Gaunt v. Alabama Bound Oil & Gas Co., Inc.

• Decision Date: 30 May 1922
• Docket Number: 5897.,5893
• Citation: 281 F. 653
• Parties: GAUNT v. ALABAMA BOUND OIL & GAS CO., Inc., et al. ALABAMA BOUND OIL & GAS CO., Inc., v. GAUNT.
• Court: U.S. Court of Appeals — Eighth Circuit

281 F. 653

GAUNT v. ALABAMA BOUND OIL & GAS CO., Inc., et al.

ALABAMA BOUND OIL & GAS CO., Inc., v. GAUNT.

Nos. 5893, 5897.

United States Court of Appeals, Eighth Circuit.

May 30, 1922

John Embry, of Oklahoma City, Okl., and Andrew W. Little, of Cushing, Okl. (Embry, Johnson & Kidd, of Oklahoma City, Okl on the brief), for appellant in No. 5893 and appellee in No 5897.

Everett C. Mead and Robert R. Burns, both of Tulsa, Okl. (George T Brown, of Tulsa, Okl., on the brief), for appellees in No 5893 and appellant in No. 5897.

Before STONE, Circuit Judge, and TRIEBER and MUNGER, District Judges.

MUNGER District Judge.

This is an appeal from a decree confirming the validity of an oil and gas lease and enjoining the appellant from interfering with operations under the terms of the lease. The lease had been executed by Ida Ropers, as owner of a tract of land in Payne county, Okl., to C. B. Shaffer, as lessee, and was duly recorded. By a series of assignments the lessee's interest was conveyed to a corporation called the Alabama Bound Oil & Gas Company, hereafter called the appellee. Ida Ropers died after the execution of the lease, and as the result of a partition suit between her heirs the land was sold to appellant. The term of the lease was for three years from February 27, 1917, and as much longer thereafter as oil or gas was found in paying quantities. The lessee covenanted to begin a well on the land on February 27, 1917 or thereafter to pay the lessor a yearly rental of $100 payable quarterly in advance, until the well was commenced; the lease to continue for the term if such payments were made, but to terminate if the payments were not made. A further covenant of the lease reads as follows:

'It is further agreed that if suit be instituted affecting above described premises, or adverse to the interests of the lessee hereunder, that thereupon the time for either the commencement or completion of a well, or for the payments of rental hereunder shall be extended from date of filing of such suit until final termination thereof, and the rentals or obligations accruing during said litigation shall not be chargeable against lessee.'

The appellant claimed that there was a default in the payment of the rental for the period of the lease beginning February 27, 1919, and when the appellee on November 15 following attempted to drill a well on the land, he threatened violence in case of continuance of the effort and served a notice on appellee that the term was at an end and a warning to stay off of the land. This suit was then instituted. and a temporary injunction was given to appellee against the appellant's interference. Under its protection appellee continued drilling operations and brought in a 75-barrel well on August 24, 1920. The appellant claims that appellee failed to show that it was the owner of the lease, because of some errors in recitals in some of the assignments; but the descriptions of the lease conveyed were otherwise sufficiently identified in the assignments to sustain the portion of the decree granting reformation and the finding of title to the lease in appellee.

The appellant claims that the term of the lease had come to an end because of nonpayment of rent by the lessee for the period beginning February 27, 1919. The lessee on January 11, 1919, mailed a letter to Ida Ropers, the original lessor, inclosing a check for the amount of the rental for the ensuing year. This letter and the check were returned to the lessee, with the information that Mrs. Ropers was dead and that the land had been sold to the appellant. The lessee then wrote to appellant, stating the fact of the sending of the check to Ida Ropers and of its return, and offering to send a check to appellant, if he was the owner of the land. Appellant answered that he had bought the land without knowledge of the lease, and asked for a copy of it and of the date of its recording, and offered to advise the lessee where a deposit of the rental money could be made, if he found a valid lease was in force. The lessee replied, giving details about the lease and of its record, and inclosed a form of bank check in payment of the rental for the year. The check was dated February 12, 1919, was drawn on a bank at Tulsa, Okl., was made payable to appellant, stated that it was in payment of the advance rental, and was signed by the lessee as follows: 'Ramona Oil & Gas Co., by . . . . ' There was evidence admitted showing that the lessee had sufficient funds in the bank to meet this check, that the bank would have paid the check if it had been presented in the condition that it was, and that, if the check had been returned to the lessee, it would have been signed by its proper officer. The appellant made no acknowledgment of the letter or receipt of the check, but he retained the check in his possession, without making any endeavor to collect it, and without making complaint of its form, until the following November. The appellant asserts that the check in the form in which it was sent was not a sufficient tender of the amount due for rental. The bank on which this check was drawn was willing to pay, and had the legal right to pay, this check in the form in which it was drawn. No written order was necessary to authorize the bank to make payment from the funds of the lessee, provided the depositor had made an order for the payment that the bank was willing to honor. Watts v. Christie, 11 Breav. 546, 552; McEwen v. Davis, 39 Ind. 109, 111; Ellis v. First Nat.Bank, 22 R.I. 565, 572, 48 A. 936; Rice v. Bank of Camas Prairie, 5 Idaho, 39, 43, 47 P. 856; Neff v. Greene County Nat. Bank, 89 Mo. 581, 585, 1 S.W. 747; First Nat. Bank v. Hall, 119 Ala. 64, 68, 24 So. 526; Whitsett v. Peoples Nat. Bank, 138 Mo.App. 81, 91, 119 S.W. 999; 1 Morse on Banks and Banking (5th Ed.) Sec. 313.

It is ordinarily required of one to whom payment is offered in the form of a check that he make his objection at the time to the offer of a check, instead of an offer of payment in money. Gunby v. Ingram, 57 Wash. 97, 101, 106 P. 495, 36 L.R.A.(N.S.) 232; Shay v. Callanan, 124 Iowa, 370 374, 100 N.W. 55; Schaeffer v. Coldren, 237 Pa....