Hicks v. Mid-Kansas Oil & Gas Co.

1938 OK 84, 76 P.2d 269, 182 Okla. 61, 1938 Okla. LEXIS 52
CourtSupreme Court of Oklahoma
DecidedFebruary 8, 1938
DocketNo. 26916.
StatusPublished
Cited by25 cases

This text of 1938 OK 84 (Hicks v. Mid-Kansas Oil & Gas Co.) 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
Hicks v. Mid-Kansas Oil & Gas Co., 1938 OK 84, 76 P.2d 269, 182 Okla. 61, 1938 Okla. LEXIS 52 (Okla. 1938).

Opinion

BILETT, J.

Plaintiffs in error, as plaintiffs below, owners of legal and equitable estate in 20 acres of land in Okfuskee county, Okla., sought cancellation of an oil and gas lease upon the land and for other relief..

The lease was executed January 19, 19-29', by E. E. Oliver to W. G. Goodwin. Thereafter lessor Oliver died and by mesne conveyances various plaintiffs acquired their interest in the land. Goodwin, lessee, transferred title in the lease to Transcontinental Oil Company, and by merger the Mid-Kansas Oil & Gas Company became owner of the" lease, and in 1933, by assignment, Helmerich & Payne acquired the principal interest, and on January 13, 1934. Helmerich & Payne began operations and “spudded in” on January 18, 1934; with due diligence operations were continued until gas in paying quantities was produced March 22, 1934. There was no production prior to January 19, 1934.

The lease contract is such as is known as producer’s S8 form, providing that the lease “shall remain in force for a term of five years from this date, and as long thereafter as oil or gas, or either of them is produced from such land by the lessee.”

And further providing that:

“If no well be commenced on said land on or before the 19th day of January, 1930, this lease shall terminate as to both parties, unless the lessee on or before that date shall pay or tender to the lessor, * * * the sum of $20”

—for deferring commencement of a well for 12 months; with like provision for deferring commencement of a well for a like number of months successively.

Defendants by joint answer plead that within the fixed term of the lease they commenced a well and had the right to complete it after the five-year period and to . maintain the lease contract as long ns oil or gas was produced in paying quantities under the law of this state, on which they relied as a rule of property in the expenditure made by them.

Plaintiffs replied by delineating what is termed a history of the development of the producer’s 88 form of lease, together with like delineation of a producer’s 88 special T. O. P. form of lease. The latter specifically *62 provides for completion of a well commenced within the fixed exploration period.

Plaintiffs further plead that the original lessor discussed the two forms of lease with the original lessee, refused to execute the latter lease contract, but did under such consideration execute the former, understanding in the agreement that production must be obtained prior to termination of the exploratory period of five years, otherwise 'the lease would expire.

At the trial plaintiffs sought a continuance on the ground of the absence of J. K. Autry, a party plaintiff, who was temporarily absent from the state, having gone to Kansas City on business and who informed C. W. I-Iicks, agent for other plaintiffs, a few days before trial that he would be present to testify, and they relied upon the statement. Amongst other things, Autry would testify that he. discussed with W, G. Goodw'in, lessee, who approached him and F. E. Oliver for the lease, the effect of the two forms of lease contract; that he, Good-w'in. Oliver, and Autry mutually understood that the form of lease executed would expire January 19, 1934, unless production had been obtained. The application was overruled.

■ Depositions of Benjamin Harvey Olds and W. F. McMechan were offered and rejected. These depositions were directed to the custom and usage in the vicinity with respect to the two forms of lease contracts.

W. M. McLennan, an attorney, w'as produced as a witness and from him such evidence w'as offered and rejected.

The court sustained a demurrer to plaintiffs’ evidence and judgment was rendered for defendants, from which plaintiffs appeal.

It is contended that the habendum clause of the lease contract governs the duration of the lease, and that the five-year term therein provided is not modified by the drilling clause contained in the said lease.

This assignment of error is governed by the decisions of this court to the contrary in Simons v. McDaniel, 154 Okla. 168, 7 P. (2d) 419, and Champlin Refg. Co. v. Magnolia Pet. Co., 178 Okla. 203, 62 P. (2d) 249.

