Woodworth v. Franklin

• Decision Date: 20 September 1921
• Docket Number: 11294.
• Parties: WOODWORTH ET AL. v. FRANKLIN.
• Court: Oklahoma Supreme Court

204 P. 452

85 Okla. 27, 27 A.L.R. 590, 1921 OK 333

WOODWORTH ET AL. v. FRANKLIN.

No. 11294.

Supreme Court of Oklahoma

September 20, 1921

Rehearing Denied Feb. 7, 1922.

Syllabus by the Court.

An oil and gas mining lease, commonly known as an "unless lease," which provides that it shall remain in force for a term of five years from its date, and as long thereafter as oil or gas, or either of them, is produced from the land by the lessee, and which contains the clause that if no well be commenced on said land on or before the expiration of one year from the date of said lease, the same shall terminate as to both parties, unless the lessee, on or before that date shall pay, or tender to the lessor, a specific sum of money which shall operate as a rental and cover the privilege of deferring the commencement of a well for 12 months from said date, etc., is a lease of land for a period of five years and under the provisions of the fifth subdivision of section 941, Rev. Laws 1910, is invalid unless in writing.

Under the statute of frauds of this state, all contracts for the leasing of real estate for a longer period than one year are invalid unless the same, or some note or memorandum thereof be in writing, and an assignment of such a lease, to be valid, must also be in writing.

An executory contract for the sale of an oil and gas mining lease, for a term of five years is invalid unless such contract, or some note or memorandum thereof, be in writing and subscribed by the party to be charged, or by his agent.

A contract for the sale of an oil and gas lease, entered into by an alleged agent of the owner of such lease and a third person, is invalid, under the statute of frauds, unless the authority of such agent to sell said lease be in writing, subscribed by such owner, and such authority must be specific and certain as to the authority conferred, the terms, description, and parties, so that such authority is disclosed by the writing itself, and recourse to parol evidence to show the intention of the parties is unnecessary.

Subdivision 1, statute of frauds (section 941, Rev. Laws 1910) applies alone to agreements other than those relating to land, and subdivision 5 of said section governs with reference to agreements concerning real estate.

A parol agreement for the sale of lands, or of an oil and gas lease thereon, will be enforced by the courts where the vendee has paid the purchase price, and taken possession, in good faith, of the premises with the knowledge and consent of the owner, and made permanent improvements, or development thereon.

The acts of taking possession of land covered by oil and gas mining leases, after the owner of such leases has disapproved a contract for the sale of such leases made by an unauthorized agent, are without warrant, and will not take the contract out of the statute of frauds, and possession under a contract of sale with an agent, invalid because the authority of the agent was not in writing, and with knowledge that the owner denied the contract, and refused to assign said leases, is of no avail as an act of part performance.

Specific performance of a contract of sale of oil and gas mining leases, made by an alleged agent whose authority was not in writing, and therefore invalid, will not be enforced against the owner of said leases, by one who has paid no part of the consideration, and who went into possession without the consent of the owner, and after he had been notified by such owner that he denied the authority of such alleged agent, and after such owner had sold and assigned such leases to a third party.

Appeal from District Court, Carter County; John L. Coffman, Judge.

Action by Wirt Franklin against W. W. Woodworth and others. Judgment for plaintiff, and defendants appeal. Reversed and remanded, with directions to enter judgment for defendants against plaintiff, canceling the contract, and for an accounting.

Specific performance of a contract of sale of oil and gas mining leases, made by an alleged agent whose authority was not in writing, and therefore invalid, will not be enforced against the owner of said leases, by one who has paid no part of the consideration, and who went into possession without the consent of the owner, and after he had been notified by such owner that he denied the authority of such alleged agent, and after such owner had sold and assigned such leases to a third party.

Geo. S. Ramsey, of Muskogee, Robt. M. Rainey, of Oklahoma City, Cruce & Potter and R. A. Hefner, all of Ardmore, Edgar A. de Meules, of Tulsa, and Malcolm E. Rosser and Villard Martin, both of Muskogee, for plaintiffs in error.

H. A. Ledbetter and Johnson & McGill, all of Ardmore (Stuart, Sharp & Cruce, of Oklahoma City, of counsel), for defendant in error.

