Griswold v. Public Service Co. of Oklahoma

1951 OK 342, 238 P.2d 322, 205 Okla. 412, 1 Oil & Gas Rep. 108, 1951 Okla. LEXIS 684
CourtSupreme Court of Oklahoma
DecidedDecember 4, 1951
Docket34446
StatusPublished
Cited by9 cases

This text of 1951 OK 342 (Griswold v. Public Service Co. of Oklahoma) 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
Griswold v. Public Service Co. of Oklahoma, 1951 OK 342, 238 P.2d 322, 205 Okla. 412, 1 Oil & Gas Rep. 108, 1951 Okla. LEXIS 684 (Okla. 1951).

Opinion

PER CURIAM.

Two separate actions were consolidated and tried as one action. From the judgment entered in said consolidated action, two separate appeals have been taken, one by Louise Griswold and C. A. Griswold, and the other by L. Milford Lett, Jr., executor of the estate of C. O. Pfenninghausen, deceased.

The evidence disclosed that on July 12, 1943, Louise Griswold and C. A. Griswold and C. O. Pfenninghausen executed on oil and gas lease to J. T. Hall, covering the N/2 SE/4 of section 5, township 9 north, range 12 east, Hughes county, Oklahoma, which lease contained the following:

“It is agreed that this lease shall remain in force for a term of six months from date and as long thereafter as oil or gas, or either of them, is produced upon said land by the lessee.

“If lessee shall commence to drill a well within the term of this lease . . . lessee shall have the right to drill such well to completion with reasonable diligence and dispatch, and if oil or gas, or either of them be found in paying quantities, this lease shall continue and be in force with like effect as if such well had been completed within the term of years herein first mentioned.
“Party of the second part agrees to begin a well on above described land on or before August 12, 1943, and continue drilling with due diligence to the Boche sand, unless oil or gas is found in paying quantities, at a lesser depth.”

The lessee commenced operations for the drilling of a well upon said land about July 15, 1943. Shortly after commencing said operations, the lessee was apprised of the rules and regulations of the Petroleum Administrator for War which required that all property interest in the SE/4 of section 5 be consolidated in order to produce gas from a well thereon. The formal order issued later reads as follows:

“Pursuant to paragraph (m) of Petroleum Administrative Order No. 11, you are hereby authorized to use material, as requested in your application dated January 15, 1945, required to produce gas from your well located in the NW/4 of the SE/4 of Section 5, Township 9 North, Range 12 East, Hughes County, Oklahoma, in the manner proposed, provided that all property interests in the SE/4 of said Section 5 are consolidated and assigned to said well.”

J. T. Hall owned the oil and gas lease covering the S/2 of SE/4 of section 5, and with C. A-. Griswold secured an oral agreement with the owners of all the minerals in and under the SE/4 of section 5 to communitize said 160-acre tract. Pursuant to this oral agreement, and with the consent of all the parties, the location of the well was changed to permit drainage of the entire 160-acre tract. Said well was thereafter completed as a commercial producer. While there may have been an unusual delay in completing said well, it was drilled with full knowledge and acquiescence of the Griswolds. When the lessee presented a written commun-itization agreement to lessors for execution, all lessors executed said agreement except Louise Griswold, C. A. Griswold and D. F. Krause, but the latter executed the agreement after institution of these actions. C. O. Pfen-ninghausen having died in the interim, L. Milford Lett, Jr., executor of his estate, executed the communitization agreement.

After the completion of the well, Louise Griswold and C. A. Griswold demanded that they be paid royalty on the basis of an 80-acre lease, refused to accept royalty under the communi-tized 160-acre tract, and instituted their action to recover royalties upon that basis, and also to cancel the oil and gas lease executed by them, for failure to drill within the terms thereof. The Public Service Company of Oklahoma, purchaser of the gas, filed an interplead *414 er action as against all mineral owners under the 160-acre tract. These two actions were consolidated.

L. Milford Lett, Jr., executor of the estate of C. O. Pfenninghausen, deceased, and one of the appellants herein, contended that his execution of the written communitization agreement was conditioned upon securing the execution thereof by all mineral owners, and since this was not done, he was not bound thereby, and said communitization agreement should be canceled, set aside and held for naught.

The trial court denied cancellation of the lease and the communitization agreement, and held, among other things, that lessee had duly complied with the lease as to commencement and completion of the well; that Louise Griswold and C. A. Griswold had entered into an oral agreement to com-munitize the lease, and were bound thereby; that C. O. Pfenninghausen had also entered into an oral agreement to communitize the lease, and his executor, having executed a communitization agreement, was also bound thereby.

Louise Griswold and C. A. Griswold seek a reversal of this judgment, and urge that the oil and gas lease of July 12, 1943, was forfeited by reason of failure of lessee to comply with the express and implied terms thereof; that they did not enter into any oral agreement to communitize their lease with the 80-acre tract to the south thereof; that the order of the Petroleum Administrator for War did not require them to so communitize.

L. Milford Lett, Jr., executor of the estate of C. O. Pfenninghausen, deceased, seeks a reversal of this judgment for the reason there is no evidence to support the trial court’s findings of fact that C. O. Pfenninghausen entered into an oral agreement to com-munitize; that the communitization agreement signed by the executor was signed upon the specific conditions that it was to be effective and binding only in the event all mineral owners signed the same, and also urges, for the first time, that the judgment is erroneous for the reason that the order of the Petroleum Administrator for War was effective only as to “leasehold interest”, and prior to April 16, 1945, there was no authority under the Oklahoma statutes for the execution of such com-munitization agreement by an executor.

We think the judgment was correct in all respects and should be affirmed.

The Griswolds contend that the lease required commencement on or before August 12, 1943, and completion of a well within six months from the date thereof, and since neither provision was complied with, the lease was forfeited. As to the first contention, the evidence discloses lessee began operations for the drilling of a well on the NW/4 of the SE/4 on or before July 15, 1943, by moving in various pieces of equipment, machinery, and supplies. When the question arose as to producing the well in compliance with the rules and regulations of the Petroleum Administrator for War, the location of the proposed well was changed with the consent of the Griswolds, to the center of the N/2 of the SE/4. There is sharp conflict as to when drilling operations were commenced on the new location, but no complaint was made as to commencement of the well until long after its completion.

The contention that the well should have been completed within six months is not well taken. The lease specifically provided that if a well was commenced within the terms thereof, lessee should have the right to drill such well to completion with reasonable diligence and dispatch. Lessors are not permitted to ignore this provision of the lease. Such provision was not rendered inoperative by the fact that the lease was for a definite term and did not provide for delay rentals. Bain v. Portable Drilling Corp., 200 Okla.

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Cite This Page — Counsel Stack

Bluebook (online)
1951 OK 342, 238 P.2d 322, 205 Okla. 412, 1 Oil & Gas Rep. 108, 1951 Okla. LEXIS 684, Counsel Stack Legal Research, https://law.counselstack.com/opinion/griswold-v-public-service-co-of-oklahoma-okla-1951.