Baldwin v. Kubetz
California Court of Appeal
307 P.2d 1005 (Cal. App. 1957)
Baldwin leased oil and gas rights to Sam Kubetz (defendant), who agreed to continuously drill additional wells with no more than 90 days between wells, subject to a force majeure clause. Drilling required zoning exceptions, obtainable only where it appeared probable oil existed. Kubetz obtained one exception, drilled a first well, but never sought further exceptions and drilled no more wells. Baldwin's estate (plaintiffs) sued for breach of the implied covenant to operate diligently, and the trial court found for the estate; Kubetz appealed.
Whether the implied covenant to operate an oil-and-gas leasehold diligently and properly includes a duty to take the incidental steps reasonably necessary to accomplish the lease's major purpose.