Millan v. Bartlett

89 S.E. 711, 78 W. Va. 367, 1916 W. Va. LEXIS 114
West Virginia Supreme Court·Decided May 9, 1916·Published·Cited by 3 cases

Opinion

Williams, President :

Defendant seeks by this writ of error to reverse a judgment recovered against Mm by plaintiff in the circuit court of Marion county in an action for breach of covenant. The case was formerly here on writ of error to a judgment sustaining a demurrer to the declaration and dismissing the action. We held the declaration good, reversed the judgment and remanded the case for trial. 65 W. Ya. 155. Defendant, being the owner and holder of twenty-one oil and gas leases on as many different tracts of land in Marion county, for a valuable consideration assigned to plaintiff, by writing under seal, an undivided one-eighth (%) of the working interests therein, and covenanted (1) to relieve him of “payment of any part of the money necessary to keep the leases in force prior to the production of oil or gas on each of said leases,” and agreed to pay all such money himself, but stipulated that he was not to be obliged to keep the leases in force, if he desired to let any of them lapse, and, in the event he should desire to let any of the leases lapse, he agreed to notify plaintiff before doing [369] so, and, if plaintiff requested it, agreed to assign to Mm such leases as he, (defendant), did not wish to continue in force; and, (2), although defendant expressly stipulated he was not bound to drill a well or wells, the declaration alleges he covenanted as follows: “that if he, the said defendant, should drill any oil wells upon said leases or any of them the same should be drilled at the expense of the defendant, and that if oil should be found the said plaintiff should have an option from the said defendant for 30 days after the completion of each of said wells, to pay to the said defendant the one-eighth part of the costs and expense-of drilling such well or wells, and if the said plaintiff should elect to pay, and does so pay to the said defendant, then the said plaintiff should have and be entitled to have one-eighth working interest in such well or wells and the production thereof and should thereafter pay one-eighth working expenses of such well or wells;” and (3) “that after two wells be located and drilled at such points thereon as shall be agreed upon by the Said defendant and the said plaintiff, and that if gas is found in paying quantities in either of said wells the costs and expenses of drilling such well or wells and the gas rentals therefor shall be paid by the said defendant, and that the said defendant shall be entitled to have the whole production therefrom;” and (4) “that if oil should be found in paying quantities in the first well drilled on the oil lease on Plum Run land, then the said plaintiff shall thereafter pay one-eighth of the rental on said Plum Run oil leases, and if oil shall be found in paying quantities in the first well drilled on land of Salt Lick, then the said plaintiff shall thereafter pay one-eighth of the rental on said lease, otherwise the said defendant shall pay all rentals as by the said contract the said defendant covenanted to do, as will appear by reference being had thereto.”

Briefly stated, the. breaches averred are that defendant did not pay the money necessary to keep the leases alive; did not assign to plaintiff the leases which he did not wish to keep in force; and did not notify plaintiff that he desired to permit the leases to lapse, but, on the contrary, without notice to' plaintiff, sold and assigned an undivided half of all the working interest in all the leases to L. S. Neely and S. P. Shealdey, [370] and thereafter joined with them in an assignment to the Fair-mont Gas & Light Company, a corporation, of the entire interest in all of said leases, and thereafter said company surrendered to the lessors ten of the most valuable of said leases, and immediately obtained from them leases in its own name, describing the leases thus being allowed to lapse. Nearly all the original leases bore date in January 1901, and were for a term of five years, except one, which was for six years. The assignment of one-eighth to plaintiff was on the 24th of August, 1901. On the 2nd of December, 1901, plaintiff assigned one-half of his interest to F. A. Prichard, and on that date both papers were acknowledged, but not recorded until the 6th of May, 1902. On the 13th of April, 1905, Prichard reassigned all his interest ta plaintiff. Defendant’s assignment of one-half of the whole working interest in all the leases to Neely and Sheakley was made on the 2nd of December, 1901, and the first assignment by defendant, Neely and Sheakley to the Fairmont Gas & Light Company of all' the leases was on the 10th of March, 1902, the consideration therefor being $45,000 and the grantors reserving all the oil rights to themselves with the privilege of drilling therefor. Both parties to the deed had the privilege of drilling, and there were certain covenants relating to the rights .of the respective parties to the product, in case a well produced oil or gas, and providing how the expense of drilling should be accounted for in case one party drilled a well which produced a product belonging to the other. But those covenants have no bearing oil this case. The Fairmont Gas & Light Company also covenanted to keep the delay rentals paid on the leases, and, in case it decided to let any of them lapse, it agreed to give the grantors thirty days notice thereof, and at the end of that time its interest in any such lease was to cease. Neither of the aforesaid deeds made any mention of plaintiff’s one-eighth, or provided for notice to him in case of a determination to drop any of the leases, but ignored his rights altogether. The last named deed was acknowledged on the 17th of March, 1902, and recorded on the 8th of April following. On the 16th of December, 1903, Bartlett, Neely and Sheakley united in assigning to the aforesaid company all the oil rights and inter[371] est which they had reserved in the last mentioned deed, and this assignment likewise ignores plaintiff’s interest. By the foregoing chain of title the Fairmont Gas & Light Company became the sole owner of all the leases in which plaintiff had been assigned a one-eighth by defendant; and, abont April 1, 1905, it surrendered to the lessors the ten leaseholds in question, and immediately procured new leases on the same lands in its own name. At the time the old leases were surrendered they had about nine months to run.

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Millan v. Bartlett, 89 S.E. 711, 78 W. Va. 367, 1916 W. Va. LEXIS 114 (W. Va. 1916).

89 S.E. 711 (Millan v. Bartlett) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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