Court Opinion

ID: 9545414
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:12:05.007938+00
Date Added: 2024-06-11T15:14:45.277203
License: Public Domain

Herd, J.:
I respectfully dissent. The majority affirmed a judgment holding there was no meeting of the minds between *87lessors and lessees to an oil and gas lease nullifying the lease. The evidence does not support that decision.
Let us review the facts. It is uncontroverted that the Miner heirs executed an oil and gas lease to Loyd. It properly described the land, the term of the lease, the consideration, the usual covenants, the parties and the beginning date. Those are the essential, material elements of an oil and gas lease. The only objection to this lease pertains to the drilling clause. Loyd mistakenly inserted the termination date of the primary term (1978) rather than the anniversary date (1976) of the lease in the blank reserved for drill, pay or forfeit. That date has no effect on the first year of the lease. Loyd could have drilled the first year and perfected the lease; obviously the parties’ minds met on the lease and the trial court’s judgment is erroneous.
Loyd’s action in inserting the wrong date unintentionally eliminated delay rentals from the lease. Loyd had agreed to pay delay rentals but he did not know how to draft a lease. He did not know delay rentals are annual obligations in lieu of drilling. He did not know an oil lease cannot be extended beyond its primary term by payment of delay rentals. Baldwin v. Oil Co., 106 Kan. 848, 189 Pac. 920 (1920). Loyd’s inexperience caused the mistake. There is no fraud or misrepresentation involved. The mistake could not nullify the lease and should not effect a forfeiture. This court should do equity and reform the lease to conform to a standard oil and gas lease, as the parties intended, with the lessee permitted to pay delay rentals out of time. He had relied, in good faith, on the terms of the lease as written. The lessors were not injured thereby and could have ascertained the defect had they checked the public record since the lease was recorded. All of the elements justifying equitable relief are present. 3 Corbin on Contracts § 614 (1960), addresses this issue as follows:
“Reformation of a written instrument will be decreed when the words that it contains do not correctly express the meaning that the parties agreed upon, as the court finds to be convincingly proved. The writing may omit a provision that they agreed should be put in; or it may contain a provision that they agreed to leave out or that was not in fact assented to. A very common mistake is the insertion of an incorrect description of the subject matter; street numbers, survey numbers, boundary lines, area, may be erroneous by reason of a typist’s error, bad memory, copying from an earlier document that was itself erroneous.” pages 713-17.
Referring to unilateral mistake:
“Reformation may be a proper remedy even though the mistake is not mutual. If *88one of the parties mistakenly believes that the writing is a correct integration of that to which he had expressed his assent and the other party knows that it is not, reformation may be decreed.” p. 730.
And mistakes of law:
“[I]t is believed that the time has come to say that the exceptions now make the rule, that social policy requires that mistake of law and mistake of fact be treated alike, and that in granting relief for mistake the attention of the court should be directed to the other factors in the case.” p. 752.
See also 66 Am. Jur. 2d, Reformation of Instruments § 19, p. 544; Federal Land Bank v. Bailey, 156 Kan. 464, 134 P.2d 409 (1943).
The majority decision is unjust and sets a bad precedent. It will invite cancellation of instruments for any irregularity, particularly in the area of insurance. I would reverse.
Schroeder, C.J., joins the foregoing dissenting opinion.