*1 outside investors for their leasehold interests, in- compared capital to the Myrtle when Lee Lester BRISCOE J. promoter Briscoe, his leasehold Appellees, vestment interest, assumed a 5 to ratio. In the PIC drilling program, in the outside investors COMPANY, HARPER OIL paid leases on a 7.2 to ratio for their corporation, Appellant. compared capital when in- interest No. 57780. for its retained interests. vestment PIC ratio, computing given In credit is Supreme Court of Oklahoma. claims for additional contribution PIC’s May 1985. outside from investors. Rehearing July Denied 1985. Prince, the court stated: receipt We hold that the securities prices
by promoters grossly below paid outside investors those remuneration.
amounts other
effect the interests retained paid equity
defendants to dilute the was plain- and to
by outside investors mislead believing
tiffs and other investors into contributing pro-
that defendants were capital
portionate share of for interests
retained.23 disproportionate price paid par- respective
leasehold interests only conclusion
ties admits
that PIC indirect remuneration for received sale of
its solicitation of the the leasehold remu-
interest Grishams. Once such paid,
neration was the sale could no exemption
qualify offering limited 401(b)(15)(A). Accordingly,
of 71 O.S. §
the securities sold must have been PIC
registered with the Commission.24 PIC’s register was a ba-
failure the securities Summary
sis for rescission of the sale.25 granted.
judgment properly
AFFIRMED.
All concur. Justices 408(a). 1981 § at 746 O.S. Mich.App. 311 N.W.2d 25.71
23. 109 at [emphasis added].
24.
pay
operation
caused
their
growing crops,
Harper
and that
caused
growing crops.
appellees’
second cause of action is
They
couched
terms of nuisance.
al-
*3
leged
reason of the unreasonable
Harper
conducting
gas
acts of
in
its oil and
operations
they
on their land
have been
inconvenience,
subjected to unreasonable
annoyance
enjoy-
and interference
the
with
agricultural, grazing
ment of their land for
purposes. They
and residential
also al-
leged subsequent
portions
loss
of the
Johnston,
Johnston, Allen, Allen &
Ken
agricultural
grazing
farm for
use.
Chickasha,
appellees.
for
prayer
Their
for relief on this cause of
A.
Peters and Randall
Bresh-
James M.
encompasses damages
action
for both tem-
Bullís,
ears, Monnet,
Thompson
Hayes,
&
(abatable)
(unabata-
porary
permanent
Edwards,
City,
appellant.
for
Oklahoma
ble) injury.
WILSON,
ALMA
Justice.
action,
appel-
In their third cause of
the
Myrtle Briscoe own and re-
Lester and
sought punitive damages by
lees
reason of
Grady County.
acre farm in
side on a 146
willful,
Harper’s alleged
oppressive and
farm is devoted to wheat
portion
A
of the
negligent
disregard
the
grossly
acts in
[appellees] also
and alfalfa. The Briscoes
fertility
productivity
of the soil.
operation on their
maintain a small cattle
jury.
to a
After
The case was tried
love,
Grazing
include
bermuda
farm.
areas
hearing
period of
all the evidence over a
grasses.
and native
permitted
days,
jury
the
to
several
23, 1976,
January
appellees exe-
On
premises
question.
in
personally view the
gas
appellant,
cuted an oil and
lease to the
jury
appel-
a verdict for the
The
returned
[Harper].
Harper
Company
Oil
Pursuant
aggregate
in the
sum of
lee-landowners
lease, Harper
made
to the terms of
$42,975. Categorically,
jury awarded
upon
appellees’
January,
entry
farm
crops
growing
result-
Harper
taking surveys
commenced
$10,-
Harper’s drilling operations;
from
site,
drilling
and short-
for the location of a
damages
annoyance and incon-
500 as
site.
ly
unilaterally
thereafter
selected the
using more land than reason-
venience or
by Harper on the site
The well drilled
nec-
ably necessary for a
time than
proved
dry
Harper
aban-
be
hole
essary during drilling operations;
drilling operations
July
doned
of 1980.
around
abatable areas
the cost
eight
dry
plugged some
The
hole was
and, $6,375.00
damages
site;
the well
pit
of the reserve
months later. Closure
appellees’
permanent
injury to the
up operations on the drill-
and further clean
farmland.
by Harper in
ing site were commenced
appellees insti-
May,
one month after
jury
court entered
verdict
trial
tuted this action.
attorney’s
appellees an
and awarded the
opin-
Harper appealed.
a divided
fee.
