Moody v. Wagner

1933 OK 416, 23 P.2d 633, 167 Okla. 99, 1933 Okla. LEXIS 38
CourtSupreme Court of Oklahoma
DecidedJune 27, 1933
Docket21946
StatusPublished
Cited by33 cases

This text of 1933 OK 416 (Moody v. Wagner) 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
Moody v. Wagner, 1933 OK 416, 23 P.2d 633, 167 Okla. 99, 1933 Okla. LEXIS 38 (Okla. 1933).

Opinion

BUSBY, J.

This action was commenced in the district court of Lincoln county in April of 1927, by John Wagner, L. C. Ross, Roy Dawson, and E. C. Love, who sought in their first cause of action to recover a money judgment against the Mid-Continent Petroleum Corporation for the value of oil and gas produced from the N. W. % of section 8, twp. 15 north, and range 6 east of the Indian Base and Meridian. In a second cause of action plaintiffs also sought to recover rtunitive damages for alleged malicious slander of title to an oil and gas lease, which slander plaintiffs claimed was caused by the defendants’ placing of record in the office of the county clerk of Lincoln county an affidavit claiming a lien on said leasehold interest.

The cause was tried to the court, and on the 14th day of May, 1930, the court rendered judgment for the plaintiffs in the sum of $23,287.75 on their first cause of action and for the sum of $5,000 punitive damages on their second cause of action.

The defendants have appealed from this judgment, and the respective parties appear in this court in the reverse order. They will be referred to in this opinion as they appear in the trial court.

In November of 1924, one Claud Russell Earp, a minor, was the owner of a 2/33 interest in the land above described. Through his guardian, Mary E. Earp, an oil and gas lease for a term of five years and as long thereafter as oil and gas should be produced from the premises in paying quantities by the lessee, was executed to • John Wagner, one of the plaintiffs herein. Wagner subsequently assigned-fractional interests in the lease to the other plaintiffs.

Just before the lease was executed to John Wagner, the owners of the other 31/33 interest in the same property executed an oil and gas lease to the Oosden Oil & Gas Company. This lease was thereafter assigned to the Mid-Continent Petroleum Corporation. That corporation entered upon the premises under the lease and developed the same for oil and gas. It obtained profitable production.

The lease of AYagner and his assignees, who will be referred to as his associates, provided that if no well should be commenced on the premises within one year, the lease should terminate unless delay rentals should be paid to defer the time of drilling, and that the payment of such delay rentals should operate to extend the time for the commencement of a well for one year. It was also provided that during the exploratory period of the lease the time to commence drilling could be deferred annually by the payment of such rentals. Wagner and his associates paid only one delay rental, thereby deferring time for drilling under the lease until November of 1926. Before that time the Mid-Coptinent Petroleum Corporation had obtained profitable production from the premises, and Wagner and his associates relied upon the operations of the Mid-Continent as a compliance with the provisions of their lease. Claude Russell Earp, their lessor, also treated the production by the Mid-Continent Petroleum as a compliance with the provisions of the lease for about two years after November of 1926. During this period of time, the parties in ferested in the premises recognized that Wagner and his associates were entitled to participate in the production which resulted from the drilling operations of the Mid-Continent Petroleum Corporation. About the time that an answer was due to be filed in this case, it occurred to the attorneys for the Mid-Continent that there might be *101 a serious question as to whether the lease of Wagner and his associates had terminated in November, 1926, by failure on the part of the lessees to drill or pay delay rentals. They further questioned the right of Wagner and his associates to participate in the proceeds of the production even though the lease had not terminated. They so advised Claude Russell Earp. who thereupon filed an action in the district court of Lincoln county, seeking a judicial declaration that the lease of Wagner and his associates had terminated, and seeking to have the same declared a cloud upon the title of the plaintiff in that action. That lawsuit was tried and appealed to this court and is cause No. 21245 herein. It is styled “Claude Russell Earp, Plaintiff in Error, v. Mid-Continent Petroleum Corporation et al., Defendants in Error.” 167 Okla. 86, 27 P. (2d) 853. The issues involved in that controversy have been this day decided. The statement of facts and the rules of law contained in the opinion in that case will be treated with brevity herein. That opinion should be read in conjunction herewith.

