Case ID: ohio-st_55/html/0161-01.html
Source: Caselaw Access Project
Author: {"author": "Burket, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Woodland Oil Company v. Crawford.
    
      Lease of land — For obtaining gas and oil — Constmiction of lease— Stipulations as to default — Assignment of lease — Liability of assignee.
    
    1. 0. granted, demised and let, by written instrument, a certain tract of land and all the oil and gas in or under the same, to U. and his assigns, for the purpose, and with the exclusive right, of drilling and operating the land for gas and oil for five years, and as much longer as oil or gas should be found thereon in paying quantities, upon the consideration of one dollar paid, and a promise to pay certain rentals for further delay if default should be made in drilling a well within one year, and which instrument had the following forfeiture clause: “And a failure on the part of U. to complete such well or wells as above specified, or instead thereof, to pay the rental as above provided, shall render this lease and agreementnull and void, together with all rights and claims', and not binding on either party, and not to be revived without the consent of both parties hereto, in writing. ’ ’ Default having been made in drilling, in an action to recover the promised rental, Held: — First—that such instrument is a lease of the land, oil and gas for the limited time and purpose expressed therein. Second — that the forfeiture is for the benefit of the lessor and at his option. Third- — that the promise to drill a well or pay rental cannot be discharged by a mere failure to perform the promise. Fourth — upon failure to drill the well, or instead thereof to pay the agreed rental, suchrentalmay be recovered by action as rental, and need not be sued for as unliquidated damages.
    2. U. assigned the lease to the oil company, and in such assignment stipulated that the oil company should have and hold the lease under the terms thereof, and under and subject to the rents and covenants therein reserved and contained, on part of the lessee to be paid, kept, done and performed, and the oil company accepted the assignment and received the lease thereunder. Held: — That thereby the oil company stepped into the shoes of XT., and assumed his obligations, and became liable for the rentals due under the lease.
    (Decided October 20, 1896.)
    Error to the Circuit Court of Monroe county.
    On the 23d day of March, 1889, Thomas J. Crawford, defendant in error, his wife joining to release dower, entered into a contract in the nature of an oil lease with one Cyrus Underwood, which lease, omitting the acknowledgement, is as follows:
    “This agreement, made the 23rd day of March, A. D. 1889, by and between Thomas J. Crawford and Mary A. Crawford, his wife, of the township of Perry, county of. Monroe, and state of Ohio, of the first part, and Cyrus Underwood of Jamestown, state of New York, the second part.
    “Witnesseth, that the said parties of the first part for and in consideration of one dollar to them in hand paid by the party of the second part, the receipt whereof is hereby acknowledged, and of the agreements hereinafter mentioned, have granted, demised and let unto the party of the second part, all the petroleum and gas in or under that certain tract of land hereinafter described and also all the said tract of land for the purpose and with the exclusive right of drilling and operating upon said premises for said petroleum and gas.
    “The said tract of land being situated in the township of Perry, county of Monroe and state of Ohio, and is bounded and described as follows, to-wit: North by lands of John T. Duvall and David G. Crawford; east by lands of Peter Eddy and David G. Crawford; south by lands of Chas. Biggie and Fanny Scales; west by lands of Fanny Scales and Wm. Robinson; containing one hundred and twenty-eight (128) acres, be the same more or less. Together with the right of way over said premises to the places of operating, the right to lay pipes to convey water, oil and gas, also to use water from said premises, and to remove any machinery or fixtures placed on said premises by the party of the second part.
    
