Essley v. Mershon

1953 OK 248, 262 P.2d 417, 3 Oil & Gas Rep. 193, 1953 Okla. LEXIS 556
CourtSupreme Court of Oklahoma
DecidedSeptember 22, 1953
Docket35534
StatusPublished
Cited by16 cases

This text of 1953 OK 248 (Essley v. Mershon) 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
Essley v. Mershon, 1953 OK 248, 262 P.2d 417, 3 Oil & Gas Rep. 193, 1953 Okla. LEXIS 556 (Okla. 1953).

Opinion

DAVISON, Justice.

This is an action between cotenants under an oil and gas lease covering some oneLhundred sixty acres of land in Noble County, Oklahoma. It was brought by Milton M. Mershon, as plaintiff, against J. L. Essley, his cotenant and the 'Champlin Refining Company, the purchaser.of the oil, as defendants, to establish and quiet his title to an undivided one-sixth interest in the leasehold estate and for an accounting by Essley of the income derived from the oil production from the premises. The issue first .tried was that of title and the judgment rendered thereon was brought here for review. Mershon v. Essley, 204 Okl. 660, 233 P.2d 293, 298. Therein it was ordered that the cause be remanded ‘fyith directions to enter judgment for the plaintiff quieting his title to an undivided one-sixth interest in the lease involved, and for an accounting.” This appeal involved the proceedings after remand. The parties will be referred to as they appeared in the trial court.

A brief summary of the facts presented in the first appeal is necessary as a background for the facts and issues herein. The plaintiff, Mershon, the defendant, Ess-ley, and one Mouser purchased the oil and gas. lease in controversy, in the name of Mouser, as lessee. Thereafter, on November 22, 1944, a contract was entered into whereby the Sunray Oil Corporation, in consideration for the assignment to it of an undivided one-half interest in said lease, agreed to develop and operate the property, to be reimbursed for the expenses thereof from the proceeds from the oil produced. The company, after drilling one well from which oil and water were produced, sold its interest in the lease to the defendant, Essley, father than to' expend ihore money in an effort to make the well more productive. Mouser, not interested in joining the defendant in further development gave his interest in the lease tO' him and executed an assignment of the remaining one-half interest in the lease to him, Essley. Thus, the entire legal title to the lease was in said defendant. It was the contention of Ess-ley that the plaintiff, ■ Mershon, also gave his interest in the lease to him, Essley. The effect of the decision of this court on the first appeal was to sustain Mershon’s denial of a valid gift. The lease was, then, equitably owned, one-sixth by Mershon and five-sixths by Essley, although the entire legal title was in the latter.

■ Following his acquisition of the Sunray interest (½) and the Mouser interest (⅜), Essley further delevoped the property by *419 'drilling two more wells making a total of three, one on each of three tén acre tracts. Essley then contracted with one Thomas E. Berry to develop the remaining one-hundred thirty acres. Five more wells, numbered 4, 5, 6, 7, and 8 were drilled under the provisions of said contract.

After the causé was remanded, following the decision on the first appeal, judgment for plaintiff, in harmony with the mandate, was rendered by the trial court on August 6, 1951, in which judgment or order, Essley was directed to render an account of receipts and costs in the development and operation of the property. The account was prepared and filed by Essley, objections thereto were filed by Mershon and a trial of the issues so formed was had. Intermediate the filing of the report and the objections, Mershon moved to make Berry a party defendant. The motion was granted and at the time of trial, November 8, 1951, Berry had regularly ans.wered. In the account, the hearing held thereon and the resulting judgment, Essley’s operations in connection with wells 1, 2, and 3 were segregated and considered separately from the operations wherein Berry was interested, being of wells 4, 5, 6, 7, and 8. The judgment on the development and operation of wells numbered 1, 2, and 3 approved defendant’s account and was for plaintiff in the amount of $8,450.02, from which plaintiff has appealed. The judgment on the development and.operation of wells numbered 4, 5, 6, 7, and 81 disapproved defendant’s account and was for plaintiff in the amount of $52,728.33 from which defendants have appealed. The plaintiff below appears here as defendant in error, and cross-petitioner in error, the defendants as plaintiffs in error.

