45 Ind. App. 211 | Ind. Ct. App. | 1910
Appellants brought this action against appellee, to enforce the payment of certain alleged cash rentals claimed to be due under a certain gas and oil contract.
A demurrer to the complaint for want of facts was sustained, and this ruling is here assigned as error.
The contract is made a part of the complaint by exhibit, and is dated April 15, 1895. It grants unto the lessee all the gas and oil in and under certain real estate, described, with the exclusive right to enter thereon at all times for the purpose of drilling and operating for oil or gas, etc. It also provides that “unless second party shall commence and complete a well within forty days from date thereof or pay a monthly rental of $5 until said well is completed, this grant shall become null and void. * * * It is further agreed that the party of the second part shall commence to drill first well in twenty days from date. Each -well shall be due in sixty days from the completion of the last one or a monthly rental of $5 for each well due. Each location shall consist of ten acres more or less and each well shall be due in sixty days from the completion of the last one. It is further agreed that no well shall occupy more than one acre. ’ ’
The complaint shows that the contract covered seventy acres of land, more or less, in Adams county; that on the date of the contract the land was undeveloped for. oil or gas; that, according to the terms of the contract, seven wells were completed on the land; that thereafter three additional wells were completed, but that more than sixty days elapsed between the completion of each of the additional wells; that the last three wells were sunk by appellee without objection or protest from anyone; that there is no express limitation
Appellants’ theory is that for the time exceeding sixty days between the completion of wells No. 7 and No. 8, and so on up to the completion of well No. 10, appellee was liable for a monthly rental of $5. While appellee insists that having completed well No. 7 without any default, the sixty-day limit did not apply to the last three wells.
1. The instrument which was the foundation of this action is not a lease, as the word “lease” is usually interpreted (Hancock v. Diamond Plate Glass Co. [1904], 162 Ind. 146; New American Oil, etc., Co. v. Troyer [1906], 166 Ind. 402), although similar instruments have been so called. It is a covenant by the owner of land to another person, whereby the latter has the exclusive right to enter upon and explore the land for gas and oil, and prosecute such business, occupying only such portion necessarily required for that purpose, which in the instrument or contract before us is fixed at not to exceed one acre for each well.
While it is true that the provisions in this class of contracts, as a rule, are ambiguous, indefinite and uncertain, it is also true that the parties are to be limited to the contract actually made. And for the purpose of ascertaining the true meaning of the language employed courts “will look to the nature of the instrument and the conditions under which it was made, the situation of the parties, the nature of their
In the case of Ohio Oil Co. v. Detamore, supra, it is said: ‘ ‘ The mutual understanding and intent of the parties, as to the purpose, scope and ultimate object to be attained by the contract, that inspired and accompanied its execution, is controlling, and must be determined, not by detached provisions, but by viewing the instrument as a whole.”
Only by the sinking of wells could the land he explored and the ultimate object of the contract he attained. The extent of the exploration of the land for oil and gas, which is the essence of such contracts (Dill v. Fraze [1907], 169 Ind. 53), depends upon the number of wells completed.
Judgment affirmed.