17, 1981,
appellees
April
filed
On
ion,
jury
Appeals reversed
the Court of
setting
separate
petition,
forth three
their
a new
the case for
verdict and remanded
cause of action
of action. The first
causes
theory
appellees’
on the
trial
appellees
contract. The
as-
is founded on
permanent and
of both
the terms of the oil
pursuant
serted that
recovery.
nowWe
Harper
constitutes a double
gas lease under which
entered
review,
certiorari,
opinion
permanent
cause of
temporary.
or
Appeals.
D-X,
Court of
Sunray
supra. Accordingly, dam-
ages adjudged in
predicated
an action
on a
challenged
The sole issue
on certiorari
theory may
nuisance
include
propriety
concerns the
of the trial court’s
Tenneco,
to land.
permitting
jury
instructions
to return a
supra. Temporary damages in the context
verdict for
to include the cost of
gas
of an oil and
nuisance are
definition
repairing temporary
injuries
abatable
abatable. Damages reasonably incapable
site,
drilling
well
as well as
permanent.
abatement are
appel-
unabatable
lees’ farmland. We find no error that
According to the evidence in the
require
would
reversal
verdict.
case,
present
could
de
termine
complained
that the acts
byof
controversy
re
appellees
private
constituted a
nuisance.
exclusively
appellees’
late
second cause
person
The fact that a
corporation
has
brought
theory
private
of action
on the
*4
authority to do certain
give
acts does not
by Harper.
nuisance created or maintained
right
the
to do such
way
acts in a
constitut
It is
well established that
result
ing an unnecessary interference with the
ing
gas operation
from an oil and
can be
rights
license,
of
permit
others. A
or fran
brought
recovered in an action
on a nui
chise to do a certain act
protect
cannot
the
theory.
sance
Sunray
Company
D-X Oil
licensee who
privilege by
abuses the
erect
Brown,
(Okl.1970);
v.
reflecting of the farm had that the value $36,500. up
decreased LAVENDER, Y.C.J., DOOLIN, the trial We likewise find that JJ., KAUGER, concur. HARGRAVE and awarding at in court committed no error HODGES, SIMMS, C.J., OPALA pursuant to torney’s appellees fees to the JJ., SUMMERS, dissent. 1981 940 A: O.S. SUMMERS,Justice, dissenting. drilling operations ant’s private created a nuisance, as defined these Instruc- preliminary- contained a The instructions tions, you then should determine the of the issues as follows: statement damages, any, amount of if for the rea- The amount of to Plain- “1. abating sonable cost of nuisance growing crops, including grasses, tiffs’ condition, the site to its former drilling resulting oper- from Defendant’s ations, $2,000, $34,000, such amount not to not to exceed the amount exceed sued for. amount sued for. Whether not Defendant’s drill- previously Under Issue No. outlined ing private operations caused a nuisance you Instructions, in these you should by: determine whether or not Plaintiffs have a) Creating annoyance and inconvenience proved that drilling opera- Defendant’s Plaintiffs; or, permanently tions damaged Plaintiffs’ b) Using more land than nec- $36,500, land an amount not to exceed essary for a time than reason- the amount sued for. ably necessary; However, you your should find from con- c) And, damages, any, the amount of if sideration of all of the evidence and the therefrom, resulting not to exceed herein, Instructions contained $25,000, the amount sued for. Plaintiffs have not met their burden of you drilling 3. Should find Defendant’s proof presented, on the your issue then operations nuisance, private created a verdict should be for the Defendant.” you
then should determine the amount of objected defendant had as follows: damages for the reasonable cost of abat- by restoring the nuisance the site to “Comes objects now the Defendant and condition, its former such amount not to # grounds to Instruction 20 on the that it $34,000, exceed the amount sued for. fully accurately does not set forth 4. Whether or not drilling Defendant’s laws State of Oklahoma with operations permanently damaged Plain- regard proper measure of dam- tiffs’ land an amount not to exceed ages in this case. $36,500, the sum sued for.” “Further, the Defendant asserts that the *6 gave The court then instruction No. 20. as Instruction, proposed, misleading as is follows: thereon, and will jury, allow the based previously “Under Issues No. as out- return a verdict for both restoration of Instructions, in you lined these if find the surface and for diminution in value. proved Plaintiffs have that Defendant’s Instruction, charged, That the as does drilling operations private nui- caused adequately not—does not set forth the by: sance law of the State of Oklahoma and should a) Creating annoyance and inconvenience given. be denied—or should not be or, plaintiffs; objects “The Defendant also to the first b) reasonably Used more land than nec- Instructions, page general the essary for a time than charge, paragraphs designat- section—or necessary; reason, ed 3 & 4 for the same that it Instructions, As defined in these then (sic) accureately does not reflect the law you should determine the amount of Oklahoma, misleading State of it is damages, if a- proximately caused jury the and allows to return drilling from operations, Defendant’s in a property in both diminution and res- $25,000, sum not to exceed the amount adequately toration. It does not set sued for. regard forth the law with to nuisance.” previously Under Issue No. as outlined you Instructions, in returned its verdict in favor of the you should proved
find that plaintiffs Plaintiffs have Defend- follows:
39
$1,600.00
Crop Damage
condition,
Issue 1
less
than the
diminution
10,500.00
Issue
value, then such cost is the measure of
24,500.00
Issue 3
recovery
injuries.
