(citing Carrs Fork Corp. v. Kodak Mining Co., 809 S.W.2d 699, 709 (Ky. 1991))). As explained in B. & B. Oil Co. v. Lane, 249 S.W.2d 705 (Ky. 1952): There can be no reason for notifying one who has abandoned a lease that suit will be filed.
So these two opinions did lip service to an implied obligation to continue producing from proven wells. Such a legal theory was not required to reach the same result in view of the earlier case of Hails v. Johnson, 204 Ky. 94, 263 S.W. 679, and was in effect repudiated in the subsequent case of B. B. Oil Co. v. Lane, Ky., 249 S.W.2d 705, both of which we will refer to later. Let us now recapitulate the implied obligations of the lessee with respect to development as set forth in the foregoing cases.
No notice and demand requirement exists when a property interest has been abandoned because there is no longer any interest to protect, it having been voluntarily relinquished. B. B. Oil Co. v. Lane, 249 S.W.2d 705 (Ky. 1952). If a lessee has not abandoned the lease, but has been only remiss or dilatory in carrying out his development duties, he is entitled to notice and demand before a forfeiture action is filed. Id. at 706.
SeeCarrs Fork Corp. , 809 S.W.2d at 702 ("The filing of a lawsuit is not proper notice when a lessor seeks forfeiture on due diligence grounds." (citing B & B Oil Co. v. Lane , 249 S.W.2d 705 (Ky.1952) )). Likewise, the Clifts accepted all royalty payments sent to them through January 2014.
Id. at 723. In B&B Oil Co. v. Lane, 249 S.W.2d 705 (Ky. 1952), the Kentucky Supreme Court held that an oil and gas lease had been abandoned when the lessee failed to operate it for more than four years. Id. at 706.
Central Kentucky Natural Gas Co. v. Williams, supra, states the rule to be that to entitle the lessor to further development he is required to give notice, plain and unequivocal in its meaning, to go forward and develop after reasonable notice. See B. B. Oil Co. v. Lane, Ky., 249 S.W.2d 705; Rowe v. Ashland Oil Refining Co., Ky., 240 S.W.2d 61. All of the eighty-eight wells now on the premises had been drilled by the end of 1947.
The filing of a lawsuit is not proper notice when a lessor seeks forfeiture on due diligence grounds. B B Oil Co. v. Lane, Ky., 249 S.W.2d 705 (1952). The law does not favor forfeiture and none should be allowed without the one claiming the right first giving notice that a forfeiture will be demanded unless the terms of the lease are followed.
Carrs Fork Corp. v. Kodak Min. Co., Ky., 809 S.W.2d 699, 702 (1991).B B Oil Co. v. Lane, Ky., 249 S.W.2d 705, 706 (1952) (citing American Wholesale Corp. v. F. S. Oil and Gas Co., 242 Ky. 356, 46 S.W.2d 498 (1932)). If [the lessee] has abandoned [the lease], he knows that fact and is entitled to no notice; while if lessee is only remiss or dilatory in the manner in which he is developing or operating the property, he is entitled to notice that he must improve his operations, and should he fail to heed the notice, suit will be brought to cancel the lease.
That is a condition precedent to the maintenance of a suit to forfeit, and the burden is upon the lessor to prove it. Among the cases so holding are Monarch Oil, Gas Coal Co. v. Richardson, 124 Ky. 602, 99 S.W. 668; Leeper Oil Co. v. Rowland, 239 Ky. 295, 39 S.W.2d 486; Lawrence Oil Corp. v. Metcalfe, 241 Ky. 353, 43 S.W.2d 986; Young v. Dunn, 302 Ky. 232, 194 S.W.2d 378; B. B. Oil Co. v. Lane, Ky., 249 S.W.2d 705; Cameron v. Lebow, Ky., 338 S.W.2d 399. But we have recognized that notice to develop the property further may be regarded as waived by the lessee's declaration that he would not drill even if adequate demand were made.
Rebutting the evidence for the appellant, there was evidence for the appellees that it was not impossible to obtain labor or equipment during the years in question, and that many leases continued to operate; that Mr. Sproul was acting merely as a custodian of the equipment, and the Hasletts did not pay him for the expenses he incurred while the lease was closed down; and that the insurance policy on the equipment was cancelled in 1946 because the Hasletts didn't pay the premium. We think the facts in this case are comparable to those in Tanner v. Reeves, Ky., 249 S.W.2d 526, and B. B. Oil Co. v. Lane, Ky., 249 S.W.2d 705, and on the authority of those cases the chancellor was correct in adjudging that the Haslett lease was abandoned. Judgment affirmed.