NICHOLSON J.

This action was instituted in the district court of Carter county by the defendant in error as plaintiff against the plaintiffs in error as defendants, seeking the specific performance of a contract of sale of two oil and gas mining leases covering certain lands in Carter county.

On June 7, 1919, the plaintiff, Franklin, filed in the trial court his petition herein in which it is alleged that the defendant Woodworth was the legal and equitable owner and holder of two certain oil and gas leases covering 30 acres of land in Carter county, which leases had been executed to said Woodworth by L. H. Thompson and wife, one of said leases bearing date February 5, 1917, and the other bearing date February 13, 1917; that said Woodworth verbally designated L. D. Evans and E. E. Evans as his agents to sell said leases. It is further alleged that said Woodworth delivered said leases, together with the abstract of title to said land, to his said agents, with authority to sell said leases, and at the time of the delivery thereof said Woodworth executed and delivered to said agents a memorandum in writing (to which we will hereafter refer). It is further alleged that said Woodworth verbally authorized his agents to go into possession of the land covered by said leases for exploration purposes and for other purposes conferred upon the lessee by said leases; that said agents, acting for and on behalf of said Woodworth, sold said leases for the consideration of $12,000, to said plaintiff, Franklin; that after the purchase of said leases by him he immediately went into possession of said lands for exploration purposes, and began the erection of a derrick thereon, and began the actual drilling of a well. It is further alleged that said Franklin tendered to the defendant Woodworth the purchase price of said leases, but that said Woodworth failed and refused to accept the same, and failed and refuse to carry out the sale so made by his said agents, the reason therefor being that the said Woodworth was offered a larger sum of money by the defendant John Heenan, which larger offer was made after the sale by the said agents to said Franklin, and that the offer made by said Heenan to said Woodworth was with actual and constructive notice of the existence of the sale of said leases by said agents to said Franklin, and with actual notice that said Franklin was in possession of said oil and gas leases, and after he had entered possession of said land for the purposes stated in said leases. The plaintiff, in said petition, then offered to do equity, and tendered into court the consideration of $12,000.

It is further alleged that Woodworth executed an assignment of said leases to John Heenan, and thereafter John Heenan assigned an undivided one-half interest therein to one B. A. Simpson, and that Simpson assigned to Anderson & Simpson, a special partnership, all the interest he acquired by the assignment of Heenan to him, and that both B. A. Simpson and Anderson & Simpson had both actual and constructive notice of the rights of said Franklin. It is alleged that the plaintiff, Franklin, has the equitable title to said oil and gas leases, with all the rights and privileges conferred upon said Woodworth in said original leases, and is entitled to have said equitable title merged into a legal one, and prayed for a special performance of his contract against the defendant Woodworth, and for judgment declaring Woodworth to hold the legal title in trust for him, and that the assignment from Woodworth to Heenan and from Heenan to Simpson, and from Simpson to Anderson & Simpson be canceled as clouds upon his right of exploration, and for such other and further relief to which he might be entitled, both legal and equitable.

The defendants John Heenan, B. A. Simpson, and C. L. Anderson filed a verified answer, in which they deny all the allegations in said petition contained, except such as were specifically admitted, and specifically denied that the said E. E. Evans and L. D. Evans had any authority to make any contract for the sale of said leases, and further pleaded that on June 3, 1919, the defendant, W. W. Woodworth, for a consideration of $15,000 cash, did sell, assign, and deliver to the defendant John Heenan said leases, and that said John Heenan did, on June 5, 1919, sell and assign an undivided one-half interest in and to said leases to said B. A Simpson, and that B. A. Simpson assigned the same to said Anderson & Simpson; that on the evening of June 3, 1919, the defendant John Heenan informed said plaintiff, Franklin, that he had purchased said leases, and on the 9th day of June, 1919, he served a written notice on said Franklin, notifying him not to go upon said land or attempt to develop the same; that Franklin knew he never had any valid claim to said leases, any right to go upon said land, or any lawful contract, and that on the 3d day of June, 1919, the defendant Woodworth notified Franklin that he had not authorized E. E. Evans ...