*1 a after code, judge function of the probate and the probate or disallow is to allow on a in an estate hearing proceeding demand made case, such order had and no it. In the instant no hearing probate court. and stated of error three Appellant assigned specifications Briefs were her involved. questions brief that there are five We raised in this points appeal. amicus curiae arguing cross- and appellee note also that has filed a “brief appellee error, notice of fail any We to find appellant.” specifications that appellee on a cross and assume appeal, argument appeal, has abandoned he had of might cross-appealing notion have any we have taken from orders of the court. From view lower any case, it is specifica- to consider of the other unnecessary tions of error or questions involved. directions court below is reversed with
remand this case to the court for further probate proceedings. concurs in J., the result.
Price, 38,116
No. Christiansen, Reynolds Mel- Earl Christiansen, Leonard Curtis Henry Langrehr, Fern Alberta Christiansen, Charles vin minor, fa- her through and Langrehr, Mae Nolte, Thelma friend, Henry Langrehr, next Patricia ther, guardian, natural father, natural guardian, her minor, through Appel, Joan Christiansen, friend, Josephine Appel, Ben next Dora Drilling Virginia Company, Inc., a Appellants, Burrhenn, Company, corporation; corporation; Murphy, Appellees. Sam (226 263) P. 2d *2 Opinion 6, January 1951. cause, Wichita, argued Jones, Everett Garvin E. of Charles Robinson, Adams, John, Ash- Garvin, I. Mark II. William Morris both of St. J. West, Wichita, Manka, the briefs were with him on I. all of and Addison ford appellants. for cause, Williams, Collins, Wichita, argued George O. H. and C. L. B. of Wichita, Martin, Hughes, for also were with him on the briefs and W. R. appellees Virginia Drilling Company, Inc., Murphy, and Sam and W. F. Lilles- Wichita, Gott, Stalhoitz, ton, George Spradling, Henry George V. all of C. appellee Magnolia Company. for Petroleum were on the briefs of the court opinion was delivered an damages This is action for to real estate. trespass Kagey, J.: The lower court sustained defendants’ motions for the pleadings, which were the court and to the action parties demurrers; treated as hence this appeal. the facts as
Briefly, admitted are as parties Ap- follows: owners, common, are the pellants as tenants in half the east 15, S, section 12 W of the 6th P. M. in Stafford township range title, county, Kansas. Appellants’ predecessors on August 1938, executed a Form 88 Oil and Gas (Producers) covering Lease the mentioned real estate Magnolia Petroleum Company as lessee, which lease was recorded in duly Stafford county. The lease was for a term of ten years lease, from the date of the as long thereafter as oil and gas should be produced from said premises. Prior to term, expiration the lease primary well, oil and gas producing oil and commercial quantities, was drilled and completed on a twenty acre location in the south twenty acres of the southeast quarter the southeast quarter the mentioned real estate. 9, 1948,
On November appellants notified Magnolia Petroleum Company then (the owner of the letter lease) by that the above described oil and gas lease was forfeited for nondevelopment inso- far as said lease covered the described, first property above except as to the south twenty acres next above described upon which there was a producing oil and gas well. This notice was received Magnolia Petroleum Company on or 16, 1948, before November and when more than sixty days had date, elapsed after said ap- pellants followed the procedure prescribed by G. S. 55-201: January statutory On given notice in the Magnolia form was Company by publication, publication Petroleum given notice was three newspaper consecutive general weeks in a circulation in Stafford county, proof made; thereof was 11, 1949, February twenty days publication On more than after the first notice, appellants Register of said county filed with the of Deeds of Stafford setting they described; affidavit forth that were owners of the land failed, Company neglected comply had and refused to with the terms of said lease insofar as it covered said real estate for failure develop; previous given Magnolia notice of forfeiture was Petro- Company, containing copy original leum said affidavit letter of 9, 1948, copy original publi- forfeiture dated November as well aas *3 20, 1949, proof showing January thereof the manner cation dated and and notice; time of service of such having filing Thirty affidavit ex- days mentioned from the date of contrary having given writing