      “To have and to hold the same unto the said party of the second part, his heirs and assigns for the term, and period of five years from the date hereof, and as much longer as oil or gas is found in paying quantities thereon.
    “In consideration thereof, the said party of the second part agrees to give or pay to the parties of the first part the full equal one-eighth part of the petroleum produced and saved by the party of the second part from the premises, and to deliver the same, free of expense into tanks or pipe lines to the first party’s credit. And should gas be found in any well in sufficient quantities to justify marketing the same, the party of the second part shall pay to the parties of the first part at the rate of two hundred ($200.00) dollars per annum for each of such wells so long as the gas shall be sold therefrom.
    “It is also agreed, that no wells shall be drilled within three hundred feet of the buildings now on the premises without the consent of both parties.
    ‘ ‘It is further agreed, that the party of the second part shall complete a test well in the township of Perry, county and state aforesaid, or within two (2) miles of the above described premises, within one year from the date hereof, or in default thereof, pay to the parties of the first part for further delay, a yearly rental of one hundred and twenty-eight dollars for the above described premises from the said time for completing the said test well until such well be completed, and in case oil is found in paying quantities in said test well, the party of the second part agrees to complete a well on the above described premises, within one year from the comple-. tionof said test well, or in default thereof, pay to the parties of the first part for further delay, a yearly rental of thirty-two ($32) dollars for the above described premises from the time set for completing a well thereon until such well shall be completed. The rentals, as they become due under this contract, shall be deposited to the credit of the parties of the first part in the Monroe Bank of Woods-field, Ohio, or paid direct to the said first parties. And a .failure on the part of the second party to complete such well or wells as above specified, or instead thereof, to pay the rental as above provided, shall render this lease and agreement null and void, together with all rights and claims, and not binding on either party, and not to be revived without the consent of both parties hereto, in writing.
    “The parties of the first part reserve a sufficiency of water for the use of the stock kept on the premises, and also for household use.
    “It is understood that all the conditions between the parties hereto shall extend and apply to their respective heirs, executors, administrators and assigns.
    ‘ ‘In witness whereof the said parties have hereunto set their hands and seals the day and year first above written.
    T. G. Crawford, (Seal.)
    Mary A. (her mark) Crawford, (Seal.)
    Cyrus Underwood, (Seal.)”
    Sealed and delivered in the presence of
    George Neff,
    D. Crawford.
    Six other parties entered into the same kind of contracts with Mr. Underwood as to lands owned by them, all of which contracts were duly recorded.
    
