Sohio Petroleum Co. v. Brannan

1951 OK 153, 235 P.2d 279, 205 Okla. 1, 1951 Okla. LEXIS 577
CourtSupreme Court of Oklahoma
DecidedMay 22, 1951
Docket33997
StatusPublished
Cited by11 cases

This text of 1951 OK 153 (Sohio Petroleum Co. v. Brannan) 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
Sohio Petroleum Co. v. Brannan, 1951 OK 153, 235 P.2d 279, 205 Okla. 1, 1951 Okla. LEXIS 577 (Okla. 1951).

Opinion

HALLEY, J.

R. Brannan instituted this action in the district court of Love county against Sohio Petroleum Company, Thomas E. Nix, and Guy G. Jameson, seeking specific performance of an oral agreement made on August 2, 1945, whereby he agreed to sell and convey and defendants agreed to purchase a certain oil and gas lease dated August 26, 1944, covering lands in Murray county, Oklahoma. We shall refer to the parties by name, or as “plaintiff” and “defendants”, as they appeared in the trial court.

It w;as alleged that Sohio Petroleum Company authorized Thomas E. Nix, a lease broker, to secure an oil and gas lease on the land of the plaintiff. Mr. Nix employed Guy G. Jameson, also a broker, to make the purchase *2 at an agreed price of $100 per acre, or a total of $16,520, plus $41,300 out of l/16th of 7/8ths of oil and gas, if and when produced. Under the oral agreement made on August 2, 1945, between the plaintiff R. Brannan and Guy G. Jameson, Mr. Brannan agreed to draw a sight draft for $16,520 on Thomas E. Nix in care of the First National Bank & Trust Company of Oklahoma City and attach to the draft an assignment of the lease to Guy G. Jameson. R. Brannan agreed to furnish a complete abstract of title for examination, and Thomas E. Nix agreed to deliver the abstract and all title papers to Sohio Petroleum Company for examination, and upon title being found merchantable draft was to be paid and assignment delivered to Sohio Petroleum Company.

R. Brannan alleges that he complied fully with the above oral agreement by delivering complete abstract of title, and that he met all of the title requirements promptly. The original opinion of the attorneys for Sohio contained some fifteen requirements. On September 29, 1945, a supplemental opinion was written, and the plaintiff claims that he met all of the requirements in these opinions and that the title was made merchantable, but that if not entirely merchantable, he stood ready, able and willing to make it so.

Plaintiff admits in his pleadings that he was to furnish a merchantable title, but there was no agreement as to whether or not the opinion of the attorneys for Sohio was to be final upon merchantability of title. No time was specified in the oral agreement as to when title should be made merchantable.

Defendants raised the defense of the statute of frauds by general demurrer, which was overruled. Plaintiff contends that the doctrine of equitable estoppel is applicable under the facts proven, and that the acts of the defendants were such as to justify the applicability of this doctrine. A well was being drilled near the land in question by Continental Oil Company, and the value of leases in the vicinity was high until unfavorable reports were received as to the drilling well, because the oil produced was of an extremely low gravity. Plaintiff claims that Sohio Petroleum Company probably delayed the acceptance of or rejection of title pending the outcome of the drilling well, and only rejected title as unmer-chantable when the well proved to be unprofitable, and now seeks to escape liability behind the statute of frauds.

It is not disputed that Sohio gave only verbal authority to Mr. Nix to secure a lease on plaintiff’s land, and that Mr. Nix gave only verbal authority to Guy G. Jameson to contact plaintiff and purchase the lease. The agreement was made on August 2, 1945, between Mr. Jameson and the plaintiff, and was entirely oral. The agreement was definite as to the land to be covered and the price to be paid for the lease. No definite time for consummation of the deal was agreed on, and under the well established rule, time was admittedly not of the essence of the contract.

The first writing in furtherance of the oral agreement of August 2, 1945, was the ten-day sight draft drawn on that date by R. Brannan on Thomas E. Nix for the agreed purchase price of $16,520, and forwarded to the First National Bank & Trust Company of Oklahoma City. On the same date, R. Brannan executed and atttached to the draft an assignment of the oil and gas lease dated August 26, 1944, executed by himself and his wife as lessors for a term of ten years, and naming W. R. Brannan, his son, as lessee. This lease already had been recorded in Murray county. The assignment recites a consideration of one dollar and other good and valuable considerations, and reserves to assignor $41,300, payable out of l/16th of 7/8ths of the oil and gas produced. The next day, the plaintiff delivered an abstract of title to Mr. Jameson, who advised plaintiff shortly thereafter that since W. R. *3 Brannan was the lessee in the lease to be assigned, it would be necessary to have him execute an assignment of the lease. W. R. Brannan was then in the South Pacific. R. Brannan did have a limited power of attorney from W. R. Brannan, but it did not authorize the assignment of an oil and gas lease covering land in Murray county. Later, an assignment from W. R. Bran-nan was secured, but it never was delivered to the attorneys who examined the title for Sohio Petroleum Company; and it contained a defective acknowledgment, which made it of doubtful validity.

On September 29, 1945, the attorneys for Sohio submitted a supplemental opinion waiving certain requirements but requiring that others be met, and also suggesting that since it now appeared that R. Brannan had sold the land in question and reserved one-half of the mineral rights, the other one-half being vested in W. E. Crump, and the assignment by R. Brannan being made for W. R. Brannan by R. Brannan, attorney in fact, a new oil and gas lease should be obtained from R. Brannan and W. E. Crump. This requirement was never met.

On October 24, 1945, the examining attorney for Sohio wrote a final opinion rejecting the title, principally upon the ground that each of the three assignments of the lease submitted contained reservations of $41,300 from the working interest of oil and gas produced, making them overlapping, and the fact that the power of attorney from W. R. Brannan to R. Brannan did not authorize assignment of oil and gas leases on land in Murray county. On November 3, 1945, Sohio returned all title papers to Thomas E. Nix, rejecting the title as unmerchantable,

The record discloses that upon the expiration of the ten days provided in the sight draft above mentioned, R. Brannan, through his bank in Marietta, advised the First National Bank & Trust Company of Oklahoma City that it should hold the draft and attached statement, subject to his recall.

Judgment was entered for the plaintiff on September 29, 1948, granting him specific performance of the contract sued upon and ordering him to execute and deliver to the defendant Sohio Petroleum Company an assignment of the oil and gas lease dated October 26, 1944, above described, and declaring that upon delivery of said assignment the plaintiff should have judgment against the three defendants in the sum of $16,520 plus accrued interest and costs. Defendants have appealed from this judgment, and submit three propositions:

It is first contended that an oral contract to convey an oil and gas lease is invalid and unenforceable under the statute of frauds. Such a contract is invalid unless “some note or memorandum thereof be in writing and subscribed by the party to be charged, or his agent,” whose authority must be in writing and subscribed “by the party sought to be charged.”

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1951 OK 153, 235 P.2d 279, 205 Okla. 1, 1951 Okla. LEXIS 577, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sohio-petroleum-co-v-brannan-okla-1951.