Sussex Land & Live Stock Co. v. Midwest Refining Co.

• Decision Date: 05 December 1923
• Docket Number: 6192,6193.
• Citation: 294 F. 597
• Parties: SUSSEX LAND & LIVE STOCK CO. v. MIDWEST REFINING CO. MIDWEST REFINING CO. v. SUSSEX LAND & LIVE STOCK CO.
• Court: U.S. Court of Appeals — Eighth Circuit

294 F. 597

SUSSEX LAND & LIVE STOCK CO. v. MIDWEST REFINING CO.

MIDWEST REFINING CO. v. SUSSEX LAND & LIVE STOCK CO.

Nos. 6192, 6193.

United States Court of Appeals, Eighth Circuit.

December 5, 1923

[Copyrighted Material Omitted]

George L. Nye, of Denver, Colo. (John H. Fry, of Denver, Colo., on the brief), for Sussex Land & Live Stock Company.

Frederick D. Anderson, of Denver, Colo., and A. C. Campbell, of Cheyenne, Wyo. (John D. Clark, of Cheyenne, Wyo., and Kent S Whitford, of Denver, Colo., on the brief), for Midwest Refining Co.

Before STONE and LEWIS, Circuit Judges, and VAN VALKENBURGH District judge.

STONE Circuit Judge.

The action was commenced by Sussex Land & Live Stock Company, a corporation, owning and operating a fully equipped stock ranch of 4,300 acres on Powder river at the mouth of Salt creek and extending up the course of that creek a distance of seven or eight miles, by the filing of its complaint against Midwest Refining Company, a corporation, which is engaged in drilling and operating oil wells, in the Salt Creek oil fields, and in storing, handling and transporting the oil produced in that field.

In the complaint it is alleged: That Salt creek is a small stream compared with the territory it drains; that where Salt creek passes through plaintiff's lands, the creek bottoms are from one-quarter to five-eighths of a mile wide; that willows and brush to a considerable extent grow along the immediate banks of the creek channel; that Salt creek is not a continuously flowing stream, but when not flowing there are in the bed of the stream continuous pools of water fed by seepage and small springs; that several times each year Salt creek overflows its banks and then recedes leaving the pools described; that before defendant commenced its operations, the overflow of Salt creek caused the bottom lands to produce a healthy growth of native blue-stemmed grass which could be used for pasturing stock and for hay; that before defendant commenced permitting oil to escape and waste, plaintiff used the pools for stock-watering purposes and that, but for defendant's acts, it would have used its lands in feeding, watering and caring for additional cattle and sheep; that Salt Creek oil fields drain naturally into Salt creek; that defendant for more than four years prior to the commencement of the action continuously permitted large quantities of oil to escape from its wells, pipe lines and tanks and to accumulate in pools from whence it was washed by melting snows and rains into Salt creek and down through and upon the lands of plaintiff; that the escaping oil accumulated in depressions on plaintiff's lands and in large quantities upon the banks, willows and brush along the creek, where in cold weather it congealed and in warm weather melted and ran down into the pools, covering the water with oil and rendering it unfit for stock-watering or any other purpose, and that defendant's acts have deprived plaintiff of its use of its lands in connection with its stock-raising business for a period of more than four years next prior to the commencement of the action.

The substance of the answer is as follows: That little oil enters Salt creek; that plaintiff is not substantially damaged by such part of that oil as reaches its lands; that it had suffered no damage therefrom; that, of the oil which does reach Salt creek, most comes from natural seepage and the production of companies other than defendant; that defendant, desiring to prevent all loss of oil, maintains an expensive field force and takes every known precaution to prevent any loss; that the loss from it comes from unavoidable causes, such as breaks in pipe lines or when bringing in wells with such high gas pressure that they cannot be at once controlled; that to enjoin all loss of oil which might get into Salt creek would be equivalent to enjoining operation by defendant; that this would result in stoppage of an industry employing thousands of men in Wyoming, paying huge royalties to the United States and to the state and of great importance.