pired to the and no notice in assigns, Company Register by Magnolia its affi- or said of Deeds Petroleum Register duly of Deeds. davit was recorded in the office of Thereafter, Inc., 26, 1949, Drilling Company, April appellee Virginia and on or about quarter question, entered the the lease in and drilled an oil and northeast gas dry test well which resulted in a hole. 11, 1949, August On filed for for appellants damages their action trespass against appellees jointly. Magnolia Company Petroleum denied or trespass that it was with or as an jointly engaged agent appellee Virginia Inc. Sam Drilling Company, Appellee filed a similar Murphy answer to that of Magnolia Petroleum Com- pany. Appellee Virginia Inc., Drilling Company, filed answer admitting entry, but that alleging its entry was authorized to the oil pursuant and gas mentioned, lease hereinbefore effect, 28, was in full force and that under date of January 1949, a certain written entered into agreement between it and .Petroleum for Magnolia Company providing assignment transfer of said leasehold estate insofar as the same covers the north- east of section quarter subject to certain conditions including an overriding reservation to royalty Magnolia Petroleum Company; that it entered upon and carried premises on drilling operations for a test well for oil and gas under said contract which resulted the oil alleging a reply hole. dry Appellants except as to all property forfeited and lease was terminated
gas by statutory procedure prescribed acres twenty developed, judg- each filed a motion for under G. S. 55-201. Appellees court appellees ment on The motions of were pleadings. as demurrers. treated The trial stipulations parties sustained motions for on the judgment court appellees’ pleadings assign and from that come here and ruling appellants error three separate specifications: holding appellants 1. That the court erred in did not G. under S. 1935, 55-201, gas forfeit and terminate the existence of the oil and lease which subject of this action. sustaining 2. That appellees Virginia the court erred the motions of Drill-
ing Company, Inc., Murphy judgment pleadings. and Sam for on the 3. sustaining That the court erred in the motion of Company pleadings. on the errors specified resolve into themselves one Were question: the proceedings followed by appellants under G. S. 55-201 sufficient as matter of law to cancel the undeveloped portion the lease in question for failure of appellees to comply implied covenant to diligently explore for oil on the urn developed portion of the premises?
The pertinent portions S.G. 55-201 read: any oil, gas “When or other mineral lease . . . shall become for- duty it shall be the assigns, lessee ... or feited . . . within sixty days after the date of the forfeiture ... to have such lease sur- writing rendered in . placed . . and county on record in the where the leased land is situated without cost Provided, owner thereof: That if assigns, the said ... or neglect lessee shall fail or to execute and record provided such surrender the time . . . within the owner of said land upon assigns serve said lessee ... publication ... newspaper general in a county three consecutive weeks *4 circulation in the situated, writing the is in substantially following where land notice in the form: “ ‘To_: I, undersigned, following the owner of the described Kansas, ---county, (description land) land in to situated wit: of _ _ lease, day 19_, upon given which a dated of to _, hereby notify you do the of have that terms said lease thereof, hereby the that I elect declare do de- been broken owner and do, that, you twenty the lease and and unless clare said forfeited void within days date, notify register county provided by the of of said as from this deeds register forfeited, I will file the law that said lease has not been with said law; provided by hereby and I demand that deeds affidavit of forfeiture as of you put proper you and have surrender of said lease that execute or executed
359
register
county
of deeds of said
within
office of the
record
the
the same of
twenty days
date.
from this
“
_
19_
_,
And
day
the
of
‘Dated this
_’
twenty days
publication
may
.
after
from the
.
.
first
owner of said land
register
setting
deeds
...
an affidavit
said
file with the
of
of
notice
land;
forth,
the lessee
his
.
.
.
affiant
the owner of said
that
or
that the
is
lease,
neglected
comply
assigns,
the
said
and
with
terms of
has failed
failure;
constituting
reciting
same
such
that
the facts
copy
void;
setting
served
out
affidavit a
of the notice
feited and is
in said
If
.
.
service thereof.
the lessee
.
.
