{ "id": 1609204, "name": "Superior Oil Company v. Etheridge", "name_abbreviation": "Superior Oil Co. v. Etheridge", "decision_date": "1951-07-09", "docket_number": "4-9553", "first_page": "289", "last_page": "297", "citations": [ { "type": "official", "cite": "219 Ark. 289" }, { "type": "parallel", "cite": "242 S.W.2d 718" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "214 Ark. 312", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8720459 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ark/214/0312-01" ] }, { "cite": "218 Ark. 415", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1611944 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ark/218/0415-01" ] }, { "cite": "205 Ark. 198", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1488233 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ark/205/0198-01" ] }, { "cite": "122 A. L. R. 1177", "category": "reporters:specialty", "reporter": "A.L.R.", "opinion_index": 0 }, { "cite": "198 Ark. 397", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1459703 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ark/198/0397-01" ] }, { "cite": "14 S. W. 2d 549", "category": "reporters:state_regional", "reporter": "S.W.2d", "opinion_index": 0 }, { "cite": "179 Ark. 132", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8719366 ], "opinion_index": 0, "case_paths": [ "/ark/179/0132-01" ] }, { "cite": "25 S. W. 73", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "58 Ark. 446", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1329201 ], "opinion_index": 0, "case_paths": [ "/ark/58/0446-01" ] }, { "cite": "47 S. W. 118", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "65 Ark. 467", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 609299 ], "opinion_index": 0, "case_paths": [ "/ark/65/0467-01" ] }, { "cite": "32 Ark. 97", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1877096 ], "opinion_index": 0, "case_paths": [ "/ark/32/0097-01" ] } ], "analysis": { "cardinality": 717, "char_count": 14400, "ocr_confidence": 0.541, "pagerank": { "raw": 2.749634930918215e-07, "percentile": 0.8326247978163978 }, "sha256": "6cdccfc65a4825dc3a76f81b2feeb22500914c8b08edb458f00eae88084393ac", "simhash": "1:b8ed9e6d388b9b51", "word_count": 2386 }, "last_updated": "2023-07-14T20:52:55.172495+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Robinson, J., dissents." ], "parties": [ "Superior Oil Company v. Etheridge." ], "opinions": [ { "text": "Ed. F. MoFaddin, Justice.\nThe trial court awarded appellee a lien under Act 615 of 1923 (now found in \u00a7 51-701, et seq., Ark. Stats.); and appellant challenges the correctness of the said judgment.\nThe appellant, Superior Oil Company (hereinafter called \u201cSuperior\u201d), was the owner of certain oil and gas leases in Ashley County, and made a \u201cletter agreement\u201d with Claud R. McSpadden. Superior addressed a letter to McSpadden reading in part :\n\u2018 \u2018 The Superior Oil Company agrees that, in the event of complete performance as hereinafter provided of the following conditions, it will assign to you without warranty of any kind, express or implied, all its right, title and interest, ... in and to the following oil and gas leases: (The letter contains a description of leases.)\n\u201cThe conditions of which prior complete performance upon your part is required are:\n\u201c1. You must on or before August 1, 1949, commence operations for the drilling of an oil well upon some part of the above described leases at a location to be selected by yon and thereafter diligently and in good faith continuously prosecute the drilling of said well to a depth sufficient to satisfactorily test, in the opinion of this company, the Cotton Valley sand, from which production is presently being obtained in the No. 1 well drilled by this company upon said premises, unless at a lesser depth oil is discovered and produced from said well in paying quantities.\u201d\nIn numbered Paragraphs 2 to 9, inclusive, Superior required of MeSpadden, inter alia: that representatives of Superior should have access at all times to the drill site, the log, the core record and the drill samples; that surface casing would be set; that all formations would be tested when Superior\u2019s geologist so indicated; that Superior would be duly notified in advance of such testings ; and that daily progress reports would be made to Superior. The letter continued:\n\u201cThis agreement may not be recorded or assigned by you or by you made the subject of any lien or contract either voluntarily or involuntarily without the written consent of this company first had and obtained and any action in violation of any of the provisions of this act shall cause all of your rights hereunder to terminate without notice.