A trial was had and findings of fact and conclusions of law stated. The substance of these findings and conclusions is that defendant has used and is using every known method and device to prevent loss of oil but that such loss does occur to the damage of plaintiff in the use of its Salt creek lands (both to these lands themselves and in connection with other lands); that such injury to the lands is not permanent but has occurred for five years and probably will continue during the life of the oil field; that a large industry is dependent upon continuance of defendant's operations; that injunction should not issue but damages should be awarded; that because the plaintiff's evidence has not brought it within the rule allowing damages for loss of prospective profits the court will apply any rule of damages authorized by the evidence; that the evidence is sufficient to apply the rule of rental value; that the annual rental is fixed at forty cents per acre for all the Salt creek land of plaintiff, a total of $720. The decree awarded the above damages for past injury and fixed such as the annual charge during continuation of the trespass; denied the injunction on condition that such damages for past injuries be paid into court within a fixed time; and retained jurisdiction for the purpose of controlling payments for future trespasses.

Plaintiff appealed because the court refused the injunction and applied the 'rental value' as the measure of damages. Defendant cross-appealed because any legal liability was found as to it, contending any injury suffered was damnum absque injuria.

Defendant attacks the jurisdiction of this court, claiming that there is no statement of evidence properly here because not allowed in time. This is based on the theory that statements of evidence in equity cases must follow the rule as to bills of exceptions in law cases in that they must be allowed within the judgment term or some extension during that term. This contention is not well founded. Struett v. Hill (C.C.A. 9th Circuit) 269 F. 247; In re General Equity Rule 75 (6th Circuit) 222 F. 884, 138 C.C.A. 574.

Merits.

The fact of injury to plaintiff by defendant is unquestioned in both appeals. The cross-appeal challenges legal liability to respond therefor. The appeal challenges the remedy (damages) exclusively applied by the court and, if that be the proper remedy, the rule by which it was measured.

As the challenge of the cross-appeal goes to the right to any relief, logically, it must be first determined before the kind or measure of remedy can be of importance.

The broad contention of the Refining Company is that this is an instance of damnum absque injuria. The facts material to the consideration of this contention are undisputed here. They are as follows: That plaintiff had priority of ownership, occupation and use; the character of usage both by plaintiff and by defendant; no lack of care in defendant; use by it of latest and most approved methods to prevent injury to others; injury by defendant, through its usage, to plaintiff in its usage; the past and continuing character of such usage; the inability of defendant, with the utmost care, to avoid injuring plaintiff's use of its property so long as defendant makes this use of its property. Obviously this state of facts raises squarely the points of whether and under what circumstances one may use his property in a way that injures the property of another without being liable for that injury. That such injury may exist without liability is certain. But, since such a result is contrary to the general rule of liability where injury is caused; and since, in a sense, it is a preference of the rights of one property owner or user over that of another; and since the law is a jealous guardian of the right to lawfully use property without interference or diminution; and since the rule of 'sic utere ut alienum non laedas' is of broad and fundamental importance--the rule which allows such injury without liability therefor is an exception which is and should be narrowly limited and carefully confined. However, it does exist. Defendant states the rule as follows:

'In the case at bar there is at most damage without injury. This comes about as the result of the application of a positive principle of property, namely, that the owner of real estate is entitled to the full, ordinary and natural use and enjoyment of his property. * * *

'In conflict with this positive rule of law there is the negative one that the owner of real estate must so use his own property as not to injure his neighbor. It is often difficult to decide which of these principles should control in a given case. Neither one is necessarily preferred. * * *

'The reconcilement of the conflict between the two principles is clear. The owner of property has the right to use his land according to the lawful inherent natural use to which it is adapted, and if in the enjoyment of such right, without negligence or malice upon his part, consequential loss, inconvenience or damage occurs to his neighbor, it is a wrong for which there is no liability. This is properly termed the principle or doctrine of 'natural user.' * * *

'The authorities constantly recur to the distinction between natural user and artificial user. * * *

'Artificial uses, whether constituting nuisances per se or otherwise, are certainly radically different from such uses as farming, cattle grazing or mining.'

It defines the natural user as:

'The use for which nature fitted his land and intended it should be used.'

Defendant then declares mining is such natural user and differentiates it from artificial user as follows:

'In the majority of case

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