189 Ky. 243 | Ky. Ct. App. | 1920
Overruling motion to dissolve temporary injunction.
In the circuit court, after the answer of the defendant had been filed, upon notice, and a hearing of all the evidence which either party desired to offer, an injunction was granted to the plaintiffs against the defendants, George A. Meade, Carroll York, M. M. York, D. A. Scott and J. N. Glass forbidding them to enter upon a tract of land which was covered by a lease owned by the Future Oli & Gas Co., for any purpose except to remove a drilling machine and attachments which they had placed thereon, and from boring for oil or gas upon the land, as well as from in any way interfering with or obstructing the plaintiffs, in entering upon the land or developing it for the production of oil and gas during the pendency of this action, and until final judgment herein. The four last named defendants have made a motion before me as a judge of the Court of Appeals, to dissolve the temporary injunction granted by the circuit court. As appears from the record filed before me, the chief facts which the controversy between the plaintiffs and defendants, and out of which the injunction complained of arose, are that the plaintiffs, Decourcey F. Niles, Edward M. Shaw, W. J. Bahner, Charles H. Smith, George Haras, Leonidas A. L. Bay, Carl J. Mattson, Gus L. Young and James F. Kearney, together with the defendants, George Meade, Florence Meade and Grover Van Vliett, all of whom reside in Chicago, 111., compose a joint association for the purpose and jointly engaged under the name of the Future Oil & Gas C'o. in the business of buying and selling leases upon lands for the production of oil and gas and operating upon the lands, covered by the leases, for the purpose of procuring oil and gas therefrom. The association is not incorporated, but, is an organization by agreement among the members, and has a president, vice president, secretary and trustees all of whom compose a board of directors for the control and management of the affairs of the association. The association, which I will hereafter call the Future Oil & Gas Co. became the owner of an oil and gas lease upon twenty-five acres of land, and by the authority of a resolution adopted by its governing authorities on the 13th 3.ay of July, 1920, entered hito a contract with its president, the defendant George A. Meade, by which he was authorized to explore and bore for oil upon the premises and in the event of success in procuring oil, he was to
“Party of the second part (Meade) agrees to have a ‘drilling rig’ on the lease, within thirty days from the date hereof, or grant the parties of the first part (Future Oil & Gas Co.) the privilege of securing a machine and putting it on the lease at the second parties’ expense, and further agrees to diligently pursue operations from the time of spudding in until the well or wells provided for in this contract or assignment shall have been completed. Failure to comply with the obligations mentioned herein and within the time limit herein set forth shall render this assignment null and void, and of no further force or effect.
“Party of the second part agrees to deposit a copy of this contract in the Citizens National Bank of Bowling Green, Ky., with instructions that this contract shall immediately revert to the parties of the first part, if any part of the foregoing contract is not complied with within the time limit set out and provided for in this contract. ’ ’
Meade did nothing looking to complying’ with the terms of the contract on his part from the date of its execution up to the time he assigned and transferred it to York & Glass, but they at once, after having obtained an assignment of the contract, with all reasonable diligence proceeded to endeavor to place a “drilling rig” upon
There is no dispute as to the facts relating to the endeavors of the defendants to place a “drilling rig” upon the lands and that they did not succeed in so doing within thirty days from the date of the contract, and, if to do so, was a precedent condition, necessary to be performed by the defendants to entitle them to go upon the lands for any purpose, or to operate thereon for oil or gas, and * the failure to perform the condition terminated and concluded any rights which they had under the contract, their operations after thirty days from the date of the contract were unauthorized by plaintiffs; and for the defendants against the consent of the owners of the lease, to continue from day to day to operate upon the lands and thereby to interfere and prevent the owners from conducting other operations desired by them, would he a violation of the rights of the owners, which would justify the interposition of a court of equity by the way of an injunction to restrain the commission of repeated trespasses, threatened to be repeated from day to day, and of such character, on account of the nature of plaintiffs’ estate in the land, calculated to destroy the substance of it, in the form it is now held, and to result in a multiplicity of suits, at law. If no contract 'exists between the parties which authorizes the defendants to go upon the land, with drilling machines and to operate thereon they occupy the positions of trespassers, as all the authorities hold, that to perform the obligations of a contract, which once existed, but, which according to its terms has terminated, without the consent of the other party to it, is not a performance of the former contract..
