Keen v. Logan
Keen v. Logan
Opinion of the Court
This suit was brought against the widow and heirs of Willis Logan, who are the landowners and lessors, and against the Atlas Oil Company, as lessee, to annul a mining lease made by the Logans to the! Atlas Oil Company, dated the 7th of May, 1918, on the W. % of N. E. % of section 2(5, in T.. 21 N., K. 15 W., containing 80 acres. Plaintiffs are the transferees of the mineral rights acquired by R. W. Norris under a mining lease from the Logans, dated the 4th of October, 1917. !
The Richardson Oil Company, one of the three plaintiffs, bought from Norris the lease on the south half of the 80 acres on the 26th of October, 1917, and C. D. Keen and R. W. Woolf, the other plaintiffs, bought from Norris the lease on the north half of the 80 acres on the 27th of November. 1917.
The defendants contended, in answer to the suit, that Norr'is was obligated by the terms of the lease dated the 4th of October,
1917, either to commence drilling a well on 'the land within six months from the date of the lease or to pay the lessors $200, that is, $2.50 per acre, before the expiration of six months from the date of the lease. Defendants contended, therefore, that whatever rights Norris had acquired by the lease dated the 4th of October, 1917, had been forfeited when the Atlas Oil Company leased the land from the Logans on the 7th of May,
1918, because, notwithstanding six months and three days had gone by, Norris or his assigns had neither commenced drilling nor offered to pay the $200.
The district judge was of the opinion that the stipulation in the lease to Norris that he. should pay a further consideration of j $2.50 per acre if drilling operations were not ] commenced within six months did not require the lessee to pay the $2.50 per acre before the expiration of the six-month period, to prevent a forfeiture or annulment of the lease. That being the only isssue in the case, judgment was rendered in favor of the plaintiffs, annulling the lease to the Atlas Oil Company, dated the 7th of May, 1918, and declaring the lease .under which the plaintiffs claim the mineral rights, dated the 4th of October, 1917, in full force and effect. The defendants prosecute this appeal.
It wms admitted, on the trial of the case, that plaintiffs tendered the $200 to the lessors on the 15th of May, 1918; that the lessors refused to accept the payment, saying that the lease to Norris had been forfeited by his failure to pay the $200 before or on the 4th of May, 1918. It was also admitted that plaintiffs then deposited the $200 in the bank in which the lease provided the money should have been deposited. And it was admitted that no demand had ever been made for the payment of the $200.
Appellants’ case depends upon an interpretation of the following language in the lease under which plaintiffs claim the mineral rights, viz.:
“That we, * * * parties of the first part, in consideration of the sum of twelve hundred dollars paid by R. W, Norris, party of the second part, the receipt of which is hereby acknowledged, and a further consideration of two and 50/100 dollars per acre to be paid if drilling operations are not commenced within six months or this lease become null and void, and the further consideration hereinafter mentioned, have granted, bargained, sold and conveyed unto the party of the second part,” etc.
The clause in question must be construed with reference to the other clauses of the contract fixing the time within which drilling operations should commence or further payments should be made by the lessee to prevent a forfeiture of the lease. There is a subsequent clause in the contract declaring that, if operations for the drilling of a well for oil or gas were not commenced within one year from the date of the contract and prosecuted with due diligence, the grant would then become ipso facto null and void; provided, however, that the lessee might prevent a forfeiture by paying in advance $1,200 for a continuance of the lease for an additional period of one year, etc.
We agree with the district judge that the tender and deposit of the $200 made on the eleventh day after the expiration of the six-month period, and before any demand for payment had been made, was not too late.
The judgment appealed from is affirmed, at appellants’ cost.
Reference
- Full Case Name
- KEEN v. LOGAN
- Cited By
- 5 cases
- Status
- Published
- Syllabus
- (Syllabus by Editorial Staff.) 1. Mines and minerals Where an oil lease expressed the consideration as a payment then made and a further payment to be made, if drilling operations were not commenced within six months, the second payment was not required within the six-month period to prevent the lease from becoming null and void, but was not due or demandable until the expiration of that period. 2. Mines and minerals &wkey;>79(6) — -Oil lease not forfeited before demand for payment for extension. Where an oil lease required a further payment if a well was not drilled within six months, but specified no date for the payment, the amount was payable on demand, and the lessee was not in default until a demand had been made, so that the lease was not forfeited by failure to make the payment without demand immediately on the expiration of the six-month period. 3. Mines and minerals 79(3) — Time during which drilling was prevented by lessor excluded in determining payments. Where lessors had wrongfully prevented the drilling of wells on the premises- during the suit, the time during which the drilling was prevented is to be excluded in determining when the lessees shall make the next payment under the lease. Dawkins, J., dissenting.