Worley v. Carroll

• Decision Date: 03 March 1925
• Docket Number: Case Number: 15072
• Citation: 237 P. 120,1925 OK 187,110 Okla. 199
• Parties: WORLEY v. CARROLL.
• Court: Oklahoma Supreme Court

1925 OK 187

237 P. 120

110 Okla. 199

WORLEY v. CARROLL.

Case Number: 15072

Supreme Court of Oklahoma

Decided: March 3, 1925

Syllabus

¶0 1. Brokers -- Production of Responsible Contractor--Compliance with Contract.

Where a brokerage contract created an exclusive agency for a term of 60 days and provided compensation for the broker in the event such broker would produce a responsible party ready, able and willing to contract, held, that the securing of such responsible party within the 60 days and the introduction of said party to the owner was a sufficient compliance with the brokerage contract, although a written contract for the signature of the owner was not presented until the 61st day.

2. Same -- Legality of Contract -- Departmental Oil and Gas Lease on Indian Lands.

Indian's lessee who prevented broker from applying for consent to contract with lessee could not defeat broker's right to contract by claim that contract was void for want of consent. Where an oil and gas mining lease on departmental form required the written consent of the Secretary of the Interior to an assignment of an interest therein by lessee, and said lessee refused to execute such assignment though bound to do so by contract, and thereby prevented said third party from applying to the Secretary of the Interior for consent to contract, said lessee cannot be heard to say that said contract is void as a violation of the rules and regulations of the Secretary of the Interior, since said lessee will not be permitted to take advantage of his own wrong in a court of equity. Hertzel v. Weber, Circuit Court of Appeals, Eighth Circuit, 283 F. 921, followed.

3. Trial--Demurrer to Evidence.

A demurrer to the evidence admits all of the facts produced, together with all reasonable inferences therefrom, and in the event such facts and inferences disclose a cause of action, it is error to sustain such demurrer.

Commissioners' Opinion, Division No. 2.

Error from District Court, Kay County; Claude Duval, Judge.

Action by H. F. Worley against Evelyn Carroll. Judgment for defendant, and plaintiff appeals. Reversed and remanded, with directions.

David L. Carter and Woodard & Westhafer, for plaintiff in error.

Sam K. Sullivan and R. J. Shive, for defendant in error.

LYONS, C.

¶1 Parties will be referred to as in the court below. Defendant was the owner of an oil and gas mining lease on the allotment of a Kaw Indian, said lease being on departmental form. Defendant desired to secure a drilling contract on the lands covered by said lease and employed the plaintiff as a broker to find a responsible party to drill a well on the premises covered by said lease.

¶2 The contract contains the following material provisions:

First. The owner does hereby agree with the said agent that for the period of 60 days from the date hereof he shall have the sole and exclusive right to negotiate for a drilling contract with some responsible party to drill a well on said premises covered by said lease and that she will enter into and execute any such contract that such agent may agree upon; provided, only that said owner is to receive in any such contract not less than an undivided one-sixteenth overriding royalty from such well and such premises covered by such lease in all oil and gas produced thereon, over and above the one-eighth royalty to be paid to the lessor.

Second. That in the event the broker is unable to make a drilling contract on a royalty basis, then the owner agrees to execute any such contract which the agent may arrange with a responsible party on a working interest basis; provided, that the owner is to have and retain not less than a three-sixteenth working interest.

Third. If the broker shall produce a responsible party ready, able, and willing to enter into such contract, either on a royalty basis or a working interest basis, the owner agrees to give the broker one-fourth of the royalty or one-fourth of such working interest which is given to or retained by the owner under the terms of the contingent drilling contract.

Fourth. That if the broker or the party with whom he may arrange a drilling contract can procure donations toward the expense of drilling, either as offset money, dry hole money, or in any other manner, the owner is not to participate therein, but the broker may have the same in addition to his one-fourth interest.

¶3 This contract requires construction, and it seems to us to be very plain upon its face that it is a brokerage contract giving an exclusive agency for a period of 60 days, and that the broker must produce a responsible party ready, able, and willing to contract within said period of 60 days.

