Pepis v. Red Bank Oil Co.

1935 OK 11, 44 P.2d 846, 170 Okla. 189, 1935 Okla. LEXIS 666
CourtSupreme Court of Oklahoma
DecidedJanuary 8, 1935
Docket21685
StatusPublished
Cited by4 cases

This text of 1935 OK 11 (Pepis v. Red Bank Oil 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
Pepis v. Red Bank Oil Co., 1935 OK 11, 44 P.2d 846, 170 Okla. 189, 1935 Okla. LEXIS 666 (Okla. 1935).

Opinion

ANDREWS, J.

This is an appeal from a judgment of the district court of Tulsa county rendered in favor of the defendant in error, as the defendant, and against the plaintiff in error, as the plaintiff. The parties will be referred to as plaintiff and defendant, as they appeared in the trial court.

The plaintiff filed his amended petition, alleging that the defendant entered into a ■contract in writing on February 21, 1925, with F. J. Searight, whereby the defendant agreed to purchase from Searight an oil and gas lease covering the N.% of N.E.% of section 1, township 9 N., range 5 E., at an agreed price of $100 per acre, $2,000 to be paid when the title had been approved by the defendant’s attorney, $2,000 to be paid when the well reached a total depth of 3,000 feet, and $4,000 to be paid when the well reached a depth of 4,000 feet, unless oil or gas was discovered in commercial quantities; that the title was approved and the lease conveyed to the defendant and the defendant drilled an oil and gas test in the southwest portion of the 80 acres to an approximate depth of 4,000 feet without discovering oil or gas in paying quantities; that the defendant paid Searight on approval of the title the sum of $2,000 as per terms of the contract; that the well referred to in the contract was drilled to a depth of more than 3,000 feet on or about July 29. 19'27, whereupon the further sum of $2,000 became due and payable under the contract; that the $4,000 payment due under the terms of the contract when the well therein referred to had reached a depth of 4,000 feet became and was due; that said test well, which was upon an adjoining tract, the S.E.Yt of the N.E.i/j of seet'on 1. township 9 north, range 5 east, had been drilled to more than the required depth of 4.000 feet, and was completed about October, 1928, as a well producing oil and gas in large quantities.

It was further alleged in the plaintiff’s petition that on September 28, 1926, the contract was assigned by Searight to the plaintiff and notice of assignment was given to and approved by the defendant. The plaintiff asked for judgment for $2,000, with interest from July 29. 1927, and for $4,000, with interest from October, 1928. A copy of *190 the contract to drill between the defendant and Searight and the approval of the transfer of same by the defendant were made exhibits to the plaintiff’s petition.

The defendant -filed his answer denying generally, and alleged that on or about February 18, 1925, F. J. Searight was engaged in drilling a well for oil and gas in the northeast corner of the south half of the northeast quarter of section 1, township 9 north, range 5 east, and was the owner of an oil and gas mining lease covering the adjoining north half of the northeast quarter of the section for the sum of $8,000, payable $2,000 when title to the lease was approved by the defendant’s attorney,,$2,000 when the well then being drilled by Searight should reach a depth of 3,000 feet, and $4,000 when said well should reach a depth of 4,000 feet, unless oil or gas should be discovered in commercial quantities at a lesser depth ; that there was no prospecting for oil and gas in the immediate vicinity of the land at the lime and the nearest known producing sand was found at a depth of approximately 3,-500 feet; that it was orally agreed between Searight and the defendant that the well then being drilled by Searight offsetting the north half of the northeast quarter named would be a test well to test the known producing sand in the general vicinity of said land generally found at a depth of approximately 3,500 feet; that the lease purchased by the defendant was worth not exceeding $2,000 without the promise of Searight to drill the offset well; that at the time of the purchase of the lease by the defendant, Searight orally agreed that upon the approval of the title and the payment of the $2,000, no further sum would be payable by the defendant, except upon performance of the conditions agreed upon to drill the well below the depth of 3,500 feet; that on November 24, 1925, the defendant was advised by Sea-right that the well he had been drilling had been or was to be abandoned and a well started on a new location, and requested a new contract for payment of the same sums of money in the event the second well should be drilled as had been agreed to drill the original well; that the defendant delivered to Searight at his request a letter confirming the defendant’s consent upon the terms stated in the letter, a copy of which is exhibit “C” and, made a part of the answer. It was further alleged in the answer that the principal inducement in purchasing the lease was the agreement by Searight to drill the test well offsetting the acreage purchased, which was being drilled in the northeast corner of the south half of the northeast quarter of the section; that the well was not drilled with diligence, and during the summer of 1927 the test well was abandoned and the hole was not in a condition so that it could have been drilled to the depth of 4,000 feet in order to constitute a test well under the terms of the contract between Searight and the defendant; that the test well was never completed and was never a test to the depth of 3,000 feet or 4.000 feet as required by the contract; that the work done on the well was of no value or benefit to the defendant and the contract of purchase of said lease was never complied with, and1 that the defendant has been and is discharged from the obligation to pay any additional sums provided for in the contract; that the defendant admits it drilled a well for oil and gas in the southwest corner of the land on which it bought the lease, and expended thereon approximately $75,000; that same was drilled more than 4,000 feet and was a dry hole; that because of the failure of Searight to drill the test well, the defendant was compelled to and did expend other large sums of money making the test. The defendant pleads the performance of every obligation imposed upon it by reason of the contract for the purchase of the lease, and asks that the plaintiff take nothing.

It is plainly shown from the plaintiff's petition that this suit was brought on an entire contract, and that it was not a suit on the basis of quantum meruit. It was the contention of the defendant that .the contract requiring Searight to drill to 4,000 feet, unless oil or gas in paying quantities was discovered at a lesser depth, was an entire contract.

The letter contract of purchase addressed to Searight by the defendant, upon which this suit was brought, is in part as follows:

“This will confirm verbal agreement between Mr. Ross Sigler and Mr. Homer T. Lamb of even date. This agreement was as follows: Red Bank Oil Company agrees to purchase from you the north half of the northeast quarter of section one (1), township nine (9), range five (5) east, Seminole county, Okla., at the agreed price of $100 per acre, payment to be made in the following manner and upon the following conditions :
“Two thousand ($2,000) dollars when title to same has been approved by attorneys for this company.
“Two thousand ($2,000) dollars when the well has reached a total depth of 3,000 feet, and.
*191 ''Four thousand ($4,000) dollars when the well has reached a depth of 4,000 feet unless oil or gas is discovered in commercial quantities at a lesser depth. * * *

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Bluebook (online)
1935 OK 11, 44 P.2d 846, 170 Okla. 189, 1935 Okla. LEXIS 666, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pepis-v-red-bank-oil-co-okla-1935.