Decker v. Kirlicks

The suit was by H.R. Decker against John A. Kirlicks to quiet the rights of Decker under an oil lease granted by Kirlicks and others, and to recover from the Texas Company the purchase price of certain oil from wells developed under the lease to which Kirlicks and others were asserting an adverse claim. The Texas Company declared its willingness to pay the amount due for the oil to the rightful owner, and impleaded other parties. Some of these joined with Kirlicks in a plea that Decker had forfeited his rights under the lease. Upon the trial a verdict for Decker was directed. The honorable Court of Civil Appeals reversed the judgment and remanded the cause.

The ruling of the Court of Civil Appeals that under the Act of 1913 the peremptory direction of the verdict was subject to challenge on the appeal, though not objected to in the trial court before read to the jury, presented a conflict with decisions of other Courts of Civil Appeals, and we granted a writ of error in order to settle the question. We decided it at the last term in Walker v. Haley which involved a similar conflict.110 Tex. 50, 214 S.W. 295. That decision sustains the holding of the Court of Civil Appeals in the present case.

The oil lease contained this provision:

"It is further agreed that in the event oil is found in paying quantities in said first well, then the lessee agrees and covenants that within thirty days from the completion of such successful well he will begin the boring of a second well on some other acre of said tract herein leased, and continue to bore additional wells with due diligence in such order as to additional wells, on the tract herein leased as developments may justify, until at least five or six wells have been completed, or the acre upon which said second party has failed to drill a well reverts to the first party by written notice to that effect being served upon said second party by said first party."

The tract of land leased embraced about 20 acres and was laid off in acre blocks. Decker bored his first two wells upon different acres. He completed five wells with due diligence, but four of them were upon the same acre. Upon the question as to whether this provision in the lease would sustain a forfeiture because of a failure to bore all of the five wells upon different acres, the Court of Civil Appeals held that the provision was ambiguous and that its meaning should have been submitted to the jury for decision.

If the provision is ambiguous, that alone condemns it as a forfeiture provision. A forfeiture should rest upon surer ground. Where a contract is so vague in its terms that a court cannot determine its meaning, it would be unjust to enforce a forfeiture under it against one whose only fault has been to possibly mistake its meaning. Forfeitures are harsh and punitive in their operation. They are not favored by the law, and ought not to be. The authority to forfeit a vested right or estate should not rest in provisions whose meaning is uncertain and obscure. It should be found only in language which is plain and clear — whose unequivocal character may render its exercise fair and rightful.

It is not necessary that we determine whether this clause in the lease requires the boring of the five wells upon five different acres, or sanctions their location upon but two different acres. If it be conceded that it admits of the first construction, it is not certain that such is its true construction. It does not plainly say that each of the wells shall be upon a different acre. It is only by inference, at best, that such meaning can be gained from the language. A provision so indefinite as to the obligation imposed, is incapable of supporting a forfeiture. Benavides v. Hunt, 79 Tex. 383,15 S.W. 396.

Another clause in the lease was as follows:

"It is further mutually agreed that in case lessee abandons said property; or in case he fails to operate any particular well which is in actual operation on said tract, which is producing either oil or gas, for the period of thirty days, and fails to operate same for said period, unless such failure is unavoidable and is because of broken machinery that cannot by proper care and diligence be sooner replaced or put in order, or because of the wells clogging so as to reasonably require a longer time to clean and put them in order, then this lease and such producing well and the land hereinabove provided to operate it, shall revert to the lessors, and the lessors shall in such event have the right to take possession of said premises and such well, together with all of its equipments, and operate same, or have same operated for their own benefit without further proceedings, or any legal proceedings, of any kind or character, but in such event the lessee shall have the right to remove his equipments and machinery from such well so forfeited, and from said land herein leased on which said well is directly located, and not to exceed one acre, in area, but in no event to so operate as to interfere with other wells operated by lessee or with other drilling by him for other wells unless the lessors shall within thirty days after such forfeiture elect to pay and do pay to the lessee fifty per cent. of the market price for the piping in such well or wells, and the market value of all equipments retained, and should lessors fail to make such payment within thirty days after such forfeiture on the part of lessee and the taking over of said well by lessors, the lessee shall have the right to remove said pipe and equipment from such well and from such land."

A further ruling of the Court of Civil Appeals, complained of here by Decker, was that in the state of the proof an issue of fact was presented as to whether under this clause Decker had forfeited the lease in whole or in part.

The clause provides two different conditions as grounds for forfeiture, and different measures of forfeiture as the consequence: (1) an abandonment of the property, whereon the entire lease should terminate; and (2) a failure to operate a producing well for thirty days unless due to an excepted cause, whereon such well and the immediate land upon which it was located in extent sufficient for its operation but not to exceed one acre, should revert to the lessors. In the event of the latter happening, the lessee is given the right to remove his machinery and equipment from such forfeited well and land unless within thirty days after such forfeiture the lessors shall pay him therefor as stipulated.

As we understand its opinion the Court of Civil Appeals did not construe the clause as authorizing a forfeiture of the entire lease upon a failure to operate one of the producing wells. It held that there was evidence tending to establish an entire abandonment of the land by the lessee, and also evidence of his failure to operate producing wells for thirty days and longer. Its ruling simply was that such being the record the issues both of an entire forfeiture and a partial forfeiture should have been submitted to the jury.

If we have jurisdiction to review this holding of the Court of Civil Appeals, it is in virtue of subdivision 6 of Article 1521 as amended by the Act of 1917 (Chapter 75), by which the appellate jurisdiction of the Supreme Court is now governed. That is, it must appear that the ruling constitutes "an error of law of such importance to the jurisprudence of the State, as in the opinion of the Supreme Court requires correction." The amendment of this subdivision by the Act of 1917 was plainly intended to further limit the jurisdiction of the Supreme Court as conferred by the Act of 1913. Whether the Court of Civil Appeals "has erroneously declared the substantive law of the case" is no longer the test as applied to cases falling within the subdivision. The amendment declares, in effect, that it is not enough that the error of law be obvious, in the opinion of the Supreme Court; nor that it be of importance to the aggrieved party; nor that its correction be necessary in the view of the Supreme Court to prevent an injustice in the immediate case; nor even that it be "of importance" to the jurisprudence of the State. For the Supreme Court to be invested with the power to revise the ruling, it is required that it amount to an error of law "of such importance" to the jurisprudence of the State as in the opinion of the court requires correction. This clearly pre-supposes a ruling of such erroneous consequence as, if permitted to stand, would constitute a serious departure from the established law or introduce a doctrine violative of fundamental principles.

Whatever may be the difficulties of its administration, this is the theory and plain meaning of the amendment. It is the written law, and our duty is to give it effect.

We do not consider a ruling of the Court of Civil Appeals in a particular case either that there was some evidence warranting the submission of a given issue to the jury, or that there was no evidence justifying its submission, as within the purview of the amendment unless it can be fairly regarded as so flagrantly wrong as to amount to a virtual denial and abrogation of the established rules of law which, in the one instance, enjoin upon the trial court the exercise of its essential function, and in the other preserve the right of jury trial. Where these questions are presented, our practice is to examine the record; but unless it discloses that the ruling is of the character stated, we do not regard it as one within the court's power to revise.

We have examined the record here under the assignment challenging the ruling of the Court of Civil Appeals above noted. If erroneous at all, the ruling was not so clearly wrong as to bring it properly within the Supreme Court's jurisdiction.

Other questions are presented, but they are equally without our jurisdiction.

The judgment of the Court of Civil Appeals reversing that of the District Court is affirmed, but with the direction that the further trial of the case be in accordance with this opinion.