.
manner and time
.
give
days
filing
assigns,
thirty
affidavit
no-
of such
within
after
or
shall
writing
register
.
.
said lease has not been
of deeds
.
tice in
to file
assigns,
still claim that said
...
or
and that said lessee
forfeited
effect,
not
recorded but
shall
be
then the said affidavit
is in full force and
notify
action of the
register
of the land
deeds
the owner
shall
land shall
entitled to
assigns,
of the
be
or
and the owner
lessee ...
disputed
provided by
such
lease.
cancellation of
law for the
the remedies now
deeds,
register
notify
assigns,
shall
If the
...
or
lessee
affidavit,
register
said
provided,
deeds shall record
then the
above
public
not be notice
lease shall
record
the said
thereafter the
thereunder,
rights
any
or
therein
interest
lease or of
existence of said
any court
the state on
evidence in
received in
not be
said record sh^ll
against
or
assigns,
lessor
as-
...
or
lessee ...
behalf of the
(Italics supplied.)
signs.”
appellants
appeal
of this
purposes
admit
Appellees
described.
above
statutory procedure
strictly
followed
regular
action was a
of this
the subject
The lease which
lease,
contained no written
and gas
form
s oil
producer
88
except
provision
for oil
develop
gas
to diligently
a certain date or a
commenced on
before
that a
should be
well
in lieu thereof. Notwithstanding
rental
be
specified
paid
should
it
to further
is the
develop,
the absence of written covenant
in this
that a lease carries
general rule and law
state
with
lessee to exercise
implied
part
diligence
covenant on the
due
whatever additional wells
be
drilling
necessary
fully
Freel,
v.
property
leased
121 Kan.
(McCarney
500;
Co.,
v.
Pac.
Greenwood
P. L.
Texas-Interstate
143 Kan.
431;
Co.,
v.
P. 2d
Shell
Myers
Petroleum
153 Kan.
810;
Co.,
110 P. 2d
Fischer
156 Kan.
Appellants contend that the to and quoted applicable statute is can be used with respect oil and any undeveloped lease or portion thereof where it is claimed to be forfeited for reason whatsoever, including forfeitures for comply failure to
covenants. contend the in Appellees legislature using the words “shall become forfeited” intended that the statute a apply only to lease which has lost or by operation forfeited of law a through penalty which is self-executing, such as expiration primary term, or term, cessation production after the due to primary all the operation of expressed covenants in the lease.
An examination of the mentioned statute will disclose that a it is statute, forfeiture in a penal nature. It is rule accepted generally of law that are favored; forfeitures not are considered harsh they exactions, odious and to be avoided when possible. A statute a imposing forfeiture should be strictly construed and in manner a as favorable to the person whose is to property be seized as is consistent with fair principles Courts will interpretation. not search a forfeiture, construction bring about a a nor will constrained construction be indulged in order to a create feiture. For a statute to forfeiture, be construed so to work a its language intent, must clearly show such an and forfeiture is never be inferred from doubtful Courts language. not force a upon will forfeiture statute a construction which amounts to a reading into the law provisions inserted therein by legislature. (37 C. 10; S. 8 to 23 Am. 601-602.) J. Jur. No contention is made appellants the lease in question by became forfeited reason of of its terms. expressed Appel- by lants contend that this lease became forfeited virtue of the failure of lessee to remaining acreage under an implied covenant.
