Meeker v. Ambassador Oil Corp.

PETITIONER:Meeker
RESPONDENT:Ambassador Oil Corp.
LOCATION:New York Times Office

DOCKET NO.: 46
DECIDED BY: Warren Court (1962-1965)
LOWER COURT: United States Court of Appeals for the Tenth Circuit

CITATION: 375 US 160 (1963)
ARGUED: Nov 19, 1963 / Nov 20, 1963
DECIDED: Dec 02, 1963

Facts of the case

Question

  • Oral Argument – November 19, 1963
  • Audio Transcription for Oral Argument – November 19, 1963 in Meeker v. Ambassador Oil Corp.

    Audio Transcription for Oral Argument – November 20, 1963 in Meeker v. Ambassador Oil Corp.

    Earl Warren:

    Number 46, Charles A. Meeker et al., versus Ambassador Oil Corporation.

    Mr. Adams — oh Mr. Adams had finished his argument.

    Mr. Thweatt.

    C. Harold Thweatt:

    Thweatt.

    Earl Warren:

    Thweatt.

    C. Harold Thweatt:

    Mr. Chief Justice —

    Earl Warren:

    Yes.

    C. Harold Thweatt:

    — may it please the Court.

    If the Court in this case takes the view that this entire case should have been tried to a jury, we nevertheless submit that on the facts of the case, the denial of a jury trial was harmless error.

    Now, I want to briefly relate the facts of the case, the — a woman by the name of Hettie Lowder, who is in her 80s, owns a 240-acre farm situated in Logan County, Oklahoma.

    In 1953, she executed a five-year oil and gas lease covering 160-acres in kind out of this 240-acre farm.

    This lease by named assignment became owned by a man by the name of W. G. Haun.

    Mr. Haun assigned the lease to Herman Hurst, reserving an overriding royalty of 1/16th of 7/8ths of all production and that assignment on its face provided that the — this reservation was made applicable not only to that 1953 oil and gas lease, but also to any extensions or renewal of that lease.

    The Meekers and Domestic Oil Corporation and other parties whose names are of no importance here, were — became the owners of this oil and gas lease.

    They had a block of acreage and we’re going to drill on the Robinson farm which abuts on this Hettie Lowder farm.

    The Robinson well on the Robinson farm was commenced in this five-year lease which didn’t name to Herman Hurst but was actually owned by the plaintiffs here, Meekers and Domestic Oil Corporation, was about to expire.

    So Mr. Hurst went to Mrs. Lowder and got a 30-day oil and gas lease, the primary term to commence after expiration of the existing lease.

    That term was, I believe, had a term — term of 30 days from July 3rd, 1958 — I mean, from June 3rd, 1958 to July 3, 1958.

    And that 30-day lease, now that’s a regular form of oil and gas lease which provides that it shall endure for the primary term of the lease which was 30 days, and as long thereafter as there is production or under the Oklahoma law as long thereafter as drilling operations or operations on the lease are pursued with due diligence.

    Well this — during the last two days of this 30-day oil and gas lease, the Robinson well wasn’t down yet.

    They didn’t know the results — what the result of the Robinson well would be, so Mr. Hurst calls the location of the estate on the 30-day oil and gas lease, that is — that’s the initial operation of course for commencing an oil well, let’s take the location.

    He calls that to be done and there were $60 worth of bulldozer work done before the primary term of that lease expired.

    The trial court found that there was a small circulating pit and roads that have been built.

    There was no machinery of any kind moved on to the lease, nothing done, other than that little bit of bulldozer work.

    But on July 22nd, now that reminds you that happened on July 2nd and July 3rd, that bulldozer work was done on that lease at 1958.

    On July 22nd, a representative from Ambassador Oil Corporation went over there and surveyed the situation and found what had been done and — and concluded that the — the — that lease had been abandoned, that there was no oil and gas lease covering that tract of land.

    And he consult — he consulted counsel about that and it was advised by counsel that in judgment of counsel, that 30-day lease had terminated and was dead.

    So on July 22nd, Ambassador Oil Corporation procured from Hettie Lowder or bought from her an oil and gas lease which covered not only the 160-acres which is covered by the 30-day lease but also covered the other 80-acres.

    In other words, it covered 240-acres and distinguished from 160-acres.

    Arthur J. Goldberg:

    What they pay (Inaudible)

    C. Harold Thweatt:

    For that lease, Ambassador, $1800, Your Honor.

    Arthur J. Goldberg:

    (Inaudible)

    C. Harold Thweatt:

    The lease reserves a 1/8 royalty, yes sir.

    Arthur J. Goldberg:

    One-eighth royalty?

    C. Harold Thweatt:

    Yes, sir.

    So they paid her in cash, that’s the bonus in consideration of $1800 which they called a — that’s the bonus and the royalty which was 1/8 from production.

