Nature of the Case
To access this section all you need to do is click here and register.
Facts
The original lease was made by Frank F. Pellissier and Sons, Inc., to the personal representatives of Anita M. Baldwin, deceased, who have been succeeded in ownership thereof by P and others as testamentary trustees of said decedent. In 1944 the original lessees made a sublease to Capital Company which assigned to Harry W. Kline and his wife, who expressly agreed to perform all the terms of the sublease. The Klines, on June 14, 1951, made a sublease to D and one Joel Brandon but excepted 166 feet surrounding two producing wells and reserved an overriding royalty. Dand Brandon expressly took subject to and agreed to perform all the terms and conditions of the Baldwin sublease. In July 1952, D succeeded to the rights of Brandon. The Baldwin sublease provides: 'Lessee agrees at all times to use diligence and observe customary oil field practices and modern methods, appliances, and equipment to save all oil, gas or other products produced from said premises, which may be saved at a reasonable profit.' The obligation of continuous drilling is found in paragraph 4A of the sublease and requires (as the court found) the sublessee to 'continuously drill additional wells, allowing not more than ninety (90) days between the completion of one well and the beginning of the next well, until an average of one well for every 10 acres of said lands shall be completed thereon, or a total of 44 wells.' Under paragraph 12 of the sublease, D was to obtain all zoning permits as necessary. It provided that the obligations of the lessee shall be suspended while the lessee is prevented from performing by acts, rules, or regulations of governmental agencies, or when prevented by other matters or conditions beyond the control of the lessee, whether similar or dissimilar to matters or conditions specifically mentioned. The focal point of the argument is an alleged inability to procure a zoning exception that would permit further drilling. Within 10 days after he acquired the lease D applied for and obtained a permit to drill one well; that he did and placed it on production. About six months later he applied for another exception in order to do further drilling but that application was denied. At the time said application was made, heard, and denied D was in violation of the conditions of his first permit, had violated various laws, regulations, or ordinances, and was operating said Kubetz No. 1 well in a manner materially detrimental to the public welfare and the property of other persons in the vicinity, and said application was denied for those reasons.' D waited about a year, prepared a third application which was never filed, and let the matter drop about the middle of 1953. Notice of default was served in October 1954, and the suit was filed on March 9, 1955. Ps sued D for declaratory relief and a declaration of forfeiture of their sublease. Ps alleged a violation of (1) the covenant to operate in accordance with customary oil field practices, and (2) continuous drilling requirements of the sublease. D claimed he was excused by zoning issues. Applicable county zoning ordinances provided for the granting of an exception to permit the drilling of an oil well if 'it appears probable that there is oil underneath the property under consideration or under adjacent property which oil cannot be otherwise extracted.' The zoning ordinance itself does not prevent drilling; it merely attaches a condition precedent which is easily fulfilled; that the applicant has the permission of the owner of the land to drill. The court found that D could have applied for and obtained zoning approval.
The court ruled for Ps and D appealed.
Support@ bsmsphd.com
Casebriefs Co