Kidd v. Hickey

fore- reasonably been have could such as unused Appellee the value lost seen. result fee as year’s license fair seems and it appellant’s negligence, compensate him judgment him to allow

for the loss. could be trailer shown that It was fully re- although it not been

repaired, had overrule

paired trial. We at the time of proof pleadings

contentions that the finding support

were insufficient being the reasonable cost re-

$792.00

pairs.

Recovery was allowed in the sum compensate appellee for the loss

$750.00

of use truck until he of his and trailer repaired

could have the trailer could replace Objection the truck. made Jackson, N. George Parker, Jr., John pleadings proof were insufficient to Coke, and Coke & Henry all Dallas,. show the amount of damages suffered in Russell, Pecos, appellants. for respect. Appellee testified in detail Whitaker, Turpin, Kerr, Smith & concerning truck, his use Brooks, Midland, Parr, Odessa, Downey & profits amount customarily he earned. appellees. He had engaged been in such line of busi- years. for many ness opinion our Giles, Commissioner, Bascom State Land this item recovery subject to the Austin, by appeared leave of Court amicus objections made appellant. curiae. points All of error are overruled, and Justice; McGILL, trial court is affirmed. appeal from a judgment an of the'

District Court Reeves 109th District. Judicial controversy involves construc- tion of oil Re- linquishment Ann.Civ.St, Act, Vernon’s n art. 5367 seq., square on a et section of containing County. 640 acres in Reeves , Appellants by an action in statutory re-, trespass try form title sought KIDD et al. v. HICKEY et al. appellees cover from an .oil and No. 4744. gas leasehold estate in Appeals Court of Civil Township Texas. El Ry. Paso. & P. T. Survey County. in Reeves Oct. 1950. containing 640 acres classified as mineral Rehearing Denied Nov. land, originally leased oil Tunstill, C. owner, surface in- Jack of, dividually and as for the State Production, Texzona Company, 7,. 1946. assignment, An was, Section 10 .lease acquired appellants April grounded to title Appellees’ claim on lease of the SW4 of Section 10 individually agents