    Alright, now that as I say, that happened after the facts had been disclosed to counsel, ask to investigate the situation and the counsel had told, “Ambassador, that lease is dead.”

    So they go buy the lease and in due course, of course Ambassador is a company, the leases have to be processed through the right — right in their channels, their main office is in Fort Worth.

    Their lease was put on record, I believe in about August 8.

    I’m not really sure.

    But anyways, shortly after they acquired the lease, the lease was put on record.

    Now, still nothing done under this 30-day lease, nothing done but the land had been — the bulldozer work had been done out there, the — related to the court.

    In the first part of September, about September 7th or 6th, without any examination of title, now that’s unusual for that to happen because ordinarily oil company and anybody drilling a well is very particular to investigate the title and find out that somebody hasn’t done what the plaintiff claims, Ambassador did here, jumped their claim or jumped their lease.

    And — but they didn’t examine the title any further and moved in.

    Domestic was the operator and now I say they — now, that’s — that’s Domestic and Meeker and other parties who owned the working interest.

    In other words, they were the drilling parties.

    The royalty interest, of course is a free interest, an overriding royalty if this is — the Court knows as a free interest.

    But anyway, the parties that owned the working interest, they started the well.

    Domestic was the operator and moved the rig in and commenced drilling.

    That’s on this —

    Arthur J. Goldberg:

    Domestic — Domestic Oil, is that the Oklahoma Oil?

    C. Harold Thweatt:

    Yes sir.

    It was the local — the Oklahoma Oil Corporation was managed by — the president of the company was the man by the name of Brook, Ed Brook who testified in this case.

    He was in-charge of the operations.

    Well, —

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    Yes, sir.

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    Yes, sir.

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    Well, the — see the — under the 30-day lease, that created a 7/8ths working interest, one-eighth royalty being reserved to the landowner and subject to this Haun overriding the 1/16th of 7/8th.

    In other words — now that — that lease, the 30-day lease, created a 7/8th working interest subject to whatever overrides and now the burdens were against it.

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    The —

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    That was in Hurst and Meeker and Domestic and whoever owned that lease.

    See that — no question about the plaintiff, Meeker, having an interest in that 30-day lease.

    And then Ambassador came along and took a new oil and gas lease, an independent oil and gas lease.

    See, Ambassadors took the position, the 30-day lease has terminated.

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    Yes, sir.

    William J. Brennan, Jr.:

    Did someone move in right (Inaudible)

    C. Harold Thweatt:

    Yes, September, that’s Domestic.

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    They were — before Meeker, the plaintiff here, yes sir, yes sir.

    See, the — there is no work under the 30-day lease.

    That’s the bull — the bulldozer work that I mentioned a minute ago.

    That was performed by Domestic or by Hurst.

    They’ve treat it as being — for the benefit of the 30-day lease.

    And the work which was commenced in September was presumably under that 30-day lease.

    I mean, that’s what Domestic was doing it for.

    William J. Brennan, Jr.:

    Oh, I take it that’s what (Inaudible) if there’s something happened, that’s (Inaudible)

    C. Harold Thweatt:

    No, no, Ambassador got — after the — oh, you mean after the September work?

    Oh, well after the September, after this lease — I think that’s worked on about 6th or 7th of September of 1958.

    Why somehow, some representative of Ambassador happened to know this, the fact that a drilling had been commenced on that farm.

    When I was called by a representative of Ambassador and he said, “Must we be — they commenced drilling out there on that tract.”

    So I immediately picked up the telephone, called Mr. Ed Brook who was President of — of Domestic Oil Corporation and — and told him that Ambassador claimed they owned the oil and gas lease on that tract of land that they were drilling a free well for Ambassador.

    And of course that calls some consternation.

    Here — in other words, the 30-day — the Domestic was drilling under the 30-day lease which Ambassador said it terminated.

    Ambassador had an oil and gas lease which it had obtained on July 22nd and which it was placed to record August 8th, so there were two oil and gas leases which were in opposition to each other.

    William J. Brennan, Jr.:

    Do I take it, in due course Ambassador would’ve been doing the (Inaudible) that Domestic had?

    C. Harold Thweatt:

    Yes sir, because the Robinson well turned out to — it turned out to be a productive well.

    I think it was completed either — it was on the processes of completion about the time this work (Inaudible) — this bulldozer worker was done.

    Now, I think they recently said and probably knew that they were going to have a well.

    Now, the feature of this case and of disturbed Judge Rizley was the fact that Ambassador had taken this oil and gas lease and had top leased the other oil and gas lease.

    And that caused Judge Rizley, the trial judge, the district judge for the Western District, one of our judges, considerable concern because there’s — there were several complaints filed.

    I think this is a Third Amendment complaint.