      Ón the 10th day of April, 1889," Mr Underwood made an assignment of said seven contracts to the Woodland Oil Company, and which assignment, with a description only of the lands of defendant in error, is as follows:
    “assignment op leases.”
    “Know all men by these presents that Cyrus Underwood, of Jamestown, New York, for and in consideration of the sum of one dollar to me in hand paid by Woodland Oil Company at and before the ensealing and delivery of these presents the receipt whereof is hereby acknowledged, hath granted, bargained, sold, assigned and transferred and by these presents doth grant, bargain, sell, assign and transfer unto the said Woodland Oil Company, its successors and assigns, all the whole of the grantees or lessees interest and estate of, in and to the following mentioned indentures of lease, grants and conveyances, and the lands and premises therein granted, leased and demised and intended so to be, situate in the county of Monroe and state of Ohio, to wit: Thomas J. Crawford and wife to C. Underwood, dated March 23, 1889, 128 acres in Perry township, recorded June 27, 1889, in book 4, page 22.
    “With the appurtenances together with the same interest of in and to all the tubing, easing, build-ding’s, improvements, rigs, machinery, boilers, engines, oil and gas well supplies, connections and fixtures upon the said premises or any part thereof and to the grantees or lessees interest be-' longing and appertaining’. And also all my estate, rig’hts title, interest, claim and demand whatsoever of, in, to and out of the said leases, grants or conveyances, lands and premises and other property hereby conveyed or intended so to be. To have and to hold the said interests in the said leases, grants, conveyances, lands and premises unto the said Woodland Oil Company, its successors and assigms, to the use of the said Woodland Oil Company, its successors and assigns, for and under the terms, limitations and conditions and reservations of the said leases or grants respectively and under and subject to the rents, royalties and covenants in the said lease or conveyances respectively reserved and contained on the part of the grantees or lessees thereof to be paid, kept, done and performed and to have and to hold the said interests in the remaining property hereby conveyed unto the said Woodland Oil Company, its successors and assigns, forever. In witness whereof I have hereunto set my hand and seal the 10th day *of April, 1891.
    Cyrus UnderwooI), (Seal.)
    Signed, sealed and delivered in presence of
    H. S. Grayson,
    H. J. O’Donnell.”
    Afterward Thomas J. Crawford commenced an action against the Woodland Oil Company for breach of said contracts and to recover the rental therein agreed to be paid. The first cause of action in his amended petition is as follows :
    “Por a first cause of action, the plaintiff, Thomas J. Crawford, says that the defendant, The Woodland Oil Company, is a corporation organized and doing business under the laws of the state of Pennsylvania, and owning real estate and personal property in Monroe county, Ohio; that on the 23d day of March, 1889, said plaintiff and Mary A. Crawford, his wife, who has since died, entered into a certain indenture of lease (of which reference is hereto made, marked exhibit ‘A’ in the petition herein filed and which exhibit is made a part of this amended petition as if hereto annexed or attached as an exhibit), with one Cyrus Underwood for the consideration of one dollar, paid said plaintiff by said Cyrus Underwood; that in said indenture of lease said plaintiff and his said wife, granted, demised and let unto the said Cyrus Underwood, his heirs and assigns all petroleum in or under a certain tract of land hereinafter described and also said tract of land for the purpose and with the exclusive right of drilling and operating upon said premises for said petroleum and gas, together with the right of way over said tract of land to the place of operating, the right to lay pipe lines to convey water, oil and gas, also to use water from said premises, and.also to remove any machinery or fixtures placed on said premises. The said tract of land or premises being situated in the township of Perry, county of Monroe and state of Ohio, and is bounded and described as follows, to-wit: North by the lands of John T. Devaul and David G. Crawford; east by the lands of Peter Eddy and David G. Crawford; south by the lands of Charles Biggie and Fannie Seales; west by the lands of Fannie Scales and William Robinson, containing one hundred and twenty-eight (128) acres, be the same more or less, for the term and period of five years and as much longer as oil and gas is found in paying quantities thereon.
    ‘ ‘Plaintiff says, that in said indenture of lease said Cyrus Underwood agreed to give or pay to said plaintiff the full equal one-eighth (£) part of the petroleum produced and saved by the said Cyrus Underwood from the said premises and deliver the same, free of expense into tanks or pipe lines to the credit of the plaintiff. And should gas be found in any well in sufficient quantities to justify marketing the same, the said Cyrus Underwood shall pay plaintiff at the rate of $200.00 per annum for each of such wells as long as the gas shall be sold therefrom; and said plaintiff further says, that said Cyrus Underwood covenanted and agreed therein to complete a test well in the township of Perry, in the county of Monroe, and state of Ohio, or within two miles of the above described premises within one year from the 23d day of March, 1889, or in default thereof pay to the said plaintiff for further delay a yearly rental of one hundred and twenty-eight (128) dollars for the above described premises from the said time for completing the said test well until such well shall be completed. The rentals as they become due under this indenture of lease shall be deposited to the credit of the plaintiff in the Monroe Bank, of Woodsfield, Ohio, or paid direct to said plaintiff.
    “Plaintiff says that on the 10th day of April, 1891, said Cyrus Underwood assigned and transferred all his rights, title and interest in and under said indenture of lease to the defendant. The Woodland Oil Company, said defendant, assuming as a part of the consideration all his (Underwood’s) liabilities thereunder; that „ neither said Cyrus Underwood nor said defendant has ever drilled, put down, begun or completed a test well or any other well as prescribed in said indenture of lease in said township of Perry, county of Mohroe and state of Ohio, or within two miles of said premises, or paid to plaintiff or deposited in the Monroe Bank aforesaid to plaintiff’s credit any rentals or money-in default stipulated under said indenture of lease although, often requested so to do. Plaintiff says, that he has duly performed all the conditions on his part to be performed under said indenture of lease, and that said Mary A. Crawford joinedin said indenture of lease merely to release her inchoate right of dower, and had and claimed no interest in said rentals, the same being the sole property of plaintiff, and that said plaintiff on the 23d day of March, 1889, owned and still owns said premises described in said indenture of lease.
    “Wherefore plaintiff prays for judgment against said defendant for the sum of $384.00, with interest on $128.00 from March 23, 1891, on $128.00 from March 23, 1892, on $128.00 from March 23, 1893.”
    There were eight other causes of action, two of which were abandoned, and the other six were each like the first, except that they were on other contracts which had been assigned to defendant in error, after a failure to drill or pay rental, and. a total recovery of over two thousand dollars was asked for a breach of the seven contracts.
    The oil company demurred to each cause of action of the amended petition upon the ground that it did not state facts sufficient to constitute a cause of action.
    The demurrer was overruled and exceptions taken. The oil company then answered, and as a first defense stated that two other named persons had an interest in the subject of the action and in obtaining the relief demanded. The second, third and fourth defenses to the whole of the amended petition are as follows:
    “Defendant, for a second defense to the amended petition and to each cause of action thereof, admits that it is a corporation, and it admits that all the leases named in the petition were made to Cyrus Underwood at the time stated; and it admits that said Underwood assigned the same (except No. 9, Exhibit ‘I’) to defendant about the time stated therein; it admits that no well was completed in one year and no rental has been paid by defendant, but it denies that it assumed or agreed to assume any of the liabilities of said Underwood to plaintiff under said leases, or to any one of the lessors under whom Underwood held; and it denies 'that the acceptance of the assignments of said leases from said Underwood created any liability or in any way obligated this defendant to pay to said lessors, or either of them, or to plaintiff any yearly rental then due, or hereafter to become due on any of said leases; and it denies that it is indebted to plaintiff in any sum, on either cause of action of his petition; and it denies each and every allegation of the petition not herein admitted.
    “Defendant says, for a third defense to the amended petition and to each cause of action thereof, that each and every lease described in the several causes of action in said petition contained among other provisions, the following” ‘And a failure on the part of the second party to complete a well or wells as above specified, or instead thereof, to pay rental as above provided, shall render this lease and agreement null and void, together with all the rights and claims, and not binding on either party, and not to be revived without the consent of both parties hereto, in writing;’ and defendant avers that before the assignment by Cyrus Underwood to it of the leases described in the petition, the time for completing a test well according to the terms of each and all of said leases had expired, and one yearly rental was overdue, yet no test well was completed and no rental has been paid,which rendered said leases and. each of them null and void ; and neither of said leases was revived by said Cyrus Underwood and plaintiff or the other lessors, or by any other person'or persons, and defendant says that each and all of the leases described in the petition were null and void when the same were assigned to it, and that neither of them has since been revived.
    ‘ ‘Defendant, for a fourth defense to the amended petition and to each cause of action thereof, says, that the sums of money to be paid for delay in completing wells called yearly rental in each of said leases, was intended and understood by the parties thereto to be a penalty, and was intended to indemnify plaintiff and the other lessors for all damages actually sustained by delay or failure to complete a test well, and other wells on the lands leased; and it avers that neither plaintiff or any of the lessors under whom he claims have sustained damages by reason of defendant having failed to complete a test well, or other wells on said lands for at the time of the execution of said leases and at the commencement of this action there was neither oil nor gas in paying quantities under the land described in said lease or either of them. ’ ’ The oil company also filed three separate defenses to the first cause of action of the amended petition, the first of which is as follows:
    “Defendant, without waiving any of its defenses to the amended petition, but insisting on each of them the same as if this separate answer were not made, answers the first cause of action as follows:
    “Defendant says, that the lease described in the first cause of action was executed March 23rd,-1889, and the first yearly rental claimed by plaintiff thereunder became due March 23rd, 1891, as stated in the -amended petition; and defendant avers that it is not liable under the assignment of the lease for yearly rental which accrued before said assignment, and it denies that it is liable for any subsequently accrued rental.”
    The second and third defenses to the first cause of action are not material here.
    The plaintiff below demurred to the third defense in the general answer to the amended petition, and also to the first special answer to the first cause of action in the same petition, both of which demurrers were sustained, and exceptions taken.
    The reply of the plaintiff below as to what was left of the answers after sustaining these two demurrers, was a general denial.
    The case was tried to a jury, and verdict returned for plaintiff below for $463.07, and motion made for a new trial, which was overruled and judgment entered on the verdict, to all of which defendant below excepted. The circuit court affirmed the judgment, and thereupon a petition in error was filed here to reverse both judgments.
    
