80 W. Va. 206 | W. Va. | 1917
This suit was instituted to recover damages for injuries claimed hv the plaintiffs because of the failure of the defendant to drill oil wells on lands of the plaintiffs so as to prevent wells drilled on adjacent lands from draining the oil from plaintiffs’ lands and thereby depriving the plaintiffs of the royalties thereon. Plaintiffs charge in their declaration that in the month of January, 1895, they made an oil and gas lease to one William .Morris covering the tract of land owned by them in Tyler county and that the defendant by successive transfers of this lease became the owner, thereof: that thereafter the defendant began to operate upon said land for oil and gas and drilled several wells thereon; that the said defendant was also the holder of oil and gas leases on adjacent lands, and that it drilled wells on these adjacent lands in' such close proximity to the plaintiffs’ lands that in order to prevent the oil under plaintiffs’ lands from being extracted therefrom' through these wells it was necessary to drill additional wells on plaintiffs’ lands, which the defendant declined to do. The declaration claims that there is an implied covenant in the lease that the lessee would drill such wells as might be necessary to prevent the extraction of the oil from plaintiffs’ land through wells drilled on other lands.
Upon the trial of the case, in answer to special interrogatories, the jury found that one such additional well should have been drilled by the defendant at one corner of the lands of the plaintiffs, and that by reason of the failure to drill this additional well plaintiffs’ lands had been devastated of the oil thereunder by wells upon other lands, and that the loss to plaintiffs by reason thereof was fifteen hundred barrels of oil valued at twenty-two hundred and fifty dollars, for which sum the jury found a verdict, and upon which verdict the court rendered judgment. The first
' Upon the trial of the case it appeared that the plaintiff Charles Newton Steele was the owner of the land covered by the lease, and that the other plaintiff, his wife, had no interest therein except her contingent right of dower. The defendant insists that she is improperly joined as a plaintiff, and that because of such misjoinder this suit should be-dismissed.
The case of Sandusky v. West Fork Oil and Natural Gas Company, 63 W. Va. 260, was an action in assumpsit to recover oil and gas royalties. The lease was made by San-dusky and his wife jointly, but the suit was brought by San-dusky alone, and it was shown that he alone was the owner of the property. It was held in that case-that she was a necessary party plaintiff, and that the suit would have to be dismissed because of her nonjoinder. The holding there is that the legal title to the royalties and rents arising from the lease is by the terms of the lease itself in the lessors jointly, and it matters not that one may not have any real interest therein, their joint interest is determined and fixed by the terms of the contract, and that conclusion seems to be well supported by the authorities cited. But it is stated
As we have before stated, the declaration alleges that the lease made by the plaintiffs was to one William Morris, and that it had been successively transferred so that at the time of the operations thereunder the defendant was the owner thereof. On the trial of the case the plaintiffs introduced in evidence the lease executed by them to William Morris, but they introduced no evidence, either written or parol, to show the assignment and transfer of this lease to the defendant, as alleged in their declaration. This action is based upon the breach of an implied covenant contained in the lease. If the defendant is not a party to that lease, then this suit cannot be maintained against it. Its acts in drilling upon the plaintiffs’ lands would be nothing but trespasses. There would be no obligation on the defendant to drill wells on plaintiffs’ land in the absence of this implied covenant relied upon. In fact, unless the defendant did have the right to go upon the land and drill for oil under the lease it would be a trespasser if it undertook to drill wells
Coming to the merits of this controversy, the defendant insists that plaintiffs have failed to show a state of facts justifying recovery. It says that the proof does not establish the fact that there has been drainage of oil from plaintiffs’ lands by wells drilled upon other lands. It contends further,- conceding that there has been drainage of some oil from the plaintiffs’ lands by these wells on other lands, that it does not appear that in the exercise of sound judgment the defendant should be required to drill additional wells upon the lands of plaintiffs. Defendant insists that, even assuming that it is shown that oil from plaintiffs’ lands has been drained therefrom, and such facts have been shown as impose upon the defendant, the duty