Plaintiffs, in error argue that the former decision in this case should be reversed because gross and manifest injustice was done by it. Cited in support thereof are the cases of Carter Oil Co. v. Eli, 164 Okl. 273, 23 P.2d 985; Powell v. United Mining & Milling Co., 107 Okl. 170, 231 P. 307; Wade v. Hope & Killingsworth, 89 Okl. 64, 213 P. 549; Oklahoma City Electric & Power Co. v. Baumhoff, 21 Okl. 503, 96 P. 758. The former'opinion was deliberately considered and is supported by the reasoning and authority therein contained and we see no reason for its reversal.

The principal contention of the plaintiffs in error is that, by the terms of the Essley-Berry fcontract, under which‘wells numbered 4, 5, 6, 7, and 8 were drilled and operated, Berry was paid $181,414.74 from %ths of the oil produced and $122,620.39 from ½ of the oil pi'oduced subsequent to the payment of the former stun or a total of $304,035.13, and that, since Mershon voluntarily accepted.the benefits of the Essley-Berry contract, knowing all the facts of the transaction, he impliedly consented to all the obligations and, in 'equity, should be held responsible for his proportionate part of them. It is argued that, at the time Berry drilled the wells, material and equipment were very scarce and were not obtainable except at exorbitant black market prices; that Berry agreed tó and did furnish the necessary equipment and supplies at normal market prices, only because he was to receive ½ of all oil produced, after being reimbursed for such development expense from %ths of the oil production; that such bonus payment (½ of net value of production) totaling said $122,620.39 and was a legitimate development expense which should have been allowed in an accounting of net profits.' The effect of the trial court'judgment was to disallow this latter amount and to allow only the $181,414.74, actual development expense as charged by Berry to Ess-ley under the terms of the Essley-Berry contract.

■The principal contention of the defendant in error is that, as to the expense of drilling wells number 1, 2, and 3, the account of Essley, as approved by the trial court judgment, included various, items totaling $60,031.61, which were not chargeable as necessary expense of such development; that the trial court was • in error in charging Mershon’s interest in the production with ⅛ of that.amount or,.$10,005.26 and thus reducing his net judgment as to said wells , number 1,. 2 and 3 by that amount.. Mershon further contends that the judgment in his favor on all amounts *420 should have included interest thereon from the date each item was received by Essley to the date of judgment.

The contention of plaintiffs in error that, if Mershon is adjudged to be entitled to the benefits of the Essley-Berry contract, he is bound by the obligations thereby impos.ed, is founded upon the provisions of IS O.S. 1951 § 75, which is as follows:

“A voluntary acceptance of the benefit of a transaction is equivalent to a consent to all the obligations arising from it so far as the facts are known, or ought to be known to the person accepting. ”

The question here presented, however, is not one which is clearly within or without the sphere of application of the quoted statute.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Anderson v. Dyco Petroleum Corp.
1989 OK 132 (Supreme Court of Oklahoma, 1989)
Teel v. Public Service Co. of Oklahoma
767 P.2d 391 (Supreme Court of Oklahoma, 1987)
Mullins v. Ward
1985 OK 109 (Supreme Court of Oklahoma, 1985)
Cox v. Davison
397 S.W.2d 200 (Texas Supreme Court, 1965)
Smith v. Owens
397 P.2d 673 (Supreme Court of Oklahoma, 1964)
Torgeson v. Connelly
348 P.2d 63 (Wyoming Supreme Court, 1959)
Black Crystal Coal Co. v. Garland Coal & Mining Co.
267 F.2d 569 (Tenth Circuit, 1959)
Roussel v. Russell
1959 OK 84 (Supreme Court of Oklahoma, 1959)
West Edmond Hunton Lime Unit v. Young
325 P.2d 1047 (Supreme Court of Oklahoma, 1958)
Daisy D. Blankenship v. Maxwell Rowntree
238 F.2d 500 (Tenth Circuit, 1956)
Ottinger v. United States
230 F.2d 405 (Tenth Circuit, 1956)
Champlin Refining Co. v. Phillips Petroleum Co.
1954 OK 124 (Supreme Court of Oklahoma, 1954)

Cite This Page — Counsel Stack

Bluebook (online)
1953 OK 248, 262 P.2d 417, 3 Oil & Gas Rep. 193, 1953 Okla. LEXIS 556, Counsel Stack Legal Research, https://law.counselstack.com/opinion/essley-v-mershon-okla-1953.