    The — Ambassador was accused of piracy and several other things like that.

    So — and it — it did concern Judge Rizley quite a bit.

    But because Ambassador took the lease, they didn’t go to Domestic and say here, “We’ve top leased your lease, we want the release of your lease.

    We just took our lease and we put it on the record.”

    And — and under advice of counsel, that — that lease was dead.

    Now, that’s — it was Ambassador’s possession on it.

    Well — alright we’ve gotten to that —

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    Yes, sir and informed him that they were drilling.

    So at that point, the Domestic — Mr. Brook’s, Domest — Mr. Brook, President of Domestic consulted an attorney there who represented the Domestic Oil Corporation and that attorney informed this Mr. Don Stinchecum, his name is mentioned in the opinion written by Judge Phillips in the Court of Appeals.

    Mr. Stinchecum informed Mr. Brook that he was afraid that that 30-day oil and gas lease was dead and that what — they had better do is see Ambassador and make the best deal they could have to see if they can compromise the thing out in some way.

    So Mr. Hurst did see Ambassador and Ambassador made an arrangement with Domestic where under Ambassador was paid a cash consideration of $2500 for this oil and gas lease that Ambassador bought for $1800 and reserved an additional override of $2500, I believe.

    My figures may be a little long.

    I think that’s about right though payable of a — of a — most of the working interest, so that Ambassador came out with $5000.

    Now, this — after that happened, after those events happened, why Mr. Brook caught Mr. Meeker in San Francisco or California somewhere, he was out of town or — oh, no that is not correct, it was not after they happened, while they were happening or after — after Mr. Stinchecum had advised Mr. Brook or Domestic that they should obtain the Ambassador lease if possible.

    Why, Mr. Brook testified as he reach Mr. Meeker in California and talked with him on the telephone and Mr. Meeker testified to this too.

    I mean, these are in the record here, these facts.

    Talked to Mr. Meeker and Mr. Meeker told him what counsel had told Domestic and Mr. Meeker said, “Why, just ignore that lease, go ahead and drill that well.

    Ignore that lease.

    Pay no attention to their claim.”

    But Domestic chose to follow the advice of counsel rather than the advice of Mr. Meeker, so that Domestic took an assignment as they did here with Ambassador and took an assignment of the Ambassador lease, and that was a compromise or a settlement in behalf of everybody.

    That’s what the — the trial court so found and the Court of Appeals so found that that — that assignment from Ambassador to Domestic was in settlement of the entire controversy.

    Now, there was no authority on the part of Domestic to settle Mr. Meeker’s interest.

    C. Harold Thweatt:

    Now, that’s admittedly but there were co-tenants and their operating agreement was not put in evidence.

    I don’t know whether it gave him authority or not but anyway, that’s — that — we’ll have to assume that there was no authority and it was done without authority.

    But after that happened — after they’d made a deal with Ambassador, why Domestic — now, they’ve gotten down in two days time about 20 — 2000 some odd feet.

    So, there was in this well, they never acquired a way sir.

    I think there’s a well that’s 4800 or — depth, the depth, I think that’s in the record too.

    So they had commenced the well that is believing that the 30-day lease was valid but they estopped it and then made the deal uncompromised.

    And Mr. Meeker, as I said, objected to that kind of a compromise and told Domestic they should just ignore it.

    Well, they didn’t do that and they went on there and made the deal with Ambassador and drill the well on down, got a productive well.

    Mr. Meeker came back from California, was informed of all the facts and decided that he would take an assignment of his interest in the Ambassador lease.

    And he did take an assignment of his interest in the Ambassador lease and he was still contending that Ambassador had robbed Domestic, that Ambassador was a bunch of crooks, that the Domestic was wrong in yielding to Ambassador, all those things.

    He testified that and there is no doubt but that’s what he believed.

    And in the assignment which he took from Domestic, he reserved his right to contest the — the Ambassador lease and a right to contend that the 30-day lease was the valid lease rather than the Ambassador lease.

    That — that assignment is — that really — important portions of it are quoted at page 4 of our brief.

    That particular assignment also contained this language.

    This assignment is subject to all of the provisions of the lease assignment from Ambassador Oil Corporation to Domestic Oil Corporation, recorded in Book 390 at page 592, to the Office of the County Clerk of Logan — Logan County, Okalahoma.

    Now in one breath, he says, “I deny the Ambassador lease.”

    In the next breath he says, “I take this assignment subject to all of the terms and provision of the assignment from Ambassador to Domestic.”

    Now, the assignment from Ambassador to Domestic contained this provision.

    And Your Honor, this is the reference again to the — you know, you’d rather bear in mind that there were two leases and contraposition to each other, the 30-day lease and the Ambassador lease, I think that’s the way to refer to them.