surface owners and as State, dated December 56, Township "All whether decision of for The basic as And Company Survey. T. Ry. & P. created in the SW4 the leasehold estate herein lessee consideration the 10 dated further of agrees commence the actual when of had terminated November tract test described well on the above of by reason acquired appellees their date days land pay drill or before from failure of the lessees’ instrument, feet, depth this to a mostly are The facts the SW4. of of rentals on them or unless oil and or either gas, parties, and by stipulation of of covered depth; paying at lesser copy A undisputed. photostatic found It is agreed that one well 1946, ap- further quantities (oil gas) will ing here We Facts. pears in the Statement pre- requirement delay rental eliminate the portions thereof. pertinent reproduce the covering acres scribed herein the 160 5367, General form No. This lease located, ‘except ten which well is Relinquish- said lease form under Land Office per acre minimum cents portions italicized herein ment Act. Paragraph 8 typewriter: hereof.’ are inserted acres, more or less. containing 640 Lease. and Gas “Oil “Subject provisions herein to the other contained, this remain force lease shall entered into Agreement, made and “This date, years (here- from this for a term of by and day this 7th. primary term) long there- in called and as man, single Tuwstill, a between Jack C. them, gas, after as oil either agent the State individually and for quantities from produced Texas. hereby leased. Worth, permanent (Give of Fort Texas. individually address) and as premises “In consideration Texas, party part, here- first State agrees: covenants and Lessee said (whether referred one Lessor pay to “1. To the Commissioner of Company, more) Production and Texzona Texas, Officeof the State General Land Worth, Bldg, Texas (Give of Fort Ins. Texas, Austin, pipe free of in the cost permanent address) party of second may or wells line with the well called part, hereinafter Lessee. connected, of the value of all oil 1/16 That in the “Witnesseth: Lessor produced and saved said leased aforesaid, capacities in considera- .and required by premises as Article 5368 of Dollars, paid, in hand tion cash $320.00 Texas, the General Laws the State estate, property re- individual 1925, Revised. hereby acknowledged, ceipt of which “2. To deliver to the credit the Les- BELOW) (SEE and a amount NOTE like soil, cost, sor as the owner of the free of Texas, paid to and of the the State of pipe in the tanks or lines which wells agreements hereinafter con- covenants and equal connected an additional 1/16 part of to be tained the Lessee produced all oil and gas and saved day grant- kept performed paid, do premises from said leased option at the demised, let, ed, leased and these of Lessor of the value of all oil and 1/16 demise, lease and let presents grant, do produced and saved from said leased Lessee, for the sole and unto the said premises. prospecting drilling for “3. If no well be gas, laying pipe commenced on said producing land, hereby leased, on or tanks, before the lines, building storing oil and build- 7th. day stations, telephone of November lines and power shall thereon, produce, savé, parties, as to both terminate structures unless the other transport products before care, Lessee on or that date said shall treat to the Lessor as following tender land situated owner Texas, or to his credit State of to-wit: soil ‘Reeves Continental Nat’l por- .Bank, Worth, at Fort above for1the production, or its succes- days test well within 90 depository sors, complied its date duly continue with. well changes ownership of was regardless of drilled on NW4 of Section land, (50c per 7, 1947, On being pro said November the sum of oil §320.00 was Dollars, duced in pay acre) and in addition shall from this well lease, to Land drilled under the terms of Commissioner of the General Austin, Texas, 7, 1947, since November pro of the been Office State of oil has date, in paying quantities duced a or said Like Sum on before a well or operate on wells drilled Section 10 which shall rental and the terms cover under lease, of privilege and at deferring of the commence- the time of the trial produced. was being so (12) ment a well for months from twelve upon 8 of the duly In said date. like manner com period plied with payments for the or tenders the commencement from the date of the lease to may he for like November further deferred 1948. Neither appellants periods predecessor months nor their the same number of interest successively. commenced the of an oil and/or gas well on the SW4 Section or However, “8. is understood and 7, 1947, prior before November nor to agreed that the fact that notwithstanding 2, 1948, when the Commissioner development progress be in or of the General Land Office noted royalty paid being secured here- records that the lease as to the SW4 operator or under the owner leased had terminated for failure to premises to shall continue make annual pay delay drill or rentals. No rentals payments