Rader v. Shaffer

• Decision Date: 06 February 1920
• Citation: 186 Ky. 802,218 S.W. 292
• Parties: RADER ET AL. v. SHAFFER.
• Court: Kentucky Court of Appeals

218 S.W. 292

186 Ky. 802

RADER ET AL. v. SHAFFER.

Court of Appeals of Kentucky.

February 6, 1920

Appeal from Circuit Court, Jackson County.

Suit by H. S. Shaffer against Richard Rader and others. Judgment for plaintiff, and defendants appeal. Reversed and remanded, with directions.

J. R Llewellyn, of McKee, for appellants.

C. C Williams, of Mt. Vernon, for appellee.

THOMAS J.

On July 1, 1916, Richard Rader and wife executed and delivered to T G. Gay, T. J. Scrivner, and Earl Scrivner an oil and gas lease, by which they granted, demised, and let unto the lessees all of the oil and gas in and under a certain described tract of land, with the usual surface privileges. The term of the lease was five years and as much longer thereafter as oil and gas were found on the land. The consideration was $1, one-eighth of the oil, and $100 for the produce of each gas well. The lessees were to drill a well upon the premises within one year, or thereafter pay quarterly in advance an annual rental of 10 cents per acre until a well was drilled. The lease was not recorded until January 27, 1917.

On November 27, 1916, Richard Rader and wife executed and delivered a second lease on the same property to H. S Shaffer. The term of the lease was 10 years, and as long thereafter as oil and gas, or either of them, were produced from the land. The consideration was $1, cash in hand paid, a royalty of one-sixteenth of the oil, $100 each year for the gas produced from each gas well, and $10 per year for the gas produced from any oil well during the time the gas should be used. It further appears from parol evidence that the lessee agreed to pay Rader the sum of $200 for the purpose of perfecting his title. if no well was completed on or before November 27, 1917, the lease should terminate unless the lessee paid the sum of $12.50, which should operate as a rental, and the privilege of deferring the completion of the well for six months. This lease was recorded on January 25, 1917.

On January 22, 1917, Richard Rader and wife executed and delivered a third oil and gas lease on the same property to Arthur Murphey, William Johnson, and Bert Richardson, upon substantially the same terms as the lease to Gay and others. This lease was ordered of record on February 19, 1917.

On June 11, 1917, Gay and the Scrivners assigned and transferred their lease to V. M. Gaines, A. J. G. Wells, Clyde Gaines, H. E. Hay, and A. E. Perry, and on the same day, Murphey, Johnson, and Richardson assigned their lease to the same parties. The consideration for each assignment was $500 cash and other good and valuable considerations.

H. S Shaffer brought this suit against Richard Rader and others, to cancel the lease of July 1, 1916, to Gay and the Scrivners, and also the lease of January 22, 1917, to Murphey and others, and to have his lease adjudged the superior lease on the property. Subsequently V. M. Gaines, A. J. G. Wells, Clyde Gaines, H. E. Hay, and A. E. Perry, the assignees of the Gay lease and the Murphey lease, were made parties defendant, and the same relief asked against them. It was contended by plaintiff that he was a bona fide purchaser for value without notice of the prior lease, while the defendants denied his contention, and also pleaded that Rader...