Court Opinion

ID: 5013100
Source: CourtListenerOpinion
Date Created: 2021-10-01 03:10:07.636339+00
Date Added: 2024-06-11T08:17:30.276188
License: Public Domain

BOND, Chief Justice
(dissenting).
I am not in accord with the majority’s construction of the lease dated September 30, 1943, the pertinent parts of which are quoted in the majority opinion; only such portion shall be here restated as bears on the question involved-. The lease executed by appellants to Stanolind Oil & Gas Company was for the purpose of “investigating, exploring, prospecting, drilling and mining for and producing oil, gas and all other minerals” etc.; and the land included in *266the lease is -70 acres more or less, owned, occupied and used by W. F. Leopard and wife Mineóla Leopard as their homestead (Emphasis mine).
The lease' provides among other things (section 1-a) : “Lessee is hereby given authority and the power to unitize or combine all or any part of the land covered •by this lease in so - far as the gas and gas rights aire concerned, at any time and from time to time, with any other land, lease or leases, when, in the judgment of Lessee it ■is advisable to do so in order properly to develop and operate said premises, * * * or to establish units for recycling or other auxiliary production purposes " * * *. 2. Subject to the other provisions herein contained, this lease shall be for a term of five (S) years from February 16, 1944 (called 'primary term’) and as long thereafter as oil, gas or other minerals is produced from said land or on any acreage pooled therewith hereunder, or drilling or reworking operations are conducted on said land or on acreage pooled herewith. * * * 4. Lessee'is hereby given the right and power to pool or combine the land covered by this lease or any portion thereof with any other land, lease or leases when in Lessee’s judgment it is necessary or advisable to do so in order to properly develop and operate said premises, provided that no unit so created shall exceed 40 acres in area. * * *. 5. If operations for drilling are not commenced on said land or on acreage fooled therezvith as above provided on or before one year from February 16, 1944, the lease shall then terminate as to both parties, unless on or before such date Lessee shall pay or tender to Lessor or to the credit of Lessor in the First National Bank at Athens, Texas (which bank and its successors are Lessor’s agent and shall continue as the depository for all rentals payable hereunder regardless of changes in ownership of said land or the rentals either by conveyance or by the death or incapacity of Lessors) the sum of Seventy and no/100 ($70.00) Dollars (herein called rental), which shall cover the privilege of deferring commencement of operation or drilling for a period of tweve (12) months * * (Emphasis mine.)
It will readily be seen that sectiragi 1-a, and section 4, in duplication, give to the lessee the right and power to -unitize the leased premises “subject to other provisions” therein contained (section 2), and “no unit so created shall exceed 40 acres in area” (section 4). Evidently the “40 acres in area” is an express limitation on lessee’s right to pool or unitize lessors’ land with other land, lease, or leases. Indeed the lessee had the undoubted right, twofold, to unitize the leased premises; subject, however, to the limitation provided in the lease —a most valuable limitation protecting lessors’ rights therein. Section 1(a), typewritten in the printed lease form, gave to lessee no greater right, or extended additional privileges, than were given and provided in section 4. The mere fact that one pro\„sion (1-a) is written in with a typewriter, and the other (section 4) printed, gives to the typewritten section no greater legal prominence than is given to the printed section. It is the language employed in a contract that gives legal effect to the powers extended. I can not conceive of any canon of construction of two analogous provisions in a contract, one granting power to unitize for the purpose of mining for “gas and gas products,” and the other for oil, gas and other minerals, as to make the two provisions ambiguous to admit proffered parol evidence in aid to interpretation ; or that would give to the typewritten provision (1-a) an interpretation as being a specific grant of unitization, and to the printed provision a general grant. While, in the case at bar, the typewritten provision relates to unitization for the purpose of drilling, mining, etc., for “gas and gas rights,” and the printed provision relates to unitization of the lease to drill, mine, etc., for “oil, gas and all other minerals,” neither provision gives unlimited power to the lessee to unitize plaintiffs’ land for any purpose, except in units created not to “exceed 40 acres in area.” Each of the provisions is expressly made “subject to all provisions contained in the contract” and limited to the provision that “no unit so created shall exceed 40 acres in area.”
