Rhodes v. The Mound City Gas

• Decision Date: 10 November 1909
• Docket Number: 16,168
• Parties: A. B. RHODES v. THE MOUND CITY GAS, COAL AND OIL COMPANY et al
• Court: Kansas Supreme Court

104 P. 851

80 Kan. 762

A. B. RHODES v. THE MOUND CITY GAS, COAL AND OIL COMPANY et al

No. 16,168

Supreme Court of Kansas

November 10, 1909

October 9, 1909.

Decided July, 1909.

Error from Linn district court; WALTER L. SIMONS, judge. Opinion filed October 9, 1909. Affirmed. Opinion denying a petition for a rehearing filed November 10, 1909.

Judgment affirmed. Rehearing denied.

SYLLABUS

SYLLABUS BY THE COURT.

1. MINERAL LEASES--Assignment--Description of Land Covered by Leases. An assignment of mineral leases covering real estate "immediately surrounding" Mound City, Kan was properly interpreted by the district court to include a lease of land situated a half mile distant from the town site.

2. MINERAL LEASES--Covenant to Drill Well or Make Annual Payments--Time of Payment. In the absence of terms indicating a contrary intention a covenant in a gas-and-oil lease to drill a well on the leased premises within two years or thereafter to pay $ 80 annually until a well is drilled does not require the annual payments to be made in advance, and the covenant is performed by a single payment of the entire sum at any time before the end of the year for which it is made.

James D. Snoddy, for the plaintiff in error.

James W. Reid, and John J. Jones, for the defendants in error.

OPINION

BURCH, J.:

The plaintiff brought suit to restrain the defendants from interfering with his possession, use and enjoyment of a gas-well to which he claimed the paramount right. The court found the facts and determined the law in favor of the defendants, and the plaintiff prosecutes error.

The title of the defendants rests upon a mineral lease given by the owner of the land on which the well is situated, Henry Carbon, to one Robert Fleming, on June 18, 1902. The defendants claim this lease was duly assigned to them and is still in force, unfortified. If this be true the judgment of the district court is correct. The claimed assignment was effected, if at all, by a written instrument dated October 15, 1903, in which Fleming assigned and transferred interests described as follows:

"All my right, title, claim and interest in and to one certain franchise granted to the undersigned on the 3d day of March, 1902, by the city of Mound City, Kan., and being Ordinances Nos. 153 and 154 of said city, and all the gas-pipes and gas-mains and fixtures not hereinafter reserved, and all my right, title, claim and interest in and to all the oil, gas, coal and other mineral leases of all kinds and descriptions belonging to said undersigned owner, or which was taken in undersigned's name, and which said leases and franchises cover real estate situated in and immediately surrounding said Mound City, Kan., and this conveyance is intended to cover and convey all the said leases and franchises of the undersigned owner or which may hereafter be taken in my name."

The Carbon land is a half mile distant from Mound City, and the plaintiff argues that the terms of the assignment exclude it because the word "immediately" forbids the existence of intervening space. This interpretation involves more of purism than the discursive phraseology of the context seems to require. Like many other absolute expressions the one under discussion is popularly used with less strictness than the literal signification requires (Cent. Dic.; 21 Cyc. 1733), and a fair consideration of the entire instrument leads to the conclusion that the parties intended the assignment to embrace leases of land lying close about Mound City, although not in actual contact with the town site. If a suspicion of ambiguity in the terms of the writing be admitted it vanishes in the light of the situation, relations and purposes of the parties, and particularly in the light of the evidence showing their subsequent conduct with reference to the Carbon lease itself. This evidence need not be recounted here. The district court was clearly justified in holding that an assignment was made as the defendants claim.

The lease granted and conveyed all the coal, oil and gas in and under the premises described, together with the right to enter, drill and operate for and remove the substances named, on the following, among other, conditions:

"(1) Second party agrees to drill a well upon said premises within two years from this date or thereafter pay to first party eighty ($80) dollars annually until said well is drilled, or this lease shall be void.

"(3) Should gas be found, second party agrees to pay to first party fifty dollars annually for every well from which gas is used off the premises.

"(8) A deposit to the credit of the lessor in Farmers' and Merchants' Bank, Mound City, Kan., to the account of any of the money payments herein provided for, shall be a payment under the terms of this lease.

"(9) If no well shall be drilled upon said premises within ten years from this date, second party agrees to reconvey, and thereupon this instrument shall be null and void."

No well has yet been drilled. On April 24, 1905, a tender of $ 80 was made to the lessor according to the terms of the first condition of the lease, and was refused. On June 16, 1905, less than three years from the date of the lease, the sum of $ 80 was deposited to the credit of the lessor in the Farmers' and Merchants' Bank of Mound City, according to the terms of the eighth condition. The plaintiff contends that if no well were drilled the lease became void at the end of two years, unless $ 80 were paid in advance to keep it alive for another year.

The lease in question is identical in legal effect with the one considered in Rose v. Lanyon, 68 Kan. 126, 74 P 625. Diligence in sinking a well was not a vital feature of the contract. The lessee might drill a well at any time within two years, or he might suffer two years to lapse without doing anything and then thereafter pay $ 80 annually until he saw fit to drill a well, the latter alternative being limited by the ninth condition terminating the lease absolutely at the end of ten years if no well should then be in...