      J. P. Spriggs <& Son and Mallory <& Jeffers, for plaintiff in error.
    The instruments in suit, although commonly called oil leases, may more properly be denominated licenses, or grants of the right to enter upon the lands and mine or drill for oil and gas; which if found in paying quantities shall after being brought to the surface be divided between the licensor and licensee in the proportions named in the instruments.
    No possession was ever taken by the licensee or his assignee under any of these instruments, so that they were all unexecuted licenses. Ohio Oil Co. v. T. F. &. S. R. R. 4, C. C. R. 210; Herrington v. Wood, 6 C. C. R. 326; Bank v. McConia, 8 C. C. R. 442; Shepherd v. McCalmont Oil Co., 38 Hun. (N. Y.) 37.
    These contracts like all other contracts should he construed so as to carry out the intention of the parties, if their intention can be ascertained from the language used in the instruments.
    There is no ambiguity, and there is not a word of doubtful or uncertain meaning used in the expression; and taken as a whole it meant that a failure to drill a test well or to pay the rental at the time it became due rendered the license void.
    We maintain that the parties had a right to make their contracts .so that each would become absolutely void in case the rental was not paid when it became due, and that the contracts in suit are such contracts.
    That the assignee of one of the instruments in suit is not liable for rental overdue at the time of the assignment, unless under a'special agreement is so apparent that no authority is necessary.
    
