Prowant v. Sealy

1919 OK 304, 187 P. 235, 77 Okla. 244, 1919 Okla. LEXIS 280
CourtSupreme Court of Oklahoma
DecidedOctober 28, 1919
Docket9046 and 10095
StatusPublished
Cited by63 cases

This text of 1919 OK 304 (Prowant v. Sealy) 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
Prowant v. Sealy, 1919 OK 304, 187 P. 235, 77 Okla. 244, 1919 Okla. LEXIS 280 (Okla. 1919).

Opinions

RAINEY, J.

This action was commenced by the defendants in error, John Sealy. E. R. Brown, R. Waverly Smith. E. E. Plumly, and George C. Greer, as trustees for the Magnolia Petroleum Company, hereinafter called the plaintiffs, against the plaintiffs in error, Chas. M. Prowant, Eva S. Prowant, Walter Brown, Earle T. Miller, Henry N. Greis and Burke-Hoffeld Oil Company, hereinafter called defendants, seeking to enjoin the de-defendants from interfering with plaintiffs’ possession of the land in controversy under an oil and gas mining lease. At the same time a similar action was commenced by the Fortuna Oil Company, as plaintiff, against Morton G. Custer et al., as defendants.

This controversy arose out of the following circumstances: On March 12, 1914, Chas. M. Prowant and wife executed, to A. P. Crockett, an attorney of Oklahoma City, an oil and gas lease on the premises involved in the action first above mentioned, which was subsequently assigned by Crockett to the Magnolia Petroleum Company. This company made a location for well No. 1 on this lease in December, 1916. On the same date the Prowant lease was executed Morton G. Custer and wife gave Crockett a similar lease on the promises involved in the second action. This lease was subsequently assigned to the Fortuna Oil Company, which, at the time of the institution of this suit, had made its location for well No. 1 on said lease. Later these companies made additional loca- . tions on the leases, so that on March 12, 1917, there were two drilling wells on each lease. On December 27, 1916, Chas. M. Prowant and wife executed an option contract to Walter Brown, for a cash consideration of $1,000, giving the said Brown an option to purchase an oil and gas lease on his land on or before March 12, 1917, for a bonus of $20,000. On January 31, 1917, Morton G. Custer and wife made a similar contract -with the said Brown and Earle T. Miller for a bonus of $25,000. It was upon receiving notice of the execution of these option contracts that the plaintiffs in each of the above cases, who were at the time engaged in drilling on both said leases, brought their actions to enjoin the lessors and Brown and Miller from interfering with the plaintiffs’ possession of the premises and to cancel the option contracts as clouds on plaintiffs’ titles. The trial court rendered judgment for plaintiffs, from which the defendants have appealed to this court.

The materia] facts in the cases are substantially the same, but they involve different tracts of land and different parties. During the trial, bj agreement, the evidence in one case was considered evidence in the other case so far as applicable, so the decision of the first named case will be controlling in the second.

The material facts covering the negotiations between the original parties to the lease are that sometime in February or March, 1914, Crockett began negotiations with the defendants in these cases and other landowners in what is hereinafter designated as (he Yale field, which negotiations resulted in Crockett and fifteen of such landowners reaching an agreement by which oil and gas leases were to be given Crockett on their lands in this field in consideration of Crockett’s proceeding to drill a test well to a depth of three thousand feet, unless oil oi-gas was found, or the Bartlesville sand reached, at a lesser depth. At the time of the negotiations the territory in which the lands were situated was approximately fifteen miles from the nearest producing well and was what is commonly denominated “wild-cat” territory. Prior to this time shallow wells had been drilled in the Yale field, but without discovering oil or gas in paying quantities, and ail other prospectors who had secured leases on these particular lands had ■abandoned them. Several dry holes had been drilled In the immediate vicinity of rlie leases taken by Crockett, which had, in a measure, apparently condemned that section for oil and gas purposes. Under these circumstances (here had been discussion-among the landowners, who subsequently joined in executing the block of leases to Crockett leading to an implied understanding between them, if not an express agreement, to the effect that they would not lease again without receiving guarantees of the drilling of a well that would test the field. Crockett appears to have had an abiding faith that oil would be discovered in the field and the prospective lessors, being impressed with his earnestness in this respect, entered into an agreement with him for the drilling of a test well. Under this agreement Crockett executed his bond in the sum of $2,500, which was to be forfeited to the lessors as liquidated damages in the event he failed to *246 drill such test well in accordance with his agreement. The leases executed by the fifteen lessors, who entered into the contract with Orockett for the drilling of the test well, were deposited in escrow in the First National Bank of Tale, to be delivered to • Orockett upon the. commencement of the test well. In the briefs this contract is denominated the “escrow agreement.” Under it Crockett further obligated himself, and the parties whom he represented, to commence within sixty days from the 20th day of February, 1914, the drilling of a test well upon some one of the tracts of the fifteen lessors, and to prosecute the drilling continuously in good faith until the test reached three thousand feet, unless paying sand was found at a lesser depth. It was further stipulated in the agreement that the test well was to be completed within one year from the date of its commencement. This well was begun within the specified time, and, in accordance with the terms of the escrow agreement, the leases executed by the fifteen lessors, among which were the two involved in these cases, were delivered by the bank to Orockett. The well was completed within the year prescribed, oil in paying quantities being found at a depth slightly in excess of three thousand feet. All the leases are substantially identical, the materikl parts of the Prowant lease being as follows:

“This Agreement, Made and entered into this 11 day of March, 1914, by and between Chas. M. Prowant and Eva S. Prowant, husband and wife, of Payne County, State of Oklahoma, lessors, and A. P. Orockett, of Ok lahoma City, State of Oklahoma, lessee;
“Witnessetb : That the lessors, in consideration of the sum of one dollar ($1.00), to them in hand, well and truly paid by the lessee, receipt of which is hereby acknowledged, do hereby grant, demise, lease and let unto the lessee, his successors, heirs and assigns, all of the oil and gas in and under the following described tract-of land, and also the said tract of land for me purpose and with the exclusive right of entering upon and operating thereon and removing therefrom said oil and gas and of laying pipe lines, building tanks, powers, stations, and structures thereon for producing, extracting, storing and disposing of said products, -and with the right to use oil, gas and water therefrom, and all rights and privileges necessary or convenient for such operations ; also the right to remove at any time all property, pipes, casing, materials, buildings and improvements placed or erected in or upon said land by the lessee, said land being all of that certain tract of land situate in Payne county, state of Oklahoma, described as follows, to wit :
“The south one-half of the northwest one-quarter of section G. township 19 north, range 6 east, of the Indian Meridian, containing 80 acres more or less.

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Bluebook (online)
1919 OK 304, 187 P. 235, 77 Okla. 244, 1919 Okla. LEXIS 280, Counsel Stack Legal Research, https://law.counselstack.com/opinion/prowant-v-sealy-okla-1919.