Long v. Magnolia Petroleum Co.

Citation166 Neb. 410,89 N.W.2d 245
Decision Date11 April 1958
Docket NumberNo. 34223,34223
PartiesElla LONG et al., Appellants, v. MAGNOLIA PETROLEUM COMPANY, Appellee.
CourtSupreme Court of Nebraska

Syllabus by the Court.

1. In a law action a party is entitled to a jury trial as a matter or right.

2. The essential character of the cause of action and the remedy or relief it seeks, as shown by the allegations of the petition, determine whether a particular action is one at law or in equity, unaffected by the conclusions of the pleader or what the pleader calls it, or the prayer for relief.

3. The purpose of a pretrial conference is to simplify the issues; amend the pleadings, when necessary; and avoid unnecessary proof of facts at the trial.

4. The participants in a pretrial conference must adhere to the spirit of that procedure and are held to have waived questions not there presented.

5. Modification of a pretrial order may be had at the trial to prevent manifest injustice, but the modification should be by direction and not by indirection. That is, modification must be attended by a degree of directness and formality such as is appropriate to a court order of such magnitude that from the time of its entry it controls the subsequent course of the action.

6. The subsequent course of an action is controlled by the agreements made at pretrial conference so long as they remain unmodified and that would be true on appeal.

7. Where there is a question as to the meaning of a contract, it is to be construed most strongly against the party preparing it.

8. When a contract is optional in respect to one party, it is to be construed strictly in favor of the party that is bound and against the one who is not bound.

9. In construing a written instrument for the purpose of ascertaining the intention of the parties, resort must be had to the instrument as a whole and, if possible, effect must be given to every party thereof.

10. In construing a writing it is the duty of the court to give to words used their ordinary and popularly accepted meaning in the absence of explanation or qualification.

11. A written contract expressed by clear and unambiguous language is not subject to interpretation or construction.

12. Courts are not at liberty to rewrite the contract made by the parties, nor should the courts add language to that used by the parties and thus change the plain expressed intention of the parties as set out in the contract.

13. An oil and gas lease containing the 'unless' clause confers an optional right upon the lessee, and should be strictly construed in favor of the lessor and against the lessee, and time is of the essence of the contract. A failure on the part of the lessee to commence the drilling of a well or to pay the rental as stipulated automatically terminates the lease contract.

14. Such a delay rental clause is a special limitation, time is of the essence of the contract, and failure of the lessee or his assigns to tender or pay rental within the specified time automatically terminates the lease without any affirmative action by the lessor, or anyone else, for that purpose.

15. Forfeitures are looked upon by courts with ill favor and will be enforced only when the strict letter of the contract requires it.

16. When a lease terminates by its own terms the equitable rule as to relieving against forfeitures is not applicable thereto.

17. The general test of production in paying quantities is whether it is reasonably possible to market or use oil producible at date of completion of the well and thereafter with some pecuniary profit, excluding from consideration expenses and liabilities incurred in bringing the well to completion.

18. When there is nothing in an oil lease providing for a forfeiture or termination thereof for failure of the lessee to produce oil and gas in paying quantities during the primary term of the lease, the failure of lessee to produce oil or gas in paying quantities during such term will not, by itself, result in a defeasance ipso facto. To hold otherwise would constitute a writing of provisions into the lease which are not contained therein. This we cannot do.

Halcomb, O'Brien, Knapp & Everson, Kimball, for appellants.

Wright, Simmons & Harris, Scottsbluff, Jack E. Earnest, Charles B. Wallace, R. T. Wilkinson, Jr., Frank C. Bolton, Jr., Dallas, Tex., for appellee.

Heard before CARTER, MESSMORE, YEAGER, CHAPPELL, WENKE and BOSLAUGH, JJ.

WENKE, Justice.

This is an appeal from the district court for Kimball County. It involves an action initiated therein on December 16, 1955, by Ella Long, widow, and her five children to obtain the release of an oil and gas lease on record in Kimball County which had been entered into by them with the Magnolia Petroleum Company. The trial court dismissed the petition of plaintiffs. Plaintiffs thereupon filed a motion for new trial and, from the overruling thereof, took this appeal. We shall herein refer to the appellants as lessors and to appellee as lessee.