which, to the State 50c acre paid were tendered or to and in absence of such conditions the owner of the soil or to the Commis owner, paid being to rentals the land shall sioner Land General Office on or (10c) per minimum of ten be the cents 7, 1947, (cid:127)before November or December provided by acre said Article appel 1948. The trial court held that party “16. If the estate of either hereto lants had no gas valid claim an oil and assigned, privilege assigning leasehold estate on the SW4 of Section expressly allowed, in part or whole they nothing by their the covenants hereof shall extend their suit. executors, administrators, heirs, successors contention that since change assigns, ownership but no or in the production continuously obtained and assignment or or of the land portions maintained rfrom other of the land royalties -be binding shall on the Lessee covered the lease of November the Lessee has furnished until after been express and since such lease contains assignment a written transfer provision for termination in the event of thereof; copy hereby agreed and it is true SW4, failure rentals on the assigned shall the event this lease acquired they the oil lease parts or as to part above de- hold estate on the Section 10 which assignee assignees lands scribed has in full continued force and effect. Ap- parts part or shall fail or make such pellees express counter terms proportion- default in the of the lease November rentals due from part of the him or ate automatically terminated as to the operate them, default shall not lessees’ SW4 on the failure to commence in so or affect far defeat on the SW4 or before November parts of upon said lands pay delay covers rentals on the SW4 any assignee said Lessee or They before such date. repeatedly make due in their brief that express said assert thereof required either the ly rentals.” a well on ¿92 pro termination; subjecttd other (1) That or the :(160 acres) each section ¼ remain it should oir therein contained visions section on each delay rentals- ½ years- from its words, a term of five in force for In other befóre long there (the primary term) and as date they' the lease of contend that -“is -of them after as -oil and or either express categorically terms its quantities from the land separate produced into1 four divided above leased”, (2) Paragraph leases, covering a each ½ language relative NE4, quoted. NW4, Certainly SE4 and designated as the to- expressly refers term of Section 10 10. in Section acres contained delay entire 640 payment of rentals development and leased”; hereby also “the land special limitations contained thát the arid paragraph 3 “If language of thé we think applied to 3 of the lease paragraph land on said no well commenced on the be lease terminated and that the SW4 provision as it does the following leased” by such limitations. SW4 term, expressly refers primary creating apparent from a mere read It is at once entirety. ex These in its to Section 10 7, 1946, that November ing of the of any pro mitigate against press provisions express provision as contains no such di express implied which would vision appellees. question The then asserted separate leases for four the land into vide provision be whether such arises payment development and of by necessary original lease into the written They entirely incon delay are of rentals. special of implication limitations any pro repugnant to with sistent applied 3 of Section paragraph to' SW4 special which would lim vision invoke longer open question an 10. It is no paragraph separate to each itations of 3 as gas lease of the that an oil and this State typewritten insertions above lease. in the les here in vests character vague quoted exceedingly are and indefi assigns its a' determinable fee see suppose illustrate —let us that nite. To place under the the oil and 10, only one well were drilled on Section by the lease. Texas Co. surface covered in the center and that well were located 717, Tex. S.W. Daugherty, 107 176 v. s square section on the cor common 989; L.R.A.1917F, Stephen County v. SW4, NW4, ners of the NE4 and SE4. Co., 113 Tex. Oil & Gas Mid-Kansas theory appellees’ Under Gas, 290; 254 31-A Oil S.W. Tex.Jur. section of 160 acres Section would 117, 118, 119. Sections kept the lease of alive provisions that It is also settled Again loo-king of such well? paragraph 3 of as contained paragraph producing 3: If a well special constitute' limitations on any were drilled on conveyed, fee determinable on the express portion of Section 10 terms comply provi- failure to with these lessee’s typewritten insertion, previously automatically estate sions the leasehold expressly agreed that the Review, p. 520(3) Tex.Law termináted. on 160 acres which the well should be cited; there A. and authorities article eliminated, paragraph yet foe located should Walker," W. Jr. is, $320.00, requires that special not limitations should Such acre, per 50c on the entire 640 acres “on or doubtful implied vague language. by production.” Ob that 222; Gurley, 52 Tex. McCallis v. required viously