to drill wells on plaintiffs’ lands to produce this oil therein and prevent the drainage of it through wells on adjoining lands, the evidence of the amount of plaintiffs’ injury by reason thereof is not fixed by any fact, is uncertain and conjectural, and no more than nominal damages should have been allowed. It cannot be doubted that in order to the recovery of damages from a lessee in such a case as this it must appear from the evidence that it is reasonably certain that oil from plaintiffs’ lands has been, or is being, drained by wells drilled on other lands. Of course, from the nature of the subject matter it is impossible to prove this with absolute certainty, but it is not impossible, nor is it difficut to prove such a state of circumstances, if they exist, as would reasonably lead to the conclusion that such was the fact. It would be not only possible but easy to show the character of the sands in,which the oil was found on the adjoining lands. It could
However, it must be remembered that the obligation of the lessee does not require him to drill wells wherever there is a reasonable expectation that some oil may be found, but it must appear that there is a reasonable expectation that the returns to the lessee from the oil which will be produced from the drilling of such a well will at least compensate him for the expense incurred in drilling the well and producing the oil. This cannot be left to conjecture, but must have for its basis some substantial proof. In a case like this it could be shown what would be the cost of drilling a well through the particular sand in which the oil was found on the adjacent lands; what would be the approximate cost of producing and marketing the oil therefrom; what the production was from wells drilled in close proximity to this land; and it might be reasonably assumed, if wells' in close proximity produced sufficient oil to compensate the lessee in drilling them, that a well drilled upon plaintiffs’ land would do likewise. However, in determining this question all of the elements which would have a tendency to influence and guide the judgment of one producing oil must be considered. The fact that wells drilled in close proximity proved to be barren would be a material consideration, as well as the fact that productive wells were so drilled. In this case it is shown that there are barren wells drilled in close proximity to the plaintiffs’ land at the point at which it is contended defendant should have drilled a well. It is also shown that productive wells were drilled in such close proximity. It is not shown, however, by any satisfactory evidence what would be the cost of drilling a well at the point indicated nor is it shown, or attempted to be shown, that even though a well
In Hall v. South Penn Oil Co., 71 W. Va. 82, Judge Poe-eenbaRGER, speaking of the duty of the lessee to sink additional wells, at page 84, says: “The number and location of wells, requisite to the performance of this covenant, depend upon the character of the leased territory. The area of the lease does not determine the number, nor is their relation to one another governed by any fixed rule. Whether, after the discovery of oil or gas, by means of the initial or experimental well, there is a duty to sink additional wells, depends upon the probability, arising from the circumstances surrounding the property, that an additional well or wells will be profitable to the lessee. He is under no duty to operate at a loss to himself to make the premises profitable to his lessor. It is only under circumstances indicative of mutual profit — profit to lessee as well as lessor — that the duty to operate devolves."
In Jennings v. Southern Carbon Co., 73 W. Va. 215, Judge Lynch discussing the same subject at page 221 says:
"The necessity for such interpretation is readily apparent when the peculiar and distinctive characteristics of these mineral substances are considered' — their illusive and migratory nature, their disposition to travel in the direction of least resistance, and to find vent through the most readily accessible opening. How far they travel to effect escape from the pressure under which they are confined, is problematical. No one does or can know the extent, nor is he even able to approximate it with any reasonable degree of certainty. Hence, we say that, although the judgment of one experienced in developments under leases of this character is controlling, when compared with that of the landowner, who is without such experience, yet his judgment, if fraudulently exercised or' exercised solely to promote his individual selfish interest, thereby ignoring the interests of the lessor, such judgment, being fraudulent, will not' avail. To serve him, it must conform to that judgment generally exercised by other operators under similar circumstances and conditions, and in view of the real purpose and intention of the parties when entering into the agreement.”
