1 Ohio C.C. (n.s.) 589 | Oh. Circ. Ct. | 1903
This case comes here from the court' of common pleas on appeal. The plaintiff named avers in his petition that he is the owner of a leasehold interest and is in possession of certain lands described, in Wood county’’, Ohio, for the purpose of producing oil, and that the defendant, John G. Watts, has entered into possession of the lands and drilled thereon and is producing oil and is converting the five-sixths part thereof to his own use. The praynr of the petition is that Watts be enjoined from such conversion, and that the Buckeye Pipe Line Company — with the limes of which the tanks upon the lease are connected — shall be enjoined from delivering to defendant the oil produced upon said premises.
The ’defendant, John G.. Watt's, files an answer which is, in substance, a general denial, and then avers that he is the owner of
This averment of the interest in Watts is denied in the reply.
From the evidence in the case, as well as from the pleadings— more specific than has been stated — it 'appears that on the 21st day of November, 1892, Stearns and Ferris, the then owners of the fee of the lands in question, executed and delivered to Monroe and Hamnon a contract, or a lease, covering 'all these lands. That after-wards this contract was filed for record and was recorded, the date of the filing being April 5th, 1893; and after this time Monroe released to Harmon all his interest in the lands, and Harmon after-wards conveyed to the plaintiff in this action the interest, if any, arising and existing under the lease, and it is under this contract that the plaintiff claims. It is evident that the claim or title t'o relief of the plaintiff in this action must be based upon the validity of the contract originally made and the subsistence of an interest or estate thereunder at the time of the bringing of this action, and, therefore, the terms and conditions of the contract originally entered into between Stearns and Ferris of the one part and Monroe and Harmon on the other, become, as we think, of controlling importance in the case. By this contract the land owner, for a consideration of one hundred dollars, grants unto the second party the privilege of drilling for and removing the oil and gas from the premises, together with the right to place thereon such fixtures as may become necessary for the production, transportation and storage of oil or gas, and the right t'o remove such fixtures at the pleasure of said second party. It is provided that if oil be found the land owner shall receive a royalty share thereof of one-sixth of all that may be produced from the premises. Should gas be found the compensation to the land owner shall be three hundred dollars yearly for each and every gas well used and while used. It is further provided that said Monroe and Harmon shall complete a well upon the premises within ninety days from the date of this agreement, or thereafter shall pay t'o the first party $25 per month until such well is completed.' A well was completed in August, 1893, and all the rental due, at $25 per month, from the expiration of the first ninety daj^s after the execution of the agreement, was paid. Nothing was found in this well so drilled, and
The assignment of this agreement by Judge Harmon to the plaintiff in this case w.as mot filed for record, nor recorded. It is contended now by the defendants in this case that this lease is not in force, for the reasons: First, that the assignment has not been recorded, and therefore, the plaintiff in this case has no title to the leasehold, even though it is still a subsisting interest; second, that this lease was invalid ab initio, for the reason that no term is stated or fixed by its terms; and, third, that if the lease ever were valid, all interest of the plaintiff in the premises has been lost by reason of the abandonment, either by himself or Judge Harmon.
We are of the opinion that under the terms of Section 4112a, the assignment of a lease need not be — as between parties sustaining the interests in the lands that these parties do — need not be filed for record, or recorded, and that the failure to so file or to so record
We are not of opinion that this agreement is invalid by reason of the fact that no term is fixed in -it. This was a contract that was entered into between the land owner and an oil producer, for the purpose of enabling the oil producer to follow his occupation upon these premises and produce oil and gas therefrom. A right to possession, at least for this purpose, passed to the oil producer. He had a right to explore for oil, and when he did discover it the contract then would endure for such time as was necessary to accomplish the purpose of the contract, the producer acting with reasonable diligence.
In this case, then, if oil had been found, Harmon, or his- assignee, would have had the right to retain possession of this land for such length of time as would be reasonably necessary to the production of the oil and gas lying in and forming part of the lands. Now it is a maxim of law that that' is certain which can .be rendered certain, and the existence of the means of rendering need not attend the formation of the contract; if subsequent events established or fixed the means that had been agreed upon in the contract, that would create the certainty that the law requires. We, therefore, think that by necessary implication the period that this contract was to endure was fixed by the terms of the contract, and that in consequence the contract is not subject to the objection in that respect that is taken to it.
