Court Opinion

ID: 3812692
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:50:41.49948+00
Date Added: 2024-06-11T13:52:46.741580
License: Public Domain

This is an original proceeding in this court in which the plaintiff seeks a writ of prohibition against the Corporation Commission of the state of *Page 238 
Oklahoma to prohibit the enforcement by said Commission of certain orders, rules, and regulations adopted by the Commission to prevent waste of crude oil in the state of Oklahoma.
The Corporation Commission, respondents herein, filed a response to which was attached copies of said orders, together with copies of the proceedings leading up to the orders themselves. In substance, the several orders and modifications thereof pleaded by respondents provide for a comprehensive plan of conservation and proration of crude oil produced in the flush and semi-flush production pools of the state, including the Oklahoma City pool, in order to prevent economic waste, underground waste, surface waste and waste incident to production of crude oil or petroleum in excess of transportation or market facilities and reasonable market demand.
The orders classify the several oil producing fields of the state and provide, among other things, that each producer in said field so classified and described might take from such pool or area only such proportion of all crude oil and petroleum that might be produced therefrom, under said order, as the production of the well or wells of such owner in said pool bore to the total potential production of such pool or area. Said orders also provide for an umpire, operator's committees, agent, etc., to carry out the provisions of said order and regulations.
The plaintiff in its petition contends that the Corporation Commission was without authority to make the orders complained of, in that the oil conservation laws of the state of Oklahoma did not coffer such authority upon it: and second, if it should be held that such authority was conferred or attempted to be conferred under said conservation laws, that the same was violative of the state and federal Constitution, and in its brief states its contention as follows:
"(1) The law itself is unconstitutional.
"(2) Many provisions of the law are unconstitutional.
"(3) The act itself, even if valid in all its provisions, does not confer the authority attempted to be exercised.
"(4) The orders go far beyond the provisions of the law, and to such extent are invalid.
"(5) The act itself says the Commission shall prevent unreasonable discrimination in favor of one common source of supply as against another. The orders are discriminatory and therefore void."
The applicable sections of the statute involved are:
"Section 7954, C. O. S, 1921: Waste prohibited. That the production of crude oil or petroleum in the state of Oklahoma, in such manner and under such conditions as to constitute waste, is hereby prohibited."
"Section 7956. Waste defined — Protection. That the term 'waste' as used herein, in addition to its ordinary meaning, shall include economic waste, underground waste, surface waste, and waste incident to the production of crude oil or petroleum in excess of transportation or marketing facilities or reasonable market demands. The Corporation Commission shall have authority to make rules and regulations for the prevention of such waste, and for the protection of all fresh water strata, and oil and gas bearing strata encountered in any well drilled for oil.
"Section 7957. Production regulated — discrimination of purchaser prohibited. That whenever the full production from any common source of supply of crude oil or petroleum in this state can only be obtained under conditions constituting waste as herein defined, then any person, firm or corporation, having the right to drill into and produce oil front any such common source of may take therefrom only such proportion of all crude oil and petroleum that may be produced therefrom, without waste, as the production of the well or wells of any such person, firm or corporation, bears to the total production of such common source of supply. The Corporation Commission is authorized to so regulate the taking of crude oil or petroleum from any or all such common sources of supply, within the state of Oklahoma, as to prevent the inequitable or unfair taking from a common source of supply of such crude oil or petroleum, by any person, firm, or corporation, and to prevent unreasonable discrimination in favor of any one such common source of supply as against another."
