162 Ind. 146 | Ind. | 1904
Contract for exploring for natural gas. Suit to recover stipulated sum for delay in putting down a well. On June 18, 1891, appellants and appellee Diamond Plate Glass Company entered into a written contract whereby appellants “granted and contracted” to said
It will be observed that there was no limit to the duration of the contract, except “when natural gas ceases to be used generally for manufacturing purposes,” and that no time was fixed for the commencement or completion of a gas-well. The Diamond Plate Glass Company assigned said
The only question presented by the appeal is the sufficiency of the complaint. Is it sufficient to constitute a cause of action? It seems to us, from the nature of the
What, then, are the terms of the agreement ? It will be observed that the contract clearly provides that it shall continue in force as long as gas is generally used for manufacturing purposes, be that one or forty years. No time is agreed upon for the commencement or the completion of a well, and no express provision that one shall ever be constructed; but it is made very plain that no one but the glass company shall have the right to put down a well anywhere on the forty acres “fluring the continuance of the contract,” or so long as natural gas shall be used generally for manufacturing purposes. In other words, under the contract the company, in unmistakable terms, has the exclusive right to take and control the output of gas from appellants’ forty acres during the period of supply. It may enter the premises to-morrow, sink a well, and extract, through it the gas from under appellants’ land, or, if it prefers, with appellants’ acquiescence, it may postpone an entry, exclude others from the premises, save the expense of making a well, and draw the gas from under the land through its well, on other premises, on the other side of the road. So far as appellants are concerned, by the contract they surrendered to the glass company, for an agreed consideration, all the right and dominion they were able to bestow to all the gas underlying their forty acres of land, the company to take its chance on the quantity, and pursue
On the part of the company, it agreed, in equally certain terms, to give appellants for the valuable concession, a supply of free gas for domestic use, and pay them $20 in cash, not for one year, but for every year that might elapse before it made a well on the premises, and thereafter $100 per annum for each well. As we have seen, the company has not bound itself to construct a gas-well on appellants’ land within any specified time; but so long as natural gas continues in general use for manufacturing purposes it has bound itself to pay the annual sum of $20 until it does make such a well. The parties themselves have agreed upon the thing to be done, and the exact amount to be paid when done, and for the delay in the doing of it, and we can not look beyond the agreement.
It is not to be supposed for a moment that either party understood when the contract was entered into that the company was to have these valuable and continuing rights without rendering to appellants what was deemed to be a coequal, valuable, continuing consideration. Eor is it to be doubted that it was the mutual understanding that, as long as the company excluded others from mining the gas on appellants’ land, it should be liable for the sum it agreed to pay for the right to do so. We must so view the agreement, because in accord with the plain, simple meaning of its terms, and in harmony with a proper sense of fairness and natural justice.
Is the contract still running? This question must be answered in the affirmative, unless it appears that it has expired by limitation, or been surrendered, forfeited, or otherwise terminated. It has not expired by limitation, for we are informed by the complaint that natural gas has been, all the time since the making of the contract, and still is, generally used for manufacturing purposes.
It has not been surrendered. The complaint avers that
The pomplaint shows no forfeiture of the contract. It is averred that appellants have performed all the conditions on their part to be performed. But appellee claims that it terminated the contract in 1896, by failing for more than sixty days to pay the stipulated annual $20, called “rent,” and relies upon that part of the contract which is expressed in these .words: “This contract shall be deemed to commence at, and run from the date of signing hereof, and shall be deemed to have terminated whenever natural gas ceases to be used generally for manufacturing purposes, or whenever the second party [the glass company], its heirs, or assigns, shall fail to pay or tender the rental price herein agreed upon within sixty days of the date of its becoming due. And in the event of the termination hereof, for any cause, all rights and liabilities hereunder shall cease and terminate.”
The promise to pay for what it received from the appellants was the covenant of the appellee, made for the sole benefit of appellants, and the manifest absurdity of the latter part of the provision makes it plain that the contract can not be enforced according to its letter. A promise to pay can not be fulfilled by a failure to pay. Perform
There is no doubt but an operator may be relieved of his obligation to put down a well, or to pay the sum promised for his failure, upon such terms as may be agreed upon in the contract, either of benefit to the landowner, or of inconvenience to himself; but a naked default or nonperformance, such as is set up in 'this case, can not be held to discharge his obligation. Leatherman v. Oliver, 151 Pa. St. 646, 25 Atl. 309; Cochran v. Pew, 159 Pa. St. 184, 28 Atl. 219; Woodland Oil Co. v. Crawford, 55 Ohio St. 161, 176, 44 N. E. 1093, 34 L. R. A. 62; Smith v. Miller, 49 N. J. L. 521, 13 Atl. 39; Jackson v. O’Hara, 183 Pa. St. 233, 38 Atl. 624; Ahrns v. Chartiers Valley Gas Co., 188 Pa. St. 249, 41 Atl. 739; Edmonds v. Mounsey, 15 Ind. App. 399; Simpson v. Pittsburgh Plate Class Co., 28 Ind. App. 343; Thornton, Oil & Gas, §§149, 151,
We are unable to see how the principles pertaining to the relation of landlord and tenant are applicable to such a contract as the one before us, either where possession has or has not been taken 'under the contract. It seems to have been held in Diamond Plate Glass Co. v. Curless, 22 Ind. App. 346, and Diamond Plate Glass Co. v. Echelbarger, 24 Ind. App. 124, that similar instruments, granting the right to explore for and remove gas or oil for an indefinite period, are, in effect, leases creating tenancies' from year to year, under §7089 Burns 1901, which may be terminated by the tenant at the end of any year, without notice. But we can not accept this view as correct. While a contract providing for an entry and removal of gas or oil from the premises is, perhaps, more than a license, we are unable to believe that it constitutes such a tenancy as is contemplated by §§7089, 7090 Burns 1901. It must be agreed that such a contract is equally binding on the parties to it. Suppose, for instance, that, under such a contract as this one, the operator shall enter and drill in a well which yields a-much greater volume of gas, and is therefore much more valuable than was anticipated by the landowner when he, made the bargain; will anyone contend that the latter may avoid his contract and eject the operator by a three-months’ notice to quit before the end of the first year, under §7090, supraf And yet this is precisely what the doctrine leads to. There appears from the complaint no good reason why the contract should not be enforced against appellees.
Judgment reversed, with instructions to overrule the demurrer to the complaint.