Amerada Petroleum Corp. v. Melton

1929 OK 283, 281 P. 591, 139 Okla. 119, 1929 Okla. LEXIS 243
CourtSupreme Court of Oklahoma
DecidedSeptember 10, 1929
Docket17356
StatusPublished
Cited by5 cases

This text of 1929 OK 283 (Amerada Petroleum Corp. v. Melton) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Amerada Petroleum Corp. v. Melton, 1929 OK 283, 281 P. 591, 139 Okla. 119, 1929 Okla. LEXIS 243 (Okla. 1929).

Opinion

CLARK, J.

This cause presents error from the district court of Stephens county, Okla., wherein plaintiff in error wasi defendant, and defendant in error was plaintiff. For convenience parties will be referred to as they appeared in the trial court.

Plaintiff alleged in 'his petition that he was the owner of an oil and gas lease in Stephens county, describing the same. That he assigned said lease to the defendant for a consideration of $1 and one-eighth of all the oil and gas produced and sold off said premises. Plaintiff further alleged that defendant had entered upon said lease and produced oil thereon; that defendant had sold and conveyed said oil to the Choate Oil Corporation as evidenced 'by a written contract. Said contract was attached to plaintiff’s petition.

Plaintiff further alleged that 'his proportionate share of one-eighth of the oil as sold and conveyed by defendant wais the value of $8,375, and prayed judgment for said sum.

Defendant answered; admitted that it was operating said lease under the assignment as alleged in plaintiff’s petition; admitted that plaintiff owned an undivided one-eighth royalty interest in the lease; admitted that it had entered into the original contract with the Choate Oil Corporation and by its terms that the defendant should deliver to the Choate Oil Corporation 1,500 barrels of crude oil per day from said oil and gas mining lease for a period of four months. Defendant answered, further, that in May, 1921, and before any oil was run from said oil and gas mining lease under said contract, plaintiff, Ben F. Melton, executed a division order which was delivered to and accepted by the Choate Oil Corporation. Said division order shows the respective interest of the parties in said oil and gas mining lease and provides by its terms that the Choate Oil Corporation shall pay directly to all persons having an interest in said oil and gas mining lease in proportion to their respective interests as shown by said division order at the same market price posted by the Prairie Oil & Gas Company for the same kind and quality of oil on the some day that said oil purchased in pursuance of said division order is delivered; settlement to be made for the oil purchased semi-monthly by mailing or delivery to the persons from whom such oil is purchased, their heirs, assigns, or legal representatives, by bank check or draft. Defendant, further answering, states that in pursuance of said contract and said division order, it delivered to the Choate Oil Corporation from said oil and gas mining lease 47,159.99 barrels of crude oil and received payment for 35,369.18 barrels of crude oil, same being the number of barrels corresponding to the proportionate interest of the defendant in said oil and gas mining lease, which was shown to be the interest of this defendant by the division order executed by the plaintiff. Defendant specifically denied that it received any money from the Choate Oil Corporation, Noco Petroleum Corporation, or from anyone else in payment for oil run from said oil and gas mining lease belonging to the plaintiff or any other royalty owner, and that when it delivered said oil to said Choate Oil Corporation it relied upon the provisions of said contract and said division order, and believing the plaintiff should and would collect t'he money due him from oil runs from said oil and gas mining lease from the Choate Oil Corporation.

Defendant answered, further, that the division order above referred to was executed on the part of the plaintiff with full knowledge of all the facts and circumstances surrounding the transfer of said oil to Choate Oil Corporation, and that plaintiff isi hereby estopped from maintaining this action against the defendant.

Plaintiff filed his reply, in which he denied each and every allegation contained in defendant’s answer except such allegations as are admitted. By further reply plaintiff says that if a contract was entered into May 10, 1921, between the Amerada Petroleum Corporation and the Choate Oil Corporation as alleged and set forth in said answer of said defendant, Amerada Petroleum Corporation, then the plaintiff is not a party to such contract, had nothing to do with the making of said contract, and was not consulted about it and is not bound thereby.

Issues thus joined, cause came on for trial before the court without intervention of a jury. The court, after hearing the testimony, found for the plaintiff in the sum of $8,375, plus interest, and costs. Defendant filed its *121 motion for new trial; in due time brought the cause here for review.

The record discloses that plaintiff, being the owner of a lease from one J. A. Blaydes and wife, who were the owners of the real estate, assigned the same on the 12th day of April, 1920, to the defendant, which assignment contained the following provision:

“Now, therefore, in consideration of the sum of $1, in hand paid, and one-eighth of all oil and gas produced and sold off these premises, the receipt of which is hereby acknowledged, the undersigned, the present owner of the said lease and all rights thereunder or incident thereto, does hereby bargain, sell, transfer, assign and convey unto Amerada Petroleum Corporation, all of the right, title and interest of the original lessee and present owner in and to said lease and rights thereunder in so far as it covers the land above described, together with all personal property used or obtained in connection therewith to the Amerada Petroleum Corporation, and its heirs, successors and assigns.”

Under this assignment the Amerada Petroleum Corporation went into possession and drilled several wells on the premises and produced oil therefrom. On May 10th, the Amerada Petroleum Corporation made a contract with the Ohoate Oil Corporation, agreeing to sell to the said Choate Oil Corporation 1600 barrels of oil per day for a period of four months, which contract contains the following provision:

“Second party agrees to make all royalty payments direct to royalty owners on the same dates and for the same periods provided above, in payments to first party; all in accordance with division orders to be signed by first party and royalty owners.”

This contract was made on the 10th day of May, 1921, and did not attempt to sell or convey any oil except that belonging to the Amerada Petroleum Corporation. The record further discloses that in May, 1921, before any oil was run under said contract by the Amerada to the Ohoate Oil Corporation, the following division order and contract was executed by plaintiff:

“Division Order.
“May 1921.
‘‘Choate Oil Corporation.
“The undersigned, certify and guarantee that they are the legal owners of all wells Nos. 1 and up on the J. A. Blaydes Farm, located in northeast quarter of northeast quarter of section 32, township 1 south, range 8 west, Stephens county, state of Oklahoma, including t'he royalty interest and until further notice you will give credit for oil received from said wells as per directions below :
"Credit to Division of Interest Post Office Address
“Amerada Petroleum Corporation, 72-96 Wklnt. Box 2622 Tulsa, Okla.

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Bluebook (online)
1929 OK 283, 281 P. 591, 139 Okla. 119, 1929 Okla. LEXIS 243, Counsel Stack Legal Research, https://law.counselstack.com/opinion/amerada-petroleum-corp-v-melton-okla-1929.