Hall v. McClesky

• Decision Date: 22 January 1921
• Docket Number: (No. 9431.)
• Citation: 228 S.W. 1004
• Parties: HALL et al. v. McCLESKY.
• Court: Texas Court of Appeals

228 S.W. 1004

HALL et al. v. McCLESKY.

(No. 9431.)

Court of Civil Appeals of Texas. Fort Worth.

January 22, 1921.

Rehearing Denied February 26, 1921.

Appeal from District Court, Wichita County; Edgar Scurry, Judge.

Suit by E. A. McClesky against E. W. Hall and another. Decree for plaintiff, and defendants appeal. Reversed and remanded.

Fitzgerald & Hatchitt, of Wichita Falls, for appellants.

Weeks, Morrow, Francis & King, of Wichita Falls, for appellee.

BUCK, J.

This suit was instituted on February 1, 1919, by E. A. McClesky, as plaintiff, against E. W. Hall and the Eleven Sands Oil & Gas Company, to cancel an oil and gas lease executed by plaintiff to defendant Hall, as trustee, on October 23, 1917, and the removal of the cloud cast thereby upon the title to 200 acres of land covered by the lease. The basis for this relief was that plaintiff and three others had executed community leases to Hall, by the terms of which the lessee was to drill a well to a depth of 2,000 feet, unless oil or gas was found in paying quantities at a lesser depth, upon some one of the four tracts, and within a mile of each of them, and after the completion of said well a well was to be started upon each tract within 60 days from the completion of the first well, or a rental was to be paid for the delay; that said first well, under the terms of the original lease, was to be begun within 90 days from the date of the same to wit, October 23, 1917, and that subsequently, to wit, on March 26, 1918, a written extension of said lease was executed by plaintiff, whereby the time for beginning a well was extended to April 23, 1918, but without changing the other provisions of the original lease; that the first well was drilled and completed on or about August 11, 1918, and thereafter the defendants did nothing toward carrying out the obligations of said lease, but abandoned same.

By their first amended original answer, the defendants, after admitting the execution of the lease and the extension thereof as pleaded by plaintiff, alleged that they had 270 days from April 23, 1918, to complete the first well, and then by the terms of the extension contract they had 60 days more in which to begin a well on plaintiff's land, and that before the expiration of said 60 days they had tendered the rentals to plaintiff, but that he had failed and refused to accept the same; and the defendants pleaded that they tendered the rentals due plaintiff under and by virtue of said original lease into court. The plaintiff, by supplemental petition, denied that the defendants had 60 days in which to begin a well on his land, after the 270 days stipulated in the original contract as a maximum time for completing the first well, but alleged that the first well was completed August 11, 1918, and that the defendants had, under their contract, only 60 days from the date of completion of the well.

The cause was tried before a jury, and the court, after giving a definition of the term "abandonment," as used in his charge, submitted only one issue of fact, to wit:

"Bearing in mind the definition of the term `abandonment' as hereinbefore given you, find whether or not the defendants abandoned the lease in controversy at any time before the filing of this suit."

The jury answered this issue in the affirmative. The court entered a judgment for plaintiff upon this verdict, and the defendants have appealed.

The lease by plaintiff to the defendants contains no forfeiture clause, and plaintiff relies entirely on the sufficiency of the proof to show abandonment by defendants of the land covered by the lease. That the rights of the lessee may be lost by abandonment is evident. This is practically the same thing as a breach of the implied covenant on the part of the lessee to use diligence in sinking a well. Abandonment is a question of intention, but this intention may be established by circumstantial evidence, such as the removal of machinery, quitting the premises, and other circumstances showing an intention to relinquish all rights and interest in the leased premises. Oil & Gas Rights, Morrison-De Soto, p. 110; Calhoon v. Neely, 201 Pa. 97, 50 Atl. 967. When the unsuccessful search for oil is abandoned, the inchoate title of the explorer for mineral is lost. Garrett v. South Penn Oil Co., 66 W. Va. 587, 66 S. E. 741; Eastern Oil Co. v. Coulehan, 65 W. Va. 531, 64 S. E. 836. Long delay is proof of abandonment, which will justify cancellation of the lease. Chandler v. French, 73 W. Va. 658, 81 S. E. 825, L. R. A. 1915B, 561; Acme Oil, etc., Co. v. Williams, 140 Cal. 681, 74 Pac. 296. The presence of a forfeiture clause is not necessary to allow of this result. Smith v. Root, 66 W. Va. 633, 66 S. E. 1005, 30 L. R. A. (N. S.) 176. Except in the case of a perfect legal title to a corporeal hereditament, every right or interest in, title to, or ownership of property may be lost by abandonment. This rule applies to mining rights and privileges. Aye v. Philadephia Co., 193 Pa. 451, 44 Atl. 555, 74 Am. St. Rep. 696; Wilmore Coal Co. v. Brown (C. C.) 147 Fed. 931, 943, affirmed in Brown v. Wilmore Coal Co., 153 Fed. 143, 92 C. C. A. 295; Derry v. Ross, 5 Colo. 295. An unexplained cessation of work would be sufficient proof of abandonment. Strange v. Hicks, 78 Okl. 1, 188 Pac. 347. The question of abandonment is one of fact for the jury. Bartley v. Phillips, 179 Pa. 175, 36 Atl. 217. But on the issue of abandonment a party may swear to his intentions in explanation of his acts. Bartley v. Phillips, supra.

The original lease between McClesky and Hall, of October 23, 1917, provided:

"This lease is made in connection with other leases, and part of the consideration is that a well is to be drilled within one mile from this tract, said drilling to be started within ninety (90) days, and the time of two hundred and seventy (270) days is given for completion, and after completion a well must be started on this tract within sixty (60) days, said first well to be drilled to a depth of two thousand (2,000) feet, unless oil or gas should be found at a lesser depth.

"The lessee agrees to begin operations for the drilling of a well upon the above-described premises * * * or thereafter pay to the lessor the sum of $4 per acre, per annum, payable quarterly in advance, until a well is commenced, or until the end of the three years hereof, as a rental and complete remuneration to lessors for delay. When a well is once begun, drilling thereof shall be prosecuted with due diligence until same is completed."

The extension agreement, dated March 26, 1918, provides that:

"I, E. A. McClesky, for and in consideration of the premises as hereinbefore set out, do hereby extend the time for beginning the drilling of a well on the hereinbefore described tract of land or an adjoining tract or tract within one mile of the said hereinbefore described land to April 23, 1918, and in the event that drilling has not started on said well by April 23, 1918, this lease to become null and void and agree that the time for the completion of said well shall be 270 (two hundred seventy) days from the beginning thereof. It is understood that no other terms or conditions of said original lease is in any manner changed by this extension."

The 270 days from April 23, 1918, did carry the further completion of the well to January 18, 1919; but the well was completed in August of 1918, either on August 11, as...