Kellar v. Craig

Citations

• 126 F. 630
• 61 C.C.A. 366
• 1903 U.S. App. LEXIS 4351

Syllabus

<p>1. Quieting Title — Jurisdictional Allegations — Possession.</p> <p>Equity has jurisdiction of a bill to remove a cloud upon the title to real estate where both the legal title and possession in complainant are shown by the bill; but the requisite possession is negatived where it appears from the bill that defendants, with complainant’s consent, drilled, producing oil wells on the land in compliance with the terms of the lease, which is alleged to constitute the cloud on complainant’s title, and that they are in possession of such wells, and producing oil therefrom, having their own casing, tools, and machinery on the land.</p> <p>2. Oil Leases — Remedy of Lessor for Breach — Equity Jurisdiction.</p> <p>After the leasehold estate of a lessee, under an oil and gas lease providing for the development of the land and the operation of any producing wells obtained on a royalty basis, has vested by the completion of paying wells, and he is still in possession of the same, producing oil therefrom, if he fails to fully develop the land or protect its lines the lessor’s remedy is not by a suit in equity for a forfeiture of the lease, but by an action for damages for its breach.</p> <p>8. Same — Forfeiture.</p> <p>In all oil and gas leases a covenant to “protect the lines” and to “well develop” the land is implied, and the fact that such covenants are expressed in the same general words adds nothing to the lessee’s obligation, and the lease cannot be forfeited for a breach of such covenants where he has in good faith done what in his judgment was required to comply therewith.</p> <p>4. Same — Construction of Covenants.</p> <p>A covenant in an oil lease to drill one well every two months after oil is produced until the land is well developed is complied with where the required number of wells bave been drilled, although not at regular intervals of two months, and a court of equity will not decree a forfeiture because of such fact, especially where the lessor made no objecti