Johnson $320.00 Co., Tex.Civ.App., 223 S.W. Texas v. ter be at the would not rate of 50c Simon, Ref.); Tex.Civ. 859, (Wr. Dale production any part any there were if affirmed, Tex.Com. App., 10 which would eliminate S.W. App., 267 rentals on 160 acres. only logical the-pro deduction is contains paragraph relative provisions pay relative to its visions express only two knowl- actual appellee had Louis Crouch applicable delay rentals are ment of of title edge appellant’s claim production on if there express leasehold estate SW4 think is 10, which we toas counsel advice paragraph and acted without portion of the first 'of he was claim, appellant’s validity writ quite clear It entering on good faith in of con not rules ambiguous. Under the ten entitled thereon, a well not war above indicated we struction expenditures which to no relief on account of meaning to it ascribing ranted in par uncontroverted so made. The evidence is special limitations would invoke Boyd appellees’ representative, construc agraph as to the SW4. Such knowl- provi express capacity administrative had actual conflict tion would the lease- edge assignment creating sion the clause express claim hold interest in the and of their term, think also with the and we prior hold title thereunder to December provisions is our express appellees acquired their these when that under prior to No of the from the individu- producing land owners drilling of a Boyd’s 1947, ally agents 7, production of oil and as for the State. vember n continuously com- testimony since reveals that was paying quantities 27th, than portions of other menced the SW4 December time from Section 10 on on 1949, 1948, 23, kept casing January and in full set the alive was on the SW4 21, completed the and the effect on the without well was on March force and regard Appellants 1949. any delay rentals. We their suit on filed .Janu- 1949, Co., ary 17, pendens the McCallister Texas and filed cases notice of lis very Simon, supra, persuasive. January 25, 1949. Dale v. as recognize the rule that the lease be We point We think this by is settled Houston parol admissible ing ambiguous evidence is Co., Production Co. v. Mecom Oil Tex. explain seeming and to ambiguity its Com.App., Appellees’ con-, 62 S.W.2d 75. parties the show the true intention of good tention that the faith of a lessee un Snyder, it. Tex. Civ. Producers Oil Co. v. Relinquishment der a Act lease cannot be However, App., inter the questioned by the courts since the lessee pretation by Commissioner unquestioned right rely ha9 by of the General Land Office as evidenced controlling.. sovereign is not his rec notation of its termination on his jury The finding Mecom case was meaning. ords is no evidence true its lessee at the time it drilled the clearly by testimony shown This is well and undertook develop the land Klavenan; nor fact good and in honestly faith believed that Hickey executed a owners who lease to right had a lease land and had a 8, 1918, and lease to December Crouch Here, develop there, it. at the time 1950, 11, language January used appellee drilling was commenced Crouch language leases which is similar to the charged knowledge knew or was employed in and at claim least some parties of the intention of the evidence done by appel was him after work meaning to the Novem lants filed suit to rights enforce their 7, ber In the two leases referred to pendens. filed notice of lis Under the hold except all lessors C. Tunstill were Jack ing in Houston Production Co. v. Mecom different, lessee in each of these Co., supra, and Oil the authorities there parties leases was different than the to the expend cited under such circumstances the lease November and their inten itures made Crouch in drilling th'e well tion can bearing have no on the intention of peril were made at and he can recover 7, part thereof. no holding appellees Our necessitates up consideration of In their answer set appellant’s point plan ground second to effect that since in abatement that the Rehearing Commissioner of On Motion for or the State of Texas Tun- C. the General Land Office Jack SUTTON, Justice. still, the who executed surface owner appeal from the District Court individually original lease County. trespass is in suit Reeves State, so executed with others who try Cherry Kidd A. W. title. Barron under which lease December brought suit to the oil and recover appellees claim, necessary and indis covering leasehold estate Southwest pensable parties to the court suit. Township quarter of plea and action overruled this Ry. Co., P. Reeves Texas. T. & brought cross- forward an alternative the court and trial was to assignment of error. We think there plaintiffs nothing, that the from which overruling error in the court’s action appeal prosecuted. On the plea in abatement. This is not a suit reversed rendered consideration we the lease of cancel rehearing but on the motion for case only by the be maintained which could concluded the Court have majority Co., Colquitt v. Production State. Gulf disposition is erroneous former Tex.Com.App., 52 It is a suit S.W.2d 235. granted and our for- the motion should trespass appellants to try title which judgment set aside. mer possession, to recover title seek to and they claim as min- leasehold classified estate which The lands involved mineral were sold with the usual eral and assignment of the of November the oil and Plaintiffs claim reservation. 