Meyer v. Latta

285 P.2d 782, 178 Kan. 316, 4 Oil & Gas Rep. 1489, 1955 Kan. LEXIS 278
CourtSupreme Court of Kansas
DecidedJuly 6, 1955
Docket39,747
StatusPublished
Cited by5 cases

This text of 285 P.2d 782 (Meyer v. Latta) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Meyer v. Latta, 285 P.2d 782, 178 Kan. 316, 4 Oil & Gas Rep. 1489, 1955 Kan. LEXIS 278 (kan 1955).

Opinions

The opinion of the court was delivered by

Wertz, J.:

This was an action to recover personal judgments and to enforce liens under the provisions of G. S. 1949, 55-207, against certain oil field equipment belonging to the leasehold owner and used by him in connection with his drilling of two oil wells on the leased property. From a judgment of the trial court holding the subject property not lienable under the mentioned statute, plaintiffs appeal.

Appellee John Latta, hereinafter referred to as defendant, was the owner of certain leases for the purposes of drilling for oil and gas. Defendant also owned a “drilling rig” and equipment for the drilling of oil and gas wells on the leases owned by him. Defendant Walker-Neer Machine Company, a corporation, hereinafter referred to as machine company, held a chattel mortgage on the “drilling rig” owned by defendant Latta. Some of appellants, hereinafter referred to as plaintiffs, were employed by defendant Latta at a specified wage to perform common labor and work as drillers, and tool-dressers in connection with the drilling for oil and gas on the leased premises. Under contract with defendant, others had furnished material used in drilling wells on the leases. No oil was found as a result of defendant’s drilling operations, and plaintiffs were not fully paid for their labor performed and material furnished.

Within the time specified by statute, plaintiffs filed their liens against the whole of the leasehold and certain oil field equipment located thereon, including the “drilling rig” owned and used by defendant in drilling two wells on the leases owned by him. Subsequently plaintiffs instituted this action to recover personal judgment [318]*318against defendant and to enforce their liens. A receiver was later appointed to take charge of defendant’s property located on the leasehold.

The machine company then filed a motion for an order directing the receiver to release the “drilling rig” for the reason it was not subject to lien under the provisions of G. S. 1949,55-207.

After hearing evidence indicating the “drilling rig” was of a portable nature, the trial court sustained the motion, holding the rig not a proper subject of lien under the statute.

The principal question for determination on ibis appeal is whether a “drilling rig” owned by the leasehold owner and used by him in the drilling of an oil and gas well located upon the leased property is a proper subject of lien under the provisions of the aforementioned statute.

The holding of the trial court was that the “drilling rig” was not of such character as to constitute a part of the leasehold, a building or appurtenance on the leasehold, oil pipe line or gas pipe line, or material or supplies furnished by claimants. The effect of such a holding by the trial court is that any equipment on an oil leasehold which has the character and nature of personal property, even though the property be owned by the owner of the leasehold, is not subject to lien under the mentioned statute. We do not believe such a strict construction applies to this statute. To properly answer the question, it is necessary to analyze the provisions of the statute. G. S. 1949, 55-207, insofar as pertinent to the issue involved, reads:

“Any person, corporation or copartnership who shall under contract, express or implied, with the owner of any leasehold for oil and gas purposes, . . . who shall perform labor or furnish material, . . . used in the digging, drilling, torpedoing, completing, operating or repairing of any oil or gas well or who shall . . . perform any labor in constructing or putting together any of the machinery used in drilling, torpedoing, operating, completing or repairing of any gas well, shall have a lien upon the whole of such leasehold, of oil pipe line or gas pipe line, or lease for oil and gas purposes, the building and appurtenances, . . . and upon all the other oil wells, fixtures and appliances used in the operating for oil and gas purposes upon the leasehold for which said material and supplies were furnished and labor performed: . . .” (Italics supplied.)

Defendant cites the cases of Marion Machine Co. v. Allen, 119 Kan. 770, 241 Pac. 450; Given v. Campbell, 127 Kan. 378, 273 Pac. 442; and Bridgeport Machine Co. v. McKnab, 136 Kan. 781, 18 P. 2d 186, as authority that plaintiffs’ lien should not attach to defendant’s property in the instant case. These cases are not in point and are [319]*319óf no assistance in answering our present question. The question presented in the three cited cases by defendant was whether the plaintiffs had in those actions established the right to a lien. (Oil Well Supply Co. v. First Nat. Bank of Winfield, Kan., 106 F. 2d 399.)

It is to be kept in mind that in these cases the material and equipment were furnished to an independent contractor, and not to the leasehold owner. Under such circumstances, these cases-hold that unless the material and equipment furnished become a part of the well or completed work, the furnishing of such material does not give the plaintiff a right to a hen on the leasehold under the statute'. The reasoning behind such a holding is clear. If the material furnished contributes value to the property, and the leasehold owner has benefited as a result of plaintiff’s furnishing material, as a matter of equity a hen should attach to the leasehold for such material furnished the independent contract driller. Conversely, there being no privity of contract between plaintiff and the leasehold owner, materials which contribute nothing to the value of the property and where the leasehold owner does not benefit by the furnishing of such material to the independent contract driller, no hen should attach to the leasehold. These cases have no application to our question now under consideration for two reasons:

1. In the cases cited by defendant, materials and supplies were furnished to an independent contractor. In our case now under consideration, materials were furnished and labor performed as the result of a contract with the leasehold owner.
2. The question of whether plaintiffs have established their right to a lien under the statute is not before this court. The question is not whether plaintiffs have a right to a lien by virtue of furnishing material and performing labor, but rather, assuming the right to a lien exists, is the drilling rig a proper subject of lien under the terms of the statute?

We have had occasion before to construe the mentioned lien statute, and the answer to the question presented here may be found in the following cases:

In Meadows v. Oil Co., 108 Kan. 228, 194 Pac. 916, we held that under the statute a lien will attach to a leasehold covered by an oil and gas lease, and to all the property used in connection therewith where the labor is performed for, or the material is furnished to, the owner of the lease or his agent for the development or improvement of the lease.

In Skinner v. Oil Co., 112 Kan. 742, 212 Pac. 684, we held that the lien mentioned in the statute will attach to the casing and drilling [320]*320rig furnished by the owner of the lease and used in drilling a well thereon, and the fact that the owner of the lease retains title to the casing and drilling rig used in drilling the well, will not defeat the right to a lien on the casing and rig.

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Meyer v. Latta
285 P.2d 782 (Supreme Court of Kansas, 1955)

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Bluebook (online)
285 P.2d 782, 178 Kan. 316, 4 Oil & Gas Rep. 1489, 1955 Kan. LEXIS 278, Counsel Stack Legal Research, https://law.counselstack.com/opinion/meyer-v-latta-kan-1955.