Rogers v. Magnolia Oil & Gas Company
| Decision Date | 04 December 1922 |
| Docket Number | 16 |
| Citation | 245 S.W. 802,156 Ark. 103 |
| Parties | ROGERS v. MAGNOLIA OIL & GAS COMPANY. CRAIN v. MAGNOLIA OIL GAS COMPANY |
| Court | Arkansas Supreme Court |
Appeal from Columbia Chancery Court; J. Y. Stevens, Chancellor affirmed.
Decree affirmed.
Joe Joiner, for appellant.
The lease is void for uncertainty in description. 30 Ark. 657; 3 Ark. 18.
Appellee had knowledge that a part of the land had been sold to J. G and M. A. Rogers without a reservation of rents or royalties yet continued to pay rentals to Jno. D. Rogers. The purchasers were entitled to the rentals on their land, but no tender or payment of same was made to them. 103 Ark. 175. 1 Thornton on Oil and Gas, p. 404. Such rentals must be paid in advance, else there is a forfeiture. 225 S.W. 45. The lease is unilateral and void, as no consideration is provided for a surrender of the lease, and a release from existing liability. See 234 S.W. 501; 214 S.W. 33. See note in 3 A. L R. 352.
McKay & Smith, for appellee.
A mutual mistake was made in omitting the State and county from the lease, and such mistakes may be reformed as to the parties to the contract. However the recital in the lease "under and by virtue of the homestead and redemption laws of the State of Arkansas" fixes the State. The description by section, township and range is sufficient to show that Columbia County was intended and could not be any other county in Arkansas. See 35 Ark. 470. The lease is not unilateral, because no payment is provided for surrender. The consideration paid for the lease extends to the whole contract and was sufficient. 145 Ark. 310; 237 U.S. 101; 3 A L. R. 378.
These two cases are separate and distinct, but, having been submitted at the same time and involving the same principal question, we will dispose of both of them in one opinion. They involve the validity of oil and gas leases, identical in form and substance, executed by the respective appellants.
In the Rogers case the lease was executed by appellant John D. Rogers, and he later conveyed fifty acres of the leased lands to his coappellants, M. A. Rogers and J. G. Rogers, and it is contended that, by reason of the fact that the rentals were not paid in accordance with the terms of the contract, there was a forfeiture by appellee of all of its rights.
In the Crain case the lease was executed by D. B. White and his wife, the then owners, to appellee, and the lessors subsequently sold and conveyed the land to appellant Crain, and it is contended that there was a forfeiture by reason of failure to pay rentals.
The controversy with regard to the payment or rentals relates entirely to questions of fact, and is determined upon the weight of the evidence.
In the Rogers case the evidence justified the finding that appellants, M. A. Rogers and J. G. Rogers, were present at the time of the execution of the lease by John D. Rogers, there having been a previous executory contract on the part of the latter to convey the land to the former, who expressly agreed with appellee's agent that John D. Rogers should execute the lease in his own name and collect the rentals therefor. The rentals were deposited to the credit of John D. Rogers, in accordance with the agreement, and the subsequent conveyance of the land to M. A. Rogers and J. G. Rogers did not constitute a revocation of the former express agreement that John D. Rogers should be authorized to collect the rentals on their part of the land.
In the Crain case the testimony also sustains the finding that there was an express agreement by Crain that the rental sums should be deposited in a certain bank, and that this agreement was complied with by appellee's agent.
It is true that the quarterly installment of $ 5, due December 13, 1920, was not paid to the bank until January 18, 1921, but this action was commenced prior to the due date, and was still pending. The institution of the action to cancel the lease was a repudiation of the continued existence of the contract, and was tantamount to a refusal in advance to accept payment of the installment. Under those circumstances the lessee was not bound to tender payment on or before maturity in order to avoid a forfeiture, for it would have been fruitless to make a tender of payment which had already, in effect, been refused. The subsequent payment of the amount to the bank during the pendency of the action was sufficient.
It is also contended in the Rogers case that the lease is void on account of insufficient description of the lands. There is no reference made, in the words of description or elsewhere in the contract, to the county and State where the lands are situated, but they are described by section and township subdivisions in accordance with the public survey. The courts take notice of the public surveys and of county lines, and we therefore are advised of the location of this land in Columbia County, and the description was sufficient.
This brings us to a consideration of the principal question in the cases, which turns upon the validity of the leases. It is in the ordinary form of such leases, and provides, in substance for the lease of the lands in question to the lessee for the purpose of mining and drilling for coal, oil, gas or other minerals. The contract recited that it was executed "in consideration of the sum of $ 1" paid by the lessee, "and the further consideration hereinafter mentioned." It provides that, if oil be discovered and produced, the lessor shall receive one-eighth thereof; that, if coal or other ore is produced, the lessor shall receive one-eighth of the market value, and that, if gas or other minerals should be produced, the lessor shall be paid the sum of $ 100 for all of the product during each year. There are other stipulations with respect to drilling within a certain distance of buildings, and also with regard to the laying of pipe lines. There is a clause which provides that if operations for drilling or mining be not commenced "and prosecuted with due diligence within one year from...
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