Freeman v. Magnolia Petroleum Company

171 S.W.2d 339 (1943)

Facts

P and D entered into an oil and gas lease. The lease was to remain in force for a term of ten years from the 'primary term' and as long thereafter as oil, gas, or other mineral is produced from said land. The lease had a shut-in royalty of $50.00 per year on each gas well from which gas only is produced while gas therefrom is not sold or used off the premises, and while said royalty is so paid, said well shall be held to be a producing well. On December 22, 1939, D completed a well on the lease. It yielded gas in large quantities, but none of it was ever sold or used off the leased premises. No other well was thereafter drilled or attempted to be drilled on the land. Ds did not pay the fifty-dollar shut-in royalty on or before April 7, 1940. They tendered it more than four months thereafter, contending that they could pay it at any time within the year. P declined the tender on the ground that the lease had terminated on April 7, 1940. P sued D and the trial court rendered judgment for d on jury answers to special issues. That judgment was affirmed by the Court of Civil Appeals.