Beatty v. Baxter

James Hubbard owned a tract of land. In 1921, James executed an oil and gas lease on the land for a primary term of five years and for as long thereafter as oil or gas was produced. In James’s will, he devised half the land to Charles Hubbard and half to Fred Hubbard. The will was contested by James’s other children. The will contest was settled in 1925 by an agreement under which Fred conveyed to his siblings a mineral estate in the portion of the land the will purportedly left for Fred. The conveyances were for a period of 20 years “and as long thereafter as oil or gas [was] produced from said premises.” Fred also granted a reversionary interest in his estate to J.B. Beatty and Zella Beatty (plaintiffs). In 1945, the last producing well on Fred’s tract ceased production. The casing was not removed from the well, which was rehabilitated and began producing again in 1948. Additionally, a new well was drilled on Fred’s tract and began production in 1947. The Beattys brought suit against F.H. Baxter and other grantees of Fred’s siblings (defendants), seeking a declaratory judgment that the cessation of production reverted the mineral estate to the Beattys. The defendants argued that the cessation was temporary and that the rehabilitation of the well had been delayed due to wartime conditions. The defendants claimed that, as a result, their mineral interests did not revert to the Beattys. The trial court found in favor of the defendants. The Beattys appealed.