Summary
In Barton v. Laclede Oil Mining Co., 27 Okla. 416, 112 P. 965, the lessee agreed to pay royalty on all gas used and sold off of the premises.
Summary of this case from Cameron v. StephensonOpinion
No. 521
Opinion Filed November 16, 1910.
MINES AND MINERALS — Gas Lease — Construction. The clause, "It is further agreed that if gas is obtained and utilized, the consideration in full of the party of the first part shall be one-tenth portion of each gas well drilled on the premises herein described when utilized and sold off the premises, payable monthly so long as the gas is to be so utilized," means one-tenth of the gross proceeds of each well when sold.
(Syllabus by the Court.)
Error from Creek County Court; Josiah G. Davis, Judge.
Action by R. L. Barton and others against the Laclede Oil and Mining Company. From a judgment for defendants, plaintiffs bring error. Reversed and remanded.
McDougal, Lattimore Lytle, for plaintiffs in error.
On the 22nd day of September, 1908, the plaintiffs in error, as plaintiffs, instituted an action in the county court of Creek county against the defendant in error, as defendant, on a certain contract which in part provided:
"It is further agreed that if gas is obtained, and utilized, the consideration in full of the party of the first part shall be one-tenth portion of each and every gas well drilled on the premises herein described when utilized and sold off the premises, payable monthly as long as gas is to be so utilized."
Said contract was executed on the first day of May, 1906, and thereafter gas was found on said premises, and on the 17th day of December, 1907, the Laclede Oil and Mining Company, as party of the first part, and the Bellevue Oil and Gas Company of Independence, Kansas, as party of the second part, without the consent of the plaintiffs in error, entered into a contract wherein the defendant in error agreed to sell gas to the said Bellevue Gas and Oil Company that was discovered under the said lease with the plaintiffs in error, the same to be received by the said the Bellevue Gas and Oil Company at certain rates, it being provided "that for the gas used (by the Bellevue Gas Oil Company) shall be paid the one-half portion of the proceeds of collection arising from the use and sale of gas each month for the month preceding." In other words, the defendant in error contracted with the plaintiffs in error that "if gas is obtained and utilized," from their land, "the consideration in full of the party of the first part shall be one-tenth portion of each and every gas well drilled on the premises" described in said contract "when utilized and sold off the premises, payable so long as gas is to be so utilized."
The defendant in error having contracted with the Bellevue Oil and Gas Company of Independence, Kansas, without the consent of the plaintiffs in error, to give it fifty per cent. for piping and selling said gas, if its contention be correct, it would result in the plaintiffs in error obtaining merely five per cent. of said gas when "utilized and sold off the premises." We think that the contract means just what it says, that the plaintiffs in error were entitled to one-tenth of said gas when "utilized and sold off the premises," and that it was encumbent upon the defendant in error to sell and to pay the plaintiffs in error one-tenth of the proceeds.
The judgment of the lower court is reversed, and this cause is remanded with instructions to enter judgment in favor of the plaintiffs in error.
All the Justices concur.