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L. M. YORK ET UX. v. WM. D. MCBEE (12/05/57)

December 5, 1957

L. M. YORK ET UX., APPELLANTS,
v.
WM. D. MCBEE, APPELLEE



Author: Mcdonald

McDONALD, Chief Justice.

This is a suit by Wm. D. McBee, as plaintiff, against L. M. York and wife and W. E. Walker, as defendants, to declare an oil and gas lease dated 15 November 1955, between plaintiff McBee as lessee and York, wife, and Walker, as lessors, to be in full force and effect. Defendant Walker in his answer joins in plaintiff's prayer that the lease be declared in full force and effect. Defendants York and wife contended the lease expired under its own terms through failure of plaintiff to pay delay rentals due 15 November 1956 in accordance with the contract and the agreement of the parties. Both sides moved for summary judgment. The Trial Court granted plaintiff's motion for summary judgment (and denied defendants' motion), and declared the lease to be in full force and effect.

A statement is necessary. Defendants York and wife own 650 acres of land in Freestone County, which they purchased 26 January 1944 from defendant Walker. The deed from Walker to the Yorks reserved to Walker 1/4 of the usual 1/8 royalty, and then provided: "This reservation is on non-participating basis as to bonus money or delay rentals." Plaintiff McBee, an independent oil operator, was desirous of leasing a block of land in Freestone County (and through F. G. Gannon, his land man and attorney) wrote York about leasing his land. The negotiation was entirely by correspondence. The correspondence discloses that plaintiff McBee was aware of the deed from Walker to York wherein Walker reserved "1/4 of the usual 1/8 royalty, on a non-participating basis as to bonus money and delay rentals", but since full title examination had not been made, and out of precaution, McBee had a lease prepared including Walker's name as a lessor and sent this lease to York, together with a check payable to York and wife for $3,250 bonus money for executing the lease. York and wife signed the lease and returned it to McBee by letter stating: "I do not think it is necessary for Walker to sign the lease; if you wish him to sign, you may get in touch with him yourself." McBee thereafter secured the signature of Walker on the lease, and the Yorks cashed the $3,250 bonus money check.

Pertinent portions of the Oil, Gas and Mineral Lease, executed by the parties herein, is quoted:

"Oil, Gas and Mineral Lease

"Agreement, made and entered into this 15th day of November 1955, by and between L. M. York and wife, Lillian York, and W. E. Walker, hereinafter called Lessor (whether one or more), and Wm. D. McBee, Lessee * * * witnesseth:

"1. That the Lessor * * * leases to Lessee (a certain 650 acres in Freestone County).

"2. It is agreed that this lease shall remain in force for a term of 5 years * * *

[308 S.W.2d 951 Page 17]

    "3. In consideration of the premises, and as royalties hereunder, the said Lessee covenants and agrees: (To deliver to Lessor 1/8 of oil, etc. produced) * * *. The royalty provided for Lessor in Paragraph 3 of this lease is owned by W. E. Walker and L. M. York in accordance with deed from W. E. Walker to L. M. York to the above described land dated January 26, 1944, of record in Vol. 171, Page 17, Deed Records of Freestone County, Texas, wherein there was excepted and reserved to W. E. Walker, * * * for a period of 20 years from the date of said deed and as long thereafter as oil, gas or other minerals be produced from said land * * * 1/4 of the usual 1/8 royalty of all oil, gas, or other minerals in, on, or under said land * * * it being understood that W. E. Walker and L. M. York between them own all rights to the royalty provided for in Paragraph 3 of this lease. In addition to the royalty provided for in Paragraph 3 of this lease which shall be shared by W. E. Walker and L. M. York in accordance with the said deed, there is hereby reserved to L. M. York * * * an overriding royalty of 1/32 of 8/8ths of all oil and gas produced * * *. /s/ L. M. York

L. M. York

/s/ W. E. Walker

W. E. Walker

/s/ Lillian ...


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