Beveridge v. Westgate Oil Co.

I dissent from the majority opinion. It authorizes an oil well to be drilled upon a city block within the corporate limits of Oklahoma City in which drilling is entirely prohibited by various provisions of the municipal ordinances of that city. Pursued to its logical conclusion, this decision will inevitably resuit in a complete striking down of the power of municipalities to regulate or restrict exploration for oil and gas within their corporate limits.

The city of Oklahoma City, acting through its legislative body, has positively prohibited the drilling of oil wells in the territory involved, but the district court of Oklahoma county has, under the guise of granting an exception to the terms of the ordinances, authorized a well to be drilled in the face of the restrictions contained therein. The majority opinion affirms the trial court.

Herein I shall discuss the situation of the property in question and the provisions of the ordinance prohibiting drilling thereon, and the power of the district court to grant exceptions to the terms of the ordinance and the limitations upon that power.

The city's zoning ordinance and amendments thereto, among other classifications, divide the property included within the corporate limits into two classes as to the production of oil and gas. In portions drilling for oil and gas is prohibited; in other parts of the city a limited amount of drilling is permitted in accordance with and subject to restrictions contained in the ordinance. The territory in which drilling is permitted is described in the ordinance as the "U-7" use district. It is also known as the oil and gas district, or U-7 zone. Drilling within 300 feet of the outer line of the oil and gas district is prohibited by the terms of the ordinance. However, the property included within this 300-foot strip is permitted to participate in the proceeds of production. This 300-foot strip is known as "nondrilling territory," and is also commonly referred to as the "buffer zone."

The property involved in this action is in the north part of the U-7 use district area. The zone line constituting the outer boundary of the district runs along the north side of block 12. The block is 320 feet in depth from north to south; thus all of the property in the block is within the "buffer zone," except a 20-foot strip running from east to west along the southern edge of the block. This 20-foot strip, on which the companies seek to drill, faces on Second street, which runs east and west along the south side of the block.

Drilling within this 20-foot strip above mentioned is prohibited by another provision of the ordinance. Section 7 of ordinance No. 3044 (a part of the zoning ordinances) reads:

"Section 7. No well for the production of or mining for petroleum or natural gas shall be drilled or put down nearer than 50 feet from the property line of the tract on which such well is situated."

Similarly the ordinance prohibits drilling within 300 feet of any property "used for public school purposes." In this connection it should be stated that the block immediately west of block 12 is occupied and used for public school purposes. Thus drilling is also prohibited in the western portion of the block, including the western portion of the 20-foot strip mentioned.

Thus, to summarize, we are confronted with an application to drill on a block, all of which is in forbidden territory by virtue of one or more provisions of the ordinance. In the southeast corner of the block there is a strip of territory 20 feet in width and about 140 feet in length, constituting approximately 1/40th of the total area in the block, on which drilling is prohibited only by the terms of the 50-foot section of the ordinance quoted, supra. It is on this small portion of the block that the lower court has authorized the companies to drill, thereby granting an exception to the terms of that provision of the ordinance.

An application for permission to drill on the property involved was first filed before the building superintendent of Oklahoma City, who denied the permit. An appeal was then taken to the board of adjustment of Oklahoma City, where the permit was again denied. The case was then taken on appeal to the district court, where it was tried de novo. It was then appealed to this court, and, after the former decision herein reversing and remanding the cause, it was again tried de novo in the lower court. The procedure followed was in accord with the requirements of section 6177, O. S. 1931, as supplemented by the provisions of the ordinances of Oklahoma City.

The board of adjustment is empowered by statute:

"To authorize upon appeal in specific cases such variance from the terms of the ordinance as will not be contrary to the public interest, where owing to special conditions a literal enforcement of the provisions of the ordinance will result in un necessary hardship, and so that the spirit of the ordinance shall be observed and substantial justice done." (Section 6176 in part).

Since the hearing and trial on appeal to the district court is de novo (sec. 6177, supra), it follows that the same power is possessed by that judicial tribunal as is specifically conferred by the above statute on the board of adjustment.

Dealing with the exercise of this statutory power to grant exceptions to the terms of the ordinance, this court, in the case of Anderson-Kerr, Inc., v. Van Meter et al.,162 Okla. 176, 19 P.2d 1068, separated the conditions upon which an exception should be granted into four requirements, namely:

"First, that the granting of such permit would not be contrary to public interest; second, that the literal enforcement of the provisions of the ordinance will result in unnecessary hardship; third, that by granting the permit contrary to the provisions of the ordinance, that 'the spirit of the ordinance shall be observed'; fourth, that by the granting of such permit 'substantial justice be done'."