The sole remaining question in the case is that of abandonment. It will be observed that by this, contract there is granted the privilege of producing oil — the privilege of going into possession of this land for.the purpose of exploring for oil is the primary right.
It was evidently the theory of the original party to this contract — the second party — that, having drilled one well, required by the terms of this contract, that thereby a perpetual interest was granted and that if at any time in the future oil should be found, it would become the property of the assignees or of the party who succeeded to the interest of Harmon in this lease. To that construction of the contract we can not agree. The contract was entered into for the benefit of both the producer and the land owner, and if oil were found, the land owner was entitled to his share. The time of the enjoyment of this beneficial interest in the contract is something that could not be fixed by the caprice of the driller — it was his right and duty to do the drilling, but it was equally the right of the land owner, within a reasonable time, to enjoy the fruits of this contract so far as he was entitled to them; and so we think that a fair construction of the rights that each of the parties had under this contract is: While upon failure to find oil when the first well was drilled, the interest of the owner of this contract — the producer — would not cease, or be in any manner forfeited, while he still had the right to continue his search, that he was bound to do so within a reasonable time. That is more especially the case where, as here, the duration of the lease is not fixed expressly by its terms. Now, to this contract Ferris was a party. She had no interest in, and no benefit was conferred upon her by the finding of oil, or its production upon adjoining lands in the immediate vicinity, or at distances remote; she had the right t'o have proceedings taken looking to the securing to her of the benefits under this contract, and within a reasonable time.
It is true that oil developments in the vicinity are matters of consequence in cases of this kind — because, having expended money
I might say, as tending to support this conclusion, that' very recently, in a case unreported, the Circuit Court of the'Third Circuit held that where nothing had been done in the way of drilling after the failure of the first well, for four years, upon a leasé
The case of Baumgardner v. Browning, 12 Circuit Court Reports, 73, relied upon here by the plaintiff, we think, so far from being authority to sustain his contention 'here, is rather against the plaintiff’s position. In that case 'a lease for oil purposes upon a cash payment of five hundred dollars was executed and the term fixed at twenty years, and that was 'a definite term. It was held finally in that case that a failure to drill for a certain length of time did not result in an abandonment or forfeiture of the leasehold interest, but it was not' held in that case that the lessee was entitled to the full period of twenty years, but it was, in substance and effect, held that a reasonable time for the' doing "of further drilling upon the premises had not expired. It is evident from a reading of the entire ease that the court intended to decide the ease upon it's own particular circumstances; and the court had, I believe, theretofore held in other oases, and where the term of lease was less clearly fixed, and where the territory had been more thoroughly developed for oil purposes, that an abandonment would result. And so it is indicated by the concluding paragraph of that' opinion that the case is exceptional and is decided upon its own peculiar circumstances. There is it stated:
“Now, without in any way infringing upon any rule we have already laid down, but deciding this case as it' stands, we are of the opinion that the equities are with the plaintiffs, Baumgardners, and that they still have a fair and just right to hold the exclusive possession of these premises for the time being, and at this time, for the purpose of determining whether there is any oil in the land or not.”
And at another part of the opinion, it is said:
“We think the better rule is to say that under this lease the parties have a right to abide, at least for some time, to see what the developments were in the vicinity around and about there.”
If it had appeared that' for several years — four, or five, or six— that upon adjoining lands oil had been produced, we are of the opinion that the lessee would not have been excused from drilling and would not be permitted to retain his interest in the absence of drilling simply because, while oil was found, it was deemed, by reason of .the state of the oil market, that it would not be profitable to do the drilling. If it is not profitable, there is an easy escape for the oil driller; he may either confer the benefits of the royalty upon the land owner by drilling, or he may surrender his interest in the land; but he has no right, when oil is found in considerable quantities to decline to produce the oil for the benefit of the land owner because in the condition of the oil market it would not be profitable for the producer to do the drilling. He may do that, but if he does it he must' surrender his interest in the premises.
• And so, upon the last case, we find that the lease here was abandoned, and that at the commencement of this action the plaintiff was without title to the interest of the oil lessee, and that' in consequence of that finding the decree must be for the defendant in the case. We find that the lease had been abandoned at the time of the commencement of the action.