The failure to perform the stipulations of a contract, such as the ones undertaken by the defendants and their
The grounds upon which the defendants insist that the injunction was erroneously granted, is that the thirty days from the execution of the. contract within which the stipulations in it were to be performed, or else the contract shall be null and void, did not include the stipulation, that a “drilling rig” should be placed upon the premises within thirty days from the execution of the contract, and the failure to perform that stipulation within the thirty days .did not terminate the contract or conclude the defendants ’ right to proceed to the performance of the other stipulations, but, under the contract the only relief which the plaintiffs would have from a failure to perform that stipulation would be to place a “drilling rig” upon the premises, and require the defendants to pay the expense of it. If tbe contract was so construed and plaintiffs had exercised the right to place a “drilling rig” upon the land, in default of the defendants having done so, the defendants would still have failed to perform the contract by making a diligent beginning of the operation of the “rig,” within the time prescribed by the contract; and in that event they would have suffered the loss of the contract, and in addition the costs of placing the “rig” upon the property, in the nature of a penalty or pure forfeiture, and the plaintiffs would have lost the benefits of the main purpose of the contract, which was the speedy development of the oil and gas in the land, if any there was. From the fact, that the contract specifically provides, that Meade should place a “drilling rig” upon the land, within thirty days, and which is the only obligation of the contract speci
The estoppel relied upon is that plaintiffs having knowledge of the fact, that the “drilling rig” had not been placed upon the property, within thirty days from the date of the contract, ratified the contract and provided the defendants with a copy of the ratification, and they relied upon same, and were induced to expend money, and move the “rig” upon the land, and to proceed to operate same, and, further that plaintiffs with knowledge of the facts stood by and permitted defendants to undergo expense and perform labor, as though in performance of the contract, and should not now be permitted to claim, that the contract had terminated, to the prejudice of defendants. The evidence, however, proves, that neither of the plaintiffs at the time the ratification resolution was adopted and a copy furnished to Meade, knew anything of the failure by Meade to perform the contract, within the time fixed by it, and it does not appear that either of them knew, that Meade had assigned the contract. A copy of the resolution of the association authorizing the contract to be made had been requested of Meade by the defendant, York, and-the resolution ratifying’ that one was sent by Meade, but neither of the defendants saw it or knew of.it, until the evening or afternoon of the 23rd, and after the expenses of placing the “rig” upon the land had been incurred, and at the same time, the defendants were informed that plaintiffs, were claiming that the contract with Meade had terminated and were directing their attorneys to prevent any operations upon the leased land, by any one. Hence no act or conduct of plaintiffs could have been relied on by defendants or could have induced them to perform either labor or made expenditures upon the land under the belief that they were consenting to it, which would be necessary to constitute an estoppel. Kenyon Realty Co. v. National Deposit Bank, 140 Ky. 133; Pemberton v. Price, 144 Ky. 518; Jett v. Jett, 171 Ky. 548; Trimble v. King, 131 Ky. 1; Alexander v. Woodford, etc., 90 Ky. 215; Poster v. Shreve, 6 Bush 519; Ringo v. Warder, 6 B. M. 514; Phillips v. Clark, 4 Met. 348; Brothers v. Porter, 6 B. M. 106; Shipp v. Swann, 2 Bibb. 32; McAdams v. Haines, 9 Bush 15.
It is insisted that Meade, who was a member of the plaintiff association and its president knew all of the facts, in regard to defendants’ performance of his con