Court Opinion

ID: 9863055
Source: CourtListenerOpinion
Date Created: 2023-09-25 03:00:48.393901+00
Date Added: 2024-06-11T11:46:43.953850
License: Public Domain

On Motion for Rehearing
SUTTON, Justice.
■ This is an appeal from the District Court of Reeves County. The suit is in trespass to try title. Barron Kidd and A. W. Cherry brought the suit to recover the oil and gas leasehold estate covering the Southwest quarter of Section 10, Block 56, Township 2, T. & P. Ry. Co., Reeves County, Texas. The trial was to the court and judgment that the plaintiffs take nothing, from which this appeal is prosecuted. On the original consideration we reversed and rendered the case but on the motion for a rehearing a majority of the Court have concluded the former disposition is erroneous and that the motion should be granted and our former judgment set aside.
The lands involved are classified as mineral and were sold with the usual mineral reservation. Plaintiffs claim the oil and gas lease on the southwest quarter of Section 10 by virtue of an assignment under an original lease covering the whole section. The original lease was executed by Jack C. Tunstill, the surface owner, as agent of the State, on a General Land Office printed form numbered 5367. It is in usual form with blanks left for the insertion of the- names and addresses of the parties, dates, the bonus payment, re'ntals, royalties and description of the lands. In the blank space provided in the lease form for the description of the land the following is inserted with typewriter, following the recitation there is leased “the following land situated in Reeves County, State of Texas, to wit:” “All of Section 10, Block 56, Township 2, T. & P. Ry. Survey. And as a further consideration thé lessee herein agrees to commence the actual'drilling of a test well on the above described tract of land on or before 90 days from the date of this instrument, to a depth of 4000 feet, or unless oil' and gas, or either of them is found in paying quantities at a lesser depth. It is further agreed that one well producing in paying quantities (oil or gas) will eliminate the delay rental requirements prescribed herein covering the 160 acres on which said well is located, except the ten *395cents per acre minimum rental provided paragraph 8 hereof.” in
The rental provided in paragraph 8 is that prescribed in Art. 5368, Vernon’s Ann. Civ. St.
Printed paragraph 3 of the lease, with the insertion of dates, name of depository, the amount of annual rentals and one in-terlineation specially noted hereafter, reads as follows: “If no well be commenced on said land, hereby leased, on or before November 7th, 1947, this lease shall terminate as to both parties, unless the lessee on or before that date shall pay or tender to the Lessor as the owner of the soil or to his credit in the Continental Nat’l Bank at Ft. Worth, Texas, on that portion not held by production, or its successors, which shall continue as the depository regardless of change in the ownership of said land, the sum of $320.00 (50‡ per acre) Dollars and in addition shall pay to the Commissioner of the General Land Office of the State of Texas, at Austin, Texas, a Like Sum on or before said date, which shall operate as a rental and cover the privilege oí deferring the commencement of a well for twelve (12) months from said date. In like manner and upon the payment or tenders the commencement of a well may be further deferred for like periods of the same number of months successively.”
The provision, “on that portion not held by production”, italicized by us above was interlined with typewriter in printed paragraph 3. The original lease was dated November 7, 1946, and was for a primary term of five years, “and as long thereafter as oil and gas, or either of them, is produced in paying quantities from the land hereby leased.”
The facts are mostly stipulated and are not in dispute. A test well was commenced on the NW4 of Section 10 within the 90 days provided in the quoted provision above. The well produced and the section has produced since the date the well was completed until the date of the trial of the case. The minimum rental of ten cents per acre due the State under the statute and as provided in paragraph 8 of the lease was timely paid on the SW4 of Section 10. .No annual rentals provided in paragraph 3 were paid either to the surface or the State; nor a well commenced on the SW4 prior to December 2, 1948, on which date the Commissioner of the General Land Office noted on his records the lease on the SW4 had terminated for failure to commence a well thereon or to pay the rentals due thereon. The SW4 was leased December 8, 1948, by the surface owner as agent of the State to the defendant, David H. Hickey, under which lease he and the other defendants, Louis Crouch and Texzona Production Company, claim title to said SW4.