    Now, the assignment of the Ambassador lease contain this provision, it’s quoted at page 4 of our brief, “That the lease hereby assigned is the effective oil and gas lease, covering the land here and above described and that the lease of record”, now that’s the 30-day lease, “under which Assignee”, of course that’s Domestic, he was doing the drilling, “commenced drilling operations, has terminated and is no longer effective”.

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    Yes sir, yes sir.

    Had those — Your Honor please, had those operations then continued with due diligence, they’ve proceeded and drilled a well, there would be no question on the Oklahoma law.

    But that those operations were a sufficient commencement of operations but that doesn’t have to actually dig into the ground in order to con — constitutes commencement of operations.

    And commencement of operations alone is sufficient to hold of the lease, so that they could have Domestic and Meeker and the other working interest owners could have under that 30-day lease had they — can move forward with diligence, have perpetuated that oil and gas lease.

    Now, the excuse that they put up for not doing that is that they hadn’t commenced that well and Sunray — some representatives of Sunray Oil Corporation called them on the telephone and said, “Hey, can you drill on that well on a 10-acre pattern?

    We don’t think that’s wide enough spacing in there.

    We’re going to apply to the Corporation Commission for 40-acre spacing and we ought not to drill that well on that pattern.”

    Now that was there excuse.

    That was Domestic’s excuse for withholding operations.

    C. Harold Thweatt:

    But both Judge Rizley and the — and — oh and subsequent to that time, the Sunray did file for 40-acre space and that controls where your wells maybe drilled and so forth as the court knows.

    Subsequent to that time, why the Sunray did file for spacing, filed a spacing application.

    And under the Oklahoma law, after there is an application for spacing, no well maybe drilled at any other location without a special order of the Corporation Commission.

    But this well had been commenced prior by the bulldozer work had been commenced prior to the application of Sunray and nothing would have prevented Domestic from drilling that.

    There is no — at that recent location that well to completion had they chosen to do so.

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    Yes, sir.

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    Without — without this — without the slightest doubt and Judge Rizley so held.

    He held — of the — that there had been commencement of drilling operations within the terms of the oil and gas lease but that the operations had not been pursued with due diligence and therefore, the lease had terminated.

    Hugo L. Black:

    Is that the crucial —

    C. Harold Thweatt:

    That’s —

    Hugo L. Black:

    — (Voice Overlap) of fact?

    C. Harold Thweatt:

    No, no, Your Honor.

    That’s not the only crucial fact.

    Hugo L. Black:

    Is that a crucial fact?

    C. Harold Thweatt:

    Yes, sir.

    It is a crucial fact, yes, sir.

    Hugo L. Black:

    Now, see if I can clearly understand it?

    C. Harold Thweatt:

    Yes, sir.

    Hugo L. Black:

    You say that they had a 30-day lease?

    C. Harold Thweatt:

    Right, sir.

    Hugo L. Black:

    That lease had rights which would’ve extended far more than 30 days, unless I’m wrong?

    C. Harold Thweatt:

    That’s correct.

    Hugo L. Black:

    If they began work —

    C. Harold Thweatt:

    Correct.

    Hugo L. Black:

    — and pursued it with due diligence.

    C. Harold Thweatt:

    That’s correct sir.

    Hugo L. Black:

    So that if they did begin work again and pursue it with due diligence, the fact-finder determined that to be true, then Domestic owned the property?

    C. Harold Thweatt:

    Yes, sir, correct.

    Hugo L. Black:

    And that is the crucial question of fact in which they insist they were entitled the right to trial by jury?

    C. Harold Thweatt:

    That’s — that — yes, sir, that is one of them.

    Now, there was another element in there.

    The — they contended that Mr. Hurst testified that he had talked to Mrs. Lowder, Hettie Lowder, and had obtained from her an oral extension of that oil and gas lease.

    Now, that’s of course if they — they had a binding and valid extension of the oil and gas lease, well then, those operations could’ve been ceased as they were and nothing done.

    But —

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    No, sir, I say — I say, had they had a binding extension of the lease, they would’ve been alright.

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    Yes sir.

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    Yes, sir.

    I don’t think there’s any question about that at all, that that is a — you can’t just go out and make an oral deal and — on — and — and extend a — an estate and land that’s created by an oil and gas lease.

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    Yes, sir.

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    Yes, its one of them, yes sir and not only, there’s several estoppel points or not only that he accept this assignment from Domestic which recites that it’s subject to all the terms and the provision of the assignment from Ambassador to Domestic, but he also signed division orders and accepted —

    (Inaudible)

    C. Harold Thweatt:

    Sir?

    (Inaudible)

    C. Harold Thweatt:

    Yes, sir.

    That’s after the — after production is obtained Your Honor.

    The pipeline companies will circulate division orders which specify the interest of the various parties and the proceeds of the oil.