\n\u201cIf this agreement meets with your understanding and approval, kindly execute the duplicate copy hereof in the space provided thereon and return to us within ten. (10) days; otherwise this agreement shall be of no force and effect.\n\u201cYours very truly,\n\u201cTHE SUPERIOR OIL COMPANY.\u201d\nIn the space provided in the said letter, MeSpadden signed the following worded statement:\n\u201cThe undersigned hereby acknowledges his understanding and approval of the foregoing letter agreement and agrees to be bound by tbe covenants, terms and conditions thereof.\n\u201cEXECUTED this 14 day of June, A. D. 1949.\n\u201c/s/ Claud R. McSpadden.\u201d\nMcSpadden began performance of the agreement, and made a contract with appellee, Etheridge, whereby the latter furnished the lumber and labor and constructed a plank road from the railroad terminus to the location of the drilling site and also furnished timbers which were placed around the pump location. Etheridge\u2019s account was $6,656.32; and when it remained unpaid, he filed action on December 16, 1949, against McSpadden and other named parties, \u201cand the unknown owners of oil wells in sections 11 and 12, township 19 south, range 10 west, in Ashley County, Arkansas, known as Bradley No. 1 and Claud R. McSpadden No. 3.\u201d The prayer of the complaint was:\n\u201cWHEREFORE, he prays judgment against the defendants, separately and severally, in the sum of $6,656.32, for a lien on said property as authorized by sections 51-701 et seq. of the Statutes of Arkansas, 1947, and for attachment of the premises and property of the defendants as set out in this complaint and in affidavit for attachment filed herein, and for such other and further general and special relief as may be justified herein.\u201d\nThe leasehold and property thereon were seized by order of attachment; and on March 21, 1950, Etheridge obtained judgment awarding him a lien, sustaining the attachment, and ordering the leasehold and property sold to satisfy his claim. Thereupon, on March 30, 1950, Superior intervened, saying:\n\u201cIntervener claims ownership of the property involved in this cause and Intervener alleges that Claud R. McSpadden, a Defendant in said cause, has no right, title or interest in any- of the property so ordered sold. . . . This Intervener has heretofore stored upon the property described above approximately 6,200 feet of oil well casing. Said easing was purchased by Intervener in the regular course of business and was transported to and stored upon the property described above for its own use. . . . Intervener alleges that it is in no wise responsible or obligated to pay to the Plaintiff any part of the obligations, if any, incurred by the Defendant Claud R. McSpadden, and that no part of its property is subject to the claims or liens of any person as security for any such indebtedness incurred by Defendant Claud R. Mc-Spadden. \u2019 \u2019\nEtheridge replied to this intervention:\n\u201cThat from the statements made by intervener herein, it should be made a party defendant and the original pleadings filed herein against other defendants should be made applicable to it as such defendant.\u201d\nThe prayer of the reply was in accordance with the above quoted language. At the trial on July 27, 1950, Superior exhibited its \u201cletter agreement\u201d with McSpadden and also an instrument from him dated May 1, 1950, entitled \u201cAcknowledgment of Forfeiture and Release,\u201d in which McSpadden stated that be bad not performed the conditions stated in the \u201cletter agreement\u201d with Superior, and therefore released Superior from any liability to him bec\u00e1use of said \u2018 \u2018 letter \u2018agreement. \u2019 \u2019 Etheridge proved bis unpaid account for $6,656.32 for materials, etc., as aforesaid. The Circuit Court denied Superior\u2019s inter\u2022vention; and from that judgment Superior brings this appeal, presenting the questions now to be discussed.\nI. Superior says:\n\u201cInasmuch as there was no denial by Etheridge of any of the facts alleged by Superior in its verified Intervention, the Circuit Court should have entered an order or judgment protecting the rights of intervener, by sustaining the prayer of Intervener.