DocketNumber： No. 2714
Citation Numbers： 220 S.W.2d 493
Judges： Collings
Filed Date： 4/22/1949
Status： Precedential
Modified Date： 10/1/2021
This suit was filed in the trial court by appellants, Tom Morrison and wife, against A. B. Swaim and others, appellees herein, seeking to declare an oil and gas lease terminated by its own limitations for non production after the expiration of the primary term and to remove the cloud from appellants' title cast thereon by said lease. Upon a jury finding to the effect that there had been no cessation of production of oil from a well drilled upon the premises in question, a judgment was entered against appellants perpetuating the lease. From such judgment this appeal is brought.
Appellants alleged the execution of an oil and gas lease dated April 25, 1941, providing for a primary term of five years from the date thereof. The habendum clause of the lease is as follows: “To have and to hold the same for a term of five years from this date, hereinafter referred to as primary term, and as long thereafter as oil or gas or casinghead gas, or either or any of them, is produced therefrom, or as much longer thereafter as the lessee in good faith shall conduct drilling operations thereon and should production result from such operations, this lease shall remain in full force and effect as long a-s oil or gas or casinghead gas shall be produced therefrom.”
. Appellants alleged that on April 16, 1946, before expiration of the primary term on April 25, 1946, an oil well was drilled in as a producer of oil on said lease. It was further alleged by appellants that from the date of completion of the well on April 16th until the middle or latter part of August, 1946, no oil or gas or casinghead gas was produced from said lease and that no drilling operations were conducted thereon. Appellants here contend that such alleged failure to produce oil automatically lapsed and terminated the lease, and that such lapsation and termination took place on or about April 25, 1946.
Special Issue No. 1 of the court’s charge and the answer of the jury thereto was as follows: “Do you find from a preponderance of the evidence that the Morrison well No. 2 involved herein between April 25, 1946 and in August, 1946, when Gratex took oil from such well, did not produce oil without cessation ? Answer: It did produce oil without cessation.”
It is contended by appellants in Point 1 that the evidence established conclusively and as a matter of law that after the expiration of the primary term of the lease involved herein, there was no such production as, under the provisions of the lease, was necessary to the continuation of the term thereof, and that according to the terms of the lease, as provided in the haben-dum clause hereinabove set out, the lease automatically terminated on or about April 25, 1946. It seems to be well settled in this State that where an oil and gas lease provides for a primary term and “as long thereafter as oil or gas is produced therefrom” the production of oil or gas at the time of the expiration of the fixed term is regarded as a condition precedent to the continuation of the lease, and that upon cessation of such production after termination of the primary term, the lease automatically terminates. Watson v. Rochmill, 137 Tex. 565, 155 S.W.2d 783, 137 A.L.R. 1032; W. T. Waggoner Estate v. Sigler Oil Company, 118 Tex. 509, 19 S.W.2d 27. The strictness of this rule has been relaxed in several cases where there was only temporary cessation.
In effect, the answer to special issue No. 1 above finds that oil was being produced from the lease at the expiration of the primary term and then continued without cessation until some time in August, after which it is admitted that oil was produced from the well in question in paying quantities. The first question confronting us in connection with appellants’ point 1 is, was the evidence herein sufficient to support such jury finding that there was production of oil as contemplated by the lease at the time of the expiration of the primary term on April 25, 1946. The evidence, in our opinion, is conclusive that there was not such production. According to the testimony, oil was discovered on April 16th but it has been held in this State that the words “discovered” and “production” are not synonymous. Texas Pacific Coal & Oil Co. v. Bratton, Tex.Civ.App., 239 S.W. 688. Production to extend a lease beyond its primary term, must be in paying quantities. Bouldin v. Gulf Production Co., Tex.Civ.
Appellees contend that the judgment should be upheld regardless of the sufficiency of the evidence to support the jury finding that there was production without cessation.