In that case it was decided that by virtue of the execution and delivery of the lease to John Wagner, he became a cotenant witB the Oosden Oil & Gas Company, lessees of 31/33 of the premises. That subsequent assignments made John Wagner and his associates tenants in common with the Mid-Continent Petroleum Corporation.

It was also therein determined that the duration of the cotenancy depended upon the lease of Wagner and his associates; that by virtue of a'contemporary construction placed upon the lease contract by the parties thereto, the drilling of the Mid-Continent was a compliance with that provision of the lease requiring the payment of delay rentals or the commencement of a well upon the premises within one year to prevent the termination of the lease. This court reached the conclusion, however, that such contemporary construction did not operate to extend the terms of the lease beyond the five years from the date of its execution.

In the case referred to. this court recognized that it was the settled law of this state that each tenant in common has the right to enter upon the common promises and explore and develop (lie same for oil and gas and to produce such products from the premises, provided, however, that a co-tenant cannot exclude his eotenant from exorcising the same right with reference to the common property. It was also decided as a matter of law in that case that each tenant in common had the right to execute a separate lease which is effective as to his portion of the common property, and that upon the execution thereof his lessee becomes and is a eotenant with the cotenants of the lessor during the period of the lease, and that lessees under separate leases obtained from different cotenants are co-tenants with each other. It was also determined that as cotenants they are entitled to share in the production from the premises by other cotenants.

Claude Russell Earp and his grantees, who were Wagner and his associates, were entitled to receive 1/8 of 2/33 of all oil and gas produced from the premises by virtue of the provisions for royalties contained in their leases.

This proportionate portion of the oil and gas was subject to the prior rights of the Mid-Continent Petroleum Corporation to deduct from the market value of the oil and gas produced the reasonable and necessary cost of development, extraction, and marketing the same. However, since the amount of oil and gas produced from the premises at the time of the trial was of such a quantity that 2/33 of the net proceeds of the same was in excess of 1/8 of 2/33 of the gross amount produced, no question of deduction from the royalties of Earp and his grantees need be considered.

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

Related

POPE v. United States
Federal Claims, 2026
Howe v. Target Corporation
S.D. California, 2020
Unit Petroleum Co. v. Mobil Exploration & Production North America, Inc.
2003 OK CIV APP 95 (Court of Civil Appeals of Oklahoma, 2003)
Harrell v. Samson Resources Co.
1998 OK 69 (Supreme Court of Oklahoma, 1998)
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)
Buckles v. Wil-Mc Oil Corp.
1978 OK 137 (Supreme Court of Oklahoma, 1978)
Schank v. North American Royalties, Inc.
201 N.W.2d 419 (North Dakota Supreme Court, 1972)
Cox v. Davison
385 S.W.2d 864 (Court of Appeals of Texas, 1964)
Wilcox Oil Company v. Corporation Commission
1964 OK 131 (Supreme Court of Oklahoma, 1964)
Meeker v. Ambassador Oil Co.
308 F.2d 875 (Tenth Circuit, 1962)
Black Crystal Coal Co. v. Garland Coal & Mining Co.
267 F.2d 569 (Tenth Circuit, 1959)
Moore Oil, Inc. v. Snakard
150 F. Supp. 250 (W.D. Oklahoma, 1957)
Willson v. Superior Oil Company
274 S.W.2d 947 (Court of Appeals of Texas, 1954)
Wickham v. Skelly Oil Co.
106 F. Supp. 61 (E.D. Oklahoma, 1952)
Champlin Refining Co. v. Aladdin Petroleum Corp.
1951 OK 207 (Supreme Court of Oklahoma, 1951)
Mershon v. Essley
1951 OK 98 (Supreme Court of Oklahoma, 1951)
DIERKS LBR. & COAL CO. v. Fry
1950 OK 242 (Supreme Court of Oklahoma, 1950)

Cite This Page — Counsel Stack

Bluebook (online)
1933 OK 416, 23 P.2d 633, 167 Okla. 99, 1933 Okla. LEXIS 38, Counsel Stack Legal Research, https://law.counselstack.com/opinion/moody-v-wagner-okla-1933.