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Warner v. Haught, Inc.

Supreme Court of Appeals of West Virginia
329 S.E.2d 88 (W. Va. 1985)


Facts

In 1979, Richard Warner (plaintiff) leased a tract of land to D. & H. Oil Company (DHOC). The lease provided that DHOC would pay an annual rental amount to Warner until, but not after, a producing well was drilled on the land. The lease also contained a surrender clause, under which DHOC could voluntarily surrender its interest in the lease. DHOC assigned the lease to Haught, Inc. (Haught) (defendant). In 1981, Haught failed to make a timely rental payment to Warner. Warner brought suit in the Circuit Court of Pendleton County, seeking a declaratory judgment that the lease had been forfeited and abandoned as a result of the failure to pay. Haught argued that the lease was still valid because Warner had failed to comply with a West Virginia statute requiring that an oil and gas lessor make a demand for payment before terminating a lease for nonpayment. The circuit court granted Haught’s motion for summary judgment. Warner appealed, arguing that the statute in question applied only to “or” leases and did not apply to “unless” leases. Warner claimed that its lease was an unless lease because of an oral statement made by a Haught agent indicating that the lease would be void if Haught did not pay a rental on time.

Rule of Law

Issue

Holding and Reasoning (McGraw, J.)

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