13 S.W.2d 22 | Ark. | 1929
Title to the land covered by the oil and gas lease in controversy, southeast southwest 6-16-15, Union County, was involved in litigation on May 20, 1925, and was settled by this court in two cases, Wilson v. Biles,
We think the decree of the chancery court was correct. The balance found due by the decree was purchase money due by Thurman, the lessee, and he could not relieve himself from personal responsibility by selling the oil to a purchaser who merely credits the amount due the lessors on his books, unless they agree to look to the purchaser therefor, or estop themselves by inconsistent conduct in some manner misleading the lessee to his injury. We find no such agreement in the record, and no conduct on which to base estoppel. True, they tried to get the Penn Liberty to pay into the depository the amount due, and joined with the lessee and escrow agent in a suit to compel them to pay, but by so doing they did not waive their right to require the lessee and his assignee to pay. They still have their action against the Penn Liberty Oil Company to recover the amount it is due and owing for such oil. The assignee simply stepped into the shoes of the lessee. He took his assignment subject to the payment of the purchase price out of the oil produced. This was a covenant running with the lease, and was not satisfied by the fact that sufficient oil had been run prior to the assignment to satisfy the claim, when, as a matter of fact, it had not been applied thereto. In such a case the assignee is liable. 1 Thornton on Oil, 102.
Moreover, under the lease the lessee had full control of all the oil except the 1/8 royalty. He had plenary power to produce, sell or otherwise dispose of 14/16 of the oil and to collect for same, without consulting with the lessors. The lease did require him to deposit in said bank the proceeds of the sale of 7/16 of the oil until $20,000 was paid in full. "* * * and $20,000 to be paid out of 7/16 of the first oil and gas produced and saved from the lease hereinafter described. * * * It is further agreed that all payments under this lease shall be deposited in the First National Bank," etc. This duty of making such deposits rested on the lessee and his assignee, and not on the purchaser.
The decree is correct, and is affirmed. *888