The basic and controlling question is, Did the original lease of November 7, 1946, terminate by virtue of its terms under the facts of the case? We think it did. By a specially inserted provision following the description of the land, copied hereinbefore, it is specifically provided one producing well will suspend the rental payments on the 160 acres on which the well is located except the minimum rental due the State under the statute. Likewise the provision interlined in paragraph 3 specifically exempts from the payment of rentals any 160 acres upon which production is had. The two specially inserted provisions when read and construed together, as they must be, make clear, we think, the intention of the parties to provide for the drilling of an additional well or wells, in the event production is had, on the remaining 160 acre tracts, or pay the rentals thereon at the rate of 50‡ per acre to the surface owner and a like sum to the State or suffer the termination of the lease on such portions. In short, the intention of the parties, clear to this writer, was in case of production to provide for the testing of the remaining portions, or for the payment of the rentals or termination of the lease as to such portions. The purpose was, if production was had, to provide for the testing and development of the remaining portions.
The commencement of the well on the NW4 obviated the payment of rentals for the first rental period on any part of the section. The production on that quarter *396suspended the payment of rentals thereon and continued the life' of the lease thereon so long as oil and gas, or either of them were produced in paying quantities. The specially, inserted provisions provided for the commencement o-f another we.ll on some portion of the remaining acreage during the second rental period or the payment of the 5(⅛⅞ rentals or the termination of the lease thereon. Neither of these provisions were met so far as the SW4 is concerned and the original lease thereon, in our opinion, terminated November 7, 1948, and the lease to Hickey dated December 8, 1948, was valid.
The rentals are provided for in the first instance in paragraph 3 if no' well be commenced. The contract provides, in paragraph 7, if the. first well drilled be a dry hole then a second well shall "be commenced within 12 months from the" expiration of "the last rental period or the lease shall terminate as to both parties unless the Lessee shall within such period resume the payment of rentals due under the contract. But, in case the first well produces, as it did in the instant case, the specially inserted provision provides for that contingency and specifically provides the production shall suspend the payment of rentals on the 160 acres upon which the well" is located and the lease continues so long as production is "continued on that unit. There is no conflict, it is thought, between any of such provisions," nor is there any conflict in the specially inserted provisions and those" fixing the primary term of the lease at five years or so long as oil and gas or either of them is produced, because that "provision recites it is “subject to the other provisions herein contained.”
It cannot be said the inserted provisions were idly inserted without a purpose.. On the. other hand they "each take care of a definite contingency. and clearly provide ■what shall be the effect. If there were a conflict between the written and the printed provisions the printed provisions would have to yield to the written provisions. Armstrong v. National Life Ins. Co., Tex.Civ.App., 112 S.W. 327 (e. r.); Constitution Indemnity Co. v. Armbrust, Tex.Civ.App., 25 S.W.2d 176 (e. r); Producer’s Oil Co. v. Snyder, Tex.Civ.App., 190 S.W. 514. Again, another elementary rule of construction is the contract will be construed ás a whole and effect given to all its provisions if it can lawfully and reasonably be done. Jackson v. Watts, Tex.Civ.App., 113 S.W.2d 584 (e. r.); Wisdom v. Wilson, 59 Tex.Civ.App. 593, 127 S.W. 1128 (e. r), and to which might be added a long list of authorities. Giving effect to all the provisions of this lease it simply means the intention of the parties was in case a well produced it should perpetuate the lease on 160 acres only and the Lessee should resume drilling operations or pay rentals at the rate of 50^ per acre to the surface owner and a like sum to the State within the rental period on the remaining portions not thus held by production, or that the lease should terminate on sttch remaining portions.
We conclude, therefore, the judgment of the trial court is correct and it is affirmed.