Yates v. American Republics Corporation‪.‬

American Republics Corporation owned an oil and gas lease covering certain land in Eddy County, New Mexico. The land was owned by the United States and the lease was executed pursuant to the provisions of the Mineral Leasing Act of February 25, 1920, as amended, 30 U.S.C.A. § 181 et seq. In October, 1941, American assigned the lease to S. P. Yates insofar as it related to part of the land. The assignment provided that Yates should commence the drilling of a well at a specified location within thirty days from the date of the assignment; that if the first well should be a commercial producer, a second well should be commenced on some portion of the land within ninety days after completion of the first; that upon like terms and conditions, a third and forth well should be drilled, with not more than ninety days elapsing between the completion of one well and the commencement of drilling of the next; that in the event any one of such wells was not a commercial producer, Yates should have the option of drilling additional wells or reassigning the undrilled area to American; and that within six months after completion of a non-producing well he should notify American whether he elected to drill additional wells or reassign the lease. The assignment also provided that in the event of a reassignment, Yates should retain the lease as to each forty-acre tract on which a well had been drilled. And it further provided that it was subject to the approval of the Secretary of the Interior, the approval to be obtained by Yates. Yates transmitted the assignment to the United States Land Office at Las Cruces, New Mexico; and it was filed there in November, 1941. From November, 1941, until July, 1945, it was under Departmental consideration; certain requirements were exacted as a condition to approval; and it was finally approved in July, 1945. Yates drilled one well on the land. It was completed in March, 1942, was not a commercial producer, was abandoned, no further drilling was undertaken, and the lease was not reassigned. In July, 1945, American made demand for the reassignment of the lease. Yates declined to reassign. American instituted this action for specific performance. A decree was sought requiring the reassignment of the lease, except as to the forty-acre tract on which the well had been drilled. By answer, Yates pleaded waiver, estoppel, and laches. Judgment was entered for American, and Yates appealed.