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Law School Case Brief

Imes v. Globe Oil & Ref. Co. - 1938 OK 601, 184 Okla. 79, 84 P.2d 1106

Rule:

The primary rule in the construction of contracts is that the court must, if possible, ascertain and give effect to the mutual intention of the parties, so far as that may be done without contravention of legal principles. Greater regard is to be had to the clear intent of the parties than to any particular words which they may have used in the expression of their intent. No matter how broad or how general the terms of the contract may be it will extend only to those matters with reference to which the parties intended to contract. 

Facts:

The property owners executed a community lease of lots in blocks of land for oil exploration. The lease contained a provision allowing extensions of the lease to additional lots at any time. Two wells were brought in on the lots. Later, owners of other lots sought to bring those lots under the lease and obtain a pro rata share of the royalty. These later owners contended that at any time meant literally at any time. The original lessors contended the phrase meant within a reasonable time and that it had elapsed. The District Court of Oklahoma County ruled in favor of defendant oil company holding that the later leases were not executed. The property owners appealed.

Issue:

In an action where plaintiff property owners contend that the repetitious use of the phrase "at any time" in the quoted provisions of the community lease meant literally "at any time," did the Oklahoma trial court properly rule in favor of defendant oil company?

Answer:

Yes

Conclusion:

The Supreme Court of Oklahoma affirmed the holding in favor of the oil company. The Court held that virtually all simple contracts were made for definite or relatively short terms designed to be accomplished within the sphere of activity of the parties and the subject matter. Generally speaking, the phrase "at any time" was one denoting a limited period of time. Here, the trial court correctly determined that the later leases were not executed and delivered within the period contemplated by the parties. The primary rule in the construction of contracts was that the court must, if possible, ascertain and give effect to the mutual intention of the parties, so far as that may be done without contravention of legal principles.

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