106 F. 764 | 6th Cir. | 1900
after stating the foregoing facts, delivered the opinion of the court.
The leading question in the case is as to the construction of the Snyder lease. As we read this instrument,' applying the familiar rule that all parts of it must be given effect if possible, and the intention of the parties gathered from the four corners of the instrument, we find it to be a lease of a certain tract of land for the purpose of removing oil and gas therefrom, together with certain privileges to enable the lessee to reach and remove the same from the premises. As was said bv the supreme court of Ohio in Harris v. Oil Co., 57 Ohio St. 129, 50 N. E. 1129:
“An instrument in such form is more than a mere license. It is a lease of the land for the purpose and period limited therein, and the lessee has a vested right to the possession of the land to the extent reasonably necessary to perform the terms of the instrument on his part.”
By the terms of the habendum clause the lessee is to enjoy the estate for the term of two years, and as long thereafter as oil and gas are found in paying quantities on the premises, not exceeding 25 years, in the whole, from the date thereof, for which the lessee is to render to the lessor one-eighth part of the oil; and, for any wells producing gas in sufficient quantities to justify marketing, the lessee is to pay at the rate of $150 per year. Thus far no time has been fixed for the beginning of operations on the premises, and no clause of forfeiture is inserted for the failure to drill and develop the same. It is then provided:
“In caso no well is drilled on said premises within two years 'from the date hereof, the lease shall become null and void, unless the lessee shall pay for the further delay at the rate of one dollar per acre at or before the end of each year thereafter.”
That is to say, the lessee is given t-wo years within which to drill, which privilege he may extend by the payment for further delay at the rate of one dollar per acre at or before the end of the following year. It is claimed that the consideration of one dollar may support the grant of the two-years term, but the privilege of extending
‘•The lessee, plaintiffs, had paid a considerai ion for the privilege for a specified term of two years, but no longer, and all rights raider the lease ceased unless some new contract was made. The lease, as we have seen, provided how a new contract might have been made. It gives the lessee the option of making- a new contrae! upon a new and an increased consideration; but, to obtain this new right or license before developing an'd holding the territory for the period of two yeai-s, the lessee must have elected to avail himself of that provision of the lease, — have notified the lessor of this promise to pay the increased or new consideration for the further time.”
This construction undertakes to divide the lease into independent parts, and annuls the effect of the privilege granted to the lessee of continuing the right to drill a well upon payment of the annual sum stipulated. We are of opinion that this lease constituted an entire contract, and that the consideration recited supports not only the grant of the two-years term, but, as well, the privilege of extending the time of drilling, by paying the stipulated price therefor. The learned judge who delivered the opinion reached the conclusion that this agreement for further time was unsupported by a consideration, and required a new agreement between the lessor and lessee, which must he in writing and recorded, under (he statute of Ohio, or the lease would become void as against the subsequent lessee. In support of this conclusion he cites Northwestern Ohio Natural Gas Co. v. City of Tiffin, 59 Ohio St. 420, 54 N. E. 77. In that case, however, there was no stipulation for extension of time of drilling upon the face of the lease. That lease expired in Eve years, by its terms. It was attempted to hold it: as against a subsequent lessee by a certain extension, indorsed on the hack of the lease, hut not recorded. In the case in the circuit: court and the one at bar the agreement for extension, in the construction we give the lease, is found upon its face, and is of record. This instrument is a contract. Assuming now that it is free from fraud, and between parties capable of contracting, it can he supported by the consideration of one dollar as well as any other valuable consideration. It is an indivisible agreement Each part of it must he given effect. We can add nothing to it: and take nothing from it. For the consideration named the lessee received a conveyance of (he term, as we have already stated, with a stipulation that the lease should become void unless delay in sinking a well within the term of the lease should be paid for at the rate of one dollar per acre at the end of two years. This
We have now to deal with the Ohio statute requiring oil leases and licenses to be entered of record. This statute, passed April 11, 1888, now section 4112a, Eev. St. Ohio, protúdes:
“ffibat all leases and licenses, and assignments thereof, or of any interest therein, heretofore executed, given or made, for, upon or concerning any lands or tenements in this state, whereby any right is given or granted to operate, or to sink or 'drill wells thereon for natural gas and petroleum or either, or pertaining thereto, shall be recorded in the lease record in the office of the recorder of the proper county by the first day of September, 1888, and all such leases, licenses and assignments hereafter executed, given, or made, shall be filed for record as aforesaid, forthwith, and recorded in the said lease record, without delay, and shall not be removed until recorded, and no such lease or license hereafter executed, or given, unless the person claiming thereunder is in actual and open possession, shall have any force or validity, until the same is filed for record as aforesaid, except as between the parties thereto, nor shall any such lease or license, heretofore executed, or given, and not recorded by the first day of September, 1888, have any force or validity thereafter until filed for record, except as between the parties thereto, and as to persons claiming thereunder and in actual and open possession.”
