Opinion
Rehearing Denied July 8, 1975.
Page 506
Allen P. Mitchem, Cheryl Turk, James E. Mitchem, Denver, for plaintiff-appellee.
Clark, Martin & Pringle, Warren O. Martin, Denver, for defendant-appellant.
KELLY, Judge.
Defendant, A. L. Lintner, appeals from a summary judgment entered in favor of plaintiff terminating a lease for the mining of silica sand on property owned by plaintiff's late husband, E. F. Munroe, and awarding plaintiff damages. We affirm.
The lease was executed by Lintner and Mr. and Mrs. Munroe in 1965 for a term of 51 years with options to renew for additional 51-year periods. It provided for royalties of $.10 per ton of sand removed, with minimum royalty payments of $6,000 per year, payable in quarterly installments of $1,500 each. All payments were to be made to Mr. and Mrs. Munroe as joint tenants. The lease further provided that, upon termination for any reason, Mr. and Mrs. Munroe were entitled to retain all payments made prior to termination.
Lintner paid $10,000 at the time of the execution of the lease and made quarterly payments through February 13, 1969. No further payments were made. Mr. Munroe died in 1971 and his widow thereafter sued for termination of the lease as of December 31, 1971, and for the unpaid quarterly installments.
On appeal, Lintner contends that summary judgment should not have been granted in plaintiff's favor. He argues that the provisions of the lease are ambiguous and that the parties intended the term of the lease to be 51 years, or as long as the minimum royalty payments were made. Therefore, he asserts, the lease was terminated with his last royalty payment on February 13, 1969.
To support this contention, Lintner points to Mr. Munroe's deposition, taken in 1967 in a separate, but related case, in which Munroe characterized the minimum royalty payments under this lease as 'delay rentals.' Lintner argues that 'delay rental' is a term used in oil and gas leases 'where the term of the lease continues so long as the delay rental is paid.'
We agree that 'delay rental' is a term used in oil and gas leases, See State v. Magnolia Petroleum Co., 173 S.W.2d 186, (Tex.Civ.App.), and it may be that when so used, it authorizes termination of the lease upon the cessation of delay rental payments. See White Castle Lumber & Shingle Co. v. United States, 355 F.Supp. 1127 (D.La.). Nevertheless, the trial court properly disregarded this testimony, since parol evidence may not be used to create an ambiguity where none otherwise exists. See Hayutin v. Colorado State Department of Highways, 175 Colo. 83, 485 P.2d 896.
Lintner also argues that the Munroes' failure to demand payment of the minimum royalties evidence their intent to make the lease terminable upon cessation of payments. We disagree. A lessor is not required to demand payment of mining royalties in order to keep a mining lease in effect, See Makins v. Shellenbarger, 144 Okl. 58, 289 P. 716, and the fact that the Munroes did not demand payment is not relevant to their intentions at the time the lease was executed.
Moreover, the provisions of this lease are clear and unambiguous, and since a mining lease is construed in the same manner as any other contract, provisions for the payment of a certain sum during the term of the lease are valid and enforceable. See Rocky Mountain Fuel Co. v. Albion Realty & Securities Co., 70 F.2d 212 (10th Cir.) . Christmas v. Cooley,
Burns v. Burns,We agree with the trial court that Mrs. Munroe's failure to include the unpaid royalties in estate and gift tax returns and her efforts to lease the property to third persons during the period for which she sought recovery under the lease are not facts material to the outcome of this case. There being no genuine issue as to any material fact, the trial court properly granted summary judgment in plaintiff's favor. Terrell v. Walter E. Heller & Co., 165 Colo. 463, 439 P.2d 989.
Judgment affirmed.
PIERCE and SMITH, JJ., concur.