US SUPREME COURT DECISIONS

U.S. Supreme Court

Oklahoma v. Texas, 253 U.S. 465 (1920)

Oklahoma v. Texas

No. 27, Original

Order entered June 7, 1920

253 U.S. 465

I

Order Instructing Receiver

Upon consideration of the First Report of Frederick A. Delano, Receiver, in the above-entitled cause and of the supplemental report of June 3, 1920, and the various suggestions of the United States, intervener, and of the State of Texas, and of the several motions, applications, exceptions, and suggestions heretofore filed by parties claiming an interest in the subject matter of this suit, it is this seventh day of June, A.D. 1920, adjudged and ordered that the action of said Receiver in taking possession of and operating under his own management and control the property described in the order of this Court of April 1, 1920 [ 252 U. S. 252 U.S. 372], until the further order of this Court, including the oil and gas wells and plants, toll bridges, water plants, tank wagons, pipelines, storage tanks, and other property located thereon and therein; the arrangements made by said Receiver for guarding and policing said property; the office and field organization created by chanrobles.com-red

Page 253 U. S. 466

him for the operation and development of the property and the resources thereof, and for collecting, conserving, and investing the proceeds of the sale of all oil, gas, gasoline, and other products taken therefrom since April 1, 1920, be, and they are hereby, ratified and approved.

2. So much of the land described in the order of this Court of April 1, 1920, in Range 14 West, as lies between the south edge of the present sand bed of the Red River (marked generally by the border line of vegetation along the edge of the flood plain) and the foot of the Texas bluff, as was on the 1st day of April, 1920, in the possession of persons claiming under patents from the State of Texas, and is not included in the riverbed lands, as hereinafter defined, shall be returned by the Receiver to the several operators or claimants in possession on April 1, 1920, or their assigns, together with all wells, tanks, pipelines, structures, equipment, and material, upon condition that such operator, claimant, or assigns account for, pay over to, and impound with the Receiver, if not already done, three-sixteenths of the gross proceeds of all oil taken from the respective lands on and since April 1, 1920, and the royalty on commercial gas customary in the Burk-Burnett and Northwest Extension oil fields, and royalty on casinghead gas in accordance with the regulations and schedule of prices promulgated for Indian lands by the Secretary of the Interior August 10, 1917, the proceeds thereof to be either paid in cash, or the payment thereof within 90 days to be secured by good and sufficient surety to be approved by the Receiver, and upon the further condition that said operator or claimant shall enter into an agreement in writing with the Receiver, by the terms of which the operator shall develop and operate said properties in a workmanlike and businesslike manner, subject to the supervision of the Receiver and to the orders of this Court, and shall impound with the Receiver three-sixteenths of the gross amount of the proceeds from the sale of oil chanrobles.com-red

Page 253 U. S. 467

thereafter produced, and the royalty on gas and casinghead gas as hereinbefore specified. This agreement to contain such further stipulations as the Receiver may deem proper for regulating the production of gas and oil and to prevent waste or the entrance of water to the oil sands or oil-bearing strata to the destruction or injury of the oil deposits or the damage of wells in the possession of the Receiver; and, provided further, that the Receiver, in his discretion, may agree with any operator or claimant to operate for his benefit and at his expense the lands in said "Big Bend" area. Until the several operators or claimants comply with the foregoing conditions, the Receiver shall retain possession of the respective properties and shall operate the same in accordance with the order of this Court of April 1, 1920, as modified by this order.

In the event of failure or refusal of any operator to operate the property as directed by the Receiver, or if any operator shall violate his agreement with the Receiver, the Receiver is authorized to take possession of and operate such property, impound three-sixteenths of the proceeds as provided by this order, and pay out of said proceeds the expenses of operation, keeping a separate account of the expense of production of each well as nearly as practicable.