Murdock-West Co. v. Logan
Murdock-West Co. v. Logan
Opinion of the Court
The lease to the defendants in error, also defendants below, contained the following clause:
“The parties of the second part, or their assigns, to have and to hold the said premises, for the said purpose only, for and during the term of sixty (60) days from the date thereof, and as much longer thereafter as oil or gas shall be found in paying-quantities. ’ ’
The defendants did not commence to drill a well on the leased lands within sixty days from the date thereof, and therefore no oil or gas was found within that time; so that if the rights of the defendants were to be determined solely by that clause, their lease expired on the twenty-second day of February, 1900. But the defendants claim that the term of their lease was extended to April 22, 1900, and that within that time oil in paying quantities was found which entitles them to a continuance of the lease thereafter so long as oil or gas shall be produced in paying quantities. The basis of this contention is the principle that when a lessee holds over after the expiration of the term of the lease, the lessor has the option to treat him as a trespasser or as a tenant under the terms of the■ original lease. The lessor, John Lightner, in this instance accepted payment from, the defendants of fifty dollars on March 1,1900, and fifty dollars on March 22, 1900, whereby, it is claimed, he treated the defendants as his tenants and extended the term of the lease to April 22,1900, ‘ ‘ and as much longer thereafter as oil or gas shall be found in paying quantities. ’ ’ •
The plaintiffs maintain, on the other hand, that these payments were not received as rent, but that they are in the nature of liquidated damages, for unavoidable delays in commencing and completing the drilling of a well on the leased lands (Gas Co. v. George, 161 Pa. St., 47, 51). The provisions of the lease which lead to these opposite propositions, are as follows:
■ “The drilling of one well to be commenced on these premises within sixty (60) days from the execution of this lease, unavoidable delays excepted, and in case of failure to commence drilling of a well within such time as herein specified, the parties of the second part agree to pay the parties of the first part for such delay the sum of fifty dollars per month from the time*985 limited for completing such well, payable by check in advance or directly to the party of the first part, and the parties of the first part agree to accept such sum as full consideration and payment for such delay until one well shall be completed, unless this lease is surrendered before said payment is due. It is hereby expressly agreed that a failure to commence, prosecute and complete the drilling of any well or wells or to pay any rental hereinbefore mentioned within the time limited for the same shall render this lease null and void.”
The diversity of views as to the true meaning of this language and as to the legal effect of acts done in performance of it, is perhaps pardonable, for the language itself is ambiguous. The payment of fifty dollars per month would seem, from one point of view, to be spoken of as “rental hereinbefore mentioned,” and it is spoken of as “payment for such delay,” that is, the “unavoidable delays’.’ previously mentioned. The “rental hereinbefore mentioned” may refer to the royalty of one-eighth of the oil which should be produced and the payment of one hundred dollars per annum, for each and every well from which gas should be sold, which are elsewhere and “hereinbefore mentioned.” But accepting the construction of the lease contended for by the defendants, if nevertheless “oil or gas in paying quantities” was not found within the term of the lease as extended to April 22, 1900, the right of the defendants'to hold and operate upon the leased lands expired at that date. But the defendants say that the circuit court found that a well was drilled by the defendants and “that oil was found in paying quantities in said well on April 8, 1900,” the day before the pumping began. We think that this “finding” is a mere argumentative conclusion from the special findings of fact by the court, that it is inconsistent with and is unwarranted by the facts found, and that upon a review of the whole evidence there is no competent evidence to support it. The circuit court finds that the defendants on April 8, 1900, completed an oil well under their lease, “which was drilled through the oil bearing sand which underlay said tract of land, and from which oil was then being produced in paying quantities on premises adjoining said tract of land. ’ ’ There is not a word in the testimony, nor in this finding; that oil was actually produced on the day the well was completed. It is further found that ‘ ‘ after completing said well on April 8, 1900,” the defendants “pumped the same with the
Judgment of the circuit■ court reversed and judgment for plaintiffs.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.