"Hence, in order to bind appellant Hines [the grantor], he either must have received this money [the rents for 60 days] or by some work or conduct of his must have induced appellee to have acted in his behalf to his injury or detriment, which is not shown. In fact, nothing was done by Staley [the lessee] between the 30th of January and the 3d of February, when written notice was given him by Hines of his refusal to accept said payment and declaring said contract forfeited, except the hauling, on the 30th of January, of one load of pipe to the land, and it is not shown whether this took place before or after Hines was informed of the deposit of the $25, and which said pipe was still on the land at the time of this trial. Besides this, if the evidence had shown such facts as constituted an estoppel on the part of appellant Hines, it could not have affected or changed the result, for the reason that appellees have pleaded no estoppel whatever as against him, and therefore could assert none."

[4] Appellee insists, since it appears from the testimony of appellant, Mrs. Owens, that it had no notice of the fact that she would

refuse the lease money on March 6th, that it had a reasonable time after her refusal to begin boring a well. It having been uniformly held, in accordance with the decision of Justice Gaines in the Teel Case, that there is a want of mutuality in contracts of this character, and that there is therefore no consideration to support the grant, the contract is void, we cannot assent to this proposition. The primary purpose of the grant on the part of appellant was to have the land explored for the purpose of ascertaining the existence of minerals thereunder and to obtain the benefits from its development. This was the real consideration for the grant. Appellee had one year from the date of the contract in June, 1911, to bore the well, and, if the well was not completed within that time, it could extend the lease from time to time for three months, provided the grantors would accept the rents and consent to such extension. The purpose of promoting these extensions was clearly not to enable appellee to hold the land without development during the entire term of the lease (which was stated to be ten years), because in such time, by surrounding the premises with other wells, appellee might have taken the oil, or a greater part of it, from under the grantor's land; but the purpose in providing for extensions from time to time must be held to have been to enable appellee to develop the property, or, in other words, pay the real consideration for the exclusive grant. It appears from the statement of facts that, a few days after appellant refused to accept the rent provided for in the contract and extend the op

months completed a well upon the premises at an expenditure of about $12,000, that the well was at the time of the trial producing 117 barrels of oil a day; and appellee contends that because of certain acts and conduct upon the part of appellants, which induced it to proceed with the work, they are estopped from maintaining this suit. Without discussing the evidence bearing upon this issue, and the right of appellee to sink a well after the expiration of the option, we merely state that it was sufficient to have required the court to submit the issue to the jury.

[5] It is held that the lessors, by permitting the lessees to expend large sums of money in developing the mine, may waive their right to declare a forfeiture, and this rule may, upon another trial, apply to this case. Washington v. Rosario Mining & Mill. Co., 28 Tex. Civ. App. 430, 67 S. W. 459; Benavides v. Hunt, 79 Tex. 383, 15 S. W. 396.

Because the court erred in peremptorily instructing a verdict, the judgment is reversed, and the cause remanded.

On Motion for Rehearing.

In its motion for rehearing it is insisted

by appellee that we erred in stating that appellant's land had oil wells upon three sides, but reference to the statement of facts shows that we are correct. Mrs. Owens and her daughter both testified to that effect, and they are sustained by appellee's wit

ness, Faulkner.

By an extended argument, in which many of the cases involving the main question to be passed upon has been discussed, we are asked to again review the authorities in this state, and it is earnestly insisted that we are in error in holding the contract to be unilateral and void for want of mutuality. As stated in the original opinion, this contract gives the oil company the option of abandoning the lease at any time, merely upon the payment of $5, and whatever lease money may be due at that time. But for this provision the case would come within the rule announced in Great Western Oil Co. v. Carpenter, 43 Tex. Civ. App. 229, 95 S. W. 57, in which a writ of error was refused by the Supreme Court. Reese, J., said in that case:

"No option is given the lessee to do this work or not [to sink one or more wells on the leased lands within 18 months and to commence work on the first well within 6 months of the date of the contract] or to let the lease lapse on account of his failure if he so elects. In case of failure of the lessee to commence work is given to the lessors to cancel the lease, but, on the first well within 6 months, the option unless the lessors chose to exercise this right of forfeiture or cancellation, the lessee can be held, at all events, to a compliance with his obligation to do the work specified in the contract and expressly agreed to be performed by him. It is true that, if the lessors elect to cancel the lease for default on the part of the lessees, the

could they recover damages for failure to comply therewith? Such an action would be successfully met and defeated by the further provision, if set up by appellee, that, in the event the well is not completed within one year, appellee had the right to pay the $28.20, and thus extend the option for three months. Then suppose appellants should file suit to recover upon this option for a longer term than three months. They certainly could not prevail in any such action, in the face of the express stipulation that the right to extend if for more than three months at a time is optional with appellee. If appellants could neither recover damages, require the completion of a well nor recover $28.20, rent without the consent of appellee, the contract is clearly unilateral and void. Any attempt to do either of these things could be instantly defeated by appellee by interposing that term of the contract whereby it is permitted to surrender the grant upon the payment of $5. No one will contend that the $5 mentioned therein is an adequate or sufficient consideration for anything granted or surrendered in the contract. This feature distinguishes the instant case from the Carpenter Case, supra.

