Peerless Oil & Gas Co. v. Tipken

1942 OK 140, 124 P.2d 418, 190 Okla. 396, 1942 Okla. LEXIS 97
CourtSupreme Court of Oklahoma
DecidedApril 7, 1942
DocketNo. 30114.
StatusPublished
Cited by10 cases

This text of 1942 OK 140 (Peerless Oil & Gas Co. v. Tipken) 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
Peerless Oil & Gas Co. v. Tipken, 1942 OK 140, 124 P.2d 418, 190 Okla. 396, 1942 Okla. LEXIS 97 (Okla. 1942).

Opinions

ARNOLD, J.

This is an appeal from the district court of Lincoln county wherein the trial court sustained the demurrer of the defendants to the petition of the plaintiff.

The plaintiff alleged that the defendant Louis Tipken was the owner in fee simple of the W.% of the N.W. 14 of sec. 15, twp. 13 N., range 6E., Lincoln county, Okla.; that on January 11, 1927, for a valuable consideration, he, together with his wife, executed and delivered to the plaintiff a mineral deed conveying, for a term of 15 years and as long thereafter as oil and gas may be produced, an undivided one-half interest in and to all the oil, gas, and other minerals in and under and that might be produced from the N.WAA of the N.W.V4 of sec. 15; that on May 22, 1935, Tipken and his wife, defendants, and the Peerless Oil & Gas Company, plaintiff, joined in the execution of an oil and gas mining lease covering the entire W.% of the N.W. 14 of said section 15. Thereafter, the iforkan Production Company secured production under said lease from a well on the S.W.% of the N.W. 14 of said section 15; all royalties had been paid to the defendants without division or distribution of any portion thereof to the plaintiff.

Plaintiff further alleged that said oil and gas lease above referred to contains a provision and an agreement which is as follows:

“If said lessor owns a less interest in the above-described land than the entire and undivided fee-simple estate therein, then the royalties and rentals herein provided for shall be paid the lessor only in the proportion which . . . interest bears to the whole and undivided fee.”

That by virtue of such agreement in said lease, the plaintiff is entitled to one-fourth of all the royalties paid or payable for oil and gas produced and sold from the above lands, the W.% of the N.W. 14 of said sec. 15; that although demand has been made for its proportionate share of said royalties, no part thereof has ever been paid to the plaintiff.

A copy of the lease was attached to the petition and made a part thereof.

*398 Plaintiff concluded its petition with a prayer for an accounting and one-fourth of the value of all oil and gas royalties accrued under the lease and judgment decreeing it the owner of a one-fourth royalty interest in the oil and gas to be produced under said lease.

The above state of facts, standing alone, constitute a cause of action in favor of the plaintiff, and the court erroneously sustained the demurrer to said petition.

■ It is the contention of the plaintiff that said above-quoted provision of said lease means that the royalties must be paid to the lessor, whether one or more, in the proportion which their or its interest bears to the whole and undivided fee, and, therefore, the plaintiff, owning 20 acres out of the 80 acres under the lease, as a colessor, is entitled to one-fourth of the royalties produced from the lands pooled and described in said lease.

The defendants take the position that such clause means that if the lessor, Peerless Oil & Gas Company, owns less than the whole of its parcel, it should receive only its proportionate part of the royalties under that particular tract, and that the lease contract should not be enlarged to allow it to participate in the oil produced from a tract that it never acquired any interest in by deed.

Galt et al. v. Metscher, 103 Okla. 271, 229 P. 522, and the other cases to the same effect, relied on by defendants, holding that where subsequent to the execution of a lease a tract of land is subdivided and sold in separate tracts subject to the lease, the owners of such separate tracts are entitled to all the royalties accruing from their separate tracts, have no application to the question herein, that is, the division of royalties under a joint lease executed by the owners of separate contiguous parcels of land as a single tract.

