Cotner v. Warren , 330 P.2d 217 ( 1958 )

DAVISON, Justice.

This suit was instituted by the plaintiff, Charles J. Warren, oil and gas lessee, against the defendants, Paul Cotner and his wife Nora Cotner, owners and lessors of an 80 acre tract of land in Wagoner County, Oklahoma, for the purpose of quieting his title to a leasehold estate in said lands. The parties will be referred to as they appeared in the trial court.

Immediately before bringing this suit, plaintiff purchased the leasehold estate existing under a certain oil and gas lease, covering said lands, executed by the defendants on. the 28th day of December, 1953, “for a term of one year from date, and as long thereafter as oil or gas or either of them, is produced from said land by the lessee.” There was one small producing well on the property, the primary term of said lease having theretofore expired. The defendant, husband, was employed by the lease operator as pumper for the well. On September 7, 1956, plaintiff’s predecessor directed Cotner to shut the well down which he did. On February 18, 1957, plaintiff purchased the working interest in the lease and two days later filed this suit seeking to quiet his title to the leasehold and to enjoin the defendants from keeping him off of the property and from operating the well.

It was the contention of the defendants that, with the voluntary cessation of production, the lease terminated under its own terms. Plaintiff contends that the cessation was only temporary and for a good reason and that the defendants were agreeable to the temporary closing down of the well. The trial court held generally for the plaintiff, finding that the plaintiff had not abandoned the lease nor had the same expired by its own terms. The defendants have appealed therefrom.

This court has not heretofore been called upon to determine when and under what circumstances such a lease terminates because of the shutting down of the only producing well on the leased premises, by the lessee, after the expiration of the primary term. In the case of Anthis v. Sullivan Oil & Gas Co., 83 Okl. 86, 203 P. 187, it was held that such a lease was terminated when the lessee plugged and abandoned the only producing well. In the case of Woodruff v. Brady, 181 Okl. 105, 72 P.2d 709, 113 A.L.R. 391, no production was had either during the primary term or after-wards. The cases of Beatty v. Baxter, 208 Okl. 686, 258 P.2d 626, and Postier v. Postier, Old., 296 P.2d 138, deal not with the rights and duties of lessees, but with the rights and interests of owners of terminable mineral estates under the mineral deeds. The difference between the two positions was recognized in both of the last two above cited cases. However, some rules of law are applicable alike to both.

Whether or not the lease or mineral estate has terminated depends upon the surrounding facts in each case and the determination thereof by the trial court in an action of equitable cognizance should be sustained unless clearly against the weight of the evidence. Beatty v. Baxter, supra.

The Kentucky court, in the case of Lamb v. Vansyckle, 205 Ky. 597, 266 S.W. 253, 254, had before it a factual situation much the same as here involved. In that opinion it was said,

“Nor are we willing to adopt the rule that a lease which is to' continue for a definite period, and so long as oil or gas is produced in paying quantities, ipso facto terminates whenever production or development ceases for a brief period of time. On the contrary, we have reached the conclusion that the only fair and just rule is to hold that the lease continues in force unless the period of cessation, viewed in the light of all the circumstances is for an unreasonable time.”

The quoted rule seems to be the most equitable one in such cases. One much more favorable to the lessee is followed in Louisiana where, “in order to cancel the lease, there must be some evidence that the wells thereon are no longer capable of producing oil or gas in paying quantities; or that the lessee, in closing down the wells, has done so with the intention of- abandoning same.” Tyson v. Surf Oil Co., 195 La. 248, 196 So. 336, 341. In Texas, the rule is much more favorable for the lessor although, there, it “has been modified when there is only a temporary cessation of production due to sudden stoppage of the well or some mechanical breakdown of the equipment used in connection therewith, or the like.” Watson v. Rochmill, 137 Tex. 565, 155 S.W.2d 783, 784.

After thorough deliberation, we conclude that the rule quoted above from the.Lamb v. Vansyckle case is the soundest and most equitable and the same is adopted. Under that rule, the controlling factual finding is whether on not the temporary stoppage in production was for an unreasonable length of time. In the case now being considered, the cessation was for a period of from five to six months. The lease was owned at that time by several co-tenants among whom dissensions had arisen. The then operator told Cotner that they were having trouble and that as soon as it was worked out they could go ahead and get a new well drilled. The testimony is in conflict as to whether or not Cotner agreed to the temporary shut down. In any event, the partnership differences were resolved by plaintiff’s purchase of the lease, immediately after which he attempted to go on the premises tO' resume operation of the existing well and to drill another. The defendants refused to permit him entry thereon.

Under these facts, the trial court was warranted in finding that the well had not been shut down for an unreasonable length of time and that the lease had not expired. The judgment, not being against the clear weight of the evidence, will not be disturbed by this court on appeal.

Judgment affirmed.

WELCH, C. J., and JOHNSON, BLACKBIRD, JACKSON and CARLILE, JJ., concur. CORN, V. C. J., and HALLEY and WILLIAMS, JJ., dissent.