Joyce v. Wyant
United States Court of Appeals for the Sixth Circuit
202 F.2d 863 (6th Cir. 1953)
Joyce (plaintiff) granted an oil and gas lease in exchange for the lessee's agreement to drill four wells, with the lease set to run for 60 days "and as long thereafter" as the lessee kept producing in paying quantities. The lease was assigned to Wyant (defendant), who drilled one well within the 60-day term that failed to produce and, concluding further wells would likewise be unprofitable, declined to drill the remaining three; the 60-day term then expired. Joyce sued for breach of the drilling covenant, and Wyant moved to dismiss, arguing the lease had simply terminated by its own terms; the district court granted the motion, and Joyce appealed.
Whether a plaintiff is entitled to damages for breach of an express covenant in an oil and gas lease if the lease's habendum clause indicates that the only remedy the parties contemplated was termination.