Pyle v. Henderson
| Decision Date | 26 January 1909 |
| Citation | 63 S.E. 762,65 W.Va. 39 |
| Parties | PYLE et al. v. HENDERSON et al. |
| Court | West Virginia Supreme Court |
Submitted January 10, 1908.
Syllabus by the Court.
Though a lease for oil and gas, for a money bonus as consideration does not bind the lessee to drill or pay money in lieu of doing so, but leaves it optional with him to do so or not the lessor cannot annul or revoke it merely on the ground of want of mutuality of obligation.
[Ed Note.-For other cases, see Mines and Minerals, Dec. Dig. § 59. [*]]
Where in an oil lease there is a clause that it shall be void if a well is not completed, or, in lieu of it, money paid, within a given time, and before the expiration of the time it is found that the lessor's title is defective, and he agrees to perfect it, and agrees that the money need not be paid when due, and gives an extension for payment until the title can be perfected, he cannot declare a forfeiture and make a second lease. A second lease, taken with notice of the first is void as to the first lease.
[Ed. Note.-For other cases, see Mines and Minerals, Cent. Dig. §§ 206, 211; Dec. Dig. §§ 78, 81. [*]]
In case of such a lease, if the lessor by his conduct clearly indicates that payment will not be demanded when due, and thus lulls the lessee into a feeling of security, and throws him off his guard, and because of this he does not make payments when due, the landlord cannot suddenly, without demand or notice, declare a forfeiture, and there is no forfeiture which equity would recognize; and, if there is in such case technically a forfeiture at law, equity would relieve against it.
[Ed. Note.-For other cases, see Mines and Minerals, Cent. Dig. § 206; Dec. Dig. § 78. [*]]
A forfeiture will be deemed waived by any agreement, declaration, or course of action on the part of him who is benefited by such forfeiture which leads the other party to believe that by conforming thereto the forfeiture will not be incurred.
[Ed. Note.-For other cases, see Mines and Minerals, Cent. Dig. § 206; Dec. Dig. § 78. [*]]
Courts of equity will not enforce a forfeiture of an estate.
[Ed. Note.-For other cases, see Equity, Cent. Dig. § 70; Dec. Dig. § 24. [*] ]
The dismissal of an original and amended bill does not carry with it an answer setting up facts calling for affirmative relief.
[Ed. Note.-For other cases, see Equity, Cent. Dig. § 755; Dec. Dig. § 359. [*] ]
Appeal from Circuit Court, Tyler County.
Bill by C. E. Pyle and others against one Henderson and others. Decree for defendants, and complainants appeal. Affirmed.
Price, Smith, Spilman & Clay, Thos. P. Jacobs, and W. S. Miller, for appellants.
F. D. Young, V. B. Archer, F. L. Blackmarr, and Wm. Beard, for appellees.
Thomas Bunfill, February 3, 1897, made an oil lease of 60 acres of land to A. B. Campbell and J. W. Swan. The lessees paid Bunfill a cash bonus or consideration for the lease of $55. The lease is for a term of five years, and so long thereafter as oil and gas shall be found in paying quantities or rental paid thereon. The lease contained a clause on which this litigation turns: "Provided, however, that this lease shall become null and void and all rights hereunder shall cease and determine unless a well shall be completed on said premises within three months from the date hereof, or in lieu thereof thereafter the parties of the second part shall pay to the parties of the first part fifteen dollars for each three months' delay, payable in advance, until such well is completed." No well was put down under this lease, nor was the $15 commutation money paid. On May 5, 1897, Bunfill made an oil and gas lease of the same tract to C. E. Pyle. The contest is between those claiming under these conflicting leases. When the first lease was made, Bunfill owned only seven undivided ninths of the tract. His brother John owned one ninth, and the Sindledecker heirs the other ninth. Thomas Bunfill secured a conveyance from John Bunfill of his ninth, March 15, 1897, before the three months' limit in the clause quoted above had expired. He never did get in the ninth interest of the Sindledeckers. Some of them were infants, and under a judicial proceeding Miller, trustee, acquired that share of the oil and gas. Pyle, the second lessee, assigned an interest in his lease to Hardman, and Pyle and Hardman assigned the second lease to Miller, trustee, and thus Miller obtained the whole, except reserved royalties to Pyle and Hardman. The first lease came to be owned by Campbell, Swan, Stealy, and Henderson. No possession was taken under the first lease, but under the second wells were drilled and oil produced. Pyle, Hardman, and Miller, trustee, claiming under the second lease, brought a chancery suit against Henderson and others, claiming, in their original and amended bills, under the second lease as superior to the right of those claiming under the first lease; claiming that all right under it had ceased before the second lease was made, because of failure to drill a well or pay the $15 commutation money, as demanded by the clause of the first lease quoted above; alleging that they were in possession, operating for oil under the second lease; and seeking to enjoin the claimants under the first lease from entering and boring for oil, and to cancel said first lease as a cloud upon their title. The defendants filed a cross-bill answer setting up their title under the first lease, and praying that the second lease be canceled. A decree was entered holding the second lease void and canceling it, and declaring the first lease good and valid, and dissolving an injunction which had been awarded against the claimants under the first lease entering or operating. The decree conceded to Miller his right to the Sindledecker share. From this decree Pyle and others appeal.