The defendants Helmerich & Payne plead, and, undoubtedly by their action in expenditure of money and effort in developing the lease, wore depending upon the former decision as a rule of property, for prior to such development this court held as to such a lease contract that lessee had the right at any time within the exploratory period to commence a well, in which event there was the right with due diligence to complete the same.

In the latter cause it was pointed out that prior to the former decision this court had not had occasion to determine the identical proposition. ■ .

It is true in the latter case mention was made of “ambiguous, if not conflicting, provisions contained in the lease.”

In Prowant v. Sealy, 77 Okla. 244, 187 P. 235, the ambiguity arose by reason of the habendum clause, wherein these words were used, “and as much longer thereafter as oil or gas is found therein; or said premises developed; or operated.” It was held that the drilling clause “is clear and unambiguous. * * *” The rule therein stated was, “where a written contract is complete in itself and the same, viewed in its entirety, is unambiguous, its language is the only legitimate evidence of what the parties intended by it; the intention of the parties is to be gathered solely from the words used.

In Lester v. Mid-South Oil Co., 296 Fed. 661 (C. C. A. 6th) it was held:

“An oil and gas lease for five years providing in the development clause that the lease should terminate ‘if no well be commenced’ on dr before certain semi-annual dates ‘unless’ rentals were paid, held not to expire where a well was commenced on the last day of the term of the lease, and was thereafter pushed to completion and production; the lease being ambiguous as regards termination, thus requiring the development clause to be harmonized with the term clause.”

The ambiguity there considered was one wherein

“The whole of a contract is to be taken together so as to give effect to every part, if reasonably practicable, each clause helping to interpret the others”

— (Code cited in Prowant v. Sealy, supra), and not such an ambiguity as requires resort to parol evidence.

Sections 9462, 9463, 9465, O. S. 1931, provide in substance that a contract must be interpreted so as to give effect to the mutual intention of the parties at the time of contracting, and in so doing the language of the contract governs if it is clear and does not involve an absurdity, and the intention of the parties to a written contract is to be ascertained from.the writing alone, if possible, and the whole of the contract is to be considered for this purpose.

*63 Even in case doubt is east upon intention or meaning of expression used in a clause of a contract, it is not always necessary to resort to parol evidence, despite the fact that section 9471, O. S.

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

Related

American Economy Insurance Co. v. Bogdahn
2004 OK 9 (Supreme Court of Oklahoma, 2004)
Pitco Production Co. v. Chaparral Energy, Inc.
2003 OK 5 (Supreme Court of Oklahoma, 2003)
Video Update v. Videoland
Eighth Circuit, 1999
Munir H. Atalla v. Ahmad H. Abdul-Baki
976 F.2d 189 (Fourth Circuit, 1992)
Little v. Page
810 S.W.2d 339 (Kentucky Supreme Court, 1991)
Lanesboro State Bank v. Fishbaugher
383 N.W.2d 349 (Court of Appeals of Minnesota, 1986)
Carl Bolander & Sons Inc. v. United Stockyards Corp.
215 N.W.2d 473 (Supreme Court of Minnesota, 1974)
Panhandle Cooperative Royalty Co. v. Cunningham
1971 OK 63 (Supreme Court of Oklahoma, 1971)
Greeson v. Greeson
1953 OK 111 (Supreme Court of Oklahoma, 1953)
Skelly Oil Co. v. Wickham
202 F.2d 442 (Tenth Circuit, 1953)
Wickham v. Skelly Oil Co.
106 F. Supp. 61 (E.D. Oklahoma, 1952)
Bain v. Portable Drilling Corp.
1948 OK 137 (Supreme Court of Oklahoma, 1948)
Bayouth v. Howard
1948 OK 34 (Supreme Court of Oklahoma, 1948)
Goldstein v. Welded Products Co.
1945 OK 306 (Supreme Court of Oklahoma, 1945)

Cite This Page — Counsel Stack

Bluebook (online)
1938 OK 84, 76 P.2d 269, 182 Okla. 61, 1938 Okla. LEXIS 52, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hicks-v-mid-kansas-oil-gas-co-okla-1938.