Court Opinion

ID: 9448188
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:25:06.308321+00
Date Added: 2024-06-11T17:31:19.169593
License: Public Domain

Upon Petition for Rehearing
PER CURIAM.
The petitioners-appellees seek a rehearing on the ground that if judgment were entered in this case decreeing termination of the lease at the end of the primary term thereof, this would inevitably withdraw plaintiff’s land from the unit and therefore would affect the absent unit interest owners. In consequence of this premise petitioners assert that the result envisioned by us in our opinion would be altogether impossible. The reference here is to the sentence of the opinion: “If the decree ran against the lease itself only and in no manner purported to deal with the continued existence of the unitization agreement, then the operator under that unit agreement would in no manner be prevented from continuing to operate and extract oil and gas in the manner therein provided.”
It is true that our opinion did make reference to the primary term of the lease; but it was not within the contemplation of the court that if the trial court should grant the appellant relief respecting the lease that such a judgment would decree that the lease terminated at the end of the primary term. The complaint itself shows that forfeiture or cancellation of the lease could not be effected until after December 27, 1955, the date of the notice of default, copy of which is attached to the complaint. Paragraph VII of the complaint alleges that such notice was given pursuant to paragraph 9 of the lease. Paragraph 9 of the lease, which was attached to the complaint, reads in part as follows:
“The breach by Lessee of any obligation arising hereunder shall not work a forfeiture of this lease nor be grounds for cancellation thereof in whole or in part save as herein expressly provided. * * * Should Lessee default in any of the express terms and conditions of this lease, no forfeiture or cancellation thereof shall be declared, nor any steps or proceedings to effect a forfeiture or cancellation taken unless and until Lessor shall have first given Lessee written notice, specifying the time, nature and extent of such default, and Lessee has wholly failed for a period of ninety (90) days thereafter to remedy such default.”
Perhaps our opinion was at fault in not expressly quoting this provision or noting the date of the notice; but it seems to us to be clear that on the date when the unit operating agreement became effective, October 1, 1938, the lease was still in effect and even after the giving of the notice the lessee could have remedied any default and kept the lease *898in continuing effect. This means that the authority to enter into the unit operating agreement recited in paragraph 11 of the lease was an authority still in existence on October 1, 1938. If as a part of a working agreement between A and B, A authorizes B to bind him to another contract with C, and B does so, the contract between A and C is not itself terminated by a rescission, cancellation or forfeiture of the original agreement between A and B providing that agreement was still in effect and the authority not terminated at the time that the contract with C was executed.
The petition for rehearing is denied.