\u201d\nIn support of its contention, Superior cites \u00a7 31-157, and \u00a7 27-1121, Ark. Stats., and also the following cases: Guynn v. McCauley, 32 Ark. 97; DeLoach Mill Mfg. Co. v. Little Rock Mill, 65 Ark. 467, 47 S. W. 118; and Rosewater v. Schwab Clothing Co., 58 Ark. 446, 25 S. W. 73.\nWe hold against Superior on this contention, because in Etheridge\u2019s reply to Superior\u2019s intervention there was the language previously copied, to-wit:.\n\u201cThat from the statements made by intervener herein, it should be made a party defendant and the original pleadings filed herein against other defendants should be made applicable to it as such defendant.\u201d\nWhen we consider (a) that the cas\u00f3, as originally styled, showed that Etheridge attempted to bring in \u201cthe un-' known owners\u201d of the oil wells, and that (b) Superior had bound McSpadden not to record the \u201cletter agreement,\u201d it is clear that the effect of the quoted language in Etheridge\u2019s reply was that Etheridge claimed he was entitled to a lien against Superior and its property, under .\u00a7 51-701, just as he had prayed in his original pleading against McSpadden. Etheridge\u2019s reply thus amounted to more than a denial of Superior\u2019s intervention: it was a cross complaint against Superior.\nII. Superior says:\n\u201cPlaintiff Was Entitled To No Lien Upon the Leasehold Involved, and Equipment Thereon, Under \u00a7 51-701, Arkansas Statutes.\u201d\nThis brings us to the real controversy in\u2019 the case\u2014\u25a0%. e., whether'Etheridge is entitled to a lien under Act 615 of 1923. Section 51-701, Ark. Stats., contains germane language :\n\u201cAny person . . . who shall under contract express or implied . . . with the owner ... of any . . . mineral leasehold interest in land . . . or with the . . . agent ... of any such owner . . . furnish . . . machinery or supplies used in . . . operating, completing, equipping ... or repairing such well . . . shall have a lien . . . upon the whole of such . . . leasehold interest . . . and upon all . . . buildings and appurtenances, including pipeline . . . for which said materials and supplies were furnished . . .\u201d (Italics supplied.)\nIn the light of the contractural relations between Superior and McSpadden, it is possible that McSpadden was an \u201cagent\u201d of Superior within the purview of the above quoted Statute, to the extent of the enforcement of the lien herein involved. But our decision need not be put on that ground, because Etheridge is clearly entitled to a lien under \u00a7 51-703, Ark. Stats., the germane language of which reads:\n\u201cAny person . . . who shall furnish . . . . . . materials or supplies to a contractor . . . shall have a lien upon . . . the leasehold interest . . . or the lease for oil or gas purposes, the buildings and appurtenances, and ... oil or gas pipeline . . . in the same manner and to the same extent as the original contractor for the amount due him for the material furnished . . .\u201d (Italics supplied.)\nIn Home Oil Co. v. Helton, 179 Ark. 132, 14 S. W. 2d 549, we had under consideration the definition of a \u201c contractor \u2019 \u2019 under our mechanics \u2019 lien statute, and we said:\n\u201cThe term \u2018contractor,\u2019 as used in-our statute relating to mechanics \u2019 lien, refers to one who, under a contract with the owner, agrees for a consideration to furnish the material, labor, and superintendence necessary to the erection of the building or other improvement on the owner\u2019s premises . . . The word \u2018contractor\u2019 as used in the statute means a person engaged in making a contract with the owner for the improvement of certain real estate.\u201d\nSuperior was the \u201cowner\u201d of the oil and gas leasehold and made an agreement, with McSpadden looking toward the \u201cimprovement\u201d of the leasehold estate, so McSpadden was a \u2018 \u2018 contractor. \u2019 \u2019\nThe \u201cletter agreement\u201d between Superior and Mc-Spadden, and his work thereunder, made McSpadden a \u201ccontractor\u201d for the drilling of the well; and under \u00a7 51-703, Ark. Stats., Etheridge, in furnishing materials to McSpadden, became entitled to a lien, just the same as a contractor would have been entitled to one under \u00a7 51-701. In other words, we construe the concluding language of \u00a7 51-703 (i. e.