Pittsburg Vitrified Paving & Building Brick Co. v. Bailey

Citations

• 76 Kan. 42
• 90 P. 803
• 1907 Kan. LEXIS 358

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Contracts — Oil-and-gas Lease — Option—-Construction. B. and wife, owners of certain land, entered into a written contract with a corporation, which by its terms granted to the corporation, in consideration of one dollar and the agreements made by the company, the privilege of entering upon the land for a term of ten years and boring gas- or oil-wells, etc., and, in the event of the discovery of oil or gas in paying quantities, conveyed the title to such products for a specified royalty. The company agreed to complete a well within two years or to pay a rental of twenty-five cents per acre until a well should be completed on the premises. The contract also provided that the term might be extended indefinitely at the option of the company so long as gas or oil was found in paying quantities or the rental was paid; also that the company had the right to surrender the contract at any time and be thereby discharged from all liability for the non-fulfilment thereof. Held, that such contract is not, strictly speaking, a lease of the premises, but constitutes a sale by B. and wife to the company of an option to exercise or not to exercise the privilege granted, as the company might choose.</p> <p>2. - Mutuality. Such contract is not void for want of mutuality. It is of the essence of an option contract that it is not mutual. The purchaser pays his money or does what he agrees to do for the privilege of choosing whether or not he will perform or claim performance of the contract, and for the consideration received the seller parts with his right of choice.</p> <p>3. - Construction — Ambiguous Terms — Conduct of the Parties. Where certain terms of a contract are ambiguous, but such terms have been construed and acted upon by the parties interested, such construction will be adopted, even though the language used may more strongly suggest another construction.</p> <p>4. - Consideration. The amount paid at the execution of the contract and t