The same question was under consideration by this Court in the case of Grass v. Big Greek Development Company, 75 W. Va. 719, in which it was held in the eighth and ninth points of the syllabus: "To entitle him to damages for unreasonable or arbitrary evasion of implied covenants of an oil and gas lease, nothing therein preventing, for diligent prosecution of .operations, either mineral being found in paying quantities on the premises, plaintiff assumes the burden of showing, and by clear and convincing proof must to avail him show, by witnesses having experience and skill
“Among such circumstances and conditions are the situation of the parties; the character of the mineral products; the nature of the oil-bearing sand, whether dense or soft and porous; developments on contiguous lands, whether by same or different operators; cost of drilling; proximity to market, and facilities for marketing; current prices, whether high or low; location of the lands, and such other conditions attendant upon the operations as may explain necessity for prompt, or excuse for delayed, action in prosecuting such developments. And if, considering these, the operator has exercised that reasonable diligence and sound, practical judgment common to and exercised by operators of ordinary prudence and experience in the same business under the same or similar circumstances and conditions, plaintiff cannot recover. ’ ’
These quotations sufficiently indicate the character of proof required in order to justify a recovery in' a case like this. In the ease at bar the showing made falls far short of the requirements there laid down. We have the testimony of three men in this case who have done some drilling in this oil field to the effect that in their judgment an off-set well should have been drilled on Steele’s land. They do not give the facts upon which they base this conclusion; they do not indicate the extent to which the ‘oil-in Steele’s land was in their opinion affected by the drilling of these wells on adjoining lands. No witness indicates what expenditure would be required for the drilling of such a well on the lands of the plaintiffs, nor does any witness say that there is a reasonable probability that such a well, if drilled, would have been profitable to the lessee. There is no witness who testifies as to what would have been the probable production from such a well from the standpoint of consideration of all of the surroundings. It is true the plaintiff Charles Newton Steele testifies that in his opinion he was damaged twelve
The defendant objects to certain instructions given by the court to the jury at the instance of the plaintiffs, and particular stress is laid upon instruction No. eleven. This instruction tells the jury .that if the defendant was the owner of the lease upon plaintiffs’ farm and also of a lease upon the adjoining lands, and upon such adjoining lands drilled wells in close proximity to the plaintiffs’ line which it refused to off-set by drilling wells on plaintiffs’ lands when demand was made upon it therefor, in order for the defendant to excuse, itself from off-setting such wells on such adjoining lands it must show by a preponderance of the evidence that it acted with due diligence, taking into consideration the situation of the parties, the character of the mineral products, the nature of the oil-bearing sand, whether .dense or soft and porous; developments on contiguous lands, whether by same or different operators; cost of di’illing; proximity to market, and facilities for marketing; current prices, whether high or low; location of the lands.and such other conditions attendant upon the operations as may explain ■ necessity for prompt, or excuse for delayed action in prosecuting such development. It is insisted that this instruction relieves the plaintiffs of the duty which is placed
It is contended that the obligation rests upon the plaintiffs to show that the lessee did not act with due diligence, taking into consideration the matters referred to. This was the holding of this Court in the case of Grass v. Big Creek Development Company, 75 W. Va. 719, in point eighth of the syllabus above quoted. ¥e think the court erred in giving this instruction. It was a necessary element of the plaintiffs ’ case to show the facts which this instruction says must be shown by the defendant in order to prevent a recovery. This instruction would allow the jury to assume without proof that the facts existed, the existence of which are necessary in order for a recovery. Such is not the law. Where a recovery of damages is conditioned upon the existence or non existence of a certain state of facts, he who seeks such recovery must show affirmatively the things essential thereto.
It is also assigned as error that the court admitted the lease executed by the plaintiffs to William Morris in evidence, for the reason that the declaration averred that the •said plaintiff Charles W. Steele, being seized of the lands referred to, together with his wife, Rosa Steele, executed a lease to William Morris, which is the lease upon which reliance is had in this case. Suit was brought in the name of Charles Newton Steele and Rosa Steele. The lease is executed by Newton Steele and Rosa Steele, his wife. It is quite clear that this averment in the declaration that it was executed by Charles W. Steele is clerical or typographical, and should be corrected upon another trial of the case.
The judgment of the circuit court of Tyler county complained of will be reversed, the verdict of the jury set aside, and the cause remanded for a new trial.
Reversed, verdict set aside, remanded.