Page:Ezzell v. Oil Associates, Inc.pdf/2

Rh #M.—The fact that an oil and gas lease, providing for payment of royalties from the profits realized by the lessee in developing the land, does not contain express provisions as to the number of wells to be drilled does not leave the matters of development subject alone to the will of the lessee.
 * 1) M.—In determining the number of wells to be drilled by a lessee under an oil and gas lease calling for payment of royalties, due deference should be given to the judgment of the lessee, but he must use sound judgment and not act arbitrarily, and must deal with the leased premises so as to promote the interest of both parties and further the original purpose and intention of the parties.
 * 2) M.—Where an oil and gas lease was to run for five years and as long thereafter as oil or gas should be produced in paying quantities, the lessors are entitled, in case of abandonment, to a cancellation of the lease, since it would be difficult for the lessors to prove their injury in damages.
 * 3) M.—Whether a lessee has abandoned an oil and gas lease is a mixed question of law and fact, depending upon the particular facts and circumstances of each case, since the lessee's intention cannot be gathered from any statement of his alone, but must be determined from his intention as shown by his acts and conduct.
 * 4) M.—Under an oil and gas lease covering 1,170 acres and calling for royalties from production, the lease to continue in force for five years and as long as oil should be produced in paying quantities, without the lessee being required to pay additional rental, the lessee's failure to drill more than one producing well on the entire tract over a period of eight years held to constitute an abandonment, warranting a cancellation.

Appeal from Union Chancery Court, Second Division; George M. LeCroy, Chancellor; reversed.

On the 26th day of July, 1928, appellants brought this suit in equity against appellee to cancel a certain oil lease executed by appellants to the assignor of appellee.

The oil and gas lease was in writing, and was executed on the 18th day of December, 1919. It provides that the lessors, for and in consideration of $3,000, in common stock of a certain operating oil company