180 Ind. 159 | Ind. | 1913
Appellant was on May 20, 1897, the owner in fee simple of 120 acres of land in Delaware County, Indiana. On that date, she and her husband executed a lease on the real estate to the Rock Oil Company “for the purpose and with the exclusive right of drilling and operating for gas and petroleum”. The lease among other things provided that “the party of the second part is to have and to hold the said premises for and during the term of five years from the date hereof, and as much longer as oil or gas are found in paying quantities, or the rental paid thereon.” It was further provided that the Rock Oil Company “shall complete a well on the above described premises within one year from the date above, or in default thereof, pay to the parties of the first part for such delay, a yearly rental of $60 on the said premises from the time for completing such well as above specified, until such well shall be completed,” and the Rock Oil Company “agree to drill an oil or gas well within one year from the above date, or forfeit to the parties of the first part Fifty Dollars.” The lease also provided for furnishing gas free of cost for household use on
This action was instituted by the Eock Oil Company and certain individuals who had by assignment acquired a half interest in the first lease, to recover alleged damages for the invasion of their alleged exclusive right of a grant to enter and possess the oil in the leased field. The defendants were Mrs. Campbell, the Lily Oil Company, and the Indiana Pipe Line Company. There was judgment against the two former and ancillary proceedings in attachment were sustained. This appeal is by Mrs. Campbell alone.
The complaint is in two paragraphs, one counting upon an alleged invasion of appellee’s common-law rights, without counting on the contract, and the second paragraph counting upon the written contract. The sufficiency of each paragraph was unsuccessfully challenged by demurrers for want of facts to constitute causes of action, and error is here predicated on those rulings. The facts, upon proper request, were found specially by the court, and conelusions of law stated, but as the findings closely follow the allegations of the complaint, and the determination of the question as to the findings and conclusions necessarily determine the sufficiency of the complaint, it will not be necessary to consider the complaint. Marion State Bank v. Gossett (1911), 175 Ind. 211, 213, 93 N. E. 996; Goodwine v. Cadwallader (1902), 158 Ind. 202, 61 N. E. 939.
The material findings are, the execution and recording of the lease; that payments were made as rentals under the lease in the sum of $60 per annum annually up to and including April 13,1903, and a payment of $50, June 17, 1898, by way of forfeiture under the terms of the lease; that on March 26, 1904, appellant served a written notice on the Eock Oil Company to the effect “that the lease for gas, and oil, made by the undersigned to the Eock Oil Company bearing
No well was drilled for oil or gas by the Rock Oil Company or anyone else, until the middle or latter part of April, 1904, at which time, the plaintiffs caused a derrick and drilling machinery to be placed on said real estate, and proceeded to drill a well which was shot with nitroglycerine on May 18, 1904; and no pipes or pipe lines were placed on said real estate, and no oil or gas was produced or saved therefrom prior to May 18, 1904; that gas for household purposes was never delivered to Julia E. Campbell or her tenant or tenants on said real estate, and no request was made therefor other than that contained in the ¡notice of March 26, 1904; that no gas was produced from said well which was shot on May 18, 1904, and the only oil produced therefrom was run into the lines of The Indiana Pipe Line Company, as follows: On June 24, 1904, 158.89 barrels; on August 6, 1904, 167.37 barrels; on May 19, 1904, the well was cleaned out and tubed, and a small quantity of oil pumped from it on May 20, 1904; on May 19, 1904, the well produced only water when pumped, and thereafter when it produced oil it produced it in small quantities and suddenly stopped and produced large quantities of salt water, with the result that the salt water smothered the oil, and prevented the well from producing the oil; that immediately after the well was completed, shot and started to pumping, the plaintiffs provided at said well sufficient machinery of proper character for pumping and operating the well, and erected tanks for
That the plaintiffs operated the well drilled by them, and which was shot on May 18, 1904, in such manner as to them seemed best for a number of months after the same was shot, and the defendants at no time molested or interfered with them in the operation of the well. That plaintiffs were never at any time notified or warned by defendants, or either of them, to quit said premises, stay off the same, or cease operations, except such as Avas given by the notice of March 26, 1904, and by the suit commenced on June 10, 1904, and that the plaintiffs never enjoined or restrained the defendants or any of them from carrying on operations on said premises, or any part thereof. That the fair and reasonable cost of mining the oil from the premises so mined by the Lily Oil Company, including the reasonable value of drilling wells and equipping the same for operation, and the operations carried on in producing and marketing the oil, and the actual cost to the defendant Lily Oil Company in drilling the two wells, equipping the same, producing and marketing the oil was $8220.92. That when it entered upon the real estate and constructed the oil and gas wells thereon, and mined and produced the oil there
As conclusions of law it was stated that plaintiffs should recover $4,440 of appellant and the Lily Oil Company, and that the attachment be sustained against them as nonresidents, and that there be no recovery against The Indiana Pipe Line Company,- and that it recover costs, and that plaintiffs recover costs against appellant, Campbell, and the Lily Oil Company, and over motion for a venire de novo and for a new trial judgment was entered accordingly.
