37 Ind. App. 154 | Ind. Ct. App. | 1906
Appellee was the successful party below,
and obtained an order perpetually enjoining appellants from drilling a gas-well upon premises described in its complaint. Upon request the court made a special finding of facts and stated its conclusions of law thereon. Exceptions were reserved to the conclusions of law. Appellants’ motions for a venire de novo, for a new trial for cause, and as of right, were overruled. All of these questions are presented by the assignment of errors.
We will only set out the facts found, which are material to determine the questions involved: August 22, 1898, Albert S. Palmer and wife were the owners and in possession of certain real estate: On that day they entered into a written contract with J. R. Bennett & Co., the material covenants and conditions of which were as follows: They granted to J. R. Bennett & Co., “its successors and assigns,” for a term of one year, or so long as gas or oil may be found upon the premises, the exclusive right to enter thereon at all times for the purpose of drilling and operating for oil, gas or water; to erect, maintain or remove all buildings, structures, pipe-lines and machinery necessary for the production and transportation of oil, gas, etc. The contract provided that the Palmers should have the right to use the premises for farming purposes, except such parts as might be actually occupied by J. R. Bennett & Co. A well was to be drilled within six months, or the company was to pay the Palmers “a rental of free gas for three fires and six lights until said well is drilled or the property hereby granted is reconveyed to first party, or this lease forfeited by its terms.” The party of the second part (J. R. Bennett & Co.) was to furnish the first
As a conclusion of law the court stated that “the law is with the plaintiff, that the restraining order heretofore issued be made permanent, and the defendant rolling mill company enjoined from drilling upon the' real estate,” etc.
Under the original lease J. B. Bennett & Co. was granted the exclusive right “to enter upon the land at all times for the purpose of drilling and operating for oil and gas,” and that right continued “for the term of one year, or so long as gas or oil is found upon the premises.” It was bound to drill a well within six months, or in lieu thereof pay a rental of free gas, etc., “until said well is drilled, or the property hereby granted is reconveyed, * * * or this lease forfeited by its terms.”
The contract does not lay upon J. B. Bennett & Co. the absolute duty of drilling a well within a fixed period, but gives it the option either to drill a well within that period, or to pay a rental of free gas for domestic purposes until said well is drilled. The contract was a continuing one, and, so long as J. B. Bennett & Co. performed the covenants required by the contract, the Palmers could not arbitrarily say that it had expired, or that it had been forfeited. It requires two or more parties to make a contract,
We have no douj)t but that the Palmers had a right to demand and have a well drilled, but so long as they accepted the rental agreed upon the contract was binding upon them, and they could not say that the contract had expired or that J. R. Bennett & Oo. had forfeited its rights thereunder, until a demand had been made for drilling a well, and a reasonable time had elapsed after the demand in which to drill.
As was said in the very recent case of New American Oil, etc., Co. v. Troyer (1906), 166 Ind. 402: “There being no definite time limit within which the well must be constructed, the law intervenes and directs that it shall be accomplished within a reasonable time. This means within a reasonable time at the option of the landowner.” The acceptance of the rental, which in this case was free gas, was a waiver of performance in developing the property during the time such gas was furnished and accepted. Consumers Gas Trust Co. v. Worth (1904), 163 Ind. 141; Hancock v. Diamond Plate Glass Co. (1904), 162 Ind. 146. The voluntary severance by the Palmers of their service-pipes from the mains of J. R. Bennett & Co. could not annul the latter’s rights under the contract.
Tn New American Oil, etc., Co. v. Troyer, supra, the contract was in all essential respects similar to the one here. There, upon failure to drill a well within the specified time, the landowner agreed to accept an annual rental in money, while here, the rental agreed upon was to be free gas furnished the landowner until a well should be drilled. In that case the court said: “Under5 a contract of this sort parties must act fairly with each other. The landowner must be given a fair opportunity to compel such timely operations as will preserve the underlying oil and gas, and prevent its being mined through wells on other
Appellants were not entitled to a new trial as of right.
Appellants have not argued their motion for a new trial for cause.
We find no error, and the judgment is affirmed.