Leath v. Humble Oil & Refining Co.

223 S.W. 1022, 1920 Tex. App. LEXIS 818
CourtCourt of Appeals of Texas
DecidedApril 24, 1920
DocketNo. 9315.
StatusPublished
Cited by4 cases

This text of 223 S.W. 1022 (Leath v. Humble Oil & Refining Co.) 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.

Bluebook
Leath v. Humble Oil & Refining Co., 223 S.W. 1022, 1920 Tex. App. LEXIS 818 (Tex. Ct. App. 1920).

Opinion

DUNKLIN, J.

O. B. Leath and wife, Byr Leath, instituted this suit against the Humble Oil & Refining Company to cancel an oil and gas lease executed by plaintiffs to the defendant company on September 2, 1918, upon 90 acres of land situated in Clay county, and from a judgment in favor of the defendant, the plaintiffs have appealed.

The lease in (controversy contained the following provisions:

“Know all men by these presents that I, O. B. Leath and wife; Mrs. Byr Leath of the post office of Charlie, state of Texas, hereinafter called lessor (whether one or more), for and in consideration of one dollar and a well to start operation within % of a mile of this tract in 60 days from date, dollars, cash in hand paid by Humble Oil & Refining Company, do hereby lease unto said Humble Oil & Refining Company, hereinafter called lessee, the following described land, situated in the county of Clay and state of Texas, as follows: * . * *
“If operations for the drilling of an oil or gas well are not begun on said land on or before the 2d day of March, 1919, this lease shall then terminate as to both parties, unless the lessee on or before said date shall pay or tender to the lessor, or to the credit of the lessor, in the First National Bank at Wichita Falls, Texas, which shall continue as the depository regardless of changes or divisions in the ownership of the land, the sum of $45.00. Such payment or tender may be made in the .check or draft of the lessee, and however made shall operate to extend said time limit and keep this lease in force for six months from said date without any drilling operations. Thereafter, in like manner and upon like payments or tenders of the same amount by the lessee and without any drilling operations, said time limit may be further extended and this lease kept in force for like periods of time successively six months in each instance, but in the absence of drilling operations this lease cannot be kept in force by such payment - or tenders for a total period longer than five years from the date of the first extension. And if by partial assignment hereof or otherwise this lease shall become the subject of plural ownership in sev-eralty then and in that event proportionate payments or tenders corresponding to any such ownership may be so made and extensions *1023 thereby obtained to the extent of the acreage covered by the payment or tender. Both drilling operations and payment or tenders are not required, and the lessee may alternate between drilling operations and payments or tenders during the above-mentioned period and prior to the discovery of oil or gas in paying quantities, having 20 days after any election of the lessee to discontinue or suspend drilling operations in which to make payments or tenders covering the then current six months or the unexpired portion thereof, and the right to resume drilling operations when periods of discontinuance or suspension have expired; and drilling operations anywhere on said leased land shall be effective as to the whole. But no payment or tender shall be necessary when a discontinuance or suspension of drilling operations is only temporary and is due to accident' or some cause beyond the control of the lessee, or is not at the voluntary election of the lessee.
“It is understood and expressly agreed that the first consideration recited in this lease, the down cash payment, receipt of which is hereby acknowledged, by the lessor, and the obligation of the lessee expressed in the next ensuing paragraph hereof, shall be held to support and sustain, not only the privileges granted to the date first written in the last preceding paragraph hereof, the date fixed for the first extension, but also the lessee’s option of extending the time limit and keeping this lease in force as aforesaid, as well as any and all other rights and privileges conferred on the lessee by this instrument. But save as stated in said next ensuing paragraph hereof the lessee shall not be obligated against the wish or option of the lessee to drill or otherwise carry on any operation hereunder.
“If during the period or any extension of this lease and prior to the discovery of oil or gas on said land there shall be drilled on adjacent land, and within 200 feet of any line of the leased land, a well producing daily for 30 consecutive days as much as 50 barrels of oil acceptable in quality to pipe line companies, the lessee wiE, with reasonable diligence, begin and prosecute the drilling of a well on the leased land in a faithful effort to reach the stratum and produce oil on the leased land.”

The trial was before the court without a jury, and the findings of fact and conclusions of law by the trial judge appear in the record and are as follows:

“Findings of Fact.
“(1) I find that the plaintiffs executed a lease introduced in evidence and acknowledged the same in due form, for a consideration stated therein, to wit, $1, cash in hand paid, and the drilling of a weE within three-fourths of a mEe of the leased premises, to begin within six months, the latter clause with reference to drilling a well being interEned in the printed lease form.
“(2) I find that said weE was commenced within the time stated therein and within the distance1 of the leased premises stated therein, and the drEling of the same has been prosecuted with due diligence, and at the time of the trial said well had been drilled to a depth of approximately 190 feet.
“(3) I find that the leased premises and tjie surrounding territory for several miles are situated in what is called ‘wildcat’ territory, there being no producing oil well in that section and that the obligation on the part of the defendant to drill a test well within that short distance of the plaintiffs’ premises was of value to the plaintiffs and other contiguous landowners in securing a test well in that community.
“(4) After the expiration of one year from the date of this lease, no well having been commenced upon plaintiffs’ premises, involved herein, I find that the defendant deposited in the bank named in said lease the rental money provided for therein to the credit of the plaintiff, but that the plaintiffs, upon learning of that fact from the bank, declined to accept the same, and had said rental money returned to this defendant, and thereupon proceeded to file suit for the cancellation of the lease.
“Conclusions of Law.
■ “I conclude as a matter of law that all of the provisions of the lease must be considered together in order to determine its effect and the intention of the parties making it, and when this is 'done I conclude that the pen and ink interlineation, appearing in the lease after the printed recitation, $1 consideration, forms as much a part of the consideration for the privileges on the part of the defendant to extend the lease after failure to develop the same at the end of one year as for the option of holding the same for the first year.

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Bluebook (online)
223 S.W. 1022, 1920 Tex. App. LEXIS 818, Counsel Stack Legal Research, https://law.counselstack.com/opinion/leath-v-humble-oil-refining-co-texapp-1920.