33 Ind. App. 559 | Ind. Ct. App. | 1904
Suit by appellee to cancel a gas and oil lease. In the second paragraph of complaint, appellee
It is further averred that appellant became the owner of the lease by assignment in 1890, and claims to have some interest in the land on account of the lease; that at no time since the execution of the lease has the lessee, nor those claiming under him, including appellant, taken any possession of the land, and no well has been drilled thereon; that appellant caused to be paid the sum of $20 per year, for the period of twelve years, and that the same was received by appellee, and those under whom he claims, for the twelve years; that the $20 per year was received by appellee from appellant as payment for the privilege of entering thereon by appellant to prospect for oil or gas during the period of one year, for which the payments were made and for no other purpose; that at the end of the twelve years, no possession having been taken and no
Appellants second paragraph of answer admits the execution of the lease, and alleges that by the terms of the lease it should continue in force as long as appellant should continue to make the payments agreed upon; that a deposit in the bank named should be considered a payment under the terms of the lease; that appellant has at all times made the- payments required by the lease on or before the 14th day of April each year; and that all payments were made that were due prior to the beginning of this action, according to the terms of the lease, by depositing the payments in the bank named in the lease at the times mentioned in the lease, and that nothing is due appellee. To this answer a demurrer was sustained. The complaint in this case was filed April 16, 1902.
It is a well-settled rule that in construing a contract the court will, if possible, give effect to all its parts, and that its true meaning will be determined from a consideration of all its provisions taken together as a whole. While the lease contains a stated consideration of $20, yet it is manifest that the substantial consideration that moved the grantor to execute the lease Was the hope of profits or royalties if gas or oil should be found. Gadbury v. Ohio, etc., Gas Co., 162 Ind. 9.
It is quite true that it is not the duty of the court to make
Why did the parties insert the twelve-year clause ? Appellant’s argument is that during the twelve years it was bound to pay the rental, and after the twelve years it could pay it or not, at its option. But does the lease give the appellee an option for an indefinite time either to put down a well or pay the $20 per annum? Is the instrument an option merely, and the $20 a year the price of it ? If so, why was anything said in the lease about when operations should commence, and why was the stipulated payment to be made “until” such operations are commenced and a “well completed ?” It is not necessary to inquire whether the lessor was bound to let the lessee hold the land for twelve years without attempting to develop it, because it was held by the lessee for twelve years, and the payments for delay were accepted by the lessor. But, giving effect to all the provisions contained in the lease, we think a reasonable and equitable interpretation is that the lessee, by mak
In Western Pa. Gas Co. v. George, 161 Pa. St. 47, 28 Atl. 1004, where a lease almost identical with that at bar, and where the term was two instead of twelve years, the court said: “The continuance of the lease beyond the definite term was contingent upon the finding of oil or gas in paying quantities, and on the payment to the lessor in such case of his share of the oil produced, or the stipulated sum for each well from which gas was obtained and sold. The primary and essential condition to any extension of the lease after the lapse of two years from its date was the finding of oil or gas in paying quantities within that time, and the secondary condition was that the rent reserved for the oil or gas- found should be paid in conformity with the covenants in relation thereto.” See Federal Oil Co. v. Western Oil Co., 112 Fed. 373; Consumers Gas Trust Co. v. Littler, 162 Ind. 320.
Judgment affirmed.