Allen v. New Domain Oil & Gas Co.

• Decision Date: 17 April 1903
• Citation: 73 S.W. 747
• Parties: ALLEN v. NEW DOMAIN OIL & GAS CO.
• Court: Kentucky Court of Appeals

73 S.W. 747

ALLEN v. NEW DOMAIN OIL & GAS CO.

Court of Appeals of Kentucky.

April 17, 1903

Appeal from Circuit Court, Floyd County.

"To be officially reported."

Injunction by the New Domain Oil & Gas Company against M. T. Allen. Judgment for plaintiff, and defendant appeals. Affirmed.

James Goble, for appellant.

W. S Harkins, for apppellee.

NUNN J.

The record, or that part of it necessary to be considered on this appeal, shows that during the year 1891 about 500 landowners in the county of Floyd, in this state, executed and delivered leases of the oil and gas privileges under their respective lands to G. H. Dimick and L. H. Gormley, of Pittsburg, Pa. The terms and conditions of the leases being similar, we copy such parts of one of them as will be necessary to elucidate the issues involved.

"This lease made this 7th day of September, A. D. 1891, between Joel Allen of the county of Floyd and State of Kentucky first party, to G. H. Dimick and L. H. Gormley, of Pittsburg Pa., second parties:

"Witnesseth: That the first party grants to the second parties the sole right to produce petroleum and natural gas from the following named tract of land: ***.

"Specifically granting to the second parties for and during the term of 15 years, from this date, the exclusive rights to drill and operate oil and gas wells; to lay and operate pipe lines; the necessary right of way over the premises; the use of enough land on which to preserve the products, and to erect such buildings as they may desire; the free use of the water, if found on the premises; with the right at any time to annul this lease by failing to comply with its terms; and to remove all machinery and fixtures which they may have placed thereon; and should the second parties find a paying production of oil or gas on said land during said term, then first party agrees to extend this lease from year to year, as long as said production continues.

"First party further agrees within -- days after the discovery of oil in paying quantities on said land to make the second parties a good and sufficient deed of the oil and gas right in said land, for which said second parties shall pay first party the sum of -- dollars per acre.

"In consideration for which the second parties agree as follows:

"1st. To pay the sum of one dollar in hand, the receipt of which first party hereby acknowledges.

"2nd. To use and occupy only so much of said land as may be necessary for the purposes therein granted.

"3rd. To commence operations and complete one well on the land herein leased, within two years after finding oil in paying quantities in one of the test wells named below, or thereafter pay as rent to first party ten cents per acre yearly in advance until such well is completed, or until second parties elect to cancel this lease by nonpayment of said rent.

"4th. To deliver to first party in pipe lines, free of charge, one-tenth of all the oil they may produce and save from said land.

"5th. To pay first party for any well from which gas is marketed, semi-annually in advance, the sum of one hundred dollars for each pound of gas pressure per square inch shown by the well at the beginning of each six months while the sale of gas continues.

"6th. To pay any money becoming due to first party at Prestonburg in said county.

"7th. Second parties agree to drill and complete one or more test wells to a depth of eighteen hundred feet, if oil or gas is not found in paying quantities at a less depth, and said well or wells shall be located within fifteen miles of Prestonburg and shall be completed within eighteen months from the date hereof, or a failure so to do shall work the absolute forfeiture of this lease.

"First party reserves all timber, coal and other minerals, and second parties shall only use enough ground for the privileges above named and shall have no railroad right or use of salt water.

"All rights under this instrument shall accrue to the heirs, assigns and other legal representatives of each party hereto.

"In witness whereof," etc.

After these leases were taken, a corporation was formed under the laws of Kentucky and under the name of the appellee, and Dimick and Gormley, as authorized by the leases, transferred and assigned each and all the leases to this appellee corporation. On the 30th day of September, 1896, the appellee filed its petition against appellant in the Floyd circuit court. After setting forth the corporation and all the leases, in substance it charged that the appellant, M. T Allen, without any right, and against the will and consent of appellee, had taken leases upon the gas and oil privileges on a portion of the same lands leased to appellee, and was without right and unlawfully soliciting others of the persons named as lessors of appellee to lease the oil and gas privileges on their lands to him, and is urging and persuading them to believe that appellee's leases are and have become forfeited. That appellee, in order to remove the leases of appellant, which had been taken subsequent to its leases, had been...