"Section 7959: Enforcement of act — hearings before Corporation Commission. That any person, firm or corporation, or the Attorney General on behalf of the state, may institute proceedings before the Corporation Commission, or apply for a hearing before said Commission, upon any question relating to the enforcement of this act, and jurisdiction is hereby conferred upon said Commission to hear and determine the same. Said Commission shall set a time and place, when and where such hearing shall be had and give reasonable notice thereof to all persons or classes interested therein, by publication in some newspaper or newspapers, having general circulation in the state, and in addition thereto, shall cause reasonable notice in writing to be served personally on any person, firm, or corporation complained *Page 239 
against. In the exercise and enforcement of such jurisdiction, said Commission is authorized to determine any question or fact, arising hereunder, and to summon witnesses, make ancillary orders, and use mesne and final process, including inspection and punishment as for contempt, analogous to proceedings under its control over public service corporations, as now provided by law."
It is first contended that the act of the Legislature in question is invalid for the reason it is in conflict with section 57 of article 5 of the Constitution of Oklahoma, which provides that every act of the Legislature shall embrace but one subject, which shall be clearly expressed in its title. This act is not in conflict with said section, because the act does embrace but one subject. to wit, prevention of waste of oil, and said subject is clearly expressed in the title. This section was construed in Ex parte Ambler, 11. Okla. Cr. 449,148 P. 1061; Oklahoma Light  Power Co. v. Corporation Commission, 96 Okla. 19, 220 P. 54; Griffin v. Thomas,86 Okla. 70, 206 P. 604. Under the authorities above cited, it was held that if the act has but one general subject that is fairly indicated by the title, it may have many details, but if they all relate to the same general subject or object they are properly included therein. The purpose of this provision of the Constitution was to forbid the Legislature from embracing in any one act two or more unconnected subjects.
It is next contended that the act under consideration confers non-delegable powers on the Corporation Commission. A careful reading of the foregoing sections of the statute will disclose that the major purpose of said legislation is to prohibit the waste of oil in this state, and it is not void in that it confers non-delegable powers on the Corporation Commission. See Ex parte Tindall, 102 Okla. 192, 229 P. 125; Insurance Company v. Welch, 49 Okla. 620, 154 P. 50; Quinton Relief Oil Gas Co. v. Corporation Commission, 101 Okla. 164,224 P. 156: Plymouth Coal Co. v. Commonwealth of Penn..,232 U.S. 532, 6 R. C. L. 179.
Neither is the act void for uncertainty. The record discloses that after hearing was had the respondent Corporation Commission found, in substance, that the potential production in the Oklahoma City pool was much greater than the marketing and transportation facilities, and the statutes above quoted clearly authorized it to make the order complained of under the definition of "waste" in section 7956, supra. See Quinton Relief Oil  Gas Co. v. Corporation Commission, supra: Ex parte Daniel (Okla. Cr.) 273 P. 1010; C., R.I.  P. Ry. Co. v. State, 23 Okla. 94, 99 P. 901.
It is contended by plaintiff that no notice, or at least no proper notice was given it prior to the promulgation of said orders. But, as respondents appear to have acted under section 7959, C. O. S. 1921, supra, the notice pleaded would appear to be sufficient in the absence of either allegation or proof that plaintiff was prejudiced thereby, or had no notice of the proceeding in which the orders were made.
This brings us to an examination of the statutes involved, and the procedure authorized thereunder, to discover if the orders complained of are on their face valid, since the reasonableness of same cannot be inquired into in this character of attack.
Statutes such as those under consideration are based largely on the police power of the state; and while this power is more or less elusive and difficult to define, this difficulty results largely from the fact that it (the police power) is plastic in its nature and accommodates itself to every change of conditions which calls for its application. Its nature and scope is well stated in R. C. L. section 182, as follows:
"The police power is an attribute of sovereignty, possessed by every sovereign state, and is a necessary attribute of every civilized government. It is inherent in the states of the American Union and is not a grant derived from or under any written Constitution. It has been said that the very existence of government depends on it, as well as the security of social order, the life and health of the citizens, and the enjoyment of private and social life and the beneficial use of property. It has been described as the most essential, at times the most insistent, and always one of the least limitable of the power of government."
