Kidd v. Hoggett

331 S.W.2d 515 (1959)

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Nature of the Case

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Facts

On April 24, 1944, the prior owners executed an oil and gas lease to 2,871 acres of land. Ps are the present owners of that land, along with Howell Wright who owns 40 acres. On January 25 and 26, 1954, by assignments, A. W. Cherry and Barron Kidd (Ds) became the owners of the oil and gas lease. This was a short time before the primary term of the lease expired, so they commenced a well on the 40-acre Wright tract. Ds took the position that the well was a producing well but there was no market for the gas from February 23, 1954, the completion date. The lease contained a shut-in gas clause which provided: '* * * where gas from a well producing gas only is not sold or used, Lessee may pay as royalty $50.00 per well per year, and upon such payment, it will be considered that gas is being produced within the meaning of Paragraph 2 hereof; * * *.' Ds paid the shut-in royalty for the year commencing in April 1954, and again for the year commencing in April 1955. Ps became suspicious when they learned that Junction Natural Gas Company needed gas. In November 1955, after Ps had accepted the shut-in royalty, they demanded a release of the oil and gas lease. Ds refused claiming the well was a producer. On January 9, 1956, Ps entered into a specific lease with Ray Albaugh by which he agreed to pay $2 an acre bonus and $1 an acre for the first year's rental. The Albaugh lease was subject to Ps' obtaining a release from Ds of the oil and gas lease of record. When Ps did not get the release Albaugh refused to enter into his lease and in January 1957, released to Ps. At the time of the trial, the tract had no value for oil and gas purposes. Ps proved actual damages of at least $8,493. The court correctly removed the cloud of the oil and gas lease from the title. Ds appealed. Ps took the position that in a suit for removal of the cloud and for damages, malice is not a necessary element, but that in any event they both pleaded and proved malice. Ds claimed that this is a suit for slander of title, that malice is a necessary element, and that it was not proved.