TSB Exco, Inc. v. E.N. Smith, III Energy Corp.

In this appeal from a declaratory judgment we must decide if the timely delivery of a bank check was effective to extend the term of an oil and gas lease when the extension clause of the lease provides only that it may be exercised by the “payment” of a sum of money. We conclude that it was effective to extend the lease, and we reverse the judgment below which held otherwise.

On July 6, 1983, the landowners, Sidney Taylor, Jean Taylor, Peggy Hogan, Bryant Moore and Jenny Moore executed oil and gas leases to Gene McKnight covering two tracts of land totaling 198.5 acres in Bowie County. The…