Meeker v. Denver Producing & Refining Co.

1947 OK 349, 188 P.2d 854, 199 Okla. 455, 1947 Okla. LEXIS 771
CourtSupreme Court of Oklahoma
DecidedNovember 18, 1947
DocketNo. 33009
StatusPublished
Cited by2 cases

This text of 1947 OK 349 (Meeker v. Denver Producing & Refining 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
Meeker v. Denver Producing & Refining Co., 1947 OK 349, 188 P.2d 854, 199 Okla. 455, 1947 Okla. LEXIS 771 (Okla. 1947).

Opinion

RILEY, J.

This is an appeal from a decree quieting title in the Denver Producing & Refining Company to the oil and gas-mining leasehold covering the W. y2 of S. W. Vi, see. 10, twp. 13 N., R. 4 W. in Oklahoma county, and all production therefrom except the Vs royalty portion. The facts are not in dispute since they are all stipulated or conclusively proved. The question presented is one of law.

The record discloses that on and prior to July 24, 1944, Denver Company was the owner of oil and gas leases covering all the oil and gas rights in said land except the undivided 1-16 thereof. Grover C. Meeker and Zoe Marie Meeker owned all the surface rights of the S.W. Vi of said sec. 10 and 1-16 of the oil and gas or mineral rights in the W. % of said quarter section. Said land is within the oil and gas field known as the West Edmond Pool. July 13, 1944, the Corporation Commission [456]*456issued an order establishing 40-acre drilling ’or spacing units for the operation and development of the Hunton Lime formation, the common source of production in said pool, which covers and includes the land here involved.

On July 24, 1944, the Denver Company served notice on the Meekers of its intention to drill a well on the N.W. 14 of S.W. Vi of'said sec. 10, that being the north 40 acres of the land here involved. Said notice set forth that the county clerk’s record showed the Meekers to be the owners of 1-16 of the oil and gas rights in and under said land. It also contained an estimate of the cost of the drilling, completing, and equipping the proposed well in the sum of $78,000.95, and an estimate of the portion thereof they deemed chargeable to the Meekers’ 1-16 interest in the sum of $4,875.05. Said notice further notified the Meekers that unless they paid said sum of $4,875.05 to the Denver Company prior to the setting of the surface casing in said proposed well, they would not be entitled to participate in the 7-8 working interest.

On October 4, 1944, Denver served the Meekers with a like notice and estimate and demand with reference to drilling a well on the S.W. Vi of S.W.' Vi of said sec. 10, being the south 40 acres of the land here involved.

Shortly after the receipt of the first notice, Grover C. Meeker wrote the Denver Company that he was advised by his attorney that he, Meeker, being a cotenant, was not compelled to advance his part of the estimated cost of drilling the well or wells.

The Denver Company commenced drilling a well on the south 40 acres and set the surface casing therein on December 21, 1944; and commenced the well on the north 40 acres and set the surface casing therein March 10, 1945.

On January 8, 1945, after the first ' well was commenced and before the second well was commenced, Gulf Petroleum Company obtained from the Meekers an oil and gas lease covering their undivided mineral interest in the entire S.W. Vi of said sec. 10. Said lease provided for the payment of the usual Vs royalty and provided further that Grover C. Meeker was to have all the income and monies, above development and production expenses, if, as, and when said oil and gas were produced, saved, and sold from any or all wells drilled upon said land, until said Grover C. Meeker shall have received the sum of $10,000.

The Denver Company completed the first well about February 20, 1945.

On January 22, 1945, Gulf Petroleum Company, by Bob Rucker, wrote some officer of the Denver Company notifying it that the Gulf Company had purchased the oil and gas rights of the Meekers and that the writer of the letter had intended to make a personal call at the office of the Denver Company, but upon telephone call for an appointment, was informed that the officer of the Denver was out in the field. The letter then stated that he, Rucker, was leaving that day for Mississippi to be gone for several days and that he would contact the Denver Company when he returned, and then stated “This is to assure you that we will co-operate with you on this property in every way possible”. Nothing further appears to have been done toward reaching an agreement between the Denver and the Gulf people. ■

Then, on March 20, 1945, the Denver Company commenced this action against the Meekers and Gulf Petroleum Company for a judgment decreeing plaintiff to be the owner of the legal title in fee simple in and to the oil and gas mining leasehold estate or estates covering the W. % of S.W. Vi of said section 10, and decreeing defendants to have no right, title, or interest therein, except the usual Vs proportionate royalty.

[457]*457Defendants Grover C. Meeker and Zoe Marie Meeker answered denying their liability to pay in advance their proportionate share of the cost of drilling the two wells, and by cross-petition asserted their ownership of and right to the 1-16 of the Vs royalty and an interest in the 1-16 of the Vs working leasehold interest to the extent of the $10,000 reserved to Grover C. Meeker under their lease to the Gulf. By the second cause of action in their cross-petition they claimed damages to the surface rights of the land. But that part of the cross-petition was later dismissed.

Defendant Gulf Petroleum Company answered asserting ownership of the 1-16 of the Vs working interest production from the property, subject only to a lien in favor of plaintiffs for the proportionate 1-16 part of the cost of drilling, equipping, and operating the lease on said land, and further asserting that neither the statute nor common law required the defendants to contribute or pay in advance its proportionate part of the cost of drilling and equipping 'said wells.

Replies were by general denial.

At the trial the facts were stipulated or proved by documentary evidence substantially as stated above. Among other matters, it was stipulated that the approximate cost of drilling the two wells was $78,000.95 each.

Decree was for plaintiff substantially as prayed for, denying defendants any right, title, or interest in the Vs working portion of said wells, and quieting title in plaintiff and allowing defendants only the 1-16 of the Vs royalty interest. Defendants appeal.

In the instant case, plaintiff and defendants are tenants in common and not the separate owners of two or more separate tracts embraced within a spacing or drilling unit. Defendants contend that a developing tenant in common must account to a nonconsenting or nonco-operating tenant in common for his share of the net profits derived from the property.

That is the general rule, in the absence^ of valid statutory provisions otherwise regulating the rights of .tenants in common in the development of lands held as tenants in common. Prairie Oil & Gas Co. v. Lizzie Allen, 2 Fed. 2d 566, 40 A.L.R. 1389. Therein many authorities are reviewed and cited in support of the rule announced.

In Earp v. Mid-Continent Petroleum Corp., 167 Okla. 86, 27 P. 2d 855, 91 A.L.R. 188, this court, in effect, recognized and followed the rule announced in Prairie Oil & Gas Co. v. Allen, supra, as to the right of a nonconsenting or conco-operating tenant in common to an accounting for oil and gas taken from the jointly owned property by his cotenant. The rule there stated is:

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Bluebook (online)
1947 OK 349, 188 P.2d 854, 199 Okla. 455, 1947 Okla. LEXIS 771, Counsel Stack Legal Research, https://law.counselstack.com/opinion/meeker-v-denver-producing-refining-co-okla-1947.