*1
Company op.Louisiana
Standard Oil
v. Oil
Well
way
Stallings,
v.
that the Company, appellants who are the herein, failed to file report corporation of the financial condition of said at during year time 1923, or default failure personally rendered them liable for all the indebtedness corporation during period created of their rendering default. The judg- court did not err against appellee. ment them favor of .judgment is therefore affirmed. Company Standard Oil of Louisiana Oil v. Well Sal vage Company. Opinion January delivered 1926. minerals—recovery escaping 1. Mines which, oil.—Oil will, escaped defendant’s from its line and found its way plaintiff’s pick-up may be recovered defendant. 2. Mines and gas minerals—construction of lease.—An oil and conveys merely lease but license an interest and ease- ment in the land itself. 3. Mines and minerals—construction of surface lease.—Where the owner of land executed an oil lease in the usual form, subsequently executed to a surface authorizing operate “pick-up such lessee to station” the same land, former, the latter lease was subordinate to the but not conflict with it.
730 *2 minerals—right station.—An oil to build 4. Mines and preserve gas the les- lease confers on the lessee the to necessary, oil, and, station or sta- if to erect a see’s own except against tions, captured hold oil in such station and to authority owner; to a station the true merely .but confers no build such capture fugitive belonging to to' others. capture — — to 5. Mines and minerals of gas land, executing recover.-—-Wherethe owner of after an oil authorizing appellant’s assignor, lease to executed a second lease appellee’s assignor erect thereupon erected, appellee appellant so much will be liable to for (cid:127) only recaptured belonged appellant. oil as Appeal Chancery Divi- Court, Union Second Special reversed. sion; Jordan Sellers, Chancellor; Gaughan appellant. for & Sifford, appellee. & Powell, Knox, Smead April 24, 1919, On Wood, J. оne E».P. Combs and an oil his wife executed lease to certain lands 'County, conveyances, Arkansas, which, Union mesne Company passed to Oil Louisiana, the Standard here- of company. company after called Standard That entered proceeded develop upon the land and same under August 1921, 2, lease. On Combs and his wife, original Murray to one lessors, executed W. L. a surface - Murray authorized lease on the lands which or his assignees operate commonly what known as a running through station on a small branch lands, being this catch the waste Murray oper- escaping oil which ran down branch. assigned this station a while and the same to the ated Oil Well & Salvage Company, salvage hereafter called salvage company On December 22, 1921, possession of lands erected a dam took across the adjacent earthen reservoir branch 'and also an to capacity approximately which had a 10,000 branch salvage company, of oil. the 12th of barrels approximately January, had collected 1922, 3,500 bаrrels January, or 13th the 12th oil. About company salvage company that informed the objected operating under its sur- to the latter had a had stating that the Standard face lease, salvage company and notified line, in its break began company then lease. The Standard to vacate taking salvage dam and oil from the whereupon insti- creek, from the against the Standard action tuted appropriated alleged dam over from behind its oil from reservoir company’s damage protest, in the sum judgment prayed that it have $12,400. and that said sum, for that enjoined appropriating oil from the sal- waste *3 taking vage company’s and from leased salvage company’s from the reservoir and oil from the premises. flowing through its leased creek up company, in set that answer, The its by assignment of the oil and it was owner that it owner of the wife, Combs and and was the salvage company to own land in which the claimed sur- salvage oil. that the face for waste admitted ¡but company dam, had erected a denied that was with acquiescence, or and .consent the%Standard salvage alleged doing company that in so was trespasser disposing gathering and and of oil that belonged to others. It also denied the other material allegations complaint. of the testimony tending salvage company
The introduced prove it estab- 2, that from time December eighty land acres of lished station on picked January covered until it had 18,1922, the up had 2,500 between barrels of sold 3,500 3,500 total 958 barrels. were some barrels There pit company put line in and when the cоmpany put pumping. salvage had commenced about a thousand after the in the Standard’s barrels break Seventy-two into the line. wells would drain oil or creek the outlet. watershed which branch Humble Both the. 732 yards
had within wells 250 and of the sta- the waste oil from which ran into the that creek tion, came tanks the dam. The oil from other waste company operating that besides migrated and ran down this shed into the watershed commingles (cid:127)creek with that of the Standard salvage company One witnesses for estimated eight that there were from to six thousand barrels of way salvage that would have found its com- pany’s storage tank. an dam The was worth on per average at $1.50 barrel the time the Standard company appropriated property. No one ever representatives salvage informed premises. no It cost be on the storage piping earthen to build the $450 holdings material about additional cost $300. salvage company pick- the up consisted its lease and the of its one witnesses estimated that the holdings reasonable vаlue of market cash company was $24,000 $25,000. around After objected maintaining station and claimed the *4 put larger powered pumps to the oil in take and salvage company’s pool into the reservoir, and the latter operations company discontinued because was useless proceed, salvage protested company to further. The and objected company taking possession. to the company operated .The lease under which whereby was a lease the lessor leased lessee his and assigns heirs and of 117 the surface acres land includ- ing the land which had estab- pi'ck-up lished its station. It was recited the lease that gathering, storing, it was executed selling therefrom waste crude oil. The lease contained a further recital as follows: The lessee shall have the plant point to locate his at a on the creek best gathering suited crude, this lease remain to force long paying quantities. crude is found in waste oil tanks, remove all lessee Said shall equipment machinery, boiler, or other expiration prem- leave the at the this lease and shall con- As a further ises the same condition as found. -lessor lease, sideration for the above the said shall one-eighth equiva- receive oil received, of all waste lent in cash. manager company testified that
during January the months December and he had charge production of oil for the n El Dorado district. The eighty acres of an land under lease.
