Yates v. American Republics Corporation

• Decision Date: 02 August 1947
• Docket Number: No. 3378.,3378.
• Citation: 163 F.2d 178
• Parties: YATES v. AMERICAN REPUBLICS CORPORATION.
• Court: U.S. Court of Appeals — Tenth Circuit

163 F.2d 178 (1947)

YATES v. AMERICAN REPUBLICS CORPORATION.

No. 3378.

Circuit Court of Appeals, Tenth Circuit.

August 2, 1947.

J. O. Seth, of Santa Fe, N. M. (Neil B. Watson, of Artesia, N. M., and Seth & Montgomery, of Santa Fe, N. M., on the brief), for appellant.

J. M. Hervey and Clarence Hinkle, both of Roswell, N. M. (Hervey, Dow & Hinkle, of Roswell, N. M., on the brief), for appellee.

Before BRATTON, HUXMAN, and MURRAH, Circuit Judges.

BRATTON, Circuit Judge.

American Republics Corporation owned an oil and gas lease covering certain land in Eddy County, New Mexico. The land was owned by the United States and the lease was executed pursuant to the provisions of the Mineral Leasing Act of February 25, 1920, as amended, 30 U.S.C.A. § 181 et seq. In October, 1941, American assigned the lease to S. P. Yates insofar as it related to part of the land. The assignment provided that Yates should commence the drilling of a well at a specified location within thirty days from the date of the assignment; that if the first well should be a commercial producer, a second well should be commenced on some portion of the land within ninety days after completion of the first; that upon like terms and conditions, a third and forth well should be drilled, with not more than ninety days elapsing between the completion of one well and the commencement of drilling of the next; that in the event any one of such wells was not a commercial producer, Yates should have the option of drilling additional wells or reassigning the undrilled area to American; and that within six months after completion of a non-producing well he should notify American whether he elected to drill additional wells or reassign the lease. The assignment also provided that in the event of a reassignment, Yates should retain the lease as to each forty-acre tract on which a well had been drilled. And it further provided that it was subject to the approval of the Secretary of the Interior, the approval to be obtained by Yates. Yates transmitted the assignment to the United States Land Office at Las Cruces, New Mexico; and it was filed there in November, 1941. From November, 1941, until July, 1945, it was under Departmental consideration; certain requirements were exacted as a condition to approval; and it was finally approved in July, 1945. Yates drilled one well on the land. It was completed in March, 1942, was not a commercial producer, was abandoned, no further drilling was undertaken, and the lease was not reassigned. In July, 1945, American made demand for the reassignment of the lease. Yates declined to reassign. American instituted this action for specific performance. A decree was sought requiring the reassignment of the lease, except as to the forty-acre tract on which the well had been drilled. By answer, Yates pleaded waiver, estoppel, and laches. Judgment was entered for American, and Yates appealed.

The major question presented is whether American effectively waived its right to the reassignment of the lease for failure of Yates to drill additional wells within the time specified in the assignment. Waiver is the voluntary relinquishment or surrender of some known right. Its constituent elements are an existing right; knowledge of such right; and an intention to relinquish or surrender it. And one in possession of a right of that kind may effectively waive it by acts, conduct, declarations, acquiescence, or silence where duty requires that he speak.

Waiver is of two kinds, express and implied. And to constitute implied waiver, there must be unequivocal and decisive acts or conduct of the party clearly evincing an intent to waive, or acts or conduct amounting to an estoppel on his part. Victor Products Corp. v. Yates-American Machine Co., 4 Cir., 54 F.2d 1062; Rosenthal v. New York Life Insurance Co., 8 Cir., 99 F.2d 578; Dougherty v. Thomas, 313 P. 287, 169 A. 219; Cure v. Midland Life Insurance Co., 109 Kan. 259, 198 P. 940; Surry v. Baker, 132 Wash. 188, 231 P. 791; Musgrave v. Equitable Life Assurance Society, 124 Kan. 804, 262 P. 571; Schwab v. Brotherhood of American Yeomen, 305 Mo. 148, 264 S.W. 690; State v. Shain, 334 Mo. 385, 66 S.W.2d 871.

An intention to relinquish or surrender some known right being the foundation of a waiver, the question whether a party against whom waiver is asserted intended by his acts and conduct to waive is ordinarily one of fact to be determined by the court or jury, as the case may be. McGrath v. Quinn, 218 Mass. 27, 105 N.E. 555; State v. Gardner, 32 Wash. 550, 73 P. 690, 98 Am.St.Rep. 858; Ketcham v. Oil Field Supply Co., 99 Okl. 201, 226 P. 93; Grippo v. Davis, 92 Conn. 693, 104 A. 165; Dougherty v. Thomas, supra; ...