    And the — Mr. Meeker admitted, it’s in the record here, that he had executed division orders and had been paid and — under the Ambassador lease.

    Now he testified, however, “I informed Champlin Refining Company,” that’s the company that’s running the oil, “that I reserve my rights to contest the — this matter.”

    But — I — I —

    Hugo L. Black:

    Do you say he couldn’t do that?

    C. Harold Thweatt:

    No — yes, Your Honor, I say he could not do that.

    Hugo L. Black:

    Under the law?

    C. Harold Thweatt:

    Yes, sir.

    Hugo L. Black:

    Can I ask you? I — I didn’t quite get these dates where — what was the date of the 30-day lease?

    C. Harold Thweatt:

    It was — it was — the actual date of the lease that was taken back in April, it was anticipating the expiration.

    Hugo L. Black:

    When was it?

    C. Harold Thweatt:

    In 1958.

    Hugo L. Black:

    When — what was the date of the 30-day lease and what date it is included?

    C. Harold Thweatt:

    On April the 30th, 1958, Herman Hurst acquired from Hettie Lower — Lowder this 30-day oil and gas lease which had a term running from July — from June 3rd, 1958 through July 3rd —

    Hugo L. Black:

    Alright, now —

    C. Harold Thweatt:

    –1958.

    Yes, sir.

    Hugo L. Black:

    (Inaudible) — it’s getting clear in my mind.

    C. Harold Thweatt:

    Yes, sir.

    Hugo L. Black:

    During that period, they went in with their bulldozers to do work on the land?

    C. Harold Thweatt:

    That’s true.

    Hugo L. Black:

    And how long do you say they did that work?

    C. Harold Thweatt:

    They did it — under the records, undisputed, they — a day or two days, about $60 worth of work, Mr. Justice Black.

    Hugo L. Black:

    Was that the proper kind of work to do to start on the —

    C. Harold Thweatt:

    With — without question.

    Hugo L. Black:

    — of their operations?

    C. Harold Thweatt:

    Without question.

    Hugo L. Black:

    Now, what date did Ambassador go over and look at the land and conclude that they’d abandoned it?

    C. Harold Thweatt:

    About July 22nd, the date they acquired the lease about that time.

    I don’t know the exact date.

    Hugo L. Black:

    July 22nd?

    C. Harold Thweatt:

    Yes, sir.

    About 20 days after the work had occurred or 20 or more or less.

    Hugo L. Black:

    Did they dispute although whether they were — there was some of the tools of the Domestic people that are still there on the land?

    C. Harold Thweatt:

    No, sir.

    No dispute about that.

    Hugo L. Black:

    What do they claim that they were doing at that time?

    C. Harold Thweatt:

    Waiting for the Corporation Commission to enter the spacing order that would permit the drilling of the well.

    Hugo L. Black:

    That they had gotten it ready to drill the well but they couldn’t do it because they didn’t have an order?

    C. Harold Thweatt:

    That — that was their position.

    Hugo L. Black:

    And while that was pending in there, Ambassador went over and got another lease for itself.

    C. Harold Thweatt:

    Yes, sir.

    That’s correct.

    Yes, but in that connection, they also contended that they had to have an oral extension of the lease from Hettie Lowder.

    Now, Hettie Lowder had a lawyer of her own Mr. Justice Black, Mr. Merle Smith, who is a prominent lawyer from Guthrie, Oklahoma.

    This lady and she is a lady, is 80 some odd years old but sharp as a tack and she consulted with Mr. Smith about this matter of whether or not this 30-day lease was dead or not.

    And Mr. Smith advised her that the lease was dead and that she was free to execute the oil and gas lease.

    And only after talking with Mr. Smith, that she execute the oil and gas lease to Ambassador.

    And now we’ve got tree lawyers, three Oklahoma lawyers, each of whom gave the same answer, that’s before the fact, I am an associate of mine, tell Ambassador your 30-day lease is dead.

    Hugo L. Black:

    But that’s not conclusive on the court, is it?

    C. Harold Thweatt:

    No, no, no it didn’t —

    Hugo L. Black:

    (Inaudible)

    C. Harold Thweatt:

    Well, only — only to this extent Your Honor please, under the Oklahoma law, advice of counsel is absolute defense to a claim of slander of title, that’s on the Oklahoma law of —

    Hugo L. Black:

    That’s one of the two prongs of the action?

    C. Harold Thweatt:

    Yes, sir, yes sir.

    If not — Your Honor please, I’m not sure Judge — Judge Phillips characterized this action with the slander of title action.

    I don’t know whether– whether it was a slander of title or not.

    If you have — I have — I have both the — his analysis of it in my brief, I talked about it to be a slander of title but I’m not sure it’s that.

    Now, here’s the second cause of action.