It is important to mention at this point that the "unnecessary hardship" referred to in the second requirement as stated in the Anderson-Kerr Case, supra, by the terms of the statute (sec. 6176, supra), refers to hardship which is "owing to special conditions." It does not contemplate the general hardship which, under usual conditions, would ordinarily flow from the enforcement of the terms of the ordinance. Any limitation or restriction on the use of property by an owner may, in a general sense, be said to be a "hardship," but, unless such hardship is unnecessary and due to specialconditions peculiar to the property involved, neither the board of adjustment nor the district court on appeal is authorized to suspend the enforcement of the terms of the zoning ordinance by granting an exception thereto.

The majority of this court in announcing the rules of law applicable recognizes in syllabus 1 that the "unnecessary hardship" which authorized an exception to the terms of the ordinance must be "owing to special conditions." I agree with that statement. However, I am unable to find in the situation presented by this case any special condition which results in unnecessary hardship. The only special condition which results in any hardship is the fact that while this case was previously pending in this court and prior to the former decision (Van Meter et al. v. Westgate Oil Co., 168 Okla. 200,32 P.2d 719), the companies which were seeking to drill the well spenta considerable sum of money in drilling the well to a depth of5,000 feet, knowing, however, at the time, that the right todrill the well was being contested in this court. If this case were decided adversely to them, their useless expenditure off money in that respect would not doubt be properly classified as a hardship. However, it is a hardship which did not exist at the time they first applied for their permit, and came intoexistence only through their own reckless disregard of thepossibility of an adverse decision.

Obviously, it cannot logically be urged that the failure of this court to order a supersedeas of the former judgment of the district court constituted a promise on our part to decide in favor of the companies. If it did, we broke our promise when we decided the first case adversely to them. If it did not, they knew when they were spending their money that they were faced with the possibility of an adverse decision which might cause them to lose the money expended. A more prudent operator would have refrained from the expenditure of money until the result of the litigation should be known. These companies chose to gamble on their judgment as to the result.

I cannot concur that this reckless expenditure of money in the face of a judicial contest constitutes an "unnecessary hardship owing to a special condition." Adopting such a rule is to accord to the reckless greater legal rights than would be accorded to the prudent. No judicial precedent for such a legal principle is cited in the majority opinion, nor do I find such an authority in the briefs.

In recognizing this expenditure of money as an element of "unnecessary hardship owing to special conditions." The majority opinion says:

"While financial loss to a citizen alone may not be used as a means of thwarting the general good, yet a large financial outlay, which would be utterly destroyed or wasted, is a factor to be considered in determining the hardship which may be alleviated under the terms of the statute by the granting of an exception, and we cannot close our eyes to the tremendous loss in this case."

It seems to me the financial loss in this case is purely a voluntary expenditure on the part of the companies which were willing to gamble on their judgment as to the outcome of pending litigation, and that, as such, it cannot logically constitute the basis of a legal right. If the reckless expenditure of money constitutes the basis of a legal right, then any operator who desires to drill in prohibited territory in the corporate limits of a city contrary to the provisions of an ordinance can himself create the"unnecessary hardship owing to special conditions" contemplated by the statute in any case by the simple expedient of spending money in the belief that the courts will later approve their right to drill. Thus an operator may tear down a valuable building worth thousands of dollars in the expectation that he will later be permitted to drill on the site of the building contrary to the terms of the ordinance. No law forbids him to raze the building, provided he owns the building or obtains the permission of the owner thereof. If he does not later obtain permission to drill, he will have suffered a loss. He has thus created precisely the same condition in principle that exists in this case and should be accorded precisely the same legal rights by reason thereof. In my judgment the theory of the majority of this court on this element of the case is obviously erroneous. The special conditions contemplated by the statute should not be interpreted to include conditions produced voluntarily by the acts of the operator himself.

The only other factor in this case which the majority opinion treats as an "unnecessary hardship owing to special conditions" is that more oil can now be produced, if drilling is permitted, than could be produced at a later date. It is not shown by the record that this condition is not true in every other portion of the field in which drilling is prohibited. In other words, this condition is not shown to be special. The very purpose of drilling an oil well is to produce oil. If one doesn't drill, one obviously cannot produce. Unquestionably, the failure to drill a well on this block will result in some oil which underlies the block not being recovered. Obviously, the same is true of every other block within the corporate limits of Oklahoma City on which drilling is prohibited where oil lies beneath the block. This condition is not a special condition. On the contrary, it is a general condition, common to every other block in the city which lies over the oil pool. If this be an "unnecessary hardship owing to a special condition," then every other property owner within Oklahoma City who owns property lying over the producing oil sands is suffering an unnecessary hardship owing to special conditions.

