Sullivent v. Clear Creek Oil & Gas Co.

211 S.W. 173, 138 Ark. 367, 1919 Ark. LEXIS 38

• Court: Supreme Court of Arkansas
• Decided: April 14, 1919
• Status: Published

Opinion

"WOOD, J.,

(after stating the facts). The judgment is correct. Under the provisions of the contract of lease the appellee had the exclusive right and privilege, upon consideration of $1 of entering upon and holding the lands described in the contract, for the period of one year, for the purpose of drilling, mining, etc., for oil, natural gas, coal, etc. If drilling operations were not begun within one year then the appellee had the option upon the payment of $35 to continue the lease in force by paying an annual rental of $35 until a well was drilled, when the rents should cease. Monfort v. Lanyon, 67 Kan. 310; the Law Relating to Oil and Gas, Thornton (2 ed.), p. 219, sec. 145.

The unambiguous terms of the contract clearly contemplated the right upon the part of the appellee at the end of the first year to continue the lease, to the end of the ten-year period, upon the payment in advance of an annual rental of $35 until a well is drilled.

The uncontradicted testimony shows that the appellee at the end of the first year paid the sum of $35. This had the effect of continuing appellee’s rights under the contract for another year, or until November 24, 1917. On that day the appellee wrote the appellant that the lease was not on productive land and that it intended to cancel the same and pay no more rent. This letter, which appellant testified he received, notified him of the intention of the appellee to terminate the lease and under the plain terms of the contract the appellee was not liable to the appellant thereafter for rents.

Indeed, appellant did not sue and does not claim rent after November 24, 1917. His claim is based on rents alleged to be due for the second year. As already shown appellant received the payment for that year.

Hence, the judgment of the court is correct, and it is affirmed.