    The first cause of action in this case was to plot title, pure and simply.

    The plaintiff and through Domestic and others was in possession, there’s no question of possession involved in this action at all.

    So there’s no action of ejectment or anything, a pure plot title action in the first cause of action.

    Second cause of action says this, that the plaintiffs re-plead all their first cause of action that Ambassador Oil Corporation, by its duly authorized officers and agents and by Merle Smith, now that’s Mrs. Lowder’s attorney, acted in no ethical or legal capacity, willfully and maliciously conspired to bring about and did bring about a renunciation breach and repudiation by Hettie E. Lowder of said lease to Herman L. Hurst under which through said assignments from said Herman Hurst, these plaintiffs obtained their mineral interest.

    And that such acts of said defendant were for the purposes of depriving these plaintiffs of their lawful contract rights and mineral interest and for a wrongful, monetary benefit to themselves.

    That Ambassador Oil Corporation, Merle Smith, and Hettie E. Lowder, knowingly conspired and did the aforesaid acts for the purpose of depriving these plaintiffs of their lawful mineral interest and thereby maliciously and unlawfully liable and slandered the said 1/16th overriding royalty owned by the plaintiffs.

    Now, under — now, in this original action, Merle Smith was made a party.

    Ambassador was a party.

    Hettie Lowder was a party.

    C. Harold Thweatt:

    Now before the case was tried, it was dismissed by the plaintiffs insofar as Merle Smith was concerned.

    That gets rid one of the conspirators.

    At the conclusion of the evidence, Ambassador moved for judgment and so did Hettie Lowder.

    Judge Rizley sustained the motion insofar as Hettie Lowder was concerned held that they’ve proved no case against her and let her out.

    The — and that juries have held Ambassador in, till all the testimony was in.

    In other words, he refused to sustain our demurrer of the evidence at the conclusion of the plaintiffs’ case.

    But he did sustain it as to Hettie Lowder.

    Now, that gets rid of the second conspirator.

    It leaves Ambassador.

    Now, he alleges conspiracy.

    I — I — I really don’t know whether this — thank you very much.

    Earl Warren:

    No, no, complete your thought.

    Complete your thought.

    C. Harold Thweatt:

    Well, I — I really don’t know whether — whether this is a slander of title action or not.

    Earl Warren:

    (Inaudible)

    C. Harold Thweatt:

    Yes, yes sir.

    Yes sir.

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    Perhaps not but they — if — of course he alleges conspiracy, he didn’t allege the —

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    Yes, they’re could be, yes indeed.

    William J. Brennan, Jr.:

    (Inaudible)

    C. Harold Thweatt:

    Yes, it would.

    That’d be a tort would it not and so I think it would.

    Hugo L. Black:

    I just want to ask you one more question —

    C. Harold Thweatt:

    Yes, sir

    Hugo L. Black:

    — to be, our top — main problem is a question of the right to trial by jury.

    C. Harold Thweatt:

    I understand that sir.

    Hugo L. Black:

    As I understand it that your argument that you’ve made, they — on this premise, that as a matter of law, this Court could determine that this man Meeker was estopped to challenge your title?

    C. Harold Thweatt:

    Right.

    Hugo L. Black:

    We should determine that as a matter of law?

    C. Harold Thweatt:

    That’s correct.

    And —

    Hugo L. Black:

    Despite the fact that every paper he signed and every word he uttered according to what you’ve said, was protesting that your lease was no good and it should — mistreated him?

    C. Harold Thweatt:

    Yes, sir.

    We’ve — our revered Dean of our Law School here, Dean (Inaudible) say, “You can’t blow hot and cold”, Your Honor and that — I think that’s the point here.

    Hugo L. Black:

    But he was — he was blowing very hot each time, wasn’t he (Inaudible) what your company had done to him, his interest.

    What you’re saying is that all — because he had a source of title in two — his claim rested on two sources.

    C. Harold Thweatt:

    One source, his claim.

    Hugo L. Black:

    Well, he claimed two sources, didn’t he?

    C. Harold Thweatt:

    No, sir, the third —

    Hugo L. Black:

    But he claimed the source of title, the 30-day lease.

    C. Harold Thweatt:

    That’s all.

    Hugo L. Black:

    The 30-day lease and you were saying are you not, that he also claimed on the Ambassador’s title?

    C. Harold Thweatt:

    Oh, yes, I —

    Hugo L. Black:

    So that you say that since he was claiming on the Ambassador’s title too, taken two prongs to a lawsuit which people in fact frequently do, that he was thereby estopped from making any claim on the other.

    C. Harold Thweatt:

    Yes, sir.

    I think he was estopped by deed, he was estopped by this acceptance.

    I think he was — that the lease had expired as a matter of law.