One argument made for the second lease is that the first has no covenants binding the lessees to do anything, unless they wished; that it binds the lessees for nothing until they should get oil either to drill a well or pay money; that the lessor could have no suit for money, or to compel operations of development of oil. It is thence contended that the contract wants the essential of a binding contract, namely, mutuality. Under this view the lessor could renounce or revoke the lease at any time, because if not binding the lessee for anything, neither would it bind the lessor, and hence the second lease would be an election by Bunfill not be bound, and would confer good title. For this contention we are cited the case of Eclipse Oil Co. v. South Penn Co., 47 W.Va. 84, 34 S.E. 923, and Glasgow v. Chartiers Oil Co., 152 Pa. 48, 25 A. 232. We differentiate the present case from the Eclipse Case, form the fact that no money was paid as a bonus in that case, whereas one of $55 was paid for the lease in this case. We cannot see that when a lessee pays a money consideration for the right or privilege of boring for oil within a fixed time, and, in default of so doing, of paying money as an alternative, he has no vested right of exploration, but his privilege may be revoked at any moment, whether the limited time has expired or not. If that be the true view, the clause of cesser is needless, because no revocation could be made for want of mutuality only. It would seem to me that a lease of this character, the lessor receiving valuable consideration for the privilege of exploration for oil, would confer a valid right of exploration for the time and on the terms spoken of in it. Such would seem to be the intent of the parties and the justice of the matter, notwithstanding the contract imposed no obligation on the lessee to drill or pay. The lessor has been paid his price for giving such privilege. It seems that this was the construction of the Eclipse Case in the opinion by Judge McWhorter in Harness v. Eastern Oil Co., on page 250 of 49 W. Va., on page 670 of 38 S.E. Denying the aptness in that case of the Eclipse Case, he said: "In that case the lessee had paid nothing; had done nothing." In Lowther Co. v. Guffey, 52 W.Va. 88, 43 S.E. 101, Judge Dent, who prepared the opinion in the Eclipse Case, differed the two cases because of $1 paid as a bonus. That lease imposed no obligation on the lessee. In Tibbs v. Zirkle, 55 W.Va. 49, 46 S.E. 701, 104 Am.St.Rep. 977, a point held is: So we cannot say that from mere want of mutuality Bunfill could ignore the first lease.
The lessees under the first lease neither drilled a well within three months, nor paid the money in place of it stipulated in that lease. For the second lease it is contended that such failure of itself caused the death of that lease; that it would work this result without any act on the part of the lessor declaring a forfeiture, even had the second lease not been made; that Bunfill could have remained quiet, done nothing to manifest an intent to insist upon the death of the lease, and it would have come to its end absolutely from such failure alone; that the "paper is self-destructive." It is said the document contains no words calling for an act declaring a forfeiture to end it. The contention for the first lease is that an oil lease implies a warranty of good title, and as Bunfill did not have the Sindledecker ninth, the title was not good, and work of development could not be safely done, and he could not insist on a forfeiture. Counsel for the second lease say that there is no place for forfeiture, as the first lease was at an end. So much is this so that the end of the lease its death from want of compliance with...
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