A reading of the statute discloses that the title to act refers released, a lessee to have a lease duty forfeited body act refers to a lease which shall become forfeited. act makes no partial mention a forfeiture of a ap- lease. It is statute, parent that before the be proceedings used under the may the lease must have become forfeited breach of its expressed Therefore, terms. relief, the lessor who seeks whether law for breach of develop, must show equity, covenant has been breached and that lease become forfeited in whole or before part, he entitled follow the In procedure prescribed the mentioned statute. Tamsk Co., Continental Oil 158 Kan. 150 P. 2d held that the we statute clear his provides procedure whereby a landowner title of the cloud on it caused that has been forfeited. however, In the sections it must that the appear order for to apply, *6 lease has become Until is no occasion forfeited. that there happens, for the in the statute. procedure provided Co.,
This court in the v. case Fischer of what supra, passed showing on was question necessary order to warrant cancellation of a lease for breach of an implied covenant to develop, alleges and there stated that a lessor who breach of an covenant to has the burden of implied show- evidence, substantial ing, that the covenant has been breached. He must prove that the lessee has not acted with dili- reasonable gence under the facts and circumstances of particular situation. Neither the lessor nor the lessee an oil under and lease is the gas judge sole of what constitutes of the tract. prudent development Whatever would be reasonably expected operators of ordinary lessee, prudence, having regard for the interests of both lessor and is is required. what
Proof of a breach of an implied covenant to reasonably develop involves the consideration of on a evidence broad range of facts and sometimes in a technical field and a matter to be determined under proper proceedings seeking cancellation in a court of law oi and is equity never self-executing, and cannot be supplanted an affidavit such as used 1935, G. appellants under S. 55-201. There can be no breach of an covenant in implied a lease until there has judicial been a determination thereof and there has been none in court, this case. In the lower plaintiffs filed an action for damages defendants; in trespass against defendants answered setting up lease; plaintiffs replied, alleging the proceedings under the above mentioned forfeiture, statute as the reason for no be- request ing made in the lower would, court cancellation. Appellants therefore, have the court cancel this any lease without partially judicial or proceedings determination or request therefor.
Instances are rare where equity will enforce a forfeiture for covenant; an breach of implied it will never do so where less drastic redress will the demands of justice, and satisfy forfeitures of oil gas leases for breach covenants are seldom decreed, and Dennis, never arbitrarily. 403, v. (Alford 102 Kan. 1005; 170 Pac. v. Co., Greenwood Texas-Interstate P. L. supra, cases therein cited.) in this
Appellants appeal four cases rely we will here- Butler, 419, 978, inafter discuss. Cole v. 103 Kan. 173 Pac. was an commenced to cancel a gas action lease. had Nothing been done the lease for a thirteen-year period, under and there was no intent 362 held under court The anything. to do indicated disposition case, begin opera- failure to particular
the circumstances or intent purpose or to show years tion for thirteen of a well the lease of cancellation of to a decree entitled operate plaintiff title. as a mere cloud on the Pac. 106 Kan. v. Oil case of Elliott Company,
The failure to lease for oil action cancel brought was an producing operations, rent, abandonment nonproduction, pay lease. The court wells provided to drill' offset and failure terms. expressed its the lease terminated held Patton, Kan. 202 Pac. case of Mollohan forfeited to recover lease declared to have a brought action record, for release it of fees, for refusal to attorney damages in dili- terms expressed comply the failure *7 well, in its abandonment. resulting the initial drilling gently 28, Haas, 2d cancella- 139 Kan. 31 P. Nigh In the case of assigned the lease was part There a of upheld. the lease was tion of Al- developed! the were not assignment covered and the lands remainder, of noth- development made for the demand was though the given, after the lease was landowner years done. Ten ing was that the lease cancelled statute was provided by notice as gave land. Later another lease made on this was undeveloped on the it Assignees under were successful. operations of the land part in affirming lease then asserted claims. This court the original of against original title lessees quieting trial court’s judgment on the tract in question held that abandoned lease when they of assignment part it their lease and they segregated Moreover, years. to drill on it for about fifteen refusal we said that we in the case not called on whether Nigh pass were be under the statute would sufficient proceedings alone to cancel in in question the lease the instant question, case was not therein discussed determined. decisions, an examination of the foregoing
From it is apparent brought all actions the lessor equitable were for cancellation for with expressed provisions failure in the comply lease or for failure with terms of the drilling agreement to comply for providing feiture, or for actual abandonment or failure to pay rentals when and in none of the cases foregoing due was there a forfeiture for* failure to with an implied covenant to comply an unde- gas of an oil or lease veloped portion as a matter of law by an affidavit as in G. filing provided S. 55-201. intend to 55-201 did not in G. S. enacting legislature The to arbi- power of an gas the lessor oil endow part lease in or in violation forfeit a whole trarily therein. court is affirmed. the lower Harvey, C. J., concurring specially: written for the opinion only
I concur court and wish more definitely stress referred therein. Our statute S. point (G. a method to have 55-201) surrendered oil and provides Nothing lease which become forfeited. in it pertains forfeiture of a of a lease part acreage which has partially developed. The statement in the dissenting opinion of Mr. Justice Wedell, to the effect that is conceded the statute fully com- with, plied inaccurate in that it is appears too broad. It is true notices given were and other taken as steps statute, outlined but pertain the notices did not to the surrender or forfeiture the lease. Indeed, that was carefully They avoided. related to a specifi- described cally portion of leased property. The statute does not authorize that.