This court in Ex parte Tindall, 102 Okla. 192, 229 P. 125, in the 6th paragraph of the syllabus said:
"The police power is an attribute of sovereignty, inherent in every sovereign state, and not derived from any written Constitution, nor vested by grant of any superior power.
"The term 'police power' comprehends the power to make and enforce all wholesome and reasonable laws and regulations necessary to the maintenance, upbuilding, and advancement of the public weal, and protection of the public interests.
"It is plastic in its nature and will expand to meet the actual requirements of an advancing civilization and adjust itself to the necessities of moral, sanitary, economic and political conditions. *Page 240 
"No principle in our system of government will limit the right of government to respond to public needs and protect the public welfare."
In this connection it cannot be disputed that the production of petroleum and its various products is one of the major industries of the state, and one in which many of its citizens are vitally concerned. The almost universal use of oil, gasoline and other petroleum products, together with the fact that a major portion of the revenues to support our educational and eleemosynary institutions and other departments of state government is derived from taxes levied upon this industry, makes the conservation of this great natural resource a matter of grave concern to the state and every citizen thereof. Notwithstanding the magnitude and importance of the oil industry, it is one of the natural resources which is peculiarly susceptible of waste and dissipation, and when it once escapes can never be recovered.
In 2 Cooley's Constitutional Limitations, (8th Ed.) pages 1319-1320, it is said:
"The Legislature may also regulate and restrict the use and enjoyment of landowners of the natural resources of the state, as subterranean waters, gas, oil and timber, so as to protect them from waste and prevent the infringement of the rights of others. Such legislation does not infringe the constitutional inhibitions against the taking of property without due process of law, denial of the equal protection of the laws, or taking property without just compensation."
In practically all of the oil producing states of the Union, laws have been enacted looking to the conservation of, and the prevention of waste in the production of both oil and gas. In Ohio Oil Co. v. Indiana, 177 U.S. 190, the Supreme Court of the United States affirmed a decision of the Indiana Supreme Court which held valid an act of that state, passed in 1893, which provides that it shall be unlawful to permit the flow of gas or oil from a well to escape in the open air for more than two days after gas or oil shall have been struck in the well, and that thereafter all such oil and gas should be securely confined in such well, pipes or other safe and proper receptacles. The suit was brought by the state of Indiana for an injunction to restrain the Ohio Oil Company from permitting the escape into the open air of gas from certain oil wells in that state. The company pleaded that both oil and gas were produced from the same sand; that it was impossible to produce the oil without producing the gas; that it had no market for the gas, and that to enforce the statute would deprive it of its property without "due process of law" and without compensation.
After discussing and defining the nature of property in oil and gas while yet in the earth, and the rights and duties of the several owners of the surface to a common pool, the court said:
"On the other hand, as to gas and oil the surface proprietors within the gas field all have the right to reduce to possession the gas and oil beneath. They could not be absolutely deprived of this right which belongs to them without a taking of private property. But there is a coequal right in them all to take from a common source of supply the two substances which in the nature of things are united, though separate. It follows from the essence of their right and from the situation of the things as to which it can be exerted, that the use by one of his power to seek to convert a part of the common fund to actual possession may result in an undue proportion being attributed to one of the possessors of the right to the detriment of the others, or by waste by one or more to the annihilation of the rights of the remainder. Hence it is that the legislative power, from the peculiar nature of the right and the objects upon which it is to be exerted, can be manifested for the purpose of protecting all the collective owners, by securing a just distribution, to arise from the enjoyment, by them, of their privilege to reduce to possession, and to reach the like end by preventing waste. This necessarily implied legislative authority is borne out by the analogy suggested by the thingsferae naturae, which it is unquestioned the Legislature has the authority to forbid all from taking, in order to protect them from undue destruction so that the right of the common owners, the public, to reduce to possession, may be ultimately efficaciously enjoyed. Viewed, then, as a statute to protect or to prevent the waste of the common property of the surface owners, the law of the state of Indiana which is here attacked because it is asserted that it divested private property without due compensation, in substance, is a statute protecting private property and preventing it from being taken by one of the common owners without regard to the enjoyment of the others. Indeed, the entire argument upon which the attack on the statute must depend involves a dilemma, which is this: If the right of the collective owners of the surface to take from the common fund, and thus reduce a portion of it to possession, does not create a property interest in the common fund, then the statute does not provide for the taking of private property without compensation. If on the other hand, there be, as a consequence of the right of the surface owners *Page 241 
