Monarch Gas Co. v. Roy
| Decision Date | 26 February 1918 |
| Docket Number | 3494. |
| Citation | 95 S.E. 789,81 W.Va. 723 |
| Parties | MONARCH GAS CO. v. ROY ET AL. |
| Court | West Virginia Supreme Court |
Submitted February 13, 1918.
Rehearing Denied May 9, 1918.
Syllabus by the Court.
Though ordinarily a married woman is not estopped by the mere disavowal of title to her separate real estate, yet, now that she may deal with it and enjoy the issues and profits derived from it as if she were single, she may be bound by estoppel in pais regarding contracts relating thereto.
And if she assure the owner, by assignment, of an oil and gas lease on land acquired by her after the date of the lease that rentals accruing and payable after title vested in her and before the lease was assigned had been paid so far as she knew, equity will not permit her to declare and enforce against the assignee a forfeiture due solely to the nonpayment of such rentals.
Refusal to accept a check for an amount less than the lease required to excuse operation on the land for the quarter then about to begin, when a check for the same amount for the same purpose within the next preceding quarter, though each amount was less than the lease required, was accepted the reduction being due to an alleged defect of title to part of the premises leased, does not warrant an immediate declaration of forfeiture by the lessor and the grant of a lease on the same land to another; and equity will relieve against such forfeiture and cancel the lease so executed.
Additional Syllabus by Editorial Staff.
Equity is the proper forum to adjudicate all issues arising between claimants under conflicting oil and gas leases executed by the same lessors, or those holding under them on the same tract of land.
Appeal from Circuit Court, Lincoln County.
Suit for injunction by the Monarch Gas Company against Orlando Roy and others. Decree for defendants, dismissing the bill, and plaintiff appeals. Decree reversed, cause reinstated, and decree for plaintiff.
Meek & Renshaw and Simms & Staker, all of Huntington, for appellant.
Maynard F. Stiles, of Charleston, for appellees.
On September 3, 1913, T. M. Bowles leased to J. L. Flack 160 acres of land in Lincoln county on which to drill and operate for petroleum, oil, and natural gas for a term of five years and as much longer as either of these products is found in paying quantities by explorations on the tract or the rental paid thereon. Bowles died November 15, 1915, and by will devised the tract to his sister, Mrs. Harriet Bowles, who now owns it. All the rights conferred on him by the lease Flack and his associates assigned to the Monarch Gas Company, a corporation, on March 28, 1916.
This is a controversy between the Monarch Gas Company, claiming under the assignment from Flack, and Orlando Roy, claiming under a lease made to him by Mrs. Bowles for the same purpose upon the same tract September 11, 1916, and involves a provision contained in the Flack lease, which, when properly interpreted and as the parties themselves construed it, as evidenced by their acts and conduct hereafter noted, required a well to be drilled on the land within the three months after the date of the lease to prolong its existence beyond that period. In other words, the failure to drill Before the expiration of the three months should terminate the rights granted and avoid and annul the lease contract. This avoidance and annulment, however, the lessee could, Before the expiration of that, prevent, and prolong the life of the lease each succeeding quarter or three-months period by paying to Bowles, or depositing to his credit in the Putman County Bank, $40 each quarter.
Neither Flack nor the Monarch Gas Company entered upon the tract at any time to exercise the authority conferred; but prior to the death of T. M. Bowles, and for the quarter beginning December 3, 1915, Flack promptly paid or deposited the money specified, Mrs. Bowles, devisee, receiving the first deposit made after the death of her brother. For the next succeeding quarter nothing was so paid or deposited, either by Flack who owned the lease until March 28th, the date of the assignment, or by the Monarch Gas Company, the assignee. Nor thereafter was there tendered or paid or deposited the exact sum required by the lease to effect its extension for any subsequent quarter until November 29, 1916, when four items two of $7.50 each, and two of $40 each, were deposited in the bank to her credit, none of which has she withdrawn, used, or recognized as properly belonging to her or subject to her control. But on May 3, 1916, the Monarch Gas Company did tender to her, and she accepted, a check for $32.50 to cover the quarter from June 3, to September 3, 1916. The reduction of the cash payment resulted from the representation of the agent of the company that an examination of the public records of the county disclosed a deficiency in the acreage of the tract due to some defect of title. Her version of the transaction is:
"I told him I would not take it [the check]; it was not for the full amount; the lease called for $40 every three months, and he said he had the land abstracted, and that was all that was due me; that he would be there in a short time to drill a well for me, but he never come."
This check, however, she did accept and collect, apparently without relying upon the alleged promise to drill promptly, and without further protesting the claim of the partial failure of title. There is no proof of such reliance, and she seems then to have recognized the justness of the reduction; at least, did not otherwise further demur to the tender, and accepted and appropriated the amount as compensation for delayed operation during the quarter beginning June 3, 1916.
Before the expiration of that quarter the Monarch Gas Company again tendered Mrs. Bowles another check for the same amount in lieu of drilling during the next quarterly period beginning September 3, 1916. This check she refused to accept and did not accept. Nor did the Monarch Gas Company cause the amount called for therein to be deposited to her credit until the thirteenth day after that period had begun to run. Acting upon the presumption of an intention to abandon the lease, she entered into the contract with the defendant Roy; and when he entered or was about to enter upon the land to drill, as so authorized, the Monarch Gas Company instituted this suit to enjoin him, his agents and employés, from exercising the rights conferred, and obtained a temporary restraining order, which, on final hearing upon the merits, the decree reviewed dissolved, and dismissed the bill.
What has been said reveals these outstanding and important facts Excepting the one due March 3, 1916, Flack paid promptly, and T. M. Bowles while living, and Mrs. Bowles after his death, accepted, the required quarterly payments of $40 each, whereby there was saved to Flack until March 3d the right to exercise the license granted by the lease; that the March, 1916, payment was not tendered to Mrs. Bowles for acceptance, or accepted by her, at any time, and was not deposited to her credit until November 29, 1916; that it remains in the bank subject to her order; that the Monarch Gas Company acquired only such rights as Flack possessed on March 28th, to defer the exercise of which the Monarch Gas Company tendered to her, and she accepted, $32.50 in lieu of $40 to extend the lease for the ensuing quarter, each of them apparently in good faith believing there was a proportional loss of acreage occasioned by some defect in title; that the Monarch Gas Company tendered to her, first in August and again in September, $32.50 to extend the lease for the quarter beginning September 3d, which sum, being twice refused by her, was deposited to her credit on the 16th, as was also on November...
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