Consumers Gas Trust Co. v. Littler

• Decision Date: 15 March 1904
• Docket Number: 20,246
• Citation: 70 N.E. 363,162 Ind. 320
• Parties: Consumers Gas Trust Company v. Littler
• Court: Indiana Supreme Court

70 N.E. 363

162 Ind. 320

Consumers Gas Trust Company v. Littler

No. 20,246

Supreme Court of Indiana

March 15, 1904

From Grant Circuit Court; H. J. Paulus, Judge.

Suit by Joseph W. Littler against the Consumers Gas Trust Company. From a judgment for plaintiff, defendant appeals. Transferred from Appellate Court, under § 1337u Burns 1901.

Reversed.

W. H H. Miller, J. B. Elam, J. W. Fesler and S. D Miller, for appellant.

Hiram Brownlee, J. F. Charles and J. R. Browne, for appellee.

OPINION

Hadley, J.

Appellee sued appellant to secure the cancelation and the quieting of his title against a gas and oil contract, the substance of which follows: It was entered into on October 15, 1896, by appellee and his wife, as first party, and one Walley assignor of appellant, as second party, hereinafter referred to as "gas company," and witnessed that the first party, their heirs and assigns, in consideration of $ 1 in hand paid, sold to the second party, his heirs and assigns, all the oil and gas under certain described lands in Grant county, "together with the right to enter upon said lands at all times for the purpose of drilling and operating for oil, gas, or water, with the right to erect and maintain all necessary telephone lines, buildings, and structures for that purpose; and together with the right to lay, maintain, and remove all lines of pipe over and across said lands for the conveyance and transportation of oil and gas. In consideration of the premises, the second party agrees to pay the first party the sum of $ 40 annually, beginning on the 15th day of October, 1896 [date of the contract], and until oil or gas is found in paying quantities, or this grant is terminated as hereinafter provided." The second party is not to drill any well within 300 feet of any building on the premises, and is not to use more than one acre of the ground with each well drilled. The first party is to have the use of the lands for agricultural or other purposes, except what is actually occupied in operating for gas or oil. The second party is to pay the first party all damages done to crops by reason of its operations in drilling wells or in laying, repairing, or removing pipe-lines. If oil is found in paying quantities, the second party is to deliver to the credit of the first party in the pipe-line with which it may be connected one-sixth part of the oil which may be saved. The first party is to have free gas for domestic purposes from the wells or pipe-line on the premises, and should gas be found in greater quantity than is required for use by the first party, the second party is to pay the first party "$ 100 each year for each and every well from which gas is used off the premises." If either gas or oil is found on the premises in paying quantities, "the part of oil to be delivered as aforesaid, or the sum per well for gas, shall be in lieu of the annual payment above provided," and such annual payment shall cease immediately. "It is agreed by the parties, that whenever, in the judgment of the second party, his heirs or assigns, oil or gas, or either, can not be found on the premises, or, having been found, have ceased to exist in paying quantities, and said party of the second part shall reconvey to the first party, their heirs or assigns, all the oil and gas in and under said premises, then all payments of every kind to be made to the first party by the terms hereof shall from and after said date cease and determine," and in case of a reconveyance the second party is to have the right to lay and maintain pipe-lines for the transportation of oil and gas over the premises for ten years from "said date," and the right at any time to remove all machinery, fixtures, and property placed on the land. All payments under the contract to be made on October 15 of each year at a bank in Muncie. "In default of complete compliance on part of second party, or his assigns, renders this lease null and void." Signed by all contracting parties, and execution acknowledged before a notary public on said October 15, 1896.

The deal embraces a quarter section of land. There was a separate contract for each eighty on same terms. The complaint is in three paragraphs. The first, being a general statutory count to quiet title, covers the whole farm. The second and third were addressed to the respective eighties, and each set out the contract in full. In addition to formal matters, the second and third paragraphs of complaint each allege the recording of the contract, the assignment thereof by Walley to the defendant, and recording of such assignment, the payment by defendant on or about October 15, 1900, of $ 40 as a consideration for the defendant's option and right to drill on the premises for one year from the last-named date to October 15, 1901, which payment was the exact amount due the plaintiff under the contract at the time it was paid, and nothing has since been paid thereon to continue the contract after that date; that on October 15, 1901, plaintiff refused, and still refuses, longer to continue the contract in force, or receive any further payments therefor, but declared the contract then terminated and forfeited; that neither defendant nor its assignor has ever drilled a well on said premises, nor has gas or oil ever been found thereon, nor has anyone under the contract laid a pipe-line thereon for oil or gas; that plaintiff is, and at all times has been, in possession, and neither Walley nor defendant has ever been in possession; that defendant claims rights under the contract. Prayer for cancelation and quieting title, etc. The defendant's demurrer to the second and third paragraphs was overruled.

In its answer to the second and third paragraphs it alleged, in substance, that the second party in the contract, Walley, was the agent of the defendant, took the contract for it, and afterwards made a formal assignment of the same to the defendant. It alleges the payment of the annual sum stipulated--$ 40--on or before the 15th day of October in each year, down to the 15th day of October, 1901, and an offer to pay for the year commencing on that date, and the refusal of the same by the first party upon the ground that first party had a right to terminate the contract and intended to do so at that time; and that second party had been at all times ready to pay the same. It denied that the contract had ever been terminated as provided therein, and denied that the $ 40 annually was paid as a consideration for the option or right to drill for any one year, but avers that it was a part of the consideration for all the rights and property granted under the contract. It denied that it had ever been ascertained that, in the judgment of said Walley or defendant, oil or gas, or either, could not be found on the premises, or that, having been found, the same has ceased to exist, and denied any reconveyance. Plaintiff's demurrer to each paragraph of the answer was sustained. Thereupon, defendant declining to answer further, judgment was rendered on demurrer against it annulling the lease and quieting plaintiff's title as against the same.

The only matter for decision is the sufficiency of the complaint and answers. They present the same questions, and will...