to reduce to possession, a right of property in them * * * in the common reservoir of supply, then, as a necessary result of the right of property, its indivisible quality, and the peculiar position of the things to which it relates, there must arise the legislative power to protect the right of property from destruction. To illustrate by another form of statement the argument is this: There is a property in the surface owners in the gas and oil held in the natural reservoir. Their right to take cannot be regulated without divesting them of their property without adequate compensation, in violation of the Fourteenth Amendment, and this although it be that if regulation cannot be exerted one property owner may deprive all the others of their rights, since his act in so doing will bedamnum absque injuria. This is but to say that one common owner may divest all the others of their rights without wrongdoing, but the lawmaking power cannot protect all the owners in their enjoyment without violating the Constitution of the United States."
In the case of Lindsley v. Natural Carbonic Gas Company,220 U.S. 61, the Supreme Court of the United States held:
"It is within the power of the state, consistently with due process of law, to prohibit the owner of the surface by pumping on his own land, water, gas and oil, to deplete the subterranean supply common to him and other owners to their injury; and so held that the statute of New York protecting mineral springs is not, as the same has been construed by the Court of Appeals of that state, unconstitutional as depriving owners of their property without due process of law. Ohio Oil Co. v. Indiana, 177 U.S. 190."
In the case of Walls v. Midland Carbon Company,254 U.S. 300, the Supreme Court of the United States sustained a statute of Wyoming which prohibited as wasteful the burning and consumption of natural gas in the manufacture of carbon. This statute limited the prohibition against such use of said gas to gas wells that were situated within ten miles of any incorporated town or industrial plant, and permitted the gas from all other wells in said state to be used for such purpose. The court held that this was not an unreasonable nor arbitrary classification. It was also shown that the enforcement of the statute would destroy a heavy investment already made in plants for the manufacturing of carbon black, but this was not sufficient in the opinion of the court to strike down the statute.
In the case of Oxford Oil Co. v. Atlantic Oil Co., 22 Fed. 2d 597, it was held that it is within the power of the Legislature to lay down a general rule for the protection of mineral rights of the adjoining landowners and to leave the details of enforcing that rule to an administrative agency or board. In this case it was also held that a rule or an order promulgated by the Texas Railway Commission prohibiting the drilling of oil and gas wells nearer than 150 feet to any property line without special permit did not violate any constitutional rights and was therefore valid.
In the case of Bacon v. Walker, 204 U.S. 312, the Supreme Court of the United States had under consideration a statute of the state of Idaho prohibiting the herding of sheep within two miles of the premises of others. The statute was attacked, first, on the ground that the plaintiff in error had an equal right with other citizens to pasture his stock upon the public domain, and to enforce that statute against him was to take property without due process of law, and second, that the statute arbitrarily and unlawfully discriminated against him, as between citizens engaged in the grazing of other classes of stock. The court denied both contentions and sustained the law as a proper exercise of the police power, basing its opinion largely on the case of Ohio Oil Co. v. Indiana, supra.
The case of Winkler v. Anderson, 104 Kan. 1, 177 P. 521, sustained a statute of Kansas making it unlawful to drill or operate oil or gas wells within 100 feet of the right of way of any steam or electric railway. The facts showed that the party attacking the statute had a lease on a strip of land about 50 feet in width parallel with and adjoining a railroad right of way and upon which there were two producing wells; and that the enforcing of the statute would render the same valueless. The court sustained the statute on the ground that under the police power of the state the Legislature had a right to protect the public, and the court was unable to determine that the statute in question was unreasonable.