Generally, it may be said that it is proper, as touching the interpretation of contracts, *267to view the construction placed thereon by the contracting parties themselves, and that, too, before any controversy arises. On March 30, 1944, Stanolind Oil & Gas Company, from its headquarters in Tulsa, Oklahoma, addressed a letter to Mr. Leopard advising him of the unitization of their lands with others, covering its “#45719 Unit B,” and enclosed a division order and an amended and modified oil and gas lease, and urged their execution by appellants. This amended and modified lease was for the express purpose of mining and producing “oil and igas,” — amendatory to the original leáse of September 30, 1943, authorizing and empowering the lessee to unitize appellants’, land or any part thereof by unlimited unitization “with any other lease, leases or unleased mineral interest lying within the area, so as to form by such uniti-zation a unit or units for the production of •’•as * * and providing further thi m that the “lessee shall also have the right hereunder to reduce the size of any such unit or units if a lease or interest therein which was a part of such unit or units expires or otherwise terminates, * * Along with said amended and modified lease, the Stanolind Oil & Gas Company addressed a form letter to Mr. Leopard requesting that he and his wife execute the instruments, and to “guarantee and warrant that they are entitled to receive payment of royalty in the proportion set out opposite their respective names in the attached schedule on all gas and its products produced and sold from that certain area designated as ‘Unit B,’ containing 524.47 acres more or less.” The record here discloses that Mr. and Mrs. Leopard persistently refused to execute the aforesaid amendment and modification of their original lease and refused to guarantee and warrant payment of royalty on the unitized leases mentioned therein. Then, on May 5, 1944, Stanolind Oil & Gas Company again wrote Mr. Leopard: “Please refer to our letter of March 30, 1944, and advise us when we may expect execution and return of the papers as therein requested, covering the above captioned- unit” (“#457,19 TriCities Unit ‘B’, Henderson County, Texas”) ; then on July 17, 1944, Stanolind Company again wrote Mr. Leopard: “You have returned to us our letter of May 5, 1944, wherein we requested that you please execute and return to us the division order and certain papers forwarded with our letter of March 30, 1944. * * *, we should appreciate it very much if _ you will please consider this matter further and advise us as to your decision in the matter”; and on> September 11, 1944, Stanolind again wrote Mr. Leopard: “Please refer to our letter to you dated June 17, 1944, ánd advise us when we may expect the information as therein requested concerning the- above captioned unit” (“#45719 Tri-Cities Unit ‘B’”). It is clear, I think, that the Stano-lind Company recognized the limitation placed on its power to unitize appellants’ land with other land, lease or leases in acreage more than 40 acres in area, and that it interpreted the original lease as giving it no such unlimited power, hence necessary to secure the extended amendment and modification of the lease.
It is undisputed, as shown from the record and ’reflected in the majority opinion, that the proposed unitization of appellants’ land with lessee’s Unit “B” was outside the group or pool of land and leases originally combined; and that Unit “B” created a separate unit in excess of 40 acres in area. And it is further undisputed that the rental of $70 covering the year of 1946 was never paid; and no operation for drilling was commenced on said land or on acreage “pooled therewith” as required in section 5 of the original lease of September 30, 1943. Plence under the very terms of the lease here involved, the rights therein terminated.
Therefore the lease of September 30, 1943, having terminated, and the amended and modified lease not executed, we need not labor further on the question of waiver or ratification of the unitization of appellants’ homestead. The amendment and modification instrument was never executed by Mr. and Mrs. Leopard to become a binding lease against them and their homestead; and the Oil Company operations off the original pool or combine did not prevent termination of plaintiffs’ lease for failure to begin operation or pay rentals as *268provided therein. The Stanolind Company was bound to unitize the group of land, lease or leases, not in excess of 40 acres in area; thus, viewing their action in the premises, the question forcibly presents itself: If the Stanolind Oil & Gas Company had an unbridled, unlimited power to unitize appellants’ land under the rights granted in section 1-a, supra, of the lease involved, with any and all lands, as contended in this lawsuit, then why did it urgently seek to have appellants to execute the amended and modified lease to include and extend such right? It is evident that they had no such unlimited right, and that they did not think they had such right. Without such right, manifestly, they cannot claim a waiver, estoppel or ratification of that which never had existed. If the Oil & Gas Company gave Mr. Leopard money as royalty from production of oil, gas and gas products from land, lease or leases off the area, in a pool or unit, in which appellants’ land was not a part, such artifice, in an effort to secure that which was never intended, cannot give rise in defense of plaintiffs’ cause of action.
I reluctantly differ with the conclusion reached by the majority, feeling that plaintiffs’ land should be cleared of the cloud thereon on account of the terminated lease involved; and that the judgment of the court below should be reversed and here rendered in favor of the appellants.