An owner of real leased for oil property gas, where the lessee has partially but developed property, not as fully as owner done, thinks should be remedy. without He take the proper in a steps proceed court for a equity decree requiring further development or a property partial cancellation the lease. (dissenting): This appeal presents primarily the Wedell, J.
question of the purpose and function of G. S. 55-201. is It conceded the landowners complied fully with the statute and that addition, in and some considerable time to prior instituting the pro- thereunder, cedure they notified Magnolia the Petroleum Company the writing forfeited, lease was except as to the twenty acres on production was had. The letter further reads: hereby a developed portion owners demand release of the “Said non of said Register by you in the office County, lease be Deeds of Stafford Kansas.” later answered that days letter Seven as follows: “Gentlemen: receipt your acknowledge letter regarding is to oí November “This 9 the captioned Geological Department has been referred lease. This to our above
364 position you notified
for recommendation will be as to our in the near future.” never notified of this letter the landowners were
Contrary to landowners first Over two months later the Magnolia’s decision. forfeiture the notice of of the lease. The fore- published statutory all the on the going facts are admitted motion for pleadings.
Before the and function of the statute I de- discussing purpose sire subjects to state a other briefly my views on few covered have opinion. always I adhered to the that neither principle lessee, the lessor nor in the absence of is the sole stipulation, arbiter of diligent what constitutes exploration development of 287, 295, Kan. Corp., a v. Shell 153 lease. (Myers of an P. 2d I also admit a breach covenant implied ordi- 810.) of an justify does not automatic forfeiture oil and narily lease. of a pursuant provisions cancellation S.G. however, 55-201, cannot be termed an possibly automatic order
forfeiture. In to obtain cancellation lease the land- strictly owner is to compelled procedure follow prescribed in the statute. Under it may judicial the lessee a compel determi- nation question the lease actually whether has been for- feited. The statute specifically grants lessee right deny to so, and when he lease has been forfeited does as provided in statute, no cancellation record results and the landowner is again relegated statutory remedy of an action in court establish the forfeiture of the lease by proof. Manifestly such a statutory procedure does not constitute automatic forfeiture. with the obliged disagree
I am also view cancellation of it ground has become forfeited for lease on the violation anof to explore and can be develop obtained only by If then action. that is the rule our judicial previous interpretation 55-201, This of G. court has wrong. S. uniformly approved of this statute and operation applied where the implied covenant to entire explore lease was squarely in- Haas, 307, 313, Kan. volved. 31 P. 2d (Nigh 28.) to the true This me the statute. brings purpose As I under- statute, amendments, as a result various stand it the was enacted inexpensive order to provide prompt method whereby clear the cloud the title his landowner land as against he claims has become forfeited and lease which that he may ob-
365 the lessee event in the the statute to pursuant cancellation such tain v. (Elliott forfeiture. claim the landowner’s dispute not does Patton, Kan. 110 v. 692; Mollohan Pac. 187 Co., Kan. 106 Oil The 307, 312, 2d 28.) 31 P. Haas, Kan. 616; v. Nigh 663, 202Pac. this statute the enactment to leading legislation history re not be need cases and in these treated purpose its peated. dispute a lease where apply does the statute
To hold forfeited, express its either become it has as to whether exists lease which has to a otherwise, applies and that terms decree, judicial or by a matter of law face as on its forfeited become canceled has been if a lease Obviously the statute. emasculates The statute in for the statute. no need there is decree judicial relative to must include leases necessity effective of order to be have become forfeited. they whether exists as to dispute which the statute. In construing been our interpretation This has Patton, v. said the statute supra, in Mollohan statute this court “ action on the of the lessee part . . affirmative . requires lease.” discharge challenged (Our italics.) prevent did not “to say, prevent discharge This court 666.) (p. of the Mollohan language opinion quoted lease.” forfeited with Haas, See, also, 314. earlier approval Nigh supra, p. cases case. cited in the Mollohan
