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02/27/87 James R. Billingsley Et Al v. Mccullough Oil

February 27, 1987





504 N.E.2d 1009, 152 Ill. App. 3d 736, 105 Ill. Dec. 724 1987.IL.252

Appeal from the Circuit Court of Peoria County; the Hon. William H. Young, Judge, presiding.


JUSTICE SCOTT delivered the opinion of the court. STOUDER, J., concurs. JUSTICE HEIPLE, Dissenting.


The plaintiffs, James R. Billingsley and his wife, are owners of rural property in Schuyler County. The plaintiffs and defendant, McCullough Oil, Inc., entered into two oil and gas leases in regard to two parcels of real estate. The term of the leases was for 12 months beginning on August 4, 1983. The plaintiffs received consideration for entering into the leases, and the documents further provided that on or before November 4, 1983, and for each three-month period thereafter during the 12-month term the defendant could keep the leases in effect notwithstanding a delay in drilling operations, provided a rental of $325.60 was paid on one tract of land and $1,100 was paid on the other larger tract.

A complaint was filed by the plaintiffs on August 10, 1984, which alleged that the defendant was obligated to the plaintiffs in the sum of $7,332 because of defendant's failure to make the quarterly payments subsequent to November 4, 1983. The complaint incorporated each of the lease contracts by attaching the same and marking them as exhibits.

The defendant answered the complaint and further included a motion entitled "judgment on the pleadings," and defendant via correspondence further requested that the pleading also be considered as a motion for summary judgment. The trial court denied the motion of the defendant and, apparently being unaware of the fact that defendant had filed an answer, directed it to do so within 14 days. A second answer was filed and a plaintiff's motion for default judgment was withdrawn.

During all the preliminary procedural skirmishing between the parties, it was the defendant's position that the plaintiff was not entitled to recover because the claimed lease payments were, by the terms of the contract sought to be enforced, payable solely at the option of the plaintiff and it (defendant corporation) was under no legal obligation to make the payments.

The case was scheduled for trial on June 16, 1986. Counsel for defendant, licensed to practice law in the State of Ohio, had been granted leave to appear on behalf of his client in the circuit court of Peoria County. Counsel for defendant chose not to appear for trial of the case, and on June 18, 1986, the circuit court entered judgment in favor of the plaintiff in the amount of $7,332. This appeal ensued.

The defendant argues that the trial court committed error in denying his motion for judgment on the pleadings and was further in error granting the plaintiffs a default judgment.

It is noted that the record in this case is very brief, containing only pleadings, correspondence of the parties, and orders of the trial court. No memorandum opinion was submitted by the trial Judge in support of his decision. The briefs filed by the parties are also scant and the meager authority cited therein is of dubitable value.

Having no indication on the basis for the trial court's decision, we will address the argument of the defendant which he believes was properly before the court when the pleadings were considered in their entirety. The crux of the defendant's argument revolves around paragraph 4 and paragraph 5 of each lease. Paragraph 4 provides:

"4. The lessee shall commence operations for a well on the premises on or before November 4, 1983, unless lessee pays thereafter a rental of $325.00 for each three (3) months that operations are delayed from the time mentioned. The consideration first recited herein, the downpayment, shall cover not only the privilege granted to the date when the first said rental is payable as aforesaid, but also the lessee's option of extending that period as aforesaid, and any and all other rights conferred. The drilling of a nonproductive well shall be accepted by the lessor in lieu of delay rental for a period of one year after its completion, and following the exhaustion or abandonment of all wells the lessee shall have the right for a period of one (1) year to resume the payment of delay rental or commence operations for ...

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