Upon this state of the record three questions are presented. (1) Upon the facts found, where the damages as claimed are speculative, uncertain and unascertainable, but
It is the theory of appellant that as the owner of the real estate she was entitled to have active operation upon her land for oil (Indiana, etc., Oil Co. v. Grainger [1904], 33 Ind. App. 559, 70 N. E. 395; Chaney v. Ohio, etc., Oil Co. [1904], 32 Ind. App. 193, 69 N. E. 477); that appellees had shown but little inclination to do so, and their efforts had been of no practical avail to her or to them, and as the matter stood at that time, under the holding of the cases there was, in practical effect, a disclosure that there was neither oil nor gas to be found in paying quantities, and that further development so disclosed; that as the oil in the earth was not the subject of property, there was no conversion of property, in any legal sense; and that as appellees’ rights were those of going on the premises and exploring for oil and marketing the same, and they were not excluded from, or molested in doing so, there is first shown that there was no substantial damage to appellees’ rights. Second, that she acted in good faith, and the measure of damages would be the difference between the oil when removed, and the cost of production. Crawford v. Forest Oil Co. (1904), 208 Pa. St. 5, 57 Atl. 47; Duffield v. Rosenzweig (1891), 144 Pa. St. 520, 23 Atl. 4. Third, that when a trespass is committed under an honest belief on the part of the wrongdoer, that he had a right to do what he did, the trespass is not intentional, and the wrongdoer cannot be held in damages for a greater amount than the profit the true owner would have received if he had operated. United States v. Homestake Min. Co. (1902), 117 Fed. 481, 54 C. C. A. 303; Motrozona Gold Min. Co. v. Thatcher (1904), 19 Colo. App. 371, 75 Pac. 595.
It was said in Gladys City Oil, etc., Co. v. Right of Way Oil Co. (1911), 137 S. W. (Tex. Civ. App.) 171, 182, “Appellee further contends that the judgment is erroneous, in that it awards to appellants the value of the oil delivered to the # * * Company instead of such value, less the cost of extraction. We quite readily agree with appellee that appellees in boring the well and extracting the oil acted under the belief, in good faith and upon reasonable ground therefor, that they had a right to do so, and that the oil belonged to the Texas and New Orleans R. R. Co. In such case, under proper allegations and proof, it would have been proper to have deducted from the value of the oil in the tanks of the * * * Company the reasonable value of extracting the
In Duffield v. Rosenzweig, supra, it is said, “But, assuming that an action of trespass is a proper remedy, and that the defendant invaded the territory of the plaintiff’s protection to put down wells, and took out oil to the amount of 8,253 barrels, * * * what should be the measure of the plaintiffs recovery ? He should not be permitted to recover the price of all this oil, for the defendant was, in any event, entitled to a royalty out of it; and it does not appear, nor can it in any satisfactory way be made to appear, that the plaintiff would have been able, by any means within his power, to produce the whole, or any definite or-certain portion of the oil at the sites to which he was restricted. * * * Plaintiff’s title is a leasehold, and the proper measure of damages for which the defendant is liable is the difference in the value of the leasehold until the expiration of the term, free from the obstructions which the defendant’s lessee’s have put upon it, less the value as.affected by these obstructions.”
In the case at bar, both parties rely upon'that ease. There, there was only a finding that so much oil was produced, and its value. Here we have a finding of the difference in value of the leasehold before entry by the Lily Oil Company, and after the oil was taken by it. The material facts in that case were, that one Elston the common source of title had executed a lease for general, purposes upon the surface of a defined tract of land, to two persons named Brown. The heirs of Elston, after the execution of the general lease, executed to the surface lessees a lease for twenty years to mine and operate for petroleum. The Browns then executed a lease to one Pratt for fifteen years
In Crawford v. Forest Oil Co., supra, it was held that the measure of damages for oil taken by the life tenant was the value of the oil less the cost of production. In that ease as in the Duffield case (Duffield v. Rosenzweig, supra), there was a dispute as to the right. "We think it must be true that appellant was not a wilful trespasser. She was insisting on a right to the property and its control, through the courts; What more consistent and legal course, could she have pursued?
The court found the fair market value of “the leasehold so owned by the plaintiffs” was $4,800, and the value of the leasehold after the oil was taken was $3G0, and gave judgment for the difference. This finding is attacked as being without evidence to support it. "We can perceive no basis whatever for this finding. The evidence on the subject of damages is wholly speculative as to the leasehold, and necessarily so, for it would be impossible to know what amount of oil would or could have been produced had appellant’s second lessee not operated, or what appellees would have obtained. Several witnesses give their opinions on an admittedly speculative basis, but all agree that the actual test of value is obtained from drilling wells, and finding what the field contains, and in this instance the evidence shows that the field was practically
We think these propositions are clear from this record: (1) That it is neither pleaded, nor found as a fact, nor shown by the evidence, that appellant was a wilful trespasser. (2) That in such case the cost of producing the oil should be deducted from its value at the surface. (3) That appellees are not shown to have been damaged. (4) That there is no basis for the finding and judgment against appellant to rest upon. The judgment is reversed with instructions to the court below to sustain the motion of appellant for a new trial.