261 F. 41 | 8th Cir. | 1919
Appeal by defendants from decree in favor of lessee (Gillespie), enjoining lessors from preventing or interfering with drilling for oil and gas on land owned by lessors and covered by an oil and gas lease to Gillespie, dated September 24, 1915, set out in the margin.
“Know all men by these presents: That, whereas, on the 24th day of September, 1915, Jesse C. Washburn and Anna M. Washburn, his wife, of*43 Billings, Okl., signed, sealed 'and delivered to E. O. Funk, of Tulsa, Okl.. an oil and gas lease covering 100 acres of land described as the northwest quarter of section 15, township 23 north, range 2 west, Noble county, Oklahoma: Therefore it is hereby expressly agreed by and between the parties hereto that if the party of the second part fails within 00 days to secure sufficient acreage to warrant operations that the party of the second part shall return this lease, thereby relieving and surrendering all rights, title and interest thereto.”
The issues here are whether or not (1) the supplemental contract as executed represents the actual agreement; (2) Gillespie failed to perform, giving right of rescission which was exercised by appellants; (3) the appellants could or did terminate the lease through the so-called “surrender.” clause thereof; and (4) the evidence shows lack of equity in that Gillespie comes with unclean hands to enforce an unfair lease.
“The party of the second, part agrees to complete a well on said premises within one year from the date hereof, or pay at the rate of forty dollars for each additional three months, such completion is delayed from the time above mentioned for the full completion of such well until a well is completed; and it is agreed that the completion of such well shall be and operate as a full liquidation of all rent under this provision during the remainder of the term of this lease.”
The facts are that nothing was done toward drilling a well on this leasehold until the last day of the first year, when Gillespie brought to the land a load of rig material and was denied admittance by. Wash-burn. The rental payment for the first quarter, which began September 24, 1916, was tendered August 22, 1916, and refused, and thereafter placed in the bank named in the lease as depository, where it remained. January 3, 1917, the tender for the second quarter, which began December 24, 1916,.was made and refused. The only objection touching the rentals is that the second tender was overdue 9 or 10 days. This is based on the theory that the lease required the quarterly payments to be in advance, which would make this payment due December 23, 1916. There is no such requirement in the lease. The contention as to the failure to drill the well is that there must be a bona fide effort to complete one during the first year. A similar contention was urged in Guffey v. Smith, 237 U. S. 101, 105, 116, 35 Sup. Ct. 526, 59 L. Ed. 856, and disapproved.
The decree is affirmed.
Agreement, made and entered into the twenty-fourth day of September, A. D. 1915, by and between Jesse O. Washburn and Anna M. Washburn, his wife, of Billings, Oklahoma, parties of the first part, lessors, and E. N. Gillespie, of Freeport Penn., party of the second part, lessee,
Witnesseth, that the said parties of the first part for and in consideration of the sum of $1.00 to them in hand well and truly paid by the said parties of the second part, the receipt of which is hereby acknowledged, and of the covenants and agreements hereinafter contained on the part of the second party to be paid, kept and performed, have granted, demised, leased and let and by these presents do grant, demise, lease and let unto the said second parties, his heirs, executors, administrators, successors or assigns, for the sole and only purpose of mining and operating for oil and gas, and of laying pipe lines and of building tanks, powers, stations and structures thereon to produce and take care of said products, all that certain tract of land situate in the county of Noble, state of Oklahoma, described as follows; to wit: The northwest quarter (N. W. %) of section fifteen (15), township twenty-three (23) north, range two (2) west, containing 160 acres more or less.
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 lands by the party of the second part, heirs, administrators, executors, successors or assigns. In consideration of the premises said party of the second part covenants and agrees:
1st. To deliver to the credit of the first parties, their heirs, or assigns, free of cost in the pipe line to which it may connect its wells, the equal one-eighth (%) part of all oil produced and saved from the leased premises.
2d. To pay the first parties at the rate of one hundred and fifty dollars eacli year in advance for the gas from each well where gas only is found, while the same is being used off the premises, the first parties to have gas free of cost from any such well for all stoves and all inside lights in the principle dwelling house on said land during the same time, by making their own connections with the well.
3d. To pay the first parties for gas produced from any oil well and used off the premises at the rate of twenty-five dollars per year, for the time during which such gas shall be used, said payments to be made each three months in advance.
The party of the second part agrees to complete a well on said premises within one year from the date hereof, or pay at the rate of forty dollars for
The party of the second part shall have the right to use, free of cost, gas, oil and water produced on said land, for its operations thereon, except water from wells of first party.
When requested by first party the second party shall bury its pipe lines below plow depth.
No well shall be drilled nearer than 200 feet to the house or barn on said premises.
Second party shall pay for damages caused by drilling to growing crops on said land.
The party of the second part shall have the right at any time to remove all machinery and fixtures placed on said premises, including the right to draw and remove casing.
The party of the second part shall not be bound by any change of ownership of said land until duly notified of any such change, either by notice in writing duly signed by the parties to the instrument of conveyance, or by receipt of the original instrument of conveyance, or a duly certified copy thereof.
All payments which may fall due under this lease may be made directly to Jesse O. Washburn of Billings, Okl., or deposited to his credit in the Billings State Bank, of Billings, Okl.
The party of the second part, its successors or assigns, shall have the right at any time on the payment of one dollar to the party of the first part, their heirs or assigns, to surrender this lease for cancellation, after which all payments and liabilities thereafter to accrue under and by virtue of its terms shall cease and determine: Provided this surrender clause and the option therein reserved to the lessee shall cease and become absolutely inoperative immediately and concurrently with the institution of any suit in any court of law or equity by the lessee to enforce this lease or any of its terms, or to recover possession of the leased land or any part thereof, against or from the lessors, their heirs, executors, administrators, successors or assigns or any other person or persons. All covenants and agreements herein set forth between the parties hereto shall extend to their successors, heirs, executors, administrators or assigns.