six wells on the and four of these wells drained already pick-up creek on men- tioned was situаted. Witness the sta- remembered when tion was there, built and went to see lessor about it. Witness had told the lessor put pit
intended they whenever could accumulate equipment, explained to him that he would royalty receive the same station as from wells. The credited the lessor one-eighth royalty up picked out of the that was company’s pipe on the occasion when the Standard line stop broke. The Standard took no action operation notify station other than to put the lessor that it in time on the сreek dam pick up the oil themselves. Witness understood lessor was interested in wit- remonstrating against ness was com- it. pany always objected operated having these stations' objection on its leases, the lessor was line objection. with its usual There in the com- was break pany’s pipe line about 350 feet from the channel of the creek on which station was situated, *5 directly oil from this break run the creek and into would company down it. The notified the that witness company put he was directed pump pick up on thе creek and had been oil that Standard Oil operation any long such as as and- continue
wasted, company The from the creek. oil could be had days pump thirty put after this dam and about itself in a salvage company’s pit pumped and oil out of the they any get kept long going as could oil. as Some days- company put in thirty a dam. later places creek could on the where oil be There were other salvage company’s picked up pick-up station. besides the company operаting at was station oper- place on the creek. The Humble another ated after the break in line discharged that of the Standard The wells the Humble creek between salvage company’s pick-up station were station and the except one. all Standard wells testimony 'amount There a conflict was company from taken of oil was -Standard price salvage company’s pick-up and as to the unnecessary, in it is view the conclusion 'but testimony. reached, to forth One of the have set we witnesses for the Standard testified the effect bringing building they when that, tanks, wells watershed, on the the waste oil would swabbed out wells if it, and, into the creek and run down this oil was drain great picked up, it not a loss. There be on the creek after the Standard deal oil. picked up from the line break. The the oil came pit up company lease a surface far as wit- creek, but didn’t ness knew. operating under a lease ‘‘ part lessor,
which as follows: That said recites paid, in hand dollar, for and in consideration cash one receiрt hereby acknowledged, cove- agreements part hereinafter contained on nants paid, performed, kept granted, has of the lessee to grant, presents leased and does demised, let, and these demise, and let unto the said for the sole lessee, only purpose mining oil and *6 op Company Oil Louisiana Standard v. Oil 735 Well gas, laying pipe building power lines, tanks, sta- produce, tbereon, tions structures save take products care of said all that certain tract of land situated county in the of Arkansas, Stаte Union, as described follows, to-wit:
“In consideration of the the said lessee agrees: covenants To 1st. deliver to the credit of pipe may lessor, free of in the cost, line which he con- pro- equal one-eighth part nect his of all oil wells, (cid:127) premises.” duced and saved from the leased The trial court found issues fact in law and salvage company, favor of the and entered a decree its favor in the sum of $5,760, which decree the company duly prosecutes appeal. this opinion
1. The
in the case of Crosson
Lion
v.
