Nature of the Case
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Facts
On February 19, 1959, Shaw (P) leased 11 parcels of real estate, consisting of 438.5 acres, to D for the production of oil and gas. The lease agreement provided that the lease would remain in effect for a primary term of three years, and as long thereafter as oil or gas is produced 'from said leased premises' or operations for drilling are continued. In consideration for the lease, Shaw (P) received one dollar and a 1/8 royalty interest in any gas or oil produced. In 1964, Ds assigned their interest in 120 of the acres reserving an overriding royalty interest in the property. Prior to his death in 1967, Cowan made numerous assignments of his working interest in the subject tract. In January of 1980, P filed a complaint against all individuals who 'have or may claim a record interest in' 318.5 acres of the leasehold (including the subject tract), seeking to cancel the lease as it applied to that property. P alleged that Ds 'have wholly failed' to develop and produce the leasehold property and that there has been no activity directed toward production during the preceding 10 years. The remaining 120 acres of the leasehold were not affected by the complaint. On March 20, 1980, the heirs of D, now deceased, purportedly assigned a working interest in the subject tract to John Ryan, and reserved an overriding [royalty interest in the property. The heirs claimed that the working interest in the property reverted to them when Cowan ceased to develop the subject tract. Only the Jefferson Heirs and Ryan appeared. Default judgments were entered against those absent, including the Cowan heirs and assigns. Kothe (P) as executor of Vera Shaw's (P) estate, was substituted as plaintiff following Shaw's (P) death. P filed a motion requesting the cancellation of the lease as to all individuals who claim to have working interests in the subject tract. He also moved for summary judgment against the nondefaulting Ds. He alleged in the motion that the only individuals who owned a working interest in the subject tract (the Cowan heirs and assigns) had been defaulted. Ds alleged that oil and gas leases are indivisible and that P cannot seek cancellation of the lease as to certain property if there is production on other tracts in the leasehold. The court granted P's motion for summary judgment and canceled the lease as to the 120 acres. Ds appealed. The appellate court determined that Ds adequately raised the issue of indivisibility, which, it stated, could be construed as an affirmative defense. P appealed.
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