They insist that the lease was continued in effect by drilling operations conducted in good faith which were in progress at the end of the primary term and resulted in production of oil. As we interpret the lease there were two ways in which it might be extended. The first is set out in the language “and as long thereafter as oil * * * is produced therefrom,” and the second is contained in the words immediately following those just quoted, to wit: “or as much longer thereafter as the lessee in good faith shall conduct drilling operations thereon.” The lease further provides: “and should production result from such operations, this lease shall remain in full force and effect as long as oil * * * shall be produced therefrom.” (Italics ours). In its usual meaning, the word “or” is a disjunctive participle that indicates a choice between two alternatives generally corresponding to “either” or “either this or that.” That is the meaning which we think was here intended. Either production in paying quantities or drilling operations in good faith would be effective to extend the term of the lease. We cannot agree with the idea advanced by appellants that the only drilling operations contemplated by the lease which might preserve the life of the lease are drilling operations which follow cessation of production once had.
Appellants, in their pleadings, al leged a lack of both production and drifting operations on the lease at and after the expiration of the primary term. Appellees denied these allegations. The burden was on appellants to establish the lack of production and also the lack of drilling operations in good faith. Each was an essential element of their right to recover. Guleke v. Humble Oil & Refining Co., Tex.Civ.App., 126 S.W.2d 38; Miller v. St. Joseph’s 55 Oil Ass’n, Tex.Civ.App., 278 S.W. 457; Hall v. McClesky, Tex.Civ.App., 228 S.W. 1004. An issue on the lack of production was submitted, but no issue was submitted or requested to be submitted on the lack of drilling operations. These issues were appellants’ issues. A favorable determination of both was necessary to sustain appellants’ right or ground of recovery. By failing to request the submission of the issue on drilling operations, appellants, in effect, waived a jury finding on that question and the trial court was empowered to determine same. When no finding is made or requested to be made by the trial, court, it will be presumed that the issue was found by the trial court in! such manner as to support the judgment if there is evidence to support such finding. Cochran v. Wool Growers Central Storage Co., 140 Tex. 184, 166 S.W.2d 904; Vanover v. Henwood, 136 Tex. 348, 150 S.W.2d 785; Rule 279, Texas Rules of Civil Procedure; Minchen v. Vernor’s Ginger Ale Co., Tex.Civ.App., 198 S.W.2d 613; Miller v. St. Joseph’s 55 Oil Ass’n., supra; Wichita Falls & Oklahoma R. Co. v. Pepper, 134 Tex. 360, 135 S.W.2d 79; Bigelow v. Rupp, Tex.Civ.App., 192 S.W.2d 791. The material evidence on the question of such drilling operations is as follows. Swaim testified, in substance:
“The oil sand was found in Morrison Well No. 2 on April 16, 1946; on April 17th he cleaned out the well and washed the sand and built a fence around the pit to keep the cattle away; on April 18th he ran
* * * * * *
“The Appellant Morrison testified “that A. B. Swaim got the tank about the time the well came in; that he knew that the casing was being taken out of the well in April; that he knew a tank was erected to put oil in; that he knew power was installed 15 or 30 days after the well came in; and that it is still there; that he knew they had put an engine there to pump the oil after April 16th' and before August; and he knew that Swaim was down there in
The above evidence, as we view it, falls short of conclusively establishing the lack of drilling operations in good faith at and after the expiration of the primary term. Since no issue was submitted or requested thereon, it is therefore presumed that the trial court found the existence of such drilling operation in good faith, that is, that the issue was found by the trial court in such manner as to support the judgment. Appellants admit and the evidence is undisputed that the well in question has been producing oil continuously since August 8, 1946, and further, that this production resulted from drilling operations conducted by appellees. These facts, together with the presumed finding that drilling operations in good faith by appellees were in progress at the time and after the expiration of the primary term, are all that was needed to extend the term of the lease.
For the reasons stated, the judgment of the trial court is affirmed.