} \u201cin the same manner and to the same extent as the original contractor\u201d) to mean that a supplier of materials to a contractor, under \u00a7 51-703, has a lien just as a contractor has a lien under \u00a7 51-701.\nSuperior says that the \u201cletter agreement\u201d between it and McSpadden was unilateral and therefore McSpadden was not a contractor. Assuming, without deciding, that the original agreement might have' been unilateral, nevertheless, McSpadden actually performed work and labor under the \u201cletter agreement,\u201d and such performance made him a contractor, irrespective of what might have been the original status. See Mid-Continent v. Russell, 173 Fed. 2d 620.\nSuperior claims that Roberts v. Tice, 198 Ark. 397, 129 S. W. 2d 258, 122 A. L. R. 1177, supports Superior in its contention; but that case is factually different from the one at bar. In Roberts v. Tice (supra) the holder of the overriding royalty had assigned the leases to a company which undertook to drill, and we held that such reserved overriding royalty was not subject to lien under \u00a7 51-701, et seq., Ark. Stats. But in the case at bar Superior, as the leaseholder, made the contract with Mc-Spadden to drill and agreed to pay him in leases and oil as a \u201cturnkey contract\u201d; so McSpadden was a contractor for Superior, and Superior does not occupy the position of a holder of an overriding royalty.\nThe case at bar has aspects like that of Bennett v. Weis, 205 Ark. 198,168 S. W. 2d 379. In that case Thompson owned oil and gas leases and made a contract with Howard to drill a well and furnish Howard 300 feet of surface pipe. Bennett let Howard Lave a drilling rig; and the question was as to the extent of the lien of the material supplier, Weis. We held that Weis had no hen on Bennett\u2019s rig; but we sustained the lien of Weis, the supplier, \u201cas to the surface pipe and the lease.\u201d In short, we held that the lease and pipe of Thompson, the leaseholder, were subject to the lien of the supplier. Under the authority of that case the pipe on the drill site and also the lease of Superior (the leaseholder in the case at bar) were properly subjected to the lien of Etheridge.\nAffirmed.\nRobinson, J., dissents.\nBy subsequent exchange of letters, this date was changed to August 21, 1949, and other provisions added to this Paragraph No. 1.\nWe are not considering Etheridge\u2019s claim to a lien for labor under Act 513 of 1923 (now found in \u00a7 51-320, Ark. Stats.), because there is no evidence as to labor that Etheridge personally performed, as distinct from the labor that he hired. See Sain v. R. Abramson Co., 218 Ark. 415, 236 S. W. 2d 585.\nIn Arkansas State Licensing Board v. Lane, 214 Ark. 312, 215 S. W. 2d 707, we again defined the word, \u201ccontractor.\u201d\nIn reaching our conclusion, we have carefully considered the case of Brooks v. Superior Oil Co., 96 Fed. Supp. (Advance Sheets) 641.\nIn Continental Oil Co. v. Jones, 177 Fed. 2d 508, the Circuit Court of Appeals said: \u201cA turnkey contract has a definite meaning in the oil industry. It is a contract where the driller undertakes to furnish everything, and to do all the work required to complete the well, place it on production, and turn it over ready to \u2018turn the key\u2019 and start the oil running into the tanks.\u201d\nWhen we say \u201cpipe on the drill site,\u201d we do not refer to some casing that was never unloaded on the drill site. Pipe in transit and never on the drill site was not subject to the lien; but discussion of this becomes an immaterial matter because Superior executed a forthcoming bond when it intervened and also a supersedeas bond when it appealed; and the affirmance of Etheridge\u2019s lien\u2014which we now do\u2014 as to the leasehold and pipe on the drilling site accompliance an affirmance within the provisions of the said bonds.", "type": "majority", "author": "Ed. F. MoFaddin, Justice." } ], "attorneys": [ "Davis & Allen and E. W. Varner, for appellant.", "Y. W. Etheridge, for appellee." ], "corrections": "", "head_matter": "Superior Oil Company v. Etheridge.\n4-9553\n242 S. W. 2d 718\nOpinion delivered July 9, 1951.\nRehearing denied October 22, 1951.\nDavis & Allen and E. W. Varner, for appellant.\nY. W. Etheridge, for appellee." }, "file_name": "0289-01", "first_page_order": 313, "last_page_order": 321 }