Oil
Refining
&
Co.,
dard entitled *7 imрounded may party it. have third who testimony prove tending to that the Stan- There was escaped only from its took the oil that dard gathered pipe which had been the line and wells own storage pit salvage company’s tank and behind its and flowing the down creek all the oil that dam, but also that drained watershed other in the from all wells. taking all In it was short, creek. into this company’s pick-up station and oil from the dam which behind its would have from the creek ultimately impounded by salvage company, been regardless source from which it emanated. It occurs to us as between the that, company, and the Standard Standard prima superior right would in all such oil facie provisions prior under the lease was lease, salvage company. lease of surface will be that the lease under which observed Standard operated it executed to lessee “for the and sole only mining for oil power laying pipe building lines and stations tanks, produce, thereon to structures save care of said take products,” grant and in of such and lease сonsideration pay premises the lessee was to to the lessor the one-eighth part equivalent produced premises. express saved the leased Under the company, above lease to the terms of the certainly had the to establish a station at eligible premises on the location leased to take the most produced care of and save all the oil from its own wells right, premises. on those lay operate gas, mine and for oil and under power any- stations and structures lines, tanks, build produce, save take where on the leased premises, gas produced from care of oil and those and, enjoy fully rights, in order to these necessary expedient occupy might site, find or building thereon for the best suited sites, Company op gathering of station for the waste crude oil. Therefore, prem- since these embraced the lease of were ises to the lessor could not there- grant party after rights to third an exclusive lease surface rights already be in conflict granted subsequent
grant lessee of the surface “to plant point locate his at a on the creek best suited for necessary gathering of waste crude oil” would inbe company’s prior conflict lease if the with the point gathering on the creek best suited of waste point gathering crude oil was likewise the best suited for *8 produced gas by oil and the in the Standard operation of such its lease. Under circumstances two such wholly repugnant leases would to other, be each the prior paramount superior. lease be would beTo right, sure, the landowner lessor would have the not- withstanding prior premises pro- a lease of for the the gas products, grant duction and conservation of oil and to rights subsequent a surface to lessee not in conflict with provisions prior subsequent the lease. A lease might provisions repug- sobe worded as not- to contain provisions prior nant to the the lease. Such subse- quent express might subject lease in terms be made to prior appropriate language might the or lease, used be protect rights to the the lessee, thus avoid repugnancy conflict between two leases. the But, we have the stated, lease under review contains no such .language; might and circumstances as above indi- arise, wholly cated, which would render in the leases conflict aught For each other. this record shows to con- the trary, may have conditions existed at the time controversy recovery arose. In order to warrant a company, upon plain- the Standard the burden was the salvage company, prove the tiff, to that there was no con- point in flict the and that the where had leases, erected it pick-up place its by station was not at essential be used operation
the of its lease; production, disposition is, conservation and 738 oe Louisiana v. Oil by products premises .prior on the covered If station by salvage company point at best erected gas products conservation of the oil and suited for the by produced from its own wells, the Standard use Com- and was not essential granted pany enjoyment it full salvage company, under its leаse, under its then the right would build fugitive have the title to the and abandoned and would gathered But otherwise the such station. oil salvage company, already entering without consent or leased trespasser, acquiescence company, latter fugitive and abandoned and have no whatever to gathered Because, oil it company thereon. if on which the sal- to use the site had the vage was located order operate the oil and conserve own lease and save doing, produced wells, alsо from its own then if, possession and abandoned came way premises into the that had found its other station erected com- between *9 pany and title would have latter fugitive oil. and abandoned this passed rights granted 2. to the lessee and which by conveyances company were mesne land, in not but interest and easement an license, 289 Mc v. Fed. Smith v. Robinson, 740; itself. Swert Donaghey, 689; A. L. Culloch, Rich v. 3 285 Fed. (U. S.) R. 614; L. A. R. v. 26 352; Co., Barnsdale Gas Co., & Ark. 300- Oil Gas 148 Blair v. Creek Clear com under which the Standard 310. The instrument conveying pany operating being an a lease аnd was premises in the leased interest and easement subsequent by lease to no the lessor had lessee, convey any with lie conflict interest that would subsequent holding prior under the lease, and those 739 of Louisiana v. upon not enter exercise instrument could rights rights alleged those claim in conflict with knowledge, prior ing consent lease without the under protest holding acquiescence and over the those prior salvage company had actual, lease. The under the notice of the lease of Stan constructive, as well therefore, when it dard entered with land covered erected its was a consent and out its trespasser, pick-up station erected at unless the point not the creek that did conflict with the under above explained. trespasser, If the then no it had troversy, title to and abandoned oil in con not was likewise entitled reimburse expended ment amount it in the establishment Pittsburg & station. W. Va. Gas Co. v. Co., Pentress Co. and Chartiers Oil L. Gas 7 A. R. 901; Cyc. pages Forsythe R. ; 1035 26 C. 949 to L., 951; Shryack-Thom Grocery Co., 10 A. R.L. 711. reaching
