Findings of Fact.
Aрpellant brought this, suit to recover of appellee $768, with interest thereon, which he alleged to be due as rental on 1,280 acres of land in Tom Green county, for the yearb 1920 and 1921.
Appellant’s cause of action is based upon an oil and gas lease, which, in so far as the same is material to the issues here involved, is as follows:
“The lessor for and in consideration of $384.-00 cash in hand paid, receipt of which is herеby acknowledged, and of the covenants and agreements 'herein contained on the part of the lessee to be paid, keрt and performed, have granted,' conveyed, demised, leased and let, .and by these presents do grant, convey, demise, lease and lеt unto the said lessee, for the sole and only purpose of mining and operating for oil and gas, etc., the following described tracts of land (describing the same). * * *
“It is agreed that this lease shall remain in force for a term of five years from this date, and as long thereafter as oil and gas, or either of them, is produced from said land by the lessee in paying quantities.”
This is followed by several covenants on the part of the lessee with reference to delivering oil in tanks or pipe lines, and paying for gas. Further quoting from the lease:
“If no well be commenced оn said land on or before the 26th day of December, 1919, this lease shall terminate as to both parties, unless the lessee on or before thаt date shall pay or tender to the lessor * * * the sum of $384.-00, which shall operate as a rental for twelve months from said date. And it is understood and аgreed that the first consideration recited herein, the down payment, covers not only the privileges granted to the date when said first rentаl is payable as aforesaid, but also the lessee’s option of extending that period as aforesaid, and any and all other rights conferred. Said $384.00 to be paid each year during the period of this lease.”
The down payment was made and the sum of $384 was paid before thе 26th day of December, 1919. No payment has been made by the lessee since that date. Plaintiff’s petition alleged the facts above sеt out. A general demurrer was sustained to plaintiff’s petition, and he declining to amend, the case was dismissed.
Opinion.
It is the contention of the apрellant that upon the payment of the first year’s lease, the lease became a binding contract for a full period of five yeаrs from the date thereof, and that appellant is entitled to recover the sum of '$384 for the years 1920 and 1921, as rental on the land. This contentiоn is plausible, but we do not think it is sound. Under the decisions in this state, it is held that a so-called oil and gas lease is not strictly speaking a lease at all. It conveys no interest in the land, nor in the oil thereon while in place, but only an option to drill and extricate oil if found. Hitson v. Gilman (Tex. Civ. App.)
Thе down cash payment is a sufficient consideration for the option. The lessee does not bind himself to drill a well nor to pay future rentals, but оnly has an option tc¡ do so, and thereby continue his right to exploit the land for oil and gas. The .ordinary oil lease contains a clausе that the lessee may extend his option from time to time by paying the stipulated rental. There
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is no such express provision in the lease here under consideration, but we think that such stipulation is implied. If this is a proper construction of the lease, then it follows that failure to pay the second year’s rental forfeited the lease, and that it became void as to both parties. Ford v. Cochran (Tex. Civ. App.)
The word “rеntal” is used in this opinion as in all opinions in reference to oil leases, but strictly speaking the amount paid from time to time is not rental, but ■simply а sum by the payment of which the lessee acquires the right to extend his option beyond the time provided for the beginning of the drilling of a well. The word “rental,” in the contract under consideration evidently had this meaning as to the first payment, in addition to the cash down payment. This is conceded by appellant. We quote from the contract as follows:
“The down, payment covers not only the privileges granted to the date whеn said first rental is payable as aforesaid, but also the lessee’s option of extending that period as aforesaid, and all other rights сonferred.”
His option to extend the period in which a well should be begun depended upon his payment of the so-called annual rentаl, and we think, applied only when such sum became payable at the option of the lessee. It will be observed that the clause “said $384.-00 tо be paid each year during the period of this lease” does not provide that it shall be paid for five years, which was the period оf the lease, unless the same was forfeited. The language “the down payment” covers not only the privileges granted to the date when said first rental is payable as aforesaid, but also the lessee’s option of extending that period as aforesaid. The use of the word “рeriod” we feel implies that the time for which said lease might remain in force was uncertain, by reason of the fact that the lease might' bе forfeited for failure to make the annual payments; and the use of the word “period,” in the clause, “said $384.00 to be paid each year during the period of this lease,” is, we think, equivalent to the words “life of this lease,” and that the life of the lease depended upon the exercise of the option by the lessee to pay $384 on December 26th of each succeeding year for five years, if no well should be bеgun within that time. Such being our construction of the lease here involved, we hold that the trial court did not err in sustaining the general demurrer to appellant’s petition.
Appellant cites, in support of his contention, Grubb v. McAfee,
The case of Wall v. Texlouana Co. (Tex. Civ. App.)
Finding no error of record, the judgment of the trial court is affirmed.
Affirmed.