Mlllan v. Bartlett

Williams, PRESIDENT: Plaintiff has obtained a writ of error to a judgment of the circuit court of Marion county, pronounced on the 16th of June, 1908, sustaining a demurrer to his amended declaration in an action for a breach of covenant, and, on his declining to further amend, dismissing his bill. The sole question presented is whether the amended declaration sufficiently states a good cause of action. It avers that defendant, for valuable consideration fully paid, assigned to plaintiff, by contract in writing under seal, an undivided one-eighth working interest in twenty-one certain oil leases, describing them by the dates of their execution, the names of- the lessors, the number of acres of land embraced in each, and the terms of years they had to run. It also avers that defendant made certain covenants with plaintiff, which he has since broken, whereby plaintiff has suffered damages to the amount of $50,000.00. Stripped of the verbiage of formal pleading, the covenants alleged are: (1) that Bartlett agreed to relieve Millan of the payment of any part of the money necessary to keep the leases in force; or, if Bartlett preferred to suffer the leases to lapse, which it is alleged he had a right to do, then he was bound to notify Millan, and thus give him an opportunity to pay the rental and prevent their forfeiture; and, (2) that Bartlett was to assign to Millan, on his request, such leases as Bartlett might decide he would not continue to pay the rental on. Breifly stated, the breaches assigned are: (1) that Bartlett did not relieve plaintiff of the payment of the rental necessary to keep alive the leases, and did not pay it himself; (2) that he did not notify plaintiff of his intention to let any of said leases lapse; (3) that he did not assign to plaintiff such leases [157] as he did not desire to keep in force; (4) that, without notice to plaintiff, he sold and conveyed an undivided one-half interest in the leases to Neely and Sheakiey, and afterwards united with •said Neely and Sheakiey in a sale of the whole to the Fair-mont Gas & Light Company; and, (5) that the Fairmont G-as & Light Company immediately surrendered the most valuable ones of said leases, and thereafter obtained new lease for the same propertjr. The breach is sufficiently averred; the declaration states a good cause of action. Its .averments show that defendant broke his covenants by voluntarily putting it out of his power to perform them. True he did not covenant not to sell the leases, but it is also true that he could not escape liability by a sale and transfer of them. There was, at least, an implied covenant that he would not sell, if by selling he would put it out of bis power to perform his covenants. He agreed not to let any of the leases lapse without notifying plaintiff. This was to give him an opportunity to pay the rental himself, and thereby prevent a forfeiture. He also agreed to assign to plaintiff such leases as he (Bartlett) might not wish to keep alive. He was bound to keep alive the leases, or to notify Millan if he decided not to do so. It is averred that the Fairmont Gas & Light Company acquired the whole of the leases, which, of course, included plaintiff’s one-eighth of the working interest; and that it then suffered the most valuable ones to become forfeited, and thereafter obtained new leases of the same lands. This defeated the rights of plaintiff which Bartlett was bound either to protect, or to notify plaintiff and thereby afford him an opportunity to protect for himself. The sale to, and later forfeiture by, the Fairmont Gas & Light Company constituted a breach of Bartlett’s covenants for which he is liable to plaintiff. The aver-ments show that he has caused to occur, by indirection, that which he had covenanted should not occur directly. It was error to sustain the demurrer and dismiss plaintiff’s action, and the judgment complained of will be reversed; and this Corrrt will enter an order overruling the demurrer and reinstating the action, and will remand the case for further proceedings to be had according to law. Reversed and Remanded.