Plaintiff lessor filed an action against defendant lessees to recover liquidated damages for breach of an oil lease. The Superior Court of Tulare County (California) entered judgment in favor of the lessees. The lessor appealed.
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Overview
The lessor and the lessees entered into a contract under which the lessee obtained land from the lessor for the purpose of sinking oil wells thereon. The lease contained a provision for liquidated damages if the lessees failed to begin actual operations toward drilling a well on the land by a specified time. The lessees failed to do so and the lessor brought an action to terminate the lease and to recover the liquidated damages as specified in the agreement. The trial court granted judgment terminating the lease but denied the lessor liquidated or any damages. On appeal, the court affirmed the trial court’s judgment. The court determined that the lessor had not proven that it had sustained any actual damages resulting from the breach of the lease and therefore was not entitled to recover the amount of liquidated damages specified in the contract.
Outcome
The trial court’s judgment in favor of the lessor and against the lessees that terminated the lease but denied liquidated damages was affirmed.