    The — that period of time has gone by, I think the Court should’ve said that lease is dead and that — there — and there — or there couldn’t be no claim of malice in due of the fact that counsel advised the Ambassador that lease is dead.

    Hugo L. Black:

    Outside of that, do you agree or deny that under the Beacon case, he would be entitled to a jury but were you alleged to estoppel?

    C. Harold Thweatt:

    Perhaps on the second cause of action, Your Honor please, I think the Beacon case is a — a very violent turn.

    I think the Beacon — as explained by the Dairy Queen case, I think the effect of the Beacon case and the Dairy Queen case would mean that — that there is no more — there are no more suits in equity which I don’t think was the intention of the — when the federal rules were adopted.

    And I — I think it would — anytime that they’re issued — there, you can take several — you could either terminate by the basic nature of the action which the Court has apparently rejected in the Beacon case.

    Or you could say that wherever there is a jury issue, while that jury issue will be tried by the case or you can say what the Court seemingly said as explained in Your Honor’s opinion in the Dairy Queen case, what they said in the Beacon case.

    And you cite the Thermo-Stitch case from the Florida Circuit that says, “That anytime there is a jury issue, then the entire case must be tried to the jury.”

    We don’t — that’s the law, of course, we’ll have to abide with it.

    But we respectfully submit that such a rule abolishes equity jurisdiction.

    We don’t think that that was the intention of the rule but of course this Court — they call the signals.

    Earl Warren:

    Mr. Adams.

    O. R. Adams, Jr.:

    Mr. Chief Justice, may it please the Court.

    There are two ways to deny a jury trial in a civil case.

    One of them is to classify the action as equitable and say you’re not entitled to a jury trial.

    The other way is to pick out some undisputed fact in the case and say, “Mr. Plaintiff as a matter of the law, you don’t have any cause of action to go to the jury.”

    This can be worked separately or together but either is just as effective as the other.

    Now, is this Court going to say to that we will protect your right to a jury trial in the one instance, but that if you’ll pick out some fact here.

    If you’ll pick out some fact and it doesn’t make any difference whether you apply the law, the substantive law of the state right or wrong, even though you’re quite wrong, all you have to do is say that under the facts of this case you have no cause to the — go to the jury.

    And whether the trial court applies the law correctly or incorrectly, that does away with the case.

    I think this Court will not say that because that would open the way clearly and obviously to a way to effectively deny the constitutional right to a jury trial.

    Now —

    Arthur J. Goldberg:

    (Inaudible)

    O. R. Adams, Jr.:

    Mr. Justice Goldberg, they didn’t just bulldoze the land.

    I think the record will show and the trial court itself held that they dug a circulating pit and they made a road.

    And as Mr. Thweatt himself has said here today, they commenced the drilling operation but if continued with due diligence, gave them title to the property as long as oil was produced.

    Now, —

    Arthur J. Goldberg:

    (Inaudible)

    O. R. Adams, Jr.:

    Yes, Your Honor.

    I will and there’s one thing I would like to say here that Mr. Thweatt has made this argument on the facts and he has stated the facts in such a way they’re favorable to him.

    And I will also submit that a reading of the record before this Court will not even establish all of his facts if they put them all of his way.

    But now along that line, this lease would have expired had the well not been commenced on July the 3rd.

    Before that time, they commenced the drilling operation.

    Right at this time, this dispute with Sunray Oil Company arose on drilling.

    And there was a question of fact, as to whether they acted with due diligence.

    Two experts testified.

    Mr. Meeker and Mr. Hurst then said it would have been unreasonable in the light of this dispute to continue with the drilling operation.

    Well, they waited the record before this Court will show that there is testimony to the effect that the Corporation Commission of Oklahoma was on vacation.

    As soon was the spacing order was made, they fired up again.

    They had their equipment there all the time.

    William J. Brennan, Jr.:

    May I ask you Mr. Adams, (Inaudible)

    O. R. Adams, Jr.:

    Oh, Mr. Justice Brennan, I’m not sure whether the record before this Court will show it or not.

    O. R. Adams, Jr.:

    I think that the record —

    William J. Brennan, Jr.:

    (Inaudible)

    O. R. Adams, Jr.:

    Correct.

    I — I think that the record below would have shown it.

    But now as I say it, on the record before this Court, you will not find all of these facts alleged by counsel.

    Arthur J. Goldberg:

    (Inaudible) on July 16th to dispute the authority of the Court of Appeals.

    William J. Brennan, Jr.:

    No, Your Honor.

    Arthur J. Goldberg:

    Well, that’s the date, isn’t it?

    O. R. Adams, Jr.:

    I believe that would be, yes, sir.

    Arthur J. Goldberg:

    (Inaudible)

    O. R. Adams, Jr.:

    Yes, Your Honor, I believe that the record affirmatively shows that without question.