In Kimbley v. Luckey, 72 Okla. 217, 179 P. 928, we said:

“Where a tract of land subject to an oil and gas lease is subdivided by the owner and lessor -by selling a portion thereof, the purchaser of such portion takes the same subject to such lease; and, should the lessee therein thereafter discover and produce oil or gas from the residue of the leased premises, such purchaser is not entitled to an apportionment or share of the royalties accruing from the oil and gas produced thereon.”

See, also, Pierce Oil Corp. v. Schacht, 75 Okla. 101, 181 P. 731; Galt et al. v. Metscher, supra, and the other cases to the same effect.

Conversely, in Brazell v. Brown, 169 Okla. 623, 38 P. 2d 17, we held that where two tracts of land, owned in severalty, are joined by different owners in an oil and gas lease providing for royalty to the credit of the lessors, and the lease is silent as to the division of royalty between lessors and the development is upon and the production is from one tract of the lands leased, the undeveloped royalty interest so joined is entitled to share proportionately in the production, and a petition so pleading, together with an allegation that at the time of execution of the lease contract it was agreed that such owner of the leased land should share ratably in the royalty, states a cause of action against the colessor and producer.

We are committed to the rule that where two or more owners of contiguous tracts of land join in a single lease thereof to a third party for oil and gas purposes as a single tract, and it is provided therein for delivery of one-eighth of the oil produced to the lessor, all the royalty will be divided among the lessors in the proportion that the area of the tract owned by each bears to the total area covered by the lease, in the absence of an agreement between the lessors to the contrary, regardless of the ownership of the particular tract upon which the well or wells may be drilled from which oil is produced. Higgins v. California Petroleum Co., 109 Cal. 304, 41 P. 1087; Lynch v. Davis, 79 W. Va. 437, 92 S.E. 427, L.R.A. 1917F, 566; and Seal v. Banes, 183 Okla. 203, 80 P. 2d 657.

*399 However, the question of the division of royalties in such a case is a matter of intention of the colessors, which may be determined from the language of the lease itself, or by separate contracts or agreements between such lessors, or such conduct of the parties after the execution of the lease as would indicate a construction of the lease by them on this matter. Lusk v. Green, 114 Okla. 113, 245 P. 636; Brazell v. Brown, supra; Parker et al. v. Parker et al. (Tex. Civ. App.) 144 S.W. 2d 303; Louisiana Canal Co. v. Heyd et al., 189 La. 903, 181 So. 439, 116 A.L.R. 1260, 1267. See 3 Summers on Oil & Gas (Perm. Ed.) sec. 611.

In Lusk v. Green, supra, Selah and Susan Lusk, husband and wife, owned severally in fee simple separated quarter sections of land. They executed in the year 1912 a joint oil and gas lease covering the separate lands. Susan died and production was had on the land owned by her; Selah died and his devi-sees sued for a proportionate royalty share in the oil produced from the land' owned by Susan. The decree of distribution in the probate of Susan’s estate became final, thus distributing the interest in the land leased by Susan adverse to Selah’s devisees.

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

Related

Leonard v. Barnes
404 P.2d 292 (New Mexico Supreme Court, 1965)
Stroud v. D-X Sunray Oil Co.
1962 OK 240 (Supreme Court of Oklahoma, 1962)
Irick v. Hubbell
1955 OK 50 (Supreme Court of Oklahoma, 1955)
Moshiek v. Lininger
274 P.2d 965 (Supreme Court of Colorado, 1954)
Southland Royalty Co. v. Humble Oil & Refining Co.
249 S.W.2d 914 (Texas Supreme Court, 1952)
Humble Oil & Refining Co. v. Southland Royalty Co.
244 S.W.2d 249 (Court of Appeals of Texas, 1951)
Magnolia Petroleum Co. v. Ouart
1947 OK 117 (Supreme Court of Oklahoma, 1947)

Cite This Page — Counsel Stack

Bluebook (online)
1942 OK 140, 124 P.2d 418, 190 Okla. 396, 1942 Okla. LEXIS 97, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peerless-oil-gas-co-v-tipken-okla-1942.