Lovett v. Eastern Oil Company.

• Decision Date: 14 February 1911
• Citation: 68 W.Va. 667
• Court: West Virginia Supreme Court
• Parties: Lovett v. Eastern Oil Company.

68 W.Va. 667

Lovett

v.Eastern Oil Company.

Supreme Court of Appeals of West Virginia.

Submitted February 9, 1910.

Decided February 14, 1911.

1. Deeds Consideration.

One dollar recited in a deed for consideration is a sufficient valuable consideration.

2. Tender Sufficiency.

A tender is not ineffectual only because upon condition that a receipt shall be given, under facts in law entitling the party to such receipt as an evidence of payment.

3. Mines and Minerals Oil Leases Construction.

The oil lease in this case is not a mere option, without valuable consideration, constituting only an estate at will in the lessee, determinable at the will of the land owner without cause.

4. Principal and Agent Liability for Acts of Agent.

An oil lease provides that rentals may be paid to the credit of the lessor into a bank. The bank is the lessor's agent to receive the money, and the lessee is not responsible for the mode of entry to the lessor's credit or its disposition by the bank.

5. Payment Acts Constituting Deposit of Money in Bank.

An oil lease provides that rentals, may be paid in a bank to the credit of the lessor, and the lessee deposits the money in the bank accompanied by a blank receipt for the lessor to sign showing such payment, but without any requirement on the part of the oil company that it must be signed by the lessor as a condition precedent that the money shall go to the absolute credit of the lessor; such deposit is an effectual payment by the lessee, and the requirement by the bank that the lessor sign the receipt will not defeat the efficacy of such deposit.

6. Same Acts Constituting.

An oil lease provides that rentals may be paid into a bank to the credit of the lessor. If the lessee deposit the money accompanied by a receipt stating that the money is paid in full of rental for a certain year, there being no objection by the lessor to its contents, the fact that, a demand is made that the receipt be signed by the lessor before the money be entered on the bank books to his absolute credit, will not render the deposit ineffectual as a payment of the rental.

7. Equity Parties Bringing in Parties by Amendment.

When a person not a party to a suit in equity has an interest in its subject matter, though it do not appear in the record, but is shown by a deed or otherwise, the court may require him to be made a party by amended bill. There is no error in so doing.

Appeal from Circuit Court, Lewis County. Bill by James B. Lovett and wife against the Eastern Oil Company and others. Deere of dismissal and plaintiffs appeal.

Affirmed.

E. A. Brannon and Robert L. Bland, for appellants. 67. M. Fleming and Brannon & Stathers, for appellees.

Brannon, Judge:

In October, 1907, James B. Lovett and wife brought a chancery suit in the circuit court of Lewis county against Eastern Oil Company and West Virginia Central Gas Company to cancel a lease made by Lovett and wife to Eastern Oil Company dated 16th May, 1899, for oil and gas, assigned to West Virginia Central Gas Company, of a tract of land, and the court refused the relief asked and dismissed the bill, and Lovett and wife appeal to this Court.

The lessee did not take possession or do any work of development of oil or gas prior to the institution of this suit, but did. later enter and drill a gas well. On the 19th day of August, 1905, Lovett and wife made a writing, which was recorded in the office of the clerk of the county court, declaring that they repudiated the lease and declined to accept any further rental or payments under it, and declaring an absolute forfeiture thereof, not only on account of the default in the performance of its conditions, but also because the same was void for want of mutuality. The lease was for a term of ten years and for as much longer thereafter as oil or gas should be found in paying quantities. It contained provisions for the payment of a royalty of one eighth of the oil produced and one hundred dollars per year for each gas well. It provided that "rentals on this lease may be paid direct to first parties or deposited to their credit in the Citizens Bank of Weston." It contained also the following provisions: "It is further agreed, That the second party shall drill a well within three months from the date hereof, or thereafter pay the party of the first part Ninety dollars per annum rent in advance for said premises from the time fixed for the drilling of the well aforesaid until a well shall be drilled.

The lessee, his heirs or assigns may surrender this lease at any time upon notice to the first party of his intention so to do, and notice of such intention may be given by a failure on the part of the second party to pay the rent when due.

Upon notice so given this lease shall be null and void and the parties of the first part hereby waive all right of action for damages by reason thereof and all money which has been paid shall be in full for all damages.

The parties then shall mutually release each other from their covenants in this lease and from all rights, claims, moneys, or action due or to become due'' The oil company paid into the bank six rentals of $90 each, which Lovett received, and on the 10th day of August, 1905, the oil company paid into said bank $90 in advance for the year running from 16th August, 1905, to 16th August, 1906, and it paid into the bank three further rentals paying down to August 16, 1909, a few days before each installment was due. As stated Lovett accepted six yearly rentals paid in lieu of development; but he did not accept that rental paid in bank on the 10th of August, 1905, for the year ending 16th August, 1906, and he has not accepted any subsequent installment, and has declined to do so, claiming the right to annul and repudiate' the lease. He knew of these payments into bank. Lovett bases his claim to repudiate this lease on the theory that it is but a mere option which he could revoke at any time because of the failure of the lessee to develop oil and gas. He claims that as the lease gives the oil company right to surrender the lease at any time, he has the correlative right of cancellation. He claims that as the oil company had right to surrender the lease either expressly or by failure to pay the rental and be released from obligation, there is no mutuality of obligation, no consideration binding, and that he had right to declare the lease at an end. We are cited for this contention to the cases of Eclipse Oil Co. v. South Penn Oil Co., 47 W. Va. 84, and Trees v. Eclipse Oil Co., Id. 107. I dissented in both those cases, as will appear in 34 S. E. 932 and 934, though my dissent was omitted in the official State Report from negligence of some one connected with the publication. But this is not material. Those cases proceed upon

68 W. Va. the idea that there were no binding leases; that there was no obligation;, no promise on the part of the lessee to pay money or do anything, and a privilege to surrender the leases without payment of anything, at mere will; that they conferred only an estate at the will of the lessee, and that the etate being one at will it might be terminated by either party; that there was no consideration for the lease. Those cases do not control this case. Why? Reference to Judge Dent's opinion in Lowther Oil Co. v. Guffey, 52 W. Va. at page 91, will show the difference between the leases in those cases and the lease involved here. So will the opinions in Harness v. Eastern Oil Co., 49 W. Va. p. 250, and Pyle v. Henderson, 65 Id. p. 42. In the lease before us we find a valuable consideration paid, as it recites the payment of one dollar down. Will it be said that that small sum is not a sufficient consideration to support the lease? We said that it was sufficient, as consideration, to make the lease good in Lowther Oil Co. v. Guffey, supra. "The mere inadequacy of a consideration does not render it insufficient except as a circumstance bearing on the question of fraud or undue influence. A valuable consideration, however small and nominal, if given or stipulated for in good faith is, in the absence of fraud, sufficient to sustain a parol contract. Accordingly, a grantor who has been tendered one dollar as a consideration for his deed, can not have it set aside for want of consideration where it does not appear that he expected any other." 1 Beach, Modern Law of Contracts, § 5. Look back at hundreds of deeds through hundreds of years and you will find them stating one dollar as a valuable consideration. To say that such a consideration acknowledged under seal is not good would be to overthrow myriads of deeds. The parties have chosen to treat it as a sufficient consideration; they have contracted that it shall be such, and no court in the absence of fraud, can nullify their contract. The fact that it is so small a consideration will not render the lease a mere option. The fact that a valuable consideration was paid for such a lease differs this case from Eclipse Oil...