Breard v. Pyramid Oil & Gas Co., Inc

• Decision Date: 28 November 1938
• Docket Number: 34814
• Citation: 185 So. 303,191 La. 420
• Parties: BREARD v. PYRAMID OIL & GAS CO., Inc
• Court: Louisiana Supreme Court

185 So. 303

191 La. 420

BREARD v. PYRAMID OIL & GAS CO., Inc

No. 34814

Supreme Court of Louisiana

November 28, 1938

Appeal from First Judicial District Court, Parish of Caddo; Robt. J O'Neal, Judge.

Action to cancel an oil and gas lease by Annie Laurie Breard against Pyramid Oil & Gas Company, Inc. From a judgment for the defendant, the plaintiff appeals.

Affirmed.

Bryan E. Bush, of Shreveport, for appellant.

Pugh Grimmet & Boatner and Fred. Simon, all of Shreveport, for appellee.

HIGGINS Justice. ODOM, J., takes no part.

OPINION

HIGGINS, Justice.

The plaintiff brought this action to cancel an oil and gas lease on all of the land involved, except eighty acres situated around one producing gas well on the leased premises. The defendant, to which the lease had been granted, answered and denied that the plaintiff had the right to cancel any part of the lease and averred that by the terms of a supplemental agreement between the parties the lease on 240 acres was not subject to cancellation as long as oil or gas was being produced in paying quantities on any part of the property.

The district judge construed the provisions of the lease as amended according to the version of the defendant and rejected the plaintiff's demand. She appealed.

The plaintiff, as owner and in possession of her separate and paraphernal property, consisting of 520 acres, on July 16, 1930, granted an oil and gas lease thereon in favor of the Pyramid Oil and Gas Company, Inc. On December 8, 1930, the Pyramid Company assigned its rights in the lease on 220 acres to the Junior Oil and Gas Company, Inc. The Pyramid Company drilled two producing gas wells and the Junior Company produced one gas well within the time stipulated in the original lease, but thereafter no other wells were drilled.

A controversy arose between the plaintiff and these companies as to certain provisions in the lease, particularly the following:

(1) "This lease shall remain valid and subsisting so long as gas is produced from said land by lessee * * *."

(2) "It is agreed that this lease shall remain in force for a term of five (5) years from this date, and so long thereafter as oil and gas, or either of them, is produced from said land by the lessee * * *."

It appears that one of the wells drilled by the Pyramid Company and the well drilled by the Junior Company ceased to produce and were abandoned and that neither company, within six (6) months thereafter, attempted to drill any more wells, contending that the production of gas from the land by the remaining well was sufficient to keep the lease in effect.

The plaintiff took the position that the lease required the lessee to drill at least one producing well for each eighty (80) acres of the tract, the pertinent part of the clause reading as follows:

"If gas is discovered in paying quantities upon the above described land, the lessee shall commence the drilling of another well for gas within six (6) months after the completion of the discovery well; and in like manner, at intervals of six (6) months lessee shall drill additional wells for gas until there shall have been drilled upon the premises at least one well for each eighty acres * * *."

In order to settle the dispute, on August 4, 1933, the plaintiff entered into a supplemental agreement with the Pyramid and the Junior Companies, amending the terms of the lease, whereby the Pyramid and Junior Companies released unto the plaintiff 280 acres of land covered by the original lease, the Pyramid Company retaining 160 acres and the Junior Company 80 acres. The agreement provides that the original lease "shall remain valid and subsisting so long as oil or gas, or either of them, is produced from any part of said land".

The description of the respective acreage retained by the two companies immediately follows the above clause.

Prior to entering into the supplemental agreement, modifying the original lease, there was certain correspondence between the plaintiff's attorney and the defendant's representative, in which the question presented for decision here was raised. On July 20, 1933 the plaintiff's attorney wrote the defendant's representative as...