Stimson v. Tarrant

HEALY, Circuit Judge.

This is a suit in equity for the cancellation of an oil and gas lease. The court declined to decree cancellation, and the lessors appeal. The problem presented is whether the lease automatically terminated upon the temporary cessation of production of oil for lack of market, pursuant to a clause providing that the lease is to continue for a period of five years and “as long thereafter as oil or gas, or either of them, is produced.”

The lease was made December 8, 1930. It provided for the payment of a royalty of one-eighth of the production, to be delivered to lessors in…