In the above conclusion but we have fol principle, opinion at least lowed, the case of Caldwell-Guadalupe Pick-Up Gregg, Station v. handed Appeals down the Court of Civil June Texas, 26, reported opinion in 276 342. W. S. This was elabo rately and well think considered, we its conclusions entirely adopt sound, and do not hesitate them. we
follows what have said that court erred in entering salvage company. a decree favor But, fully developecl along inasmuch as the cause has been opinion, appellee’s the lines indicatеd in com plaint equity. will not be dismissed for want of Instead, parties the cause will be remanded if the leave, pleadings proof to amend elect, their take further *10 parties, order to determine which of the under the rules fugitive above is entitled to the announced, and aban gathered by oil doned station erected the gathered or that been would have .iu v. Standard Oil appropri- and which the Standard ated to its own use. (on rehearing). views enter- C. J., McCulloch, origi- majority
tained call for modification of the opinion, judgmеnt nal in court as well as of the of this directions to trial cause. court on remand opinion original
Most in of what is is said majority, accord with the but some views important respects opinion their not to does conform present views. opinion necessary con-
We are of the that there is no parties respective flict between the leases held from facts is the same lessor. Our conclusion appellant is entitled to recover from by appellant appellee’s value of res- taken except appel- portion escaped ervoir, In own wells. lant’s line or wasted from its own appellant other words, our conclusion entitled is that recapture to oil, own and more. held no The lease appellant independently right, did not confer the or oil, conservation of its own to erect a premises. nothing stations on leased There in. capture referring right fugitive and the only right respect merely in that inci- is that which is preserve product. dental to the A its own fair interpretation appellant’s lease is that had the necessary pro- to erect a stations preservation, product, tect its interest in the of its own and would be entitled to the of an use available site accomplishment purpose. for the most efficient of that Incidentally, cap- it would be entitled to hold except tured its own station the true owner. subsequent appellee placed lease to init the shoes of rights respect lessor, and conferred all the erection, operation subject only stations, superior rights might lessee which be in conflict. One of leases subordination to they conflicting. might other, were A conflict assertion under but there arise the leases, *11 Company op 741 Standard Oil Louisiana v. Oil Company. Salvage Well upon conflict was no the face instruments them- rights selves, the interests conferred the lessor perfect harmony. in two No the ‘leases were conflict in could arise unless a hostile claim arose between the occupancy particular pick- lessees as to the of for a a undisputed site up According station. evidence in this simple case, no such conflict arose, for that reason appellant nor had never erected station made a any objections effort to do nor so, did it ever make appellee erecting to the latter a until the controversy captured appellee 'by oil in had been appellant appellee’s objection. started to it, retake over question rights superiority of of in of the erection particular pres- place at that in is not involved controversy. occupied by appellee ent only If the site is the place
available for the erection of a sta- by appellant preserving tion for use then rights may own appellant rights superior, of are and those appellant But, asserted. stated, before had never attempted erect did trespasser by occupying appel- become the site which might lant if have claimed it was one most available preservation product. use own When question priority particular use quеstion site arises, be determined it must appellant preserving whether or not essential is question oil. own But that is not involved present controversy. Appellee’s occupancy site rightful appellant superior until asserted its Appellee possession, being rightfully thereto. it captured against entitled hold all comers, including except appellant, the true owner. expressed views now are not in conflict with Caldwell-Guadalupe Pick-Up Gregg, case of Stations v. earnestly pressed upon 276 W. which has been S. our сounsel and relied on attention the writer opinion. original really think We views our are decision, harmony in that case. The there facts plaintiff owner of an oil and were v. *12 for a lease, and erected product. preserving was the The defendant its own junior sta also erected holder tion occupied by plaintiff, which site above operation by of its station. latter with the interfered alleging- plaintiff, brought by interference Suit superior rights, recovered decision he and under the with necessary ground conflict between on the that there was respective claims. lessees of their the assertion present appellant If case had erected preservation have its own station for the plaintiff in the Texas attitude been the same erecting prevented from and could have case, or own which interfered a station already But, as we under the lease. existing, appel such state shown, there is no of facts nor asserted lant never erected has necessary recapture it became so until do prоduct only its own but claimed not own then it oil, and fugitive had flowed stream and which down .oil Appellant escaped of other owners. from wells had oil which no claim the is therefore attitude captured appellee; can own claim its had been no more. judgment will as to court modified, testimony, if offered, direct further the trial court hear appel- of oil reservoir to the value taken appellant’s escaped lee than oil other judgment render therefor wells, and to lines appellee. further, and no favor of To that extent, petition rehearing sustained. J., dissents.
Wood,