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Superior Oil Co. v. Devon Corp.
United States Court of Appeals for the Eighth Circuit
604 F.2d 1063 (8th Cir. 1979)
In 1949, the Olsens (defendants) leased oil and gas rights to Superior Oil Company (Superior) (plaintiff) for a primary term of ten years. Superior produced oil and the lease was extended. After 1961, Superior and its assignees ceased any further development of the leasehold. In 1976, the Olsens, without notice to Superior, leased oil and gas rights to Chris Christensen on certain property that was covered by the original Superior lease. Superior brought suit, claiming that the Olsens breached the Superior lease by leasing the same property to a third party. The Olsens counterclaimed that Superior had breached the implied covenant to further develop the lease. The district court found in favor of the Olsens and cancelled the Superior lease. Superior appealed.
Rule of Law
Holding and Reasoning (Benson, C.J.)
Dissent (Heaney, J.)
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