To summarize this particular phase of the case, it is apparent from an examination of the majority opinion that any person owning a block of property within Oklahoma City or owning a lease upon a block of property within the city who can show that oil lies underneath the block which could not be recovered, if he is not permitted to drill and who, in expectation of being permitted to drill, spends money in preparation, has met the requirements of the law and is suffering an "unnecessary hardship owing to special conditions." I cannot concur in such a conclusion, nor can I subscribe to establishing such a judicial precedent. In my judgment the permit should be denied for the reason that the hardships suffered are not owing to such special conditions as are contemplated by the statute authorizing the district courts to grant exceptions.

In finding No. 5 of the trial court as quoted in the majority opinion, it was determined that the drilling in this case would not "violate the public spirit of the zoning ordinance herein referred to." In support of that conclusion the trial court in that finding determined that the drilling of the well in this block would not increase fire hazard, and that the gas pressure in the vicinity of such well was so reduced as not to cause any unusual danger from the flow of gas. The finding was based upon evidence produced by the companies seeking to drill to the general effect that drilling within the Oklahoma City field is now accompanied by much less danger than it was in the former stages of the field's development, owing to a gradual reduction of gas pressure throughout the field. To approve the finding of the trial court in this respect is to say that a well can be drilled without increase in fire hazard. If this finding of the trial court is correct; if thousands of barrels of oil can be produced in the immediate neighborhood of residential property, in close proximity to school property, and within 19 feet of a busy street without increasing fire hazard and without increasing the danger to the personal safety of individuals inhabiting and traveling through that neighborhood, then the entire theory of regulating and restricting the production of oil within the city limits rests upon a tottering foundation, for the only justification of restricting the use of property in this respect under the authority of the police power is the protection of life and property of the individual and the promotion of the general welfare of the community.

In many oil fields of the state there is little or no gas pressure, even in the first stages of development of the field. If the production in such a field can be accomplished without danger, as the trial court in this case says it can, then the right of a city to regulate or prohibit drilling in such a field lying within its corporate limits hangs on an extremely slender thread.

In my opinion this court should take judicial knowledge of the fact that inflammable substances such as oil and gas cannot be produced in large quantities in close proximity to dwellings without an increase in fire hazard. See Beveridge v. Harper Turner Oil Trust, 168 Okla. 609, 35 P.2d 435. Assuming, as I do, that, notwithstanding the finding of the trial court, the drilling of the well in this and the production of oil in the residential block involved must inevitably result in an increased measure of fire hazard and in an element of danger to persons and property in the immediate vicinity of the well, I am impelled to conclude that the 50-foot ordinance previously quoted is a reasonable measure for the protection of the public, including the school children who travel to and fro along Second street within a few feet of this well. The question of whether or not a regulation enacted under the authority of the police power is reasonable and necessary for the protection of the public peace, health, and safety is, in the first instance, one for the determination of the legislative department of government. The power to legislate upon this subject in matters relating to oil and gas has been delegated to the municipalities of this state. The legislative branch of the Oklahoma City government has acted and expressed its views upon the subject. A part of its judgment is expressed in the provision prohibiting wells from drilling within 50 feet from the street. It is not claimed by the companies that this provision of the ordinance is either unreasonable or unnecessary, except as applies to their particular property. In other words, they do not question the validity of this provision of the ordinance, but only assert that it should not be enforced as against their property.

To uphold their contention in this case and permit the drilling of a well in close proximity to a street establishes a judicial precedent for permitting wells to be drilled in close proximity to any other street within the U-7 use district, at least, unless it can be shown that such other street is a busier street than Second street in order to form the basis of distinction.

The record reveals that Second street is one of the busy thoroughfares of this city and is constantly used by the traveling public, and that the sidewalks along said street are periodically throughout the day used by school children in traveling to and from school, some 350 feet away. It is at once apparent that we are, in this case, establishing a judicial precedent for ignoring this provision of the ordinance in connection with practically every block within the U-7 use district. For all practical purposes we are repealing the section of the ordinance in question, and, in effect, are establishing the courts as a superior legislative body in determining the character of restriction that shall be imposed upon drilling operations. In so doing, we are, in my judgment, authorizing the district courts to go beyond the legitimate scope of judicial review in this character of case.

It is important to note in connection with the consideration of this case that block 12 is, for drilling purposes, attached to block 13, lying immediately south thereof, and that a producing well has been drilled in block 13. Thus the property owners in block 12 now participate with the property owners in block 13 in the proceeds of production. The well in block 13, however, was drilled in accord with the provisions of the ordinance.

In conclusion I would state that in my judgment the permit to drill in this case should be denied for the reason that drilling is prohibited on the territory in question by the provisions of the ordinance; that an exception to the terms of the ordinance should not be granted for the reason that nospecial conditions which will result in unnecessary hardship are shown to exist, and for the further reason that the protective spirit of the ordinance is violated by the exception approved in this case.

I am authorized to state that Chief Justice McNEILL and Justices BAYLESS and GIBSON concur in this dissent.