Riggs Oil Co. v. Gray

30 P.2d 145, 46 Wyo. 504, 1934 Wyo. LEXIS 46
CourtWyoming Supreme Court
DecidedMarch 13, 1934
Docket1808
StatusPublished
Cited by5 cases

This text of 30 P.2d 145 (Riggs Oil Co. v. Gray) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Riggs Oil Co. v. Gray, 30 P.2d 145, 46 Wyo. 504, 1934 Wyo. LEXIS 46 (Wyo. 1934).

Opinion

Riner, Justice.

This calse brings a judgment of the District Court of Weston County for review by direct appeal. The facts material to be considered, and in connection with which the present litigation arose appear to be these:

The State of Wyoming, through its Board of Land Commissioners, on August 2, 1927, granted to one Clinton W. Smith, a “Lease of State Land” on Section 16, Township 46 North, Range 64 West, in Weston County, Wyoming. This lease ran for the term of five years from the date thereof, i. e., “until and including the first day of August, A. D. 1932.” The instrument, among other provisions, contained the following, “The lease holder or tenantry right leased and let by this lease, is for grazing purposes”; “Reservations by the State Board of Land Commissioners. * * * (b) The right to lease and dispose of all minerals, metals, coal and timber within and upon said premises, together with sufficient surface rights and rights of way upon and through said premises for conducting the necessary work for developing and prospecting of minerals, metals or coal in said premises, or the cutting and removal of timber thereon”; and “no assignment or sub-lease made by the second party will be recognized by the first party unless it shall have been entered upon the records of the Commissioner of Public Lands and approved by the State Board of Land Commissioners.” Smith, without the State Board’s approval, thereafter orally leased this land to one Henry Martens, and the latter used it for *508 the purpose of grazing his own cattle thereon, Martens reimbursing Smith for the rental due the State, under the terms of the lease.

On February 2, 1931, the State of Wyoming, through its Board of Land Commissioners, aforesaid, issued to one Herbert B. Fowler, an “Oil and Gas Prospector’s Lease” covering the above described property, for the period of one year from and after its date. By this instrument, there was granted to the said Fowler “the exclusive right to prospect said land for OIL AND GAS during the term of this lease, together with such surface rights as may be actually required for roads, pipe lines, telephones, storage, housing and drilling operations.” It also provided that “in the event of a commercial discovery of Oil and-or Gas in the land hereby leased the lessee will within thirty (30) days after making such discovery surrender this lease and apply for an Oil and Gas Operating lease.”

Thereafter, an arrangement was consummated whereby one A. J. Riggs was employed to “enter into a contract with a reliable well drilling contractor for the drilling and completion of a well for oil upon the said premises.” This Riggs did through the plaintiff and appellant, the Riggs Oil Company, a New Jersey corporation, of which he was the accredited agent, by contracting with the defendant and respondent, Duff 0. Gray, for that purpose. Under the instrument last mentioned, acknowledged by both parties July 7, 1931, Gray agreed to drill a well for oil upon the property, aforesaid, as provided by the terms of the contract, at such location on the South half of the Northeast quarter of said Section 16, as the Riggs Oil Company might select.

The well was, in due course, drilled by Gray as agreed, and completed about October 28, 1931, oil in *509 commercial quantities being discovered therein. Gray’s work in connection with the drilling operations appears to have been satisfactory, and he received the agreed compensation therefor.

During the course of putting down the well, Gray informed Riggs in substance that he intended to erect a dam across a draw situated a short distance off the South half of the Northeast quarter of said section, but however, located on the remaining portion thereof, for the purpose of creating a catch basin for surface waters to aid in drilling operations and, thereby, to avoid hauling the necessary water therefor. Under the terms of the contract between Riggs and Gray, the latter was to furnish the water needed for his operations. Riggs responded that “that would be fine if he got water.” Gray, accordingly, with the assistance of Martens, put in the dam, it being orally agreed between them that Martens should have the right to water his cattle at the reservoir thus made, if he so desired. The well was duly completed and Gray paid for his work in drilling the well pursuant to contract, as heretofore stated, but no water in the meantime had accumulated in the reservoir, as there was no precipitation in the form of either rain or snow. Subsequently, and from December, 1931, onward, water gradually began to be impounded in the reservoir, as the snows and rainfall made their contributions thereto.

On January 2, 1932, the State of Wyoming, through its Board of Land Commissioners, granted to *510 Herbert B. Fowler an “Oil and Gas Operating Lease” on all of said Section 16 for the term of ten years, with certain preferential rights as to the future. Under this instrument, he was given the “exclusive right and privilege to drill for, mine, extract and remove all of the oil and gas deposits” in or under said land “together with the right to construct and maintain thereon all works, buildings, plants, waterways, roads, telegraph or telephone lines, pipe lines, reservoirs, tanks, pumping stations, or other structures necessary to the full enjoyment thereof.” On March 9, 1932, Fowler assigned an undivided one-fourth interest in this operating lease to each of the three associates, and on June 8, 1932, all four of these parties assigned all of their interest in the South half of the Northeast quarter of said Section 16, to the Riggs Oil Company, these assignments each being made with the consent and approval of the Board of Land Commissioners of the State.

Sometime in February, 1932, Riggs, on behalf of the Riggs Oil Company, secured from Fowler and his associates, under the State Oil and Gas Operating lease, aforesaid, the right to use the water which was being impounded by the dam erected, as above described, the same to be employed in the oil producing operations of that company on that part of said Section 16 in which it was interested. Later and during the spring of the year last mentioned, Gray also went to Fowler and asked for Fowler’s written permission to use the water aforesaid. This was refused, Fowler, however, saying to Gray that he could have all water out of the pond that Gray wanted, “after Mr. Riggs’ needs were taken care of.”

Subsequently, and under date of May 30, 1932, Gray and Martens executed a written instrument which, after reciting the previous oral arrangement between *511 these parties concerning the dam, aforesaid, then provided :

“that D. O. Gray shall repair said dam and maintain the same and for such service shall have the right to the exclusion of all others to the water stored in said dam except and reserving to said Henry P. Martens the water rights for his cattle as above stated and now existing. D. O. Gray further agrees that in the event he should derive profit from the disposal of any of said water he will pay the said Henry P. Martens the percentage of such profit verbally agreed upon.”

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Bluebook (online)
30 P.2d 145, 46 Wyo. 504, 1934 Wyo. LEXIS 46, Counsel Stack Legal Research, https://law.counselstack.com/opinion/riggs-oil-co-v-gray-wyo-1934.