      Stern v. Sewing Machine Co., 53 How. (N. Y.) Pr. 478; L. Gierse v. Green, 61 Tex., 128; Johnson v. Bates, 48 N. Y. Sup. Ct. Rep.
    The defendant below requested the court to charge the jury: “That the sums named in the several leases to be paid as yearly rental, is a penalty only, and is not liquidated damages, and if the plaintiff is entitled to recover he can.
    1. Although the amount to be paid is called in the leases a rental, it is manifest that it is not rent, because the language is that the amount is to be paid for “further delay,” which is clearly not rent.
    Payments in addition to the rents reserved in the lease, which the lessee, for any cause, agrees to pay for the balance of the term are not recoverable as rent, although the word rent -is used.
    Wood’s Land and Tenant, 2nd Ed., p. 1023, and cases cited. Miners' Bank v. Heilner, 47 Pa. St. 452.
    2. In general a sum of money in gross to be paid for the non-performance of an agreement, is considered as a penalty. It will not, of course, be considered as liquidated damages. Taylor v. Sandiford,, 7 Wheaton, 13; Baird v. Tolliver, 6 Humphrey, Tenn. 186; Walls v. Carpenter, 13 Allen, (Mass.) 19; Chedwick v. Marsh, 21. N. J. L., 463; Bell v. Fruit, 9 Bush., 257; Moore v. Platt Country, 8 Mo. 467; Colwell v. Lawrence, 38 Barb. 643; Goldsborough v. Baker, 3 Cranch C. C. 48; Greer v. Tweed, 13 Abb. (N. S.) 427. 38 N. Y. 11 Tiff. 71.
    3. If the court was correct in its charge, “That the non-existence of oil in paying quantities in the lands would defeat the right to recover any sum, then the rentals named must be considered as penalties; for if they are liquidated damages they are payable whether oil exists in the land or not.
    
      Cook v. Andreas, 36 Ohio St., 174, and in Brick Co. v. Pond, 38 Ohio St., 65.
    
