Schwartzenberger v. Hunt Trust Estate

244 N.W.2d 711 (1976)

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Nature of the Case

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Facts

On July 25, 1972, Ps executed in favor of D an oil and gas lease that provided for a primary term of ten years and which included a provision to the effect that if operations for drilling were not commenced on the premises or on lands pooled therewith, the oil and gas lease should be considered terminated unless, on or before one year from the date of the lease, the lessee should tender and pay to Ps the rental of four hundred nineteen and 27/100 dollars ($419.27) which should cover the privilege of deferring commencement of drilling operations for a period of twelve months. Drilling was not commenced in one year. D also failed to make payment of delay rentals on the anniversary date as provided in the lease. On March 25, 1974, a notice of termination and forfeiture of the oil and gas lease was given to D, and that said Trust Estate had neglected, failed, and refused to file a release of the oil and gas lease. Ps sued D to quiet title. In court, after a hearing, the court made the determination that the written lease between the parties did not truly express the intentions of the parties because of a mutual mistake on the part of the parties and that therefore the lease should be reformed so as to express the true intention of the parties. It found that the delay rentals should have been a yearly rental of $406.24. he court found that D on the 10th day of June, 1973, deposited $399.31 * to cover the rental period of July 25, 1974 to July 25, 1975. The court ordered D to pay Ps the sum of $23.79 for the differences in the bonus payments actually made under the original lease and those required by the reformed lease and to pay to the Ps the sum of $15.79 for the difference between the delay rentals actually paid under the original lease and those required by the reformed lease. Ps appealed. claiming that the trial court was in error in its finding that Ps, during the negotiations prior to the execution of the oil and gas lease, informed the agent for D that there was a 5% reduction in the mineral acreage due to a reservation by McKenzie County or the State of North Dakota. Ps claim that D underpaid the rental and that the lease should not be reformed but canceled.