Raydure v. Lindley
| Decision Date | 02 April 1918 |
| Docket Number | 3069.,3067 |
| Parties | RAYDURE v. LINDLEY et al. TIPTON v. SAME. |
| Court | U.S. Court of Appeals — Sixth Circuit |
F. A Baldwin, of Bowling Green, Ohio, Hugh Riddell, of Irvine Ky., and Ed. C. O'Rear, of Frankfort, Ky., for appellants.
A. R Burnam, Jr., of Richmond, Ky., O. B. Harris, of Sullivan Ind., and R. W. Smith, of Irvine, Ky., for appellees.
Before KNAPPEN, MACK, and DENISON, Circuit Judges.
The facts in this case are fully set forth in the opinion of Judge Cochran (D.C.) 239 F. 928. We add thereto but one additional fact; that, while the certificates of the record of the Raydure leases postdated those of appellees, Raydure's leases were the first to be lodged for record. The evidence establishes, however, that Raydure had actual knowledge of the Huntsman leases when the leases to him were executed.
1. We concur in Judge Cochran's conclusion on the principal legal question before us, that in Kentucky an oil and gas lease, granted in consideration of $1 actually paid, under which the lessee covenants to complete a well within one year or to pay 10 cents per acre yearly in advance for each additional year that such completion is delayed, and further covenants to pay to the lessor one-eighth of all oil produced, is not invalid during the first year or within the reasonable time during which an implied covenant to commence operations under penalty of forfeiture may be enforced, either by reason of the smallness of the consideration or the reservation of the right of the lessee on payment of $1 to surrender the lease for cancellation.
His able and exhaustive exposition of the reasons therefor, and his critical analysis of the cases in Kentucky and elsewhere bearing thereon, render any further discussion superfluous. We add only that the very recent opinion in Dinsmoor v. Combs, 177 Ky. 740, 198 S.W. 58, does not touch the questions before us.
2. Judge Cochran's opinion on questions of facts was oral it suffices to say that we concur in his conclusions, based on an examination of the witnesses in open court, that the provision in appellees' lease from Tipton for a royalty of 8 per cent. as printed in the form lease, instead of one-eighth of the oil produced, as verbally agreed upon, was due, not to any fraud, but to a mutual mistake of fact based upon Huntsman's honest belief that the provisions were equivalent, and that reformation of the...
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