This statute was construed by the supreme court of Ohio in the case of Northwestern Ohio Natural Gas Co. v. City of Tiffin, 59 Ohio St. 420, 54 N. E. 77, and was held to establish a rule governing-leases and licenses of the class referred to, and to take such leases and licenses out of sections 4112, 4134, Eev. St. Ohio; and the court held such leases and licenses to be without effect, either at law or in equity, as against a subsequent lessee or licensee or other third person acquiring an interest in or lien on the land, although he took with notice of such prior unrecorded lease or license, unless the person claiming thereunder was at the time in the actual possession of
The question is made as to the right to try disputed questions of title under the allegations of the bill of the appellees. Under the Ohio Statutes (section 5779) an action is given to one in possession of real estate to quiet title against adverse claimants. There is no allegation in the petition filed by appellees in the state court that they were in possession at the time of the bringing of the action, nor has any amendment been made in that regard in the circuit court. We do not think the remedy given by the Ohio statute is exclusive in a case presenting the facts of the one under consideration. The equitable estate of appellees was in danger of destruction by the removal of gas and oil. In such case equity will intervene to prevent irreparable injury. Having acquired jurisdiction for the purpose of preventing waste and the destruction of the estate; a court of equity will retain jurisdiction for the purpose of granting full relief. Pom. Eq. Jur. §§ 237, 1399; Bettmann v. Harness, 42 W. Va. 433, 26 S. E. 271.
It is urged by counsel for appellant that the circuit court erred in disposing of the cases on their merits, and entering final decrees therein without taking proofs in due course und'er the equity rules. The cases came on for hearing on the application of the oil company for a temporary injunction, the granting or refusal of which necessarily involved the continuing of the injunction granted in the state court, as well as the cross application of the oil company for an injunction. The court considered these cases together. The cases stood upon bill, answer, and affidavits. In view of the construction given the Snyder lease in the circuit court, affirmed in this court, the holders thereof were entitled to have their rights protected, and interference therewith by holders of the second lease enjoined. The first lease being held valid, the attempted second lease must necessarily fail. There was nothing in the bill of the Allegheny Oil Company in the one case, or its answer in the oth§r, which required further testimony before construction and effect could be given to the first lease. As was ■ said by Judge Thompson in the circuit court, the facts were substantially undisputed. The allegation made that Fowler understood the premises were to be promptly drilled for oil and gas could not affect the agreement as reduced to writing, in the absence of allegations of fraud or mistake. There was no attempt to reform the instrument. No amendment to the bill or answer was proposed, nor has there been any suggestion of further facts material to the controversy. In such cases the courts of the United States may proceed to administer final relief without putting the parties to the expense and delay of protracted litigation. Mast, Foos & Co. v. Stover Mfg. Co., 177 U. S. 485, 20 Sup. Ct. 708, 44 L. Ed. 856, citing, with approval, Gardt v. Brown, 113 Ill. 475; Green