Case Name: GULFSTREAM PETROLEUM CORPORATION, a corporation, Petitioner, v. Judge Robert A. LAYDEN, District Judge of Pittsburg County, Respondent
Court: Oklahoma Supreme Court
Jurisdiction: Oklahoma
Decision Date: 1981-05-12
Citations: 632 P.2d 376
Docket Number: No. 55809
Parties: GULFSTREAM PETROLEUM CORPORATION, a corporation, Petitioner, v. Judge Robert A. LAYDEN, District Judge of Pittsburg County, Respondent.
Judges: IRWIN, C. J., and WILLIAMS, SIMMS and HARGRAVE, JJ., concur.
Reporter: Pacific Reporter 2d
Volume: 632
Pages: 376–382

Head Matter:
GULFSTREAM PETROLEUM CORPORATION, a corporation, Petitioner, v. Judge Robert A. LAYDEN, District Judge of Pittsburg County, Respondent.
No. 55809.
Supreme Court of Oklahoma.
May 12, 1981.
Robert A. Miller, Crabtree & Miller, Oklahoma City, for petitioner.
H. B. Watson, Jr., and Richard K. Books, Watson, McKenzie & Moricoli, Oklahoma City, for respondent.

Opinion:
LAVENDER, Justice:
This is an original action in which the petitioner, Gulfstream Petroleum Corporation, asks this court to prohibit the respondent trial judge from further proceeding in the cause before him, a quiet title action filed by Hamilton Brothers Oil Company. The land involved is section 18, township 5 north, range 17 east, Pittsburg County, Oklahoma. Both Gulfstream and Hamilton Brothers own oil and gas leases in the section.
In 1978 Gulfstream filed applications with the Oklahoma Corporation Commission to space and pool certain formations underlying section 18. The applications were heard, recommended, and granted, but for some reason the pooling order was issued two weeks before the spacing order. Later, Gulfstream applied for an extension of time to drill a well. At the hearing on Gulf-stream's application Hamilton Brothers, out of time, sought to elect under the pooling order to participate in the well. Gulf-stream's application for an extension of time was granted; Hamilton Brothers' election was denied. Gulfstream then drilled a producing well to the Middle Atoka (Red Oak) formation.
Hamilton Brothers has never sought administrative or appellate relief from any of these orders of the Corporation Commission. Instead, in February 1980, some nineteen months after the pooling order was issued, Hamilton Brothers filed this quiet title action. In it they seek, among other things, a determination that the Commission was without jurisdiction to issue the pooling order because there was no spacing order in effect and that the pooling order is void.
Gulfstream now petitions this court to assume original jurisdiction and issue a writ of prohibition, prohibiting the trial court from further proceeding in the cause. They argue that all necessary elements of jurisdiction existed at the time the Commission entered the pooling order. The question of whether a spacing order existed when the pooling order was entered is not, Gulf-stream argues, a fact question constituting proof of one of the necessary elements of the Commission's jurisdiction. They conclude that the trial court lacks jurisdiction to entertain such a question, because to do so would be to allow a collateral attack on an order of the Corporation Commission.
We assume original jurisdiction, but decline to issue the writ.
I.
By statute, collateral attacks on orders of the Corporation Commission are prohibited. Generally, the district courts of this state lack the jurisdiction to even inquire into the validity of these orders. A district court in a collateral proceeding may, however, examine a Corporation Commission order for the limited purpose of determining the jurisdiction of the Commission, or its lack thereof, to issue the order.
The three elements of jurisdiction are (1) jurisdiction over the person, (2) jurisdiction over the subject matter, and (3) jurisdiction to render the particular judgment. There is no problem here with personal jurisdiction or subject-matter jurisdiction. The question is whether the Corporation Commission had jurisdiction to render the particular judgment, the pooling order.. That question in turn depends on whether the entry of a spacing order is a jurisdictional prerequisite to the entry of a pooling order. It is commonly thought to be, and we have implied that it is. This court, however, has not been called upon to answer the question directly.
The answer to the question is a matter of statutory interpretation. If the statute that creates the authority for the Commission's spacing and pooling orders, 52 O.S.
Supp.1977 § 87.1, makes the entry of a spacing order before a pooling order merely directory, then the requirement is not jurisdictional. If on the other hand the statute makes it mandatory, then the requirement is jurisdictional. Whether a statute is directory only or is mandatory depends, to the extent it can be determined, upon the intent of the legislature. We have held:
If the lawmakers in providing the method of such steps had in mind only an advisable manner of orderly advancement, and had not in mind the nature of the judgment to be rendered when the course was run, then such statutes are usually regarded as directory, and will be considered only in determining the procedure, and are entitled to no consideration in determining the judicial power of the court to render a judgment. Facts showing compliance with such statutes are clearly quasi jurisdictional only, and not subject to consideration in collateral attack. On the other hand, if it appears that in the enactment of such statute the lawmakers, while providing a step in the procedure, had uppermost in mind the effect of such a step upon the judgment thereafter to be rendered, and intended the taking of such step in the procedure as a condition precedent to the existence of the judicial power of a court to there after render the particular judgment, then such facts, while in a sense being quasi jurisdictional, are clearly jurisdictional facts, necessary to the existence of the third element of jurisdiction. Such statute is a mandatory one.
We believe that the legislature, in providing for pooling orders, had uppermost in mind the effect of a prior spacing order. This is clear from the language of the provision authorizing pooling orders, 52 O.S. Supp.1977 § 87.1(e), which provides:
When two or more separately owned tracts of land are embraced within an established spacing unit, or where there are undivided interests separately owned, or both such separately owned tracts and undivided interests embraced within such established spacing unit, the owners thereof may validly pool their interests and develop their lands as a unit. Where, however, such owners have not agreed to pool their interests and where one such separate owner has drilled or proposes to drill a well on said unit to the common source of supply, the Commission, to avoid the drilling of unnecessary wells, or to protect correlative rights, shall, upon a proper application therefor and a hearing thereon, require such owners to pool and develop their lands in the spacing unit as a unit. [Emphasis added.]