      C. S. Bushcman, L. F. Matz and G. L. Weems, for defendant in error.
    In answer to plaintiff in error’s first argument, we claim the instruments in this suit are leases, and that we are entitled to collect the rents therein named, according to well settled rules of law, and according to .the terms as set forth in the defendant in error’s amended petition. We claim the court did not err in sustaining the demurrer to the 3rd general defense in plaintiff in error’s answer. 29 N. E. Rep., 398.
    An agreement in an oil lease providing that a failure to sink a well within a certain time, or to make certain payments, shall render the lease void, is enforceable at the option of the lessor.”
    To place the phrase “null and void” in a contract does not effect its validity with either party or parties to the same. A contract can be discharged by breach of the same; but not by him who makes the breach according to well settled principles of law, equity and justice. “That no man can take advantage of his own wrong.” 1 Parsons on Contracts, 506; Taylor’s Landlord and Tenant, See. 492; 1 Smith Leading Cases, 102, 119; Smith v. Whitbeck, 13 Ohio St., 471; 3 Kent 464; Section 4113, Revised Statutes; Gay v. Davy, 47 Ohio St., 396; Williams on Real Property, 396; Galey v. Kellerman, 16 Atl. Rep. 474; Jones v. Gas Co., 25 Atl. Rep., 386; Wills v. The Gas Co. 18 Atl. Rep, 721; Ogden v. Baty, 23 Atl. Rep. 334; Smith v. Miller, 49 N. J., 521; 13 Atl. Rep., 39; Gainhart v. Finney, 40 Mo., 449; 93 Am. Dec. 303.
    Are the amounts named in these leases rent or liquidated damages or are they a penalty?
    In the following cases, leases similar to the ones in this case, the amounts were held to be rentals, and the whole amount therein named was held to be collectable. Letherman v. Olive, 25 Ath. Rep. (Pa.) 309: Clark v. Jones, 1 Denio, 516, Am. Dec. 43, p. 706; Galey v. Kellerman, 16 Ath. Rep. 474: Jones v. Gas Co., 25 Ath. Rep. 386. Smith v. Miller, 49 N. J. 526; Ray v. Western Penn. Nat. Gas. Co., 21 Amer. St. Rep., 922; Ogden v. Haty, 23 Atlantic Rep., 334. Pomeroy’s Equity Jurs. Vol. 1, p. 604; Grasilli v. Lowden, 11 Ohio St., 349; Cothel v. 
      
      Talmage, 9 N. Y., 55; 61 Am. Dec., 716; Clement v. Cash, 21 N. Y., p. 83; Lange v. Werk, 2 Ohio St., 519: Lehigh Zinc & Iron Co. v. Bramford. 14 Supreme Court Reporter, 219; 33 Fed. Rep., 677; 15 Amer. Enc. of Law, 599-600; McCahan v. Wharton, 121 Pa. St., 424: Gilmore v. Ontario Iron Co., 86 N. Y. 415; Clark v. Midland Blast Furnace Co., 21 Mo. App., 58; Bradford Oil Co. v. Blair, 113 Pa. St., 83; Westmoreland & Cambria Nat. Gas Co., v. De Witt, 18 Atlantic Reporter, 724.
   Burket, J.

By the instrument in question, the. plaintiff below granted, demised and let the oil, gas and tract of land for the purpose, and with the right of drilling and operating for oil and gas for five years, or as much longer as oil or gas should be found in paying quantities in the land. This is more than a license; it is a lease of the land, oil and gas for a limited time and purpose, with a right of possession to the extent reasonably required for such purpose, the landlord retaining all that should not be so required.

The principal contention in this case arises upon that part of the lease which provides that a test well should be drilled within one year, and in default, payment of a yearly rental of $128.00 for further delay, and the further provision that a failure to drill the test well, or pay the rental should render the lease null and void, and not binding on either party, and not to be revived without the consent in writing of both parties.

It was this provision that was relied upon in the demurrer to the amended petition, and in the third general defense in the answer of the oil company.

Reduced to its essence, this is a promise in writing upon sufficient consideration, to pay a yearly rental of $128.00 for the right to use, to a limited extent, certain premises, with a further provision in the same instrument, that a failure to pay should discharge the debt; that a default of payment should be the equivalent of payment; that failure should be performance; that non-payment should be payment.