sum,
for such
To this
6,375.00
Issue 4
determined,
when
may be added such
$42,975.00
reasonably compensate
sum as will
the loss of
portion injured
the use of the
complains that
the instruc-
Defendant
during
railway
the time the
company de-
law,
correctly
tions failed to
state
prived the owners of its use.”3
awarding damages
misled the
into
restoring
of
the land and
both for the cost
Appeals
of
of New York
Court
by
its diminution
value caused
the de-
rule in 1892 in Hartshorn v.
adopted the
drilling operation. No
fendants
instruction
The Court said:
Chaddock.4
recovery
made clear that double
was not
repairing
reasonable cost of
“[W]hen
way
in-
permissible. Because of the
or,
injury,
case,
in this
the cost of
(cost
treat issues No. 3
of resto-
structions
restoring
condition,
the land to its former
ration)
I
(permanent damages),
and No.
is less than what is shown to be the
opinion
must dissent from the
which af-
diminution in the market value of the
quarrel
handling
firms.
I
no
with the
have
property by
whole
injury,
reason of the
(nuisance).1
(crop damage)
of No. 1
or No.
such cost
proper
of restoration is the
Our law on how to arrive at
damages.
measure of
On the other
injury
property
pronounced
to real
be-
hand,
restoring
when the cost of
is more
Ry.
fore statehood.
Enid & A.
Co. v.
diminution,
than such
gener-
the latter is
Wiley2 this court held:
ally the true measure
damages.”5
of
by
“On the trial of the issues made
pleadings
as to
the evidence
the amount
accepted
Illinois
the rule in 1906 in
of
should be confined to the
discussing
Swanson v. Nelson.6 In
cost
the land to
former
its
approach
determining
condition; also to the reasonable market
property,
the court stated:
by
value of the entire tract affected
“The result of this reasonable
injuries,
immediately
the do-
view
both
before
which has been taken
injurious
almost
immediately
acts
all
after; and,
courts
they
if the
of last resort where
diminution
value
have had
railway
pass
caused
the work done
occasion to
on the matter has been
company is less than the cost of restor-
to establish a rule that makes the mea-
land,
ing the
then such diminution is the
sure
damages, in
cases
perma-
estate,
true measure of
for the
real
the cost
restoration or
nent
to the land.
other
value,
On the
in market
as one
difference
hand,
repairing
injury,
if the cost of
(em-
or the other is the less amount.”7
*7
restoring
or of
the land to its former
added)
phasis
thereto,
14,
(No.
2)
previous
part
1.In
as described in
a
instruction
and after the
correctly
Paragraph
court had
instructed as to the method
2 below.”
determining damage
permanent,
of
to land if
310,
(1904); See also
2. 14 Okl.
v.
40
sistent
remedies and both should not be
expressly adopted
have
states
Numerous
allowed.19
rule,
California,8 Idaho,9
including
Ken-
Missouri,12 Pennsylva-
tucky,10 Michigan,11
It appears
majority
today has
Washington.14 In
nia13 and
essence these
come under the belief that
this rule has
jurisdictions recognize
and other
the rule
been modified in nuisance cases. Tenneco
repairing
that when the reasonable cost of
v. Allen20 is cited
proposition
for the
property
to real
or the cost of
restoring the
its
land to
former condition is
damages may be recovered on a nuisance
less than what is shown to be the diminu-
theory.
syllabus
The Court’s second
says:
property
tion in the market value of the
as
“2. Damages
adjudged in an action
by
a
the injury,
whole
reason of
such cost
predicated on a
theory
nuisance
may in-
proper
of restoration is the
measure of
clean-up
clude
gas
costs of
oil
les-
hand,
damages. On the other
when the
impediments
see’s surface
necessary
not
cost
more than
such diminu-
operation,
for its
damages for use of
tion, the diminution is the true measure of
land
lessee for more than a reason-
damages.
ably
period
necessary
op-
of time for its
Corollary
proposition
rule is the
to this
erations,
unnecessary
for lessee’s
use of
party
have a
cannot
land
operations,
area in its
and for tem-
or diminution
permanent depreciation,
porary
injury to the
value,
cost of
and also for the
restoration
land.”
former
same land to its
condition.15
to no
our
limits
Tenneco
By statute
law
cites Lanahan
v.
