Hitzelberger v. Samedan Oil Corp.

Hitzelberger (plaintiff) leased his mineral rights to Samedan Oil (defendant) under a lease whose habendum clause set a three-year primary term, subject to the lease's other provisions, and whose separate royalty clause required an initial royalty payment plus ongoing monthly royalties once a producing well was drilled, with nonpayment terminating the lease. After Samedan drilled a producing well in a pooled unit (though not directly on Hitzelberger's land) and paid the initial royalty, it failed to make any monthly payments during the primary term; Hitzelberger sued for a declaration that the lease had terminated, and the trial court sided with Samedan's argument that only the habendum clause controlled lease duration.