 The learned trial judge, as a conclusion of law, expressed the view that as applied to such corporations as defendant, it is the purpose of the constitutional provision to:

"Prohibit corporate ownership of land or real estate outside of incorporated cities and towns and additions thereto"

and his reasons were based upon the initial inhibition in the constitutional provision as against the creation or licensing of corporations within this state to buy, acquire, trade or deal in rural real estate, together with the second provision in reference to rural real estate which "prohibits corporations from doing those things which a corporation cannot be created or licensed to do," and the view that the provision further prohibits such corporations from buying, acquiring, trading or dealing in real estate in such towns and cities except when such real estate is necessary and proper for carrying on the business for which such corporation was chartered or license. It was the trial court's view that "It is a further exception to the corporate privilege of owning real estate, to wit, real estate situated in incorporated cities and towns and additions thereto."

¶5 The conclusion of law is error. The constitutional provision deals with different types of corporations. The first is land companies. They shall have no corporate existence within this state to deal in other than real estate located in incorporated cities and towns and additions thereto. As to corporations in general, such as typified by the defendant corporation, it is not denied ownership of rural real estate, but it is limited under the further exception in its acquisition of such real estate "as shall be necessary and proper for carrying on the business for which it was chartered or licensed."

¶6 The constitutional provision is not ambiguous, and while resort has been had by the parties to proceedings of the Constitutional Convention to sustain their respective views of meaning to be derived from the words employed, there is no absolute necessity for consideration of those proceedings. The Constitution does not derive its force from the convention, but from the people who ratified and adopted it. The intention to be ascertained is that of the people. The rule of construction is common understanding, rather than obtuse meaning as may be attributed by some who were members of the convention and based upon motives personally persuasive. Cooley, Const. Limitations.

"Courts, in construing unambiguous constitutional provisions, are not at liberty to search for meaning beyond the instrument . . . Meaning of Constitution, apparent on face, must be accepted." Shaw v. Crumbine, 137 Okla. 95. 278 P. 311; State v. Millar, 21 Okla. 448, 96 P. 747.

¶7 The trial court erred in construing the further exception as a limitation upon the initial prohibition. The Texas Company, under the further exception, was limited in its ownership of rural real estate to such as was necessary and proper for carrying on its corporate business. Under the adverse view, oil companies could not own real estate outside of cities and towns and additions thereto, upon which to locate refineries, gasoline plants, or tank farms, nor would other corporations own rural real estate upon which to locate cotton compresses, warehouses, grain elevators, mills and plants, nor golf clubs, hospitals, sanitoriums, and the like. It would mean that industries could not be but urban. Such was not the intention of the constitutional provision as indicated by the use of "further" in connection with the exception signifying additional or as going or lying beyond, thus enlarging the first exception but restricting and narrowing its meaning. The constitutional provision did not negative corporate ownership of rural lands, but amplified it. Truax v. Capitol Life Ins. Co., 166 Okla. 153, 26 P.2d 755.

¶8 In Oklahoma Natural Gas Co. v....