¶4 The evidence in the case discloses that on the 28th day of June, 1922, which appears to be the 60th day, the broker had this proposition pending with two parties, one, the Skelly Oil Company, and the other, the Enid Drilling Company. A Mr. Lee, who was acting on behalf of the Enid Company, and who designated himself as an authorized agent, had agreed on behalf of said Company to take, the proposition if Skelly did not. Skelly's decision on the matter was announced on the morning of June 29th, and he decided not to take said proposition. Lee thereupon entered into a drilling contract on behalf of the Enid Drilling Company, and this contract met the requirements of the brokerage contract. On June 29th, when the written contract of the Enid Drilling Company was exhibited to the defendant for execution, she refused to proceed further with the matter and declined to execute said contract.

¶5 There is testimony in the record disclosing that Lee, on June 28, received his authorization from Thatcher, president of the Enid Drilling Company, to consummate a contract on behalf of said Enid Drilling Company, and thereafter, within a day or two, the Enid Drilling Company executed a formal written authorization by its president and secretary, in the authorized mode in which a contract is executed by a corporation. This ratification appears on page 162 of the case-made and is as follows:

"Whereas, a certain contract was entered into on the 28th day of June, 1922, between the Enid Drilling Company and Evelyn Carroll, concerning the drilling of a well on the south half of the southwest quarter of section 15, township, 27 north, range five east, in Kay county, Oklahoma, and, whereas said contract being signed Enid Drilling Company, by H. W. Lee, authorized agent:

"Now, therefore, we, the said Enid Drilling Company, hereby ratify the said contract and accept the same in the manner and to the same effect as if said contract had been signed by the president and secretary of the Enid Drilling Company, and in all things confirm and ratify the said contract and accept the obligations therein contained and defined on the part of the Enid Drilling Company, and agree to carry out said contract according to its tenor and effect,

"Dated this 28th day of June, 1922.

"Enid Drilling Company,

"W. L. Thatcher, President.

"Attest:

"E. D. Thatcher, Secretary"

¶6 On June 28, 1922, the date of the Osage sale, the following conversation took place between the plaintiff and the defendant, on the train going back to Pawhuska:

"Q. You may answer the question? A. On June 28, 1922.

"Q. Where was that, Mr. Worley? A. Pawhuska, Okla.

"Q. When did you notify Mrs. Carroll of that fact? A. On the train going back to Pawhuska, Okla., on the day of June 28, 1922.

"Q. What did you state to her about it? A. I told her I had entered into an agreement with the Enid Drilling Company with which to drill a well on this lease, on terms in accordance with my contract giving her a 1-64 overriding royalty--1-16 overriding royalty, as per my contract with her.

"Q. What did she say at that time? (Objected to as incompetent, irrelevant, and immaterial. Objection overruled. Exception.) A. She said that was all right, she would accept it. The Court: When was that? A. On June 28th, going back on the train from Pawhuska.

"Q. Why are you positive that was the date, Mr. Worley? A. Because of the day that the Osage sale was held at Pawhuska. The Court: June 28th? A. Yes, sir."

¶7 The trial court sustained a demurrer to the evidence, and the defendant contends that the judgment of the trial court was correct for two reasons:

(1) That the evidence fails to disclose performance of the contract by the plaintiff.

(2) That the contract is void and against public policy.

¶8 We think it clearly appears from the evidence set forth and referred to that the contract was performed if this testimony is to be taken as true. The contract merely required the plaintiff to produce a responsible party within the 60 day period, able, ready, and willing to drill on the terms specified. Such a party was produced and the fact thereof was communicated to the defendant. We are unable to conclude that because the acceptance of the proposition by the Enid Drilling Company was contingent upon Skelly's rejection thereof that such situation is material, in view of the fact that Skelly rejected said proposition and that the Enid Drilling Company forthwith, on June 29, in pursuance of its former conditional acceptance, carried out its agreement and executed a proper written agreement, binding it to drill.

¶9 The contract requires the broker to see that a person ready, able, and willing to perform was presented to the defendant within the 60 days. Such performance was had when the responsible party was found within that time and said fact communicated within that time to the owner.

¶10 The fact that the written contract was not presented to the defendant until June 29, under these facts and circumstances, cannot be material upon familiar principles which govern the rights of brokers and their principals.

"Of course if the terms of his employment merely require the broker to find or introduce a purchaser within a certain time, or if his commissions are promised for a sale 'effected in any wise through his influence or instrumentality,' within

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