The above language makes a prior spacing order mandatory.
The necessity for a prior spacing order also appears from the statutory scheme. The purpose of the conservation statutes, of which section 87.1 is one, is to prevent waste and protect correlative rights. The correlative rights of royalty interest owners and of working interest owners are treated separately. A pooling order serves to protect the correlative rights of working interest owners, by pooling their interests. A spacing order is necessary and sufficient to satisfy the other conservation purposes. It creates the unit. It directs that only one well be drilled in the unit, within a specific location, and drilling a well at another location or operating a well drilled in violation of the spacing order is prohibited. The spacing order also pools the royalty interests within the unit.
The entry of a spacing order is not a mere procedural step in the process of entering a pooling order. It is, rather, an essential and compulsory requirement. The result of compliance with this requirement — the unit — "inheres in such decree as a material and substantial part of the judgment itself." A pooling order pools working interests in a unit; without an established unit there is noting to pool. We therefore hold that a spacing order is a jurisdictional prerequisite to the entry of a pooling order.
Having decided that, it is clear that the facts relating to the existence or nonexistence of a spacing order at the time the pooling order was issued are jurisdictional facts. They may be inquired into in a collateral proceeding, and we therefore decline to issue a writ of prohibition against the trial court.
II.
In defense in the action below, Gulf-stream raised several other issues. They were briefed in this original proceeding here, but it has not been necessary for us to address them. Gulfstream can pursue them in the action below. We do, however, have one further observation to make.
It is common for the Corporation Commission to receive simultaneous applications for spacing the pooling orders. Typically they are filed together, heard together, recommended together, and the orders approved and signed together. In such a case it does not matter which order is the first to which the signatures of the Commissioners are affixed. In either case we hold that the jurisdictional prerequisite is satisfied.
In this case we are told that Gulfstream's two applications were filed together, heard together, and recommended together. It was only through a processing error, we are told, that the orders were not presented to the Commissioners for signature together. We consider this processing error to be de minimis and not controlling under the facts of this case. Therefore, if Gulfstream's evidence shows the error to be as described, and if no party is shown to have been prejudiced or had his rights impaired by the delay between the signing of the two orders, then the jurisdictional prerequisite will have been satisfied. We leave the trial of the case to the trial court, but if that turns out to be true the pooling order will have to be found valid.
ORIGINAL JURISDICTION ASSUMED; PETITION FOR WRIT OF PROHIBITION DENIED.
IRWIN, C. J., and WILLIAMS, SIMMS and HARGRAVE, JJ., concur.
BARNES, V. C. J., and HODGES, DOO-LIN and OPALA, JJ., dissent.
. 52 O.S. 1971 § 111 provides in part:
No collateral attack shall be allowed upon orders, rules and regulations of the Commission .
. 52 O.S.1971 § 111 continues:
[T]he sole method of reviewing such orders and inquiring into and determining their validity, justness, reasonableness or correctness shall be by appeal from such orders, rules or regulations to the Supreme Court.... No court of this State except the Supreme Court, and it only on appeal, as herein provided, shall have jurisdiction to review, reverse, annul, modify or correct any order, rule, or regulation of the Commission within the general scope of its authority herein or to enjoin, restrain or suspend execution or operation thereof .
See also Shell Oil Co. v. Keen, 355 P.2d 997, 1000 (Okl.1960).
. State ex rel. Comm'rs of the Land Office v. Corporation Commission, 590 P.2d 674, 677 (Okl.1979).
. Abraham v. Homer, 102 Okl. 12, 13, 226 P. 45, 47 (1924).
. Nesbitt, A Primer on Forced Pooling of Oil and Gas Interests in Oklahoma, 50 Okl.B.J. 648, 654-55 (1979); Hart, Conservation Practice, in OBA/CLE Institute, Practical Oil and Gas Law 53, 58 (1980). Mr. Hart refers to the existence of a drilling and spacing unit as "[t]he sine qua non for pooling interests."
. Helmerich & Payne, Inc. v. Corporation Commission, 532 P.2d 419, 422-23 (Okl.1975); see Southern Union Production Co. v. Eason Oil Co., 540 P.2d 603, 607-08 (Okl.App.1975).
. This is the version of section 87.1 that applies to these orders. The statute has been amended many times, and was amended again last year. 1980 Okla.Sess.Laws ch. 33, § 1. .
. Abraham v. Homer, 102 Oki. at 14, 226 P. at 47.
. Id.
. Id at 15, 226 P. at 48.
. See, e. g., State ex rel. Comm'rs of the Land Office v. Carter Oil Co., 336 P.2d 1086, 1093 (Okl.1959); Tenneco Oil Co. v. District Court, 465 P.2d 468, 470 (Okl.1970); Hladik v. Lee, 541 P.2d 196, 198 (Okl.1975).
. 52 O.S.Supp.1977 § 87.1(e). The statute does recite another purpose, "to avoid the drilling of unnecessary wells."
. See Note, Oil and Gas: The Necessity of Obtaining a Pooling Order Before Drilling, 31 Okla.L.Rev. 451, 457 (1978).
. 52 O.S.Supp.1977 § 87.1(c).
. Id.
. Id. § 87.1(e).
. Id.
. Abraham v. Homer, 102 Okl. at 15, 226 P. at 48.
. Id. at 13-14, 15, 226 P. at 47, 48.
. State ex rel. Comm'rs of the Land Office v. Corporation Commission, 590 P.2d at 677.