Myers21
gained had
plaintiff would have
more than
which is a most instructive case and one
all
fully performed
obligations.16
defendant
holding
brought
whose
has apparently
us
present
To
for both diminution in
our
posture.
allow
plaintiff
sued
gas
using
value and the cost
restoration for the
oil
his
lessee for
an unrea-
property
surface,
same
temporarily
amounts to
dou-
sonable amount of
recovery,17
mistakenly
permanently damaging
ble
often
referred
his land. Note this
damages”.18
disposition:
“double
These are incon-
court’s
Brisbane,
565,
City
Cal.App.3d
Recovery. Recovery
17. Double
8.
v.
67
repre-
which
Mozzetti
751,
(1973).
Cal.Rpt.
136
757
sents more than
total
loss
maximum
which
parties
all
have sustained. Black’s Law Dictio-
Co.,
235,
9.
v. Union Pc.
62
Alesko
R.
Idaho
109
nary.
874,
(1941).
P.2d
877
Damages.
18.
Double
Twice the amount of actu-
Co.,
10.
Duff,
&
Edwards Webb Const.
Inc. v.
554
al
as found
the verdict of a
(Ky.App.1977).
S.W.2d 909
injuries by
in some
allowed
statute
cases
negligence,
trespass.
fraud
Black’s Law Dic-
184,
11. Bluemlein v.
Mich.App.
Szepanski,
101
tionary.
493,
(1980).
300 N.W.2d
496-497
Elliott,
15;
supra
19. Illinois Cent. R. Co. v.
note
Fruin-Colnon,
676,
v.
Curtis
363 Mo.
253
Saffold, supra
R.
Atlantic Coastline
Co. v.
note
158,
(1952);
S.W.2d
164
Decker v. J.E. Siben
15;
Co.,
Ellis v.
R.
New Orleans Great Northern
Co.,
155,
(Mo.App.
Construction
492 S.W.2d
157
797,
64,
(1930); Paper
La.
So.
169
126
67
Prod
1975).
Mills,
114,
Safepack
Mach.
ucts
Co. v.
239 Mass.
(1921); Kugel Village
N.E.
131
288
v.
Brook
Co.,
252,
Shoenberger
13. Rabe
v.
Coal
213 Pa.
62
349,
92,
(1944);
field,
Ill.App.
322
54
96
N.E.2d
854,
(1906).
A.
855
571,
Co.,
Paper
Barker v. Publisher’s
N.H.
103
78
McElveen,
(1918);
v.
20
A.
Strickland
Ga.
Clark,
14. Burr
v.
Wash.2d
190 P.2d
Harrison,
(1917);
App.
tion that both than failure instructions other the court’s But it does damages may be recovered. requested No. which would give his modify Ry.A. Under its not Enid & Co. problem of “double not have addressed amount five to evidence “this latter [the recovery”. in addition to the seven acres was ruined] in Tenne- agree I cannot that this Court damaged.”23 temporarily pits and roads pro- consciously repealed the ancient has co recovery. There could That is not double recovery, against allowing double hibition allowing recovery for objection no be majority appears to be what but that correctable, damage por- to one objection to an in- today, over has done perma- in addition to tion of a leased tract court. If timely made to the trial struction nent, another diminished value double has authorized Tenneco v. Allen26 tract, long as the was portion of the so should be damages then it recovery of duplication of properly instructed to avoid done so. in so far as it has overruled damages. But in this case no such caution lan- re- and the imparted. jury could have I affirm Lanahan Our would syllabus in its guage under No. second turned a verdict for of Tenneco proposition abatement, they stand for and added to that an insofar as the cost of diminution award of estate to real may be recovered perfect compliance
in value and been Supra 25. note 20. 22. Id. at 93. Id.
23. Id. 26. Supra note 19. *9 case, (1) provided same
in the supports finding
evidence
damage part perma- to one addition to (as damage part
nent to another Lana-
han) (2) prevent the instructions a dou-
ble portion to the same nothing in the instructions
land. Because they give should not
informed recovery, and because the
double plus for restoration costs
awarded value, loss of I would
reverse and remand for new trial with
proper instructions. SIMMS,
I am authorized to state that
C.J., OPALA, and HODGES and JJ. concur expressed
in the herein. views HORNBECK, Mary
Linda now
Armbruster, Appellant, HORNBECK, Appellee.
R. Gene
No. 61282.
Supreme Court Oklahoma.
June