    William J. Brennan, Jr.:

    (Inaudible)

    O. R. Adams, Jr.:

    Yes, Your Honor, I think that would have to be concluded from the record also.

    Ambassador knew about our lease.

    It was of record.

    They knew that Meeker’s earnings — Meeker and his associates had brought in the Robinson well on adjoining acreage that this was valuable property.

    They knew that he wasn’t going to turn loose of this lease and the —

    (Inaudible)

    O. R. Adams, Jr.:

    I think Your Honor that this record would show that it may or may not.

    There is testimony to the —

    (Inaudible)

    O. R. Adams, Jr.:

    — effect that it would.

    (Inaudible)

    O. R. Adams, Jr.:

    The — the testimony in this case is that since the dispute had arisen that if it had been continued in the face of the dispute, there could’ve been a penalty.

    (Inaudible)

    O. R. Adams, Jr.:

    Yes, Your Honor.

    Now, one of the thing about this oral extension, we certainly take issue for the possession of the respondent that an oral extension on this prospect cannot be binding.

    Now, the very case that counsel cites for this proposition goes on to say and it isn’t on this type of case but it is on work done.

    It goes on to say however, if he showed that the work was done, well then you’re entitled to recover on quantum merit for the work.

    Now, that isn’t this situation.

    O. R. Adams, Jr.:

    We don’t think it supports the situation at all.

    We think it is elementary.

    Under the law of the statute of frauds, that you can even buy any kind of real property by an oral extension, if you then rely on it and sufficiently change your position.

    And we submit that in addition to the question in fact of due diligence, we had a question of fact of an oral extension and whether or not there was sufficient reliance to remove it from the statute of fraud.

    Hugo L. Black:

    Would that depend to some extent on the position they took after the oral extension?

    O. R. Adams, Jr.:

    Our — our position on that Your Honor is that in — reliance on the oral extension, although they had thought they didn’t need it, they still had it.

    They went ahead and they moved in and they started drilling the well and they drilled a third down before anyone told them about (Voice Overlap) —

    Hugo L. Black:

    Your argument here as I gather it is that whatever the record may show as to the fact that we’ve been asking you about, they were facts on which your right to show that you proceeded with due diligence with what crucial in your case, you’re entitled to have them tried by jury and neither by the federal court below and now by this Court.

    O. R. Adams, Jr.:

    That’s right Your Honor.

    And in addition to that, I don’t have time to go into these cases but only a estoppel by deed, there are three Oklahoma cases that are squarely in line which disposed of the respondents’ argument on an estoppel by deed even if we hadn’t have had that reservation.

    But we had the reservation.

    We could’ve contested it anyway because we made our contest under — on another deed not the one with anything about Ambassador Corporation in it.

    Hugo L. Black:

    What law would we have to defend on to determine whether there’s an estoppel?

    O. R. Adams, Jr.:

    Oklahoma law, but again Your Honor I — I say —

    Hugo L. Black:

    That’s a rather complicated feel as it may, isn’t it?

    I found Oklahoma law sometimes rather complicated even when it didn’t involve a estoppel.

    O. R. Adams, Jr.:

    Nevertheless Your Honor, we submit that it wouldn’t be one way to get rid of our right to a jury trial to pick out this complicated field, construed the law wrong and say, “Mr. Plaintiff, you had no cause of action to take to the jury in the first place.”

    (Inaudible)

    O. R. Adams, Jr.:

    Yes Your Honor, I would.

    I think that —

    (Inaudible)

    O. R. Adams, Jr.:

    First counsel ignores everything but the quiet title.

    He ignores our accounting.

    (Inaudible)

    O. R. Adams, Jr.:

    Yes Your Honor, I think that under the Beacon Theatre’s case, we are not asking for an injunction.

    We did not (Inaudible) action, the quiet title part under the old terms by saying, someone’s bothering us in our quiet possession of our property and we want an injunction against them.

    (Inaudible)

    O. R. Adams, Jr.:

    Your Honor, I don’t feel that the Oklahoma cases will be controlling here.

    (Inaudible)

    O. R. Adams, Jr.:

    Only in slander of title.

    (Inaudible)

    O. R. Adams, Jr.:

    No, I — but on the other hand, Your Honor I feel —

    (Inaudible)

    O. R. Adams, Jr.:

    I feel that the Beacon Theatre case does because it says that the legal remedies have been expanded by the Declaratory Judgment Act and we have to take a new look at this need for a quiet title action.

    And if we don’t need it, if it isn’t necessary, it isn’t available.

    And that’s all we ask in this case that the title to our property be — to this property, be declared in the plaintiff.

    We didn’t ask that anyone be enjoined in any part of the action.

    May I say that I wish to thank you for your kind attention and indulgence in this case and it was certainly an honor to have the opportunity to appear before you.