Plumber v. Southern Oil Co.

• Decision Date: 03 October 1919
• Citation: 214 S.W. 896,185 Ky. 243
• Parties: PLUMBER v. SOUTHERN OIL CO.
• Court: Kentucky Court of Appeals

214 S.W. 896

185 Ky. 243

PLUMBER v. SOUTHERN OIL CO.

Court of Appeals of Kentucky.

October 3, 1919

Appeal from Circuit Court, Lee County.

Suit by H. M. Plumber against the Southern Oil Company. From a judgment dismissing his petition, plaintiff appeals. Affirmed.

B. G Williams, of Frankfort, and S. P. Stamper, of Beattyville for appellant.

Sam Hurst, of Beattyville, for appellee.

CARROLL C.J.

On April 21, 1916, Plumber, in consideration of $1 paid by C. W Sale & Co. leased to them the oil and gas privileges in a tract of land containing 160 acres "for the term of 10 years from date and as much longer thereafter as oil and gas is found thereon." It was further provided in the lease:

"First. Lessee agrees to drill a well upon said premises within one year from this date, or thereafter pay to lessors rentals as hereinafter provided until a well is completed or the property hereby granted is reconveyed to lessors.

Second. Should oil be found in paying quantities, the lessee agrees to deliver to the lessors free of charge into tanks or pipe lines one-eighth part or share of all crude oil produced or saved from said premises.

Third. Should gas be found in paying quantities, the lessee agrees to pay $100 each year for the product of each well while the same is being sold off the premises.

Second party agrees to complete a well on the premises within one year from the date hereof (unavoidable accidents and delaying excepted) unless the lessee thereafter pays a yearly rental of 10 cents per acre, payable quarterly in advance, until a well is completed, which payments for delay in completing well may be made direct to lessee or deposited to his credit in the People's Exchange Bank, Beattyville, Ky. which payments shall fully and completely extend this lease from time to time until a well is completed, and lessors agree to accept said payments of rentals when made, and to mail receipts for same to the lessee.

And it is further agreed that the lessee may at any time remove all his property and reconvey the premises hereby granted, which conveyance said lessors agree to accept, and thereupon this instrument shall become null and void, and the payments which shall have been made be held by the lessors as the full stipulated damages for nonfulfillment of the foregoing contract."

It appears that later Sale & Co. assigned this lease to the Southern Oil Company, and thereafter, on October 27, 1917, Plumber brought a suit in equity against the oil company, seeking to have the lease to Sale & Co., which had been assigned to it, canceled upon the ground that the consideration of $1 for the lease and the further consideration of 10 cents an acre was not a valuable consideration, and further that the Southern Oil Company, on the 21st day of October, 1917, violated its contract, in that it failed to pay the rental due on or before that date to him or the People's Exchange Bank.

To this petition the Southern Oil Company filed an answer, setting up that on April 27, 1917, it deposited in the People's Bank to the credit of Plumber the sum of $4, the rental due according to the terms of the lease, and this sum was received by the bank and placed to the credit of Plumber and accepted by him as rental for the first three months after the expiration of the one year during which it was permitted to hold the lease without rental; that on July 17, 1917, it again deposited in the People's Bank to the credit of Plumber the sum of $4, which sum was received by the bank and placed to his credit and accepted by him as rental for the second three months after the expiration of the year in which it was permitted to hold the land without rental; that on October 22, 1917, it again deposited in the People's Bank to the credit of Plumber the sum of $4, which sum was received by the bank and by it placed to the credit of Plumber as rental for the third three months after the expiration of the year in which it was permitted to hold the land without rental; that the reason it did not pay this last rental sum on the 21st day of October, 1917, according to the terms of the lease was because that day was Sunday.

For reply to this Plumber denied that the People's Bank was designated in the lease as his agent to collect, receive, or hold the rentals named in the lease, or that on October 22, 1917, the Southern Oil Company deposited in the bank to his credit the sum of $4 as rental due under the lease, or that said sum was accepted or received by the bank and placed to his credit on that date.

It will be observed that Plumber admits the payment and receipt by him of the stipulated rental paid on April 26, 1917, and July 17, 1917, and only denies the payment or receipt by him of the rental due on August 21, 1917. In...