In the case of Marrs v. City of Oxford, 24 Fed. (2nd S.) 541, the federal district court upheld a city ordinance in the state of Kansas regulating the drilling upon town lots and among other things held that oil and gas, while in the earth, were susceptible of only a qualified ownership, which is the rule adopted in this state (Rich v. Doneghey, 71 Okla. 204,177 P. 86), but even if it be property in the strict sense, the right of a landowner to produce same is subject to the police power of the state, and that the owner must use this property so that he will not injure another, and that where the provisions of the ordinance were generally reasonable it would not be held invalid because better or more scientific provisions *Page 242 
might be suggested. This case was affirmed on appeal (see 32 Fed. [2nd S.] 134); and petition for writ of certiorari was denied by the Supreme Court of the United State, See280 U.S. 573, 74 Law Ed. 625.
Other authorities bearing on the questions above discussed are: C. B.  Q. R. Co. v. People, 200 U.S. 561; Oxford Oil Co. v. Atlantic Oil.  Producing Co. (D.C. Tex.) 16 Fed. (2nd.) 639; Summers Oil  Gas, sections 22 to 38; Duluth  Oklahoma Oil Co. v. Lane, in cause No. 246, Equity Western District of Oklahoma (unreported); Rich v. Doneghey, 71 Okla. 204,177 P. 86; Commonwealth v. Trent, 117 Ky. 34, 77 S.W. 390; Ex parte Elam (Cal.App.) 91 P. 811; Humble Oil  Refining Co. v. Strauss (Tex. Civ. App.) 243 S.W. 528; State v. Thrift Oil 
Gas Co. (La.) 110 So. 188; Prawhuska Oil  Gas Co. v. City of Pawhuska, 47 Okla. 342, 148 P. 118.
Plaintiff contends that sections 7954 prohibiting, and 7956 defining "waste" are vague, uncertain and therefore void. Section 7954 prohibits "waste"; section 7956 defines "waste" by saying that in addition to its ordinary meaning it shall include "economic waste, underground waste, surface waste, and waste incident to the production of crude oil or petroleum in excess of transportation or marketing facilities or reasonable market demands." Can it be seriously contended that these terms are meaningless? This state maintains a great school of petroleum engineerig, and the Legislature evidently had, and the Corporation Commission may procure the assistance of experts in determining the terms used in the statute if necessary or expedient. The finding of the Corporation Commission that the potential production of the Oklahoma City field is far in excess of the transportation and marketing facilities, and that to permit same to be produced in excess of transportation facilities, market demands or proper storage facilities would result in physical waste, clear states a case of physical waste so elementary and plain that any one may understand. There is nothing in this record to indicate that either of the terms applied to "waste," such as "economic waste," etc., is not capable of exact determination by the Corporation Commission if and when such determination becomes necessary.
The terms used to define the various kinds of oil waste are no more technical nor indefinite than those used in the gas conservation statute defining "waste" of gas. That act was before this court in the case of Quinton Relief Oil  Gas Co. v. Corporation Commission, supra, in a proceeding identical with this, and the validity of the act was assailed on the same grounds as the oil conservation act is being assailed here. Sustaining the act in toto this court said:
"The Act of 1915 defined 'waste' to include the escape of natural gas in commercial quantities into the open air, the drowning of gas stratum with water, the permitting of any natural gas well to wastefully burn, and the wasteful utilization of such gas. The act in plain language provides that a gas well producing 2,000,000 cubic feet per day should be considered a commercial well and makes it the duty of pipeline companies to purchase ratably from all producers in the field; provides civil and criminal remedies for the violation of the act; vests the Corporation Commission with jurisdiction to enforce it and grants appeals from, the Commission's order to the Supreme Court. It is obvious, under these statutory provisions, the Commission had jurisdiction to enter the orders in question.