Such contradictions in like instruments have caused the courts to look critically into such instruments to ascertain the real intention of the parties because such contracts cannot be enforced according to their letter. A promise to pay cannot be fulfilled by a failure to pay. A promise to drill a well cannot be satisfied by a failure to drill such well. The proper construction to be placed upon such an agreement is, that upon failure of the lessee to drill a well, or pay the rental, or both, as the case may be, the lessor may elect to put an end to the lease, and enforce payment of the promised rental, or sue for damages for failure to drill the well, or he may elect to have the lease continue in force to the end of the term, and enforce the drilling of wells, and the payment of rentals, as provided in the lease. Such provisions of forfeiture are for the benefit of the lessor, and not for the benefit of the lessee. The lessee cannot plead his own default or wrong, in discharge of his obligation to drill or pay rental. Parties may agree that in case of failure to drill or failure to pay, or both, the lessee shall be relieved of his obligation upon such terms as the parties may agree upon in the lease, whether the terms be of value to the lessor, or loss or inconvenience to the lessee, but a naked default and non-performance, as in this lease cannot be held to discharge the obligations of the lessee. The following authorities are in point:

Leatherman v. Oliver, 151 Pa. St. 646; S. C. 25 Atl. Reporter, 309; Ray v. Western Pa. Nat. Gas Co., 138 Pa. St. 576; S. C., 21 Am. St. Reports, 922; Clark v. Jones, 1 Denio, 516; S. C., 43 Am. Dec. 706; Galey v. Kellerman, 123 Pa. St. 491; S. C., 16 Atl. Rep. 474; Jones, v. Gas Co., 146 Pa. St. 204; S. C. 23 Atl. Rep., 386; Wills v. The Gas Co., 130 Pa. St., 222; S. C., 18 Atl. Rep., 721; Ogden v. Hatry, 145 Pa. St., 640; S. C., 23 Atl. Rep., 39; Smith v. Miller, 49 N. J. L., 521; S. C., 13 Atl. Rep., 39; Taylor’s Landlord and Tenant, Sec. 492; 1 Smith’s Leading Case’s, 102, 119.

It would also be competent for an owner of land to give an option to another party, upon a sufficient consideration, to drill one or more wells within a stated time, and upon failure to drill such wells within the time limited, all rights to cease as to both parties. And it is contended by the oil company in this case, that the leases in question are such options, or else are mere unexecuted licenses. In case ' of an option, a certain consideration is paid or agreed to be paid to tie up the land for a given time, and during1 that time the owner is prevented from using or disposing of the land contrary to the terms of his contract. But in such cases the consideration for the option must be paid, and cannot be satisfied by a naked default. If such default could' be held as satisfaction of the consideration, the instrument would be without consideration, and therefore void.

In. the leases in question the consideration is one dollar paid, and certain rentals promised to be paid in default of drilling a well, and considered as an option, the whole consideration for the option must be paid. The same result follows if the instruments be regarded as unexecuted licenses. The consideration paid and agreed to be paid for the license is one dollar paid, and certain ■rentals to be paid, and the licensor not having interferred with the rights, of the licensee, the latter is bound to pay the full consideration promised for the license, even though he never availed himself of its privileges.'

So that whether the instruments in question are regarded as leases, options or licenses, the plaintiff below is entitled to receive the considerations or rentals agreed to be paid.

The first defense to the first cause of action of the amended petition, to which a demurrer was sustained, raised the question whether the oil company became liable under the assignment to it for the rentals which had matured and remained unpaid at the time of the assignment of the leases, as well as for the rentals which thereafter accrued. We think that the demurrer was properly sustained. In his assignment of the leases, Mr. Underwood stipulated that the oil company should have and hold the leases under the terms thereof, and under and subject to the rents and covenants therein reserved and contained, on part of the lessee to be paid, kept, done and performed. By accepting this assignment with that stipulation, and causing the same to be recorded, and receiving the leases thereunder, the oil company became bound to perform all the unperformed terms of the leases. It stepped into Mr. Underwood’s shoes and assumed his obligations.

■ It is also urged that the failure to drill the required well, and failure to pay the agreed rental did not entitle the lessor to recover the amount named as rental, but at most would only entitle him to recover unliquidated damages. We regard the case as one of rental. The amount agreed to be paid was for the exclusive right of drilling and operating the premises for oil and gas. Failure to exercise the right would not relieve the company from payment of the amount agreed upon as the price of such exclusive right. There are some other questions made in the record, but we find no error as to them, and do not regard them of sufficient general interest to warrant a further report.

Judgment affirmed.