1946,insofar of Sec covers southwest of Sec- on the we have that this lease tion 10. Since held assignment an by virtue of tion 10 terminated, appellants had not are entitled original covering the whole sec- adjudi necessary recover. is not lease was executed tion. rights cate State Tunstill, owner, surface as C. Jack rights and such December State, a Land agent on General Of- judgment adjudicata by ren not rés printed form numbered 5367. It is fice ques the same herein. The fact that dered form with blanks left inser- usual necessarily be are involved as would tions par- addresses names and the- brought by a the State or involved in suit re'ntals, roy- ties, dates, payment, the bonus validity of the appellees to determine description of the lands. In the alties and require does lease of not provided for space in the lease form blank of the Commissioner that the State following description the land the or the owners Land Office surface General typewriter, following the is inserted suit. following “the leased recitation there judgment that the It is ordered County, in Reeves State land situated reversed, appearing trial court be Texas, 10, wit:” “All of Block developed, fully the facts have been 2, Ry. Survey. Township T. P. And 56, & appellants1 rendered that judgment is here thé lessee a further consideration herein recover of and do have and (plaintiffs) the actual'drilling commence agrees to for appellees (defendants) the above a test well on described tract of possession days or before 90 from the land on date of Section in the SW4 estate leasehold depth instrument, to feet, Ry. 2, & 56, Township T. P. Sur gas, or either unless oil' them is Texas, prayed in Reeves vey depth. found in lesser suit, appellee costs of for, and agreed that one further well It is nothing as reim recover Crouch Louis quantities (oil gas) will made, expenditures in drill for bursement requirements delay rental pre- eliminate property. on such ing a covering herein scribed 160 acres on located, except which said the ten rendered. Reversed paid timely in was provided per minimum cents paragraph .No annual rentals paragraph 8 hereof.” paid surface 3 were either to the paragraph 8 provided in The rental the SW4 State; nor commenced a well Ann. Vernon’s in Art. prescribed date prior to December St. Civ. Land Of- General Commissioner of lease, with paragraph 3 of Printed fice records the noted on his depository, dates, name the insertion com- failure to SW4 had terminated in- and one the amount of annual the rentals pay mence thereon or to a well hereafter, reads noted specially terlineation Decem- leased due thereon. The SW4 well be commenced “If no as follows: owner ber the surface leased, No- or before land, said defendant, David H. to the State terminate 7th, 1947, shall this lease vember other Hickey, lease he under which lessee on parties, unless as to both defendants, Texzona Louis Crouch to the or tender shall that date before said title to Company, Production claim soil or to the owner Lessor as SW4. at Ft. Nat’l Bank credit the Continental question is, controlling The basic and Worth, on that Did the shall successors, which production, or its under the terminate virtue of its terms depository regardless of continue as the By think it facts the case? We did. land, ownership of said change in the provision following specially inserted Dollars and acre) (50‡ sum $320.00 hereinbefore, description land, copied pay to the Commissioner shall addition producing specifically provided one of the State of of the General Land Office suspend payments on well will the rental Austin, Texas, a Like Sum on Texas, at well is located the 160 acres on which the operate date, before said except the minimum rental due the State deferring privilege oí rental and cover under the statute. Likewise the of a well twelve the commencement specifically ex- interlined in man- said date. In like (12) months empts payment any the of rentals 160 upon payment or tenders the the ner and upon production acres which is had. The well be further commencement of provisions specially two inserted when read periods the same num- for like deferred they be, together, and construed must successively.” months ber think, clear, make we the intention of the portion held provision, “on that not The parties provide to for the of an was italicized us above production”, wells, pro- additional well or in the event printed para- typewriter in interlined had, remaining duction is on the acre 160 lease was The dated No- graph tracts, or pay the rentals thereon at the term and was for vember per rate of acre to the surface owner 50‡ long years, “and as thereafter as of five sum to the like State or suffer the them, produced either of gas, or portions. termination the lease on such the quantities from in short, parties, In the intention of the clear leased.” writer, production in case of to this was provide for the testing remaining stipulated mostly and are facts are The portions, payment or for the of the rentals dispute. A test well was commenced termination of the por- lease to such within of Section 10 the NW4 on the was, purpose production The if tions. quoted provision in the provided days had, provide was the testing and produced and the section well The above. development remaining portions. the date the well since was produced has The commencement of the date of the trial of the the on completed until the payment the NW4 obviated rental ten cents minimum rentals for The case. period any rental under the first the State the statute due the per acre production section. that provided suspended the rentals thereon 25 (e. r); S.W.2d Producer’s Oil continued life' of thereon v. the the lease Tex.Civ.App., Snyder, gas, so long as oil and them Again, either of elementary another construc rule of produced quantities. ás tion is the contract will construed specially, provisions provided for given pro inserted a whole and to all its effect some reasonably commencement o-fanother lawfully visions if can we.ll it the remaining acreage during done. Tex.Civ.App., 113 Watts, Jackson period (e. Wilson, second rental r.); of S.W.2d 584 Wisdom v. 5( nn Tex.Civ.App. 593, the termination of the (e. r), S.W. 1128 provisions might au long thereon. Neither of these be added a list of Giving provisions were met so far as the all SW4 is concerned effect thorities. thereon, opin- simply and the lease it our means intention ion, parties it terminated case a well produced perpetuate only lease to acres Hickey dated the lease