Whale v. Rice

1935 OK 838, 49 P.2d 737, 173 Okla. 530, 1935 Okla. LEXIS 480
CourtSupreme Court of Oklahoma
DecidedSeptember 17, 1935
DocketNo. 23723.
StatusPublished
Cited by10 cases

This text of 1935 OK 838 (Whale v. Rice) 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
Whale v. Rice, 1935 OK 838, 49 P.2d 737, 173 Okla. 530, 1935 Okla. LEXIS 480 (Okla. 1935).

Opinion

BUSBY, J.

This action was commenced in the county court of Marshall county on January 30, 1926, by H. M. Rice, as plaintiff, against Herbert M. Moore, S. A. Whale, and the United States Eidelity & Guaranty Company of Baltimore, Maryland, a corporation, as defendants. The plaintiff sought to recover from the defendants the sum of $750 in annual royalties and rentals alleged to be due under and by virtue of a departmental oil and gas lease. The plaintiff, H. M. Rice, died on May 14, 1931, and the cause was thereafter revived and subsequently maintained and prosecuted by Rhoenna Rice, administratrix of the estate of the deceased.

In October of 1931, the cause was tried to a jury in the court below, resulting in a verdict in favor of the plaintiff in the sum of $505. The trial court rendered judgment on the verdict for the sum stated, plus accrued interest thereon from the date the action was commenced.

The defendant S. A. Whale brings the cause to this court on appeal for review, appearing herein as plaintiff in error. The defendant United States Eidelity & Guaranty Company presents a cross-petition in error. The defendant Herbert M. Moore has not appealed, and the judgment of the county court,, is final as to him. For the sake of convenience we will continue to refer to the parties in the order of their appearance in the court below. The general term “defendants” will be used on occasion in this opinion to; refer only to the defendants who have appealed. The defendants complain: (1) That there was error committed by the trial court in determining the amount of recovery, in that the jury was permitted to include $200 which became due under the lease on September 23, 1926, some six or seven days before the lease was canceled ; (2) that the proof introduced by the plaintiff is insufficient; (3) that the lower court erred in restricting the scope of cross-examination when the defendant S. A. Whale was placed on the stand as a witness for *532 the plaintiff; and (4) that the lower court erred in adding interest to the amount of recovery as specified in the verdict. The defendant United States Fidelity & Guaranty Company also, urges in behalf of itself only that the lower court erred in holding it liable to the plaintiff in any sum.

Preliminary to a consideration of these various contentions, it is essential that rve review briefly the facts in this case.

On July 3, 1920, Nicholas McGilberry, a full-blood citizen of the Choctaw Nation, who was then the owner of 100' acres of allotted land which was restricted as to alienation, executed an oil and gas lease on that land to the defendant Herbert M. Moore. The lease was on a form prescribed by the Department of the Interior commonly referred to as a departmental oil and gas lease. This lease was approved by the Secretary of the Interior. A bond was executed in connection with the lease by Moore, as principal, and the United States Fidelity & Guaranty Company, as surety, which was also approved by the Secretary of the Interior on September 23, 1920'. The purpose of the bond was to secure the faithful performance by the lessee of the obligations 'and conditions imposed by the terms of the lease. Among other obligations imposed upon the lessee by the lease, was the payment of annual rentals and royalties in an amount therein specified, the alleged nonpayment of which resulted in this action.

On July 10, 1920, restrictions on the alienation of the land of McGilberry were removed by the Secretary of the Interior to be effective 30 days after date. Thus the removal of restrictions became effective' on August 9, 1920. On April 13, 1921, McGil-berry conveyed the land to I-I. M. Rice, the original plaintiff in this action, and on December 2, 1921, the original lessee, Moore, assigned the lease to the defendant S. A. Whale.

By the terms of the lease the rentals and royalties became due on the 23rd day of September of each succeeding calendar year during the life of the lease. The rentals and royalties falling due in 1921 and 1922 were paid. The plaintiff’s recovery in this action was for royalties and rentals falling due on September 23rd of the years 1923, 1924 and 1925. On September 29, 1925, or very soon thereafter, a release of the oil and gas lease was executed by the defendant S. A. Whale and delivered to the landowner, II. M. Rice. Thus the due date of the last rental and royalty payment included in the verdict, which was for $200, was only about a week before the cancellation or surrender of the lease. The defendants urge that by demanding and receiving the release, .the plaintiff waived his right to collect the rental and royalty, even though they were then past due. They say it would be unjust for the plaintiff to receive the benefit of a release and collect the rental which fell due only a few days before.

Our decision on this point must be governed by the terms and provisions of the lease contract and not by what we think the parties should have agreed to. In dealing with the obligation of the lessee to pay advance royalties, the lease contract provides in part:

“Nor shall the lessee be relieved from its obligation to pay such advance royalty annually when it becomes due by reason of any subsequent surrender or cancellation of this lease.”

Concerning the payment of annual rentals (lie lease provides:

“The lessee shall exercise diligence in sinking wells for oil and natural gas on and covered by this lease and shall drill at least one well thereon within one year from the date of the approval of this lease by the Secretary of the Interior, or shall pay to said Superintendent for the Five Civilized Tribes, Muskogee, Olcla., for the use and benefit of the lessor, for each whole year, the completion of such well is delayed after the date of such approval by the Secretary of the Interior, for not to exceed ten years from the date of such approval, in addition to the other considerations named herein, a rental of one dollar per acre, payable annually; and if the lessee shall fail to drill at least one weR within any such yearly period and shall fail to surrender this lease by executing and recording a proper release thereof and otherwise complying with paragraph numbered 7 hereof on or before the end of any such year during which the completion of such well is delayed, such failure shall be taken and held as conclusively evidencing the election and covenant of the lessee to pay the rental of one dollar per acre for such year and thereupon the lessee shall be absolutely obligated to pay such rental.”

Thus by the terms of the lease the obligation of the lessee to pay royalty and rental became definite and fixed on the due date thereof, and the first contention of the defendant is answered by the terms of the lease itself and further discussion of that point is unnecessary.

We shall next consider the assertion of the defendants that the proof is insufficient. The specific argument under this point is that the plaintiff failed to prove that the *533 amount alleged to be due bad not been paid. No authorities are cited by the defendants in support of their argument. Payment is an affirmative defense and must be pleaded and proved by the defendant. The argument that the negative of this affirmative defense must be proved by the plaintiff is without merit.

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Bluebook (online)
1935 OK 838, 49 P.2d 737, 173 Okla. 530, 1935 Okla. LEXIS 480, Counsel Stack Legal Research, https://law.counselstack.com/opinion/whale-v-rice-okla-1935.