Moreover, the statute itself discloses it to leases applies where of forfeiture is in In dispute. providing the question action if the may forfeiture, the landowner take lessee denies statute reads: register notify . . of deeds shall the owner of the land of the lessee, assigns, action his successors or and the owner of the land shall provided by
be entitled to the remedies now law for the cancellation of such (Our disputed italics.) lease.” That a lease become forfeited by reason of failure to comply with the implied diligent exploration and development be, is, all must conceded the parties. There is no basis of this statute for language excluding from its operation from a violation of resulting feitures covenants. The law- did not make such a distinction and courts are makers not permitted it. exceptions into The statute legislate by reading pertains In “shall become forfeited.” the absence of leases which restrictive means forfeited for reason. language court, stated, action this In a declaratory previously *10 held the statute to a forfeiture of the lease applicable was partial claimed reason of failure to the covenants comply with to explore the entire lease where a certain as- only Haas, signed portion thereof.had been v. developed. (Nigh supra.) Although the does so state contains directly not it opinion clearly an intimation statute does case for the the not instant apply reason the did not to obtain a release of the attempt landowners entire lease partial and that the statute makes no mention of a feiture. In to counsel it stated they fairness should be appellees Furthermore, stated, do not make a contention. this court such has not so construed the statute.
True, Haas, some facts in v. not Nigh supra, were precisely the same as in case. that case the assigned the instant In lessee the part lease. The retained of it the remainder assignee assigned retained developed. to another. The such part assignee was for cancellation under G. S. 55-201 proceeding pertained the to the latter of lease. The undeveloped portion original of the that against contention forfeiture of lease was the part thereof, of the other was sufficient to development portion keep This court entire in effect. renounced contention rightly is insufficient concluding development that a to ascertain entire is contained under the lease does not con- oil what of It also statute the lease. said the was development stitute proper just situations such as those there presented enacted to meet of forfeiture to the statute pursuant found notice was further of I the lease. shall portion to cancel undeveloped sufficient the point. not labor a discussion of other cases. I prevent pause, of time
Limitations however, that in consideration the motion for judg- to observe the record was not limited to the mere ment on pleadings under forfeiture statute but addition statutory procedure notice had of the landowners’ prior personal thereto lease, forfeiture, term of the expiration primary after claim to release undeveloped portion with a demand served it. about nothing whatever and did the lease the wisdom the forfeiture statute. not concerned with are We parts are of the statute which function. There legislative a is That me to should has led believe be im- in the practice experience me should the statute direct provide It has seemed proved. statutory designated agent pro- his the lessee service the register the landowner with for forfeiture ceedings us. before is not the question obviously presently deeds but approved this court As indicated uniformly previously therefore, Our problem, exists. the statute as now operation it effective. to make will legislative is to declare again in a operative to be intended It the statute was my opinion inis such a conclusion and that obtains here situation such as decisions. and our past intent legislative harmony in the dissent. concurs J., Smith, 38,127
No. Shirley Appellants, Rathbun, A. E. Briscoe and Edna June *11 Stolp Stolp, Appellees. Reschke, and Beulah R. Melvin 255)
(226 P. 2d Opinion January 1951. Howard, City, argued William R. cause, Arkansas and W. L. Cun- Walker, ningham, Cunningham, D. Arthur and Wm. E. City, also of Arkansas appellants. him on the briefs for the were with