on 160 opera was valid. should resume Lessee rentals at the rate of tions 50^ The rentals are in the first surface owner a like sum paragraph 3 if well be instance in no' com- period re State within the para- provides, menced. The contract by produc portions not thus maining dry if the. first well drilled be a graph tion, or that lease should terminate hole then second well shall "be commenced portions. remaining sttch expiration within 12 months from the" period last rental ter- "the conclude, therefore, We parties unless Lessee minate as to both is affirmed. the trial court correct it period pay- shall within such resume due the contract. ment of rentals PRICE, (concurring). Chief Justice produces, But, in first case might case, specially instant in- did provide lawfully that section be devel provision provides for that contin- serted oped might provide that as a unit or the}' provides specifically gency and 160 acre tracts for divided into the land be suspend of rentals tion shall development. It seems upon the well" is acres on the 160 of the lease the me so long as the lease continues located and proper is that same was construction production "continued unit. There quarter-sections pur into divided conflict, thought, any between is no development; also' con pose provisions," nor is there conflict drilling as to limitation ditional provisions specially inserted and in contracting ap parties delay rentals fixing term the lease those" primary quarter section. plied each See Summers to years long as oil and five or so Gas, p. Perm.Ed. Vol. latter Oil & produced, that is because them either of 515; Oil v. Producers Sec. “subject to it is the other recites "provision 514; Tex.Civ.App., Snyder, 190 S.W. contained.” provisions herein Montgomery, Tex.Civ.App., 31 v. Johnson provisions be said the inserted It cannot Ref.; Hunt Production Wr. S.W.2d purpose.. without a On idly inserted were Dickerson, Company Tex.Civ.App., 135 v. they "each care of a other hand the. Kent, 106 597; v. W.Va. S.W.2d Jackson. clearly provide contingency. and definite 572 145 S.E. n what shall effect. If there were a be the quarter- sixty is a hundred and acres One printed and the written between conflict only sanction the State had to section. provisions printed would provisions quarter-section each enforce the provisions. written yield to to have limitation. conditional Co., Life Ins. Tex. National Armstrong v. only rentals for in the r.); Constitution (e. 327 S.W. 112 Civ.App., delayed question are rentals. State Armbrust, Tex.Civ.App., Indemnity Co. v. portion of Tex.Civ.App., particular indicates on which Co., Petroleum Magnolia v. 10any to well should'be drilled'or 173 S.W.2d apply. is exemption which the should lease, provisions of express Under the true,that judicially we that know there.are quantities development of oil paying;' quarter-section acres of land in one un- delay rentals of' payment renders land, but it does follow that toas keep lease in force necessary to acres on which a com drilled shall is on which quarter-section 160 acres or any, particular prise one-quarter section. (cid:127) developed. This production is original opinion is our demonstrated provide that the to certainty intends question pose.d par (cid:127)where as to which is development of oil quarter-section exempt ticular be would stand- keep good 160 acres shall the -well should have been drilled in the For a cer- only. 160 acres ing as ;160 center Sectoin where the acrés 10" paid for he tainty that rental it is intended whi'ch it drilled Could lie in one development delaying privilege of one-quarter section as well as At another. constituting the section other 480 acres language vague most the and indefinite as paid for the Delay are not rentals leased. just which of Section 10 shall be minerals, payment is purpose of use exempt delay develop option use make n of a well thereon. The lan lessee at a later date. The the minerals guage Phillips of Chief in Decker Justice rentals. way in no bound Kirlicks, cit. 94, Tex. loc. during term Their applied to a for development keep alive excuse does feiture; my opinion equally should in develop. right to applicable to a “If conditional limitation. ambiguous,, that con alone McGILL, (dissenting). Justice provision. demns it as A for forfeiture proper I construction of realize that the ground. upon feiture should rest surer is not free the lease of November vague Where contract is so its terms However, respect doubt. due meaning, court its- cannot'determine by the able brief filed Dand Commis unjust-to it would be enforce1 a forfeiture my I and the views associates . sioner against only one whose has fault orig expressed views in our adhere to the possibly meaning. been mistake its For opinion adopt opinion my inal punitive feitures harsh in their dissent. I can be desire add there operation. They are' not favored question but that could ought law, and not to The authority be. language appropriate lawfully provide that right forfeit a vested or estate riot leased, consisting of the section rest whose uri- meaning is n acres, should be divided into one- certain obscurer It -should found the; section tracts for plain clear, language development rentals. unequivocal character whose render point. This is beside the rightful.” fair its exercise they whether did so do under the vague far better It is and indefi- It may be conceded language employed nite be held to abe the instrument evidences an intention futility than that it have the effect of limit- one well on Section 10 estate, conveyed to them n exempt 160 acres from the lease. For these- reasons reasons remaining rentals on stated 480 acres of Sec original opinion respectfully I in our required. nevertheless Yet dissent. nothing there instrument which

Case Details

Case Name: Kidd v. Hickey

Court Name: Court of Appeals of Texas

Date Published: Oct 11, 1950

Citation: 237 S.W.2d 389

Docket Number: 4744

Court Abbreviation: Tex. App.