"Counsel for petitioner insists that the Legislature has failed to define what constitutes wasteful utilization of gas but has delegated to the Corporation Commission the power to determine that fact, and this constitutes an unlawful delegation of power and renders the act unconstitutional. We are unable to concur in the contention of counsel for the petitioner that the Act of 1915 repealed section 4319, Revised Laws 1910 * * * or that said Act of 1915 is unconstitutional by reason of the power delegated to the Corporation Commission for uncertainty in its provisions. In construing various legislative enactments relating to the same subject, such enactments shall be construed together and given effect as a whole, if possible, in order to accomplish the purpose for which such acts were passed. Brown v. Miller et al.,89 Okla. 287, 215 P. 748."
On page 158 the court said:
"We are clearly of the opinion that the Act of 1915, supra, is a valid act. The power of the Commission to regulate the burning of natural gas for the production of carbon black or soot in enforcing the conservation policy of the state is definitely settled in favor of the state in the case of Walls v. Midland Carbon Company, 254 U.S. 300."
It is seriously contended by plaintiff that article 9 of the Constitution, which created the Corporation Commission and defined its powers and jurisdiction, did not authorize the proceeding had in this case. With this contention we do not agree. But even if the point be conceded, article 5, section 36, of the Constitution provides:
"The authority of the Legislature shall extend to all rightful subjects of legislation, and any specific grant of authority in this Constitution, upon any subject whatsoever, shall not work a restriction, limitation, or *Page 243 
exclusion of such authority upon the same or any other subject or subjects whatsoever."
And, under this authority, the Legislature was authorized to enact the conservation law herein discussed and to delegate to the Corporation Commission or any other suitable administrative agency the duty of enforcing the same. In the case of State ex rel. v. Hooker, County Judge, 22 Okla. 712, 98 P. 964, Chief Justice Williams, construing the above section of the Constitution, held that it was adopted as a precaution to exclude the idea of the exclusion of power by implication. At page 719 he said:
"In creating the legislative department, and in conferring upon it the legislative power, the people must be understood to have conferred the full and complete power as it rests in, and may be exercised by, the sovereign power of any country subject only to such restrictions as they may have seen fit to impose, and to the limitations which are contained in the Constitution of the United States. The legislative department of a state is not made a special agency for the exercise of specifically defined legislative powers, but is intrusted with the general authority to make laws at discretion."
The above excerpt was copied and cited with approval in Anderson v. Ritterbusch, 22 Okla. 761, 98 P. 1002.
That portion of the Oil Conservation Act involved in this proceeding has been in effect and has been administered by the Corporation Commission for many years, and was before this court in the case of Love v. Boyle, 72 Okla. 300, 180 P. 705, as early as 1919. Every reasonable presumption will be indulged in favor of the constitutionality of a statute, and the same will be upheld unless its conflict with the Constitution is clear and certain.
This rule is particularly applicable and the presumption is especially strong when the statute has been long acquiesced in and has been treated as valid by the various departments of government. 12 C. J. 798; Reeves v. State, 36 Okla. Cr. 186,253 P. 510.
Section 7955, C. O. S. 1921, which is section 2 of the Oil Conservation Law of 1915, is not involved in this action, and it is not to be assumed that If the Corporation Commission were attempting to fix the market value of oil under that section, we would sustain same; but we do hold that the act as a whole provides a valid method of preventing waste of the oil of this state; that the same is a proper exercise of the police power of the state; and that plaintiff has not been deprived of any of its constitutional rights.
The writ is therefore denied.
HUNT, CLARK, SWINDALL, and ANDREWS, JJ., concur.
LESTER, V. C. J., concurs in the conclusion.
RILEY and CULLISON, JJ., dissent.
HEFNER, J., disqualified, not participating; Hon. Guy Green, of Waurika, being duly appointed to serve as Special Justice.
                      Supplemental Opinion.