81 W. Va. 399 | W. Va. | 1917
The decrees entered in these causes, argued and submitted together, canceled the two oil and gas leases made to G. B. Armstrong in 1898, one of them by W. J. Clark and wife June 15 on 136 acres, the other by S. J. Johnson and his sister Abigail J. Johnson June 16 on 75 acres, as clouds upon the title of the owners and upon the oil and gas rights and estates of Joseph H. McDermott and Pentress Gas Company, his assignee thereof. The Chartiers Oil Company and Monongahela Natural Gas Company have appealed.
The Chartiers Oil Company acquired by assignment from Armstrong in 1898 the right to mine and market the oil and gas in each tract, and the Monongahela Natural Gas Company by assignment from it in 1905 the right to mine and remove the gas therefrom, the gas company assuming the
The leases differ solely as to the names of the landowners, the quantity of land embraced, cash consideration paid and the compensation provided for the gas from each well producing gas only. Each of them granted the usual surface rights, including the right to remove property used in drilling and operating and to surrender the lease at any time the lessee may elect, and provides the time, manner and place of payment of moneys payable under the terms thereof, and reserves as royalty ope-eighth of the oil produced and saved from each tract. Neither group of owners had or have any interest in common in the two tracts; the leases arfe separate and independent contracts, although the questions for solution are identical.
The provision most material and vital upon the issues involved, and except as to money consideration in lieu of drilling, is: “In case no well is completed within three months, then this grant shall become null and void, unless the second party pay to said first party thirty-four dollars in advance for each three months thereafter such completion is delayed”. There is in neither agreement any other provision. that attempts’to limit or define the term within which the lessee or his assigns shall drill. The duration’of the term, according to this clause or stipulation, was made to depend upon the discovery of oil or gas, or in lieu thereof payment of the specified sum quarterly in advance to the lessors. No well was drilled on either tract within the first or any subsequent three months’ period provided for. But, until December, 1914, the Chartiers Oil Company or Monongahela Natural Gas Company regularly and promptly made the required quarterly advance payments in lieu of a well, and the lessors, without objection or complaint, and without demanding active operations for the production of these minerals, accepted the payments as and when made in the mode, at the time and in the amounts provided in the agreements; and the parties agree that the Monongahela Natural Gas Company in the same manner thereafter regularly tendered the delay rentals, and that the lessors refused to accept them.
The Johnsons on March 1 and the Claries on April 9, 1915, severally leased to Joseph H. McDermott thje 136 acres and 75 acres to mine and operate each tract for oil and gas production, which leasehold rights conferred by the Clark lease and three fourths. interest in the leasehold fights conferred by
Acting under the authority of the leases so assigned and transferred, the Pentress Gas Company in November, 1915, entered upon the lands and began preparations to explore for and produce the mineral oils and gas therein, as did also the Monongahela Natural Gas Company upon the authority of the leases to Armstrong. But neither company so entered until after each of them had notified the other of its claim to leasehold rights and estates under the respective lease contracts executed by the owners of the land. The plaintiffs in each of these causes thereupon filed their bills and obtained the injunctions made perpetual by the decrees complained of, ■ enjoining Armstrong, the Chartiers Oil Company and Monongahela Natural Gas Company from entering on such lands for any purpose and from interfering in any manner with the exercise of the rights conferred by the leases to Mc-Dermott.
The first contention or claim is that the agreements with Armstrong, being in the nature of or having some of the characteristics of a perpetuity, could be and were destroyed or terminated by the notices by the landowners; and, whether this claim be well founded or not, that, if Armstrong or his assigns could at will surrender the lease contracts, the owners could also terminate theiti, and did do so, by these notices; and also that, as these contracts could be extended by payments of a money consideration from quarter to quarter, the owners, by declining to accept such payment^ could terminate the leasehold rights at.the end of any quarter they might fix for that purpose. These are the theories which' constitute the bases or predicates of the decrees and of the argument to sustain them.
It can not be said, in view of the principles enunciated and repeated in our own decisions, that contracts in the nature of grants of oil and gas, conferring upon the grantee the
Though the instruments executed to Armstrong, and by him assigned, purport to grant- all the oil and gas contained in the two tracts, yet, considered in their entirety, they only confer the right to produce and market such oil and gas upon the payment of rentals and royalties. The sole distinguishing feature is that no definite or specific limitation or restriction is prescribed as to the time when the right to explore shall end and the license or privilege granted shall cease. Hence, the grants are similar to the one construed in Oil Co. v. Guffey, 52 W. Va. 88, to create a lease from year to year at the option of the lessee until a well is completed, the difference there being that the contract was to be null and void if a well were not drilled in two years, and that a forfeiture could be prevented by an annual payment of the sum specified therefor. Likewise, we held in Thaw v. Gaffney, 75 W. Va. 229, that the grant of a right to construct two residences, and- to occupy them for a definite period and as long there
There was here, as' we have said, no demand to drill or notice of an intention to declare a forfeiture, no warning that the lessors were dissatisfied with deferred operations, nothing to show a premeditated disposition summarily to cut short
And, with the declaration of an immediate forfeiture before it, without a demand or opportunity to drill within a reasonable time to preserve such leasehold rights, it can not justly be said the failure of the Monongahela Natural Gas Company to enter on the lands thereafter and commence developments before the leases to MeDermott were executed, should be regarded as evincing lack of diligence, entitling the lessors to enforce the forfeiture declared, or as of itself constituting a ground of forfeiture. Reserve Gas Co. v. Wilson, supra; Jennings v. Carbon Co., decided November 13, 1917; Gas Co. v. Kensay, 164 Ind. 563; Consumers Gas Trust v. Ink, 163 Ind. 174. The very terms of the notices were sufficient to deter an attempt to enter on the lands for any purpose. Their effect was to warn against such entry. The leases to Mc-Dermott emphasized, such effect and intention. Disregard of them would perhaps have brought about the very situation now being dealt with. The failure then to go upon the lands merely deferred these proceedings. Otherwise, doubtless the bills would have been filed and the injunctions awarded ear
Being of this opinion, we reverse the decrees, dissolve the injunctions, and dismiss the bills.
Decrees reversed, injunctions dissolved and bills dismissed.