Bradley v. Avery

746 S.W.2d 341, 102 Oil & Gas Rep. 577, 1988 Tex. App. LEXIS 574, 1988 WL 23625
CourtCourt of Appeals of Texas
DecidedFebruary 24, 1988
Docket3-87-160-CV
StatusPublished
Cited by12 cases

This text of 746 S.W.2d 341 (Bradley v. Avery) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Bradley v. Avery, 746 S.W.2d 341, 102 Oil & Gas Rep. 577, 1988 Tex. App. LEXIS 574, 1988 WL 23625 (Tex. Ct. App. 1988).

Opinion

SHANNON, Chief Justice.

Appellants Lewis L. Bradley, Jr. and William J. Bradley filed a declaratory judgment suit in the district court of Milam County seeking a declaration that an oil and gas lease terminated due to a cessation of production. After a bench trial, the court rendered judgment that appellants take nothing. This Court will reverse the judgment.

In 1925, J.P. and S.J. Kevil, owners of fee simple title, executed an oil and gas lease covering one hundred acres of land in Milam County. The lease contained a provision that “failure of Lessee to continue production without interruption from any such well or the failure to pay such royalties, shall terminate the Lease as to such well.” Appellants succeeded to all of the right, title, and interest of the Kevils in and to the said one hundred acres.

H.H. Coffield acquired an interest in part of the original one hundred acre lease in 1949. Sometime after the assignment to Coffield, production from three of the lease’s four oil wells ceased and those wells were abandoned. Continued production from the remaining well, Kevil 1, maintained the lease. On August 1, 1981, the Independent Executors of the Estate of H.H. Coffield, Deceased and Minerva Refining Company assigned the estate’s interest in the lease to Cornell Oil Company. Under the authority of the original lease and the assignments, Cornell Oil Company produced oil from the leasehold’s one remaining well, Kevil 1, and reported production through July of 1982. Without any apparent reason, production ceased by August 1,1982, and no production was reported from said lease until October of 1982.

On September 1, 1982, Cornell Oil Company executed a reassignment of the lease to the Estate of H.H. Coffield and Minerva Refining Company. Sometime during the latter part of September or early October 1982, the new lessees initiated workover operations on Kevil 1. Eventually, production of oil resumed and was first reported in October of 1982.

On April 1, 1983, appellants executed division orders to the Estate of H.H. Coffield for oil produced after October 1,1982. Appellants negotiated royalty checks paid by appellees subsequent to April 1,1983. Ap-pellees have continued to produce oil and/or gas from the lease to the date of the filing of this suit.

By their suit appellants sought a declaration that the lease terminated due to a *343 cessation of production from August 1, 1982 to October of 1982. Appellants further sought an accounting of all oil, gas or other mineral production from the subject property from June 25, 1982, to the date of judgment. The district court rendered judgment that appellants take nothing.

Upon request, the district court filed original and amended findings of fact and conclusions of law. Among other things, the district court found that from August 1, 1982, until October 1, 1982, no oil or gas was produced from the property in question. The court determined further that the reason for the cessation of production was “uncertain.” During the latter half of September 1982, appellees initiated work-over operations on Kevil 1 and continued such operations until paying production was restored in October 1982. In April 1983, appellants executed a royalty division order to the estate of H.H. Coffield.

The district court concluded that cessation of production in 1982 was temporary and not permanent and was not of such duration as to terminate the lease. The court concluded further that appellants’ execution of the division order after there had been a cessation of production ratified ap-pellees’ leasehold interest.

By two points of error, appellants attack the district court’s conclusion that the cessation of production from the lease between August 1,1982 and October 1,1982, did not terminate the lease. If an oil and gas lease provides for a primary term and the continuation of the lease “as long thereafter as oil or gas is produced therefrom,” cessation of production, after termination of the primary term, automatically terminates the lease. Watson v. Rochmill, 137 Tex. 565, 155 S.W.2d 783 (1941).

The pertinent clause of the lease in this appeal contains no language that either expressly or by implication extends the lease after a period of nonproduction following the expiration of the primary term. The language of the clause provides for a continuation of the lease only “so long as Lessee shall continue to produce oil and gas ... but the failure of Lessee to continue production without interruption from any such wells ... shall terminate this Lease_” (emphasis added).

The rule is relaxed if the lessee can prove only a temporary cessation of production due to sudden stoppage of the well or some mechanical breakdown of the equipment used in connection therewith or a like cause. Amoco Production Co. v. Braslan, 561 S.W.2d 805 (Tex.1978); Midwest Oil Corp. v. Winsauer, 323 S.W.2d 944 (Tex.1959); Watson v.- Rochmill, supra. Under such circumstances, the lease does not automatically terminate, but instead the lessee is entitled to a reasonable time in which to remedy the defect and resume production. Watson v. Rochmill, supra.

The lessee did not prove that the temporary cessation in this appeal resulted from a sudden stoppage of the well or some mechanical breakdown of the equipment. In point of fact, the district court determined only that the cause of cessation of production was “uncertain.” In our opinion, the lessee failed to discharge its burden. The district court's finding that the cause of cessation of production was “uncertain” will not support the court’s conclusion of law that “the cessation of production in 1982 was temporary and not permanent and was not of such a duration as to terminate the lease causing an expiration of same.” Appellants’ points of error are sustained.

Appellees further defend the judgment by arguing that the district court correctly concluded that appellants ratified the lease by their execution of the division order after the time of cessation of production.

As a preliminary matter, this Court recognizes appellants' observation that there is confusion in Texas law concerning the distinction between the doctrines of ratification and revivor, with the terms sometimes being used interchangeably. See Westbrook v. Atlantic Richfield Co., 502 S.W.2d 551 (Tex.1974); McVey v. Hill, 691 S.W.2d 67 (Tex.App.1985, no writ); 2 Williams and Meyers, Oil and Gas Law, § 340.04 (1986); Bond, Revival and Rat *344 ification of Leases-Synonym or Antonym?; 26 Baylor L.Rev. 455 (1974).

Williams and Meyers suggest the following view:

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746 S.W.2d 341, 102 Oil & Gas Rep. 577, 1988 Tex. App. LEXIS 574, 1988 WL 23625, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bradley-v-avery-texapp-1988.