We will briefly review some of the cases cited by appellant in its motion: The consid-, eration of $1 set out in the Carpenter Case was held to be an adequate consideration for the lease. Appellee quotes from the case of J. M. Guffey Petroleum Co. v. Oliver, 79 S. W. 884. The lease contract in that case was based upon a consideration of $1, and contains this stipulation.

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"It is agreed that the second party, upon the payment of $2.00 at any time by the party of the second part, its successors or assigns, to party of the first, heirs or assigns, said party of the second part, its successors or assigns, shall have the right to surrender this lease for cancellation, after which all payments and liabilities thereafter to accrue under and by virtue of its terms shall cease and terminate and this lease become absolutely null and void." In construing the contract, Garrett, C. J.,

said:

"The contract in this case was an option to the lessee. It was executed in consideration of royalties reserved, and though silent as to the extent of development required, the law implies a condition for diligent, good faith, and reasonable development. By the second group of assignments the defendant seeks to maintain that the contract was not unilateral and void for want of mutuality, because: (1) There was a covenant on the part of the obligee to do something involving the expenditure of money, time, or labor; (2) it provided that the lessee could put an end to it only by paying a valuable consideration; and (3) although void in the beginning for the want of mutuality, when the lessee accepted the option, and had partly executed the contract, his act related back, and made it binding from the beginning. Although the option had been complied with by the commencement of work, as stipulated, and the contract may have lost its unilateral character, yet, as above stated, it was subject to forfeiture for failure to diligently prosecute the development of the land for oil; and this notwithstanding the expenditure of money and labor already made, if it fell short of a compliance with the obligation, and the facts alleged in the petition are

sufficient to show the right of the plaintiff to forfeit the lease for want of development."

The provision in the lease that it may be surrendered by the defendant upon the payment of $2 makes it terminable at the will of the defendant. Since the sum named is only a nominal consideration, and will not deprive the lease of such character when the great value of the lease of the premises as oil-bearing land is considered, the trifling sum mentioned cannot be considered more than nominal. It is a well-established principle of law that, when it is provided in the lease that it is terminable at the will of one of the parties, it becomes terminable at the will of either. 1 Wash. Real Prop. (4th Ed.) 583; Robb v. Railroad, 82 Tex. 392, 18 S. W. 707. Many other authorities might be cited sustaining the general principle announced. In Marble Co. v. Ripley, 10 Wall. 339, 19 L. Ed. 955, the Supreme Court of the United States, passing upon a contract giving to one of the parties the right to terminate it upon a year's notice, held that it could not be enforced by Ripley because it gave the right to Ripley to terminate the estate by giving one year's notice, using the following language:

"Another reason why specific performance should not be decreed in this case is found in the want of mutuality. Such performance by Ripley could not be decreed or enforced at the suit of the Marble Company, for the contract expressly stipulates that he may relinquish the business and abandon the contract at any time on giving of one year's notice. And it is a general principle that when, from personal incapacity, the nature of the contract, or any other cause, a contract is incapable of being enforced against one party, that party is equally incapable of enforcing it specifically against the other, though its execution in the latter way might in itself be free from the difficulties attending its execution in the former."

The next case presented in the argument of appellee is Roberts v. McFadden, 32 Tex. Civ. App. 47 on page 57, 74 S. W. 105 on page 111. We insist that this case also sustains the position taken by us in the original opinion. We quote from the opinion as found as follows:

"This brings us to the question of the validity of the lease. It is contended by appellees that the lease is void for two reasons: First, it was a unilateral contract unsupported by any consideration and was forfeited by Junker's conveyance to defendants before any prospecting was done thereunder; second, because they purchased of Junker, for value without notice of the lease. We are of opinion that either of these objections is fatal to the lease. It was shown, without dispute, that the consideration of $1 named in the lease as paid was not, in fact, paid, and the only consideration upon which the contract rested, so far as the lessee was concerned, was the promise to develop the leased premises and to deliver to the lessor 10 per cent. of the gross oil product. It may be held, when the question is presented in this state (it has been intimated in the case of Oil Co. v. Teel, 67 S. W. 547), that the nominal consideration of $1, if paid, will support the option for the fixed time named in the lease. But here not only is it true that the cash consideration named was not in fact paid, but the contract was further weakened by the stipulation that the lessee could terminate the

lease at any time, and that the sum paid the lessor should be his full compensation for any injury sustained. No sum was paid the lessor, and thus he has sought to be held at all events for the full time, the lessee being bound in no respect to do or perform anything. We can imagine no more glaring instance of a unilateral contract."

