Court Opinion

ID: 9673942
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:20:55.553119+00
Date Added: 2024-06-11T12:06:36.042447
License: Public Domain

Mr. Justice Brewster,
joined by Justice Smith, dissenting.
I am convinced that the lease involved here is not ambiguous and that when Superior and Intex, as assignees, began a second well on the land before March 3, 1949, the Anderson lease was valid and subsisting.
The rental paragraph, quoted in the majority opinion, provided that if no well was commenced on the land on or before March 3, 1945, the lease should terminate unless lessee had sooner paid lessors $320 or deposited that amount to their credit in the Snyder bank; that by such payment lessee could defer commencement of a well until on or before March 3, 1946; and *325that upon like payments thereafter commencement of a well could be deferred to March 3 of each succeeding year throughout the primary term. In short, lessee could hold the lease for 10 years without ever commencing a well by paying $320 on or before March 3, of each year.
Under the dry-hole paragraph, if lessee shouldered the more expensive burden of drilling a well, he was relieved of his obligation to pay the annual rental on the succeeding March 3; but if the well proved to be a dry hole he was required either to commence a second well within 12 months thereafter or pay lessors $320, evidently to insure that his failure to bring in a well had not discouraged him to the point of abandoning the lease. When he had resumed payment of rentals, “as before provided”, that is, within 12 months after drilling a dry hole instead of an oil well, then “the last preceding paragraph hereof (the rental paragraph), shall continue in force just as though there had been no interruption in the rental payments.” I assume that this meant that the entire rental paragraph, not just part of it, should “continue in force.”
So, when Richfield completed the dry hole on February 3, 1945, it was required to pay $320 rental to lessors by Feb. 3, 1946, which it did by depositing that amount to lessor’s credit in the Snyder bank. When that was accomplished, the effect of the dry hole as well as the force of the dry-hole paragraph was spent and the “last preceding paragraph” (the rental paragraph) was again operative, to “continue in force just as though there had been no interruption in the rental payments.” Under its clear and explicit terms Richfield could keep the lease alive for 10 years without ever attempting to drill any well by paying $320 on or before March 3, of each year, beginning March 3, 1945. Therefore, the rental paragraph can be continued “in force just as though there had been no interruption in the rental payments” only by holding that after Richfield completed the dry hole and resumed payment of rental within 12 months thereafter, it could keep the lease alive by paying the annual rental on or before March 3, 1947, and on or before March 3 thereafter during the term of the lease in lieu of drilling another well. I think the accelerated payment made on Jan. 28, 1946, met the dry-hole condition and also paid the rental due by March 3, 1946, because only thus can effect be given to the entire language of both the dry-hole and rental paragraphs.
The majority holding penalizes lessees for attempting to develop the lease, which development doubtless was the primary *326purpose of the lessors, by drilling a well which proved to be a dry hole and which surely cost lessees many times the $320 they otherwise would have been bound to pay by March 3, 1945. Rather than abandoning the lease after drilling the dry hole they showed their faith in it by paying the $320 within 12 months thereafter exactly as the lease required. Having done that, they had the right to pay rentals thereafter, beginning on or before March 3, 1947, “just as though there had been no interruption” in their payment. Otherwise, the last sentence of the dry-hole paragraph would mean nothing.
That Richfield may have treated the rental as due by Feb. 3, of each year, after “resumption of the payment of rentals” cannot defeat the rights acquired by its assignees, Superior and Intex, when they purchased the lease, because, there being no ambiguity in the instrument, “resort cannot be had to an interpretation given by the parties to the terms of the agreement in order to prove a construction contrary to the plain meaning.” Highland Farms Corp. et al. v. Fidelity Trust Co., 125 Texas, 474, 481, 82 S. W. 2d 627, 630.
I would render the judgment for petitioners.
Associate Justice Smith joins in this dissent.
Opinion delivered May 2, 1951.
Motion for rehearing overruled June 27, 1951.