H. F. Wilcox Oil Gas Co. v. Walker , 168 Okla. 355 ( 1934 )

The majority opinion in this case sustains a collateral attack upon certain orders of the Corporation Commission made in connection with the proration of oil in the Oklahoma City field.

Considerable importance is attached by a majority of my associates to the decision of this court in H. F. Wilcox Oil Gas Co. v. State, 162 Okla. 89, 19 P.2d 347. I do not agree with the language used in that case. However, that case is distinguishable from the case at bar and is not authority for the holding in the majority opinion herein. In that case the evidence was before this court upon which the orders of the Commission were based. Moreover, the orders therein determined to be invalid were directly attacked on appeal, whereas the orders herein complained of are attacked collaterally in an original proceeding. Therefore, I do not consider that case as authority for holding the orders herein invalid.

In my judgment the result announced in the majority opinion is based upon an erroneous application of the principles of law which should govern in cases involving collateral attacks. Every presumption favors the validity of a judgment when attacked in a manner not provided by law, and the invalidity of a judgment should affirmatively appear from an examination of the record in order that the same be vulnerable. This presumption should likewise apply to the judgment of a tribunal of limited or special jurisdiction when it appears from the record that the subject of the controversy falls within the limits of the jurisdiction of that tribunal. The Corporation Commission is such a tribunal. Unquestionably, the jurisdiction to enforce the proration laws in connection with the production of oil has been properly conferred by statute upon that Commission. The orders of the Corporation Commission which are declared invalid on collateral attack by the majority opinion are said to be void because they recognize the existence of four different sands of common sources of supply in the Oklahoma City field, and fail to contain a specific finding that the full production cannot be accomplished from any one of the common sources of supply without waste. While a specific finding to that effect is not contained in the orders of the Commission complained of, a careful examination of those orders fails to affirmatively disclose that the full amount of production from each of the common sources of supply could be accomplished without waste. In other words, there is an absence of finding on this point. There had, however, been a previous finding that the full amount of production from the Oklahoma City field taken as a whole could not be accomplished without waste. Since every presumption should be indulged in favor of the validity of the Commission's orders when attacked collaterally, it appears to me that these orders are entitled to the benefit of that presumption, and that in this case it should be presumed that the Corporation Commission found as a matter of fact that the full production could not be accomplished from any one of the common sources of supply without waste.

It is also said in the majority opinion, in effect, that the Corporation Commission erred in continuing the case in which the orders were made from month to month without giving a new notice each month. While such a continuation of a case from time to time, and a failure to finally decide it, may be subject to some criticism as an improper method of exercising jurisdiction which has previously been acquired, it appears to me that it does not render the orders of the tribunal void on collateral attack; for the jurisdiction of the Commission having attached, the irregularity or impropriety of the manner in which it proceeds to exercise its jurisdiction should only be open to question on appeal. The orders in question may or may not have been voidable on appeal, but they are not void on collateral attack.

Not only does the majority opinion arrive at a conclusion which I believe to be a misapplication of the principles of law, but I consider it particularly objectionable from the standpoint of its result. The orders reflect on their face that there are many operators in the Oklahoma City field. It is apparent from the face of the record before us that a number of these operators totally ignored the previous orders of the Commission, and in secret or open violation thereof overproduced their wells to the detriment of others obtaining oil from the same source of supply. On the other hand, it is apparent that a great many of the operators respected the orders and authority of the Commission, abided by and honored its rules and regulations, and produced no more than their proportionate part of the oil as established by the orders of the Commission. It is the purpose of the Commission as reflected by its recent orders to adjust this inequitable taking between the different operators, and compel those who have previously overproduced to reduce their present production until the amount of their previous overproduction has been absorbed. The effect of the majority opinion in this case is to deprive the Commission of any power to accomplish this salutary result. In other words, the operators who willfully or otherwise violated the Commission's orders and took more than their just proportion of the oil are not in the future to be penalized in any way by the Corporation Commission for having violated its orders from which they took no appeal as provided by statute. On the other hand, the operators who respected the orders of the Corporation Commission, although their neighbors took their oil while they were obeying the order of the lawfully constituted authority, are deprived of any redress. The violators of previous orders will thus be rewarded and the operator who obeyed will be penalized. In my judgment this result is unsound and contrary to the principles of both law and equity, and presents a striking example of the evils that flow from what I consider a relaxation of the rules of law which should govern in cases involving collateral attack.

In this case we are likewise confronted with the question of the limit of the power of the Corporation Commission to inquire into the activity of those who produce oil for the purposes of determining whether or not previous orders have been violated. Section 28 of art. 2 of the state Constitution provides as follows.

"The records, books, and files of all corporations shall be, at all times, liable and subject to the full visitorial and inquisitorial powers of the state, notwithstanding the immunities and privileges in this Bill of Rights secured to the persons, inhabitants, and citizens thereof."

I concur in the last eight lines of the majority opinion, namely:

"but it is not hereby intended to interfere with any power or authority of the Commission granted to it by virtue of the provisions of section 28, art. 2 of the Constitution, relating to the inquisitorial powers of the Commission, with full authority to require production of books, records, etc., in any proper proceeding."

But I disagree as to the Corporation Commission not having before it herein a proper proceeding to determine the full amount of oil which was produced from any oil field during the time such field was subject to proration, with a view of reducing the production of an overproduced operator until his reduced production shall have absorbed the overproduction.

This court, in connection with the case at bar, on the 29th day of September, 1933, issued an alternative writ of prohibition, wherein it was provided:

"Now, therefore, you are commanded to desist and refrain from the enforcement of section 11 of Order No. 6433 and requiring the petitioner to file reports of production and the taking of oil from the Wilcox zone in the Oklahoma City field, as provided therein."

The effect of the peremptory writ authorized by the majority opinion is to make the above-quoted provision of the temporary writ final. This, in my judgment, is erroneous for the reason that the Commission had before it a proper proceeding in which to ascertain the information it sought, with a view of enforcing the equitable taking of oil from a common source of supply by the various producers.

For the reasons stated, I respectfully dissent.