Appellee does not contend in the instant case that the $28.20 consideration paid to Mrs. Owens and her husband, at the time of the execution of the lease was a consideration to support the option for a longer term than one year. If so, why was it provided that this amount should be paid thereafter quarterly? While in the Roberts v. McFadden Case, from which we have just quoted, the lessee was given the option of terminating the lease at any time without the payment of $5, as is provided in the instant case. The sum of $5 is so insignificant in amount as to render it totally inadequate as a consideration for anything pertaining to the

lease.

In Emery v. League, 31 Tex. Civ. App. 474, 72 S. W. 603, the consideration named for the lease was $10, and it was provided that party of the second part (the lessee) shall begin operations in good faith on the land leased within six months after the lands had been partitioned, and that the second party should have six months after said period in which to prospect the land and complete a well, and contained this stipulation:

"Provided, however, it is distinctly understood and agreed that the party of the second part shall have the right to cease operations under this contract whenever it shall become manifest that it would be unprofitable not to do so,"

etc.

It is claimed that the contract was void: "(1) For the want of mutuality; (2) for failure of consideration in that the real consideration for same was the promise and agreement of Emery to procure without delay and free of cost to his vendors a partition of the land and to explore, prospect, and develop said land for oils and other minerals, and that in the performance of said agreement and undertaking Emery had wholly failed; (3) because by the terms of said contract it is provided that same shall be effective only so long as the parties thereto should faithfully comply with the covenants and agreements therein undertaken to be performed, and that, said Emery having never performed or offered to perform, etc., the contract had been declared void."

In disposing of the issues, Pleasants, J.,

said:

"While the instrument under which appellant claims contains apt words of conveyance, and recites a valuable consideration which the evidence shows was actually paid, it cannot be held to be an absolute conveyance of the minerals underlying the land therein described, and the title to such minerals was not vested in appellant by the execution of said instrument. The whole instrument must be construed together, and, when so considered, it is apparent that the real consideration therefor was the prospecting and developing, with due diligence, the land therein described, for oil and other minerals. This was clearly the primary purpose of the grantors in the execution of said contract, and it is expressly provided in the instrument that the same shall remain in force and effect only so long as the parties thereto faithfully comply

with the covenants and agreements undertaken to be performed. It is well settled that contracts of this kind do not vest an absolute title in the grantee, but only confer upon him the right to acquire title by a compliance with the terms of the contract and the discovery and development of oils or other minerals mentioned in said contract. In other words, such instrunature of options, and can only ripen into a timents are not conveyances of title, but are in the tle by compliance with their terms on the part of the grantee and the accomplishment of the purpose for which they were executed. The instrument under consideration stipulates that appellant shall have six months after the partition of the land in which to prospect same and complete a well, and further stipulates that appellant shall procure a partition of said land. No time is fixed within which a partition must be secured, but the presumption of law is that the parties intended a reasonable time. It is to appellant should have six months after the parbe observed that this is not a stipulation that tition to begin his explorations, but shall have the right to prospect the land for that length of time, and it would seem that, under this stipulation, the failure to complete a well within the time named would terminate appellant's rights under the contract."

And so it may be said of the instant case. [7] Our construction of the contract is that appellee had 12 months within which to complete a well, and the plain import of the language is that appellee should begin operations within such time as would enable it to complete the well within 12 months. we think, further, that the provision for

an extension of the lease for 3 months was for the purpose of enabling appellee to complete a well already begun within the 12 months, if, perchance, from accident or other cause, its completion had been prevented or deferred. In our opinion, the stipulation in the contract under which appellee was permitted to extend the lease from term to term was not inserted for the purpose of giving it time during which it could hold the land, delay its development, or in which to commence a well.

[8] As said by Pleasants, J., in the Emery v. League Case:

"A different rule is applied to contracts of this character from that applied to ordinary leases, and the decisions uniformly hold that contracts in which land is leased for the purpose of being prospected and developed for oil are to be construed most favorably for the lessor. Bryan's Law of Petroleum, p. 146. In order to preserve his rights under a contract of this kind, the lessee must begin within a reasonable time the performance of his part of such contract, and continue in the performance of the same with reasonable diligence. The reason for this rule is thus forcibly stated in the case of Huggins v. Daley, 99 Fed. 613 [40 C. C. A. 19, 48 L. R. A. 320]: 'While most of the cases have gone upon the ground of abandonment, the governing principle in all oil leases of the character under consideration is that the discovery and production of oil is a condition precedent to the continuance or vesting any estate in the demised premises; that such leases vest no present title in the lessee, and if, at any time, the lessee has the option to suspend operations, the lease is no longer binding upon the lessor because of want of mutuality; and, where the only consideration is prospective royalty to come from exploration and development, failure to explore renders the agreement a mere nudum pactum, and works a forfeiture of

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