Page:Ezzell v. Oil Associates, Inc.pdf/8

Rh covenant upon the lessee's part to begin the exploitation for gas and minerals within a reasonable time. In discussing the subject, the court said that the authorities uniformly hold that there is an implied obligation on the part of the lessee to proceed with the search, and also with the development of the land with reasonable diligence, according to the usual course of such business, and that a failure to do so amounts, in effect, to an abandonment, and works a forfeiture of the lease.

Again, in Mansfield Gas Co. v. Parkhill, 114 Ark. 419, 169 S. W. 967, it was held that in every oil and gas lease a covenant is implied that the lessee will prosecute a diligent search and operation, and when the only consideration for the lease is a royalty, a failure on the part of the lessee to commence operations for a period of ten years will be held to be an abandonment, and the lessor may have the lease canceled, even though he has failed to notify the lessor of his intention to have the lease canceled.

In Mauney v. Millar, 134 Ark. 15, 203 S. W. 10, where the court had under consideration the construction of the lease of a diamond mine, it was held that where the sole (benefit of a contract results from a continued performance of the contract (such as to develop a mine, to operate it, pay royalties or to divide the proceeds), where one party completely abandons the performance thereof, equity will give relief by canceling the contract. For a partial breach the parties will be remitted to their remedies at law, but for abandonment equity affords relief by rescission or cancellation.

In Millar v. Mawney, 150 Ark. 161, 234 S. W. 498, it was held that, where the conduct of the lessees in mining leases, given in consideration of royalty to be paid, is such as to show that the lessees do not intend in good faith to perform the covenants by which they are bound, they have, in legal effect, rescinded those covenants and released the lessors from the obligations of the contract, and the latter are justified in treating the contract as rescinded. In that case it was also held that where a