On September 11, 1950, the lessors entered into the oil and gas lease with lessee, a Texas corporation authorized to do business in the State of Nebraska. The lease covered approximately 1,280 acres of land in Kimball County. It was recorded on December 14, 1950, in Book 4, Oil and Gas Records of Kimball County, pages 391-393, in the office of the county clerk of Kimball County. The statutory procedural steps required by sections 57-201 to 57-204, R.S.Supp., 1955, were complied with by the parties to the lease, which procedures raised the issue of whether or not the lease had become 'forfeited' (terminated). This action was thereupon instituted by the lessors under the pursuant to the authority of section 57-205, R.R.S.1943.

The basis for the action is the claim that the lease, as to approximately 1,160 acres covered thereby, had terminated because the lessee had failed to pay the (delay) rental due thereunder as of September 11, 1955. In this respect we said in Valentine Oil Co. v. Powers, 157 Neb. 71, 59 N.W.2d 150, 160: '* * * the responsibility of properly construing the lease and making timely payment or tender of delay rentals is imposed upon the lessee or his assignee, * * *.' One hundred twenty acres of the land covered by the lease was farmed out by lessee to the Sunbeam Oil Company and is not involved in this action as the lessors admit that the Sunbeam Oil Company paid the rental thereon which they claim was due under the terms of the lease on September 11, 1955.

The lessee, within the time provided for that purpose by section 57-204, R.S.Supp., 1955, notified the county clerk, ex officio register of deeds of Kimball County, in writing that the 'lease has not been forfeited' and that it claimed the lease to be in full force and effect. Under this situation this section of the statute provides: '* * * the owner of the land shall be entitled to the remedies now provided by law for the cancellation of such disputed lease.' The statute so providing is section 57-205, R.R.S.1943, and it provides that: 'Should the owner of such lease neglect or refuse to execute a surrender as provided in section 57-201, then the owner of the leased premises may sue in any court of competent jurisdiction to obtain such surrender, and he may also recover in such action of the lessee, his successors or assigns, the sum of one hundred dollars as damages, and all costs, together with a reasonable attorney's fee for preparing and prosecuting the suit, and any additional damages that the evidence in the case will warrant. In all such actions, writs of attachment may issue as in other cases.'

Lessors asked for but were refused a jury trial, the matter being tried to the court. They now contend such refusal was prejudicial error, claiming the present action is a law action. It will be noted that the Legislature, in section 57-204, R.S.Supp., 1955, referred to such action as one for the 'cancellation of such disputed lease.'

We said in Yeiser v. Broadwell, 80 Neb. 718, 115 N.W. 293, 294, that: 'In a law action a party is entitled to a jury trial as a matter of right. Section 6, art. I, Const. Lett v. Hammond, 59 Neb. 339, 80 N.W. 1042 * * *.' See, also, Gandy v. Wiltse, 79 Neb. 280, 112 N.W. 569.

And in In re Guardianship of Warner, 137 Neb. 25, 288 N.W. 39, 44, we said: '* * * section 6, art. I of our Constitution, provides: 'The right of trial by jury shall remain inviolate,' etc. We are committed to the view that this provision does not create or extend, but merely operates to preserve, the right of jury trial as it existed prior to the adoption of our Constitution of 1875. In other words, it may not be curtailed.'

However, as stated in Mills v. Heckendorn, 135 Neb. 294, 281 N.W. 49: 'The essential character of the cause of action, or the remedy or relief it seeks, as shown by the allegations of the complaint, determine whether a particular action is one at law or in equity, unaffected by the conclusions of the pleader or what the pleader calls it, or the prayer for relief.'

Section 25-21,112 R.R.S.1943, provides: 'Action to quiet title; scope of relief. An action may be brought and prosecuted to final decree, judgment or order, by any person or persons, whether in actual possession or not, claiming title to, or an estate in real estate against any person or persons who claim, or apparently have an adverse estate or interest therein, for the purpose of determining such estate or interest, canceling unenforceable liens, or claims against, or which appear to be against said real estate, and quieting the title to real estate.'

Section 25-21,120, R.R.S.1943, provides: 'Action to quiet title; trial; appeal. The court shall try such cause in like manner as other equitable actions and shall enter therein such orders and decrees as the parties may be entitled to. Appeals from final orders may be had as in other actions.'

We think the essential character of the relief sought by the lessors is a surrender (cancellati...

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