Cadillac Oil & Gas Co. v. Harrison

• Decision Date: 31 October 1922
• Parties: CADILLAC OIL & GAS CO. v. HARRISON ET AL.
• Court: Kentucky Court of Appeals

244 S.W. 669

196 Ky. 290

CADILLAC OIL & GAS CO. v. HARRISON ET AL.

Court of Appeals of Kentucky.

October 31, 1922

Appeal from Circuit Court, Allen County.

Action by James W. Harrison and another against the Cadillac Oil &amp Gas Company. Judgment for plaintiffs and defendant appeals. Reversed, with directions to dismiss.

Harper & Denton, of Scottsville, for appellant.

A. B York, of Staunton, Va., and Francis R. Goad, of Scottsville for appellees.

SAMPSON J.

On October 31, 1917, R. L. Sears, Herbert Gillock, and Leslie Gillock, owners of a boundary of land in Allen county containing about 1,000 acres, leased the same by a single contract of that date to J. E. Wright and J. Y. Kuykendall. The lands were described in the lease as follows:

"Said lands being that certain tract of land situate in the _____ of _____, county of Allen, state of Kentucky, bounded and described as follows, to wit [[[[[here follows a description by adjoining lands], containing 1,000 acres, more or less."

The lease contains the following provision:

"To have and to hold the same unto the party of the second part, its successors and assigns, for eighteen months from date hereof and so long as oil and gas are produced from said premises in paying quantities."

The consideration was $1 paid to the grantors, and the reservation of one-eighth of all the oil taken and saved from the premises, and certain sums to be paid for gas wells in case gas was found in paying quantities and was marketed off the premises. After the making of the oil lease the lands were divided and sold in tracts. Appellee Harrison and wife acquired about 100 acres. They received their deed January 5, 1919, while the lease was yet in force. Before appellees purchased a part of the leased boundary several wells had been drilled on the lease, but, owing to the absence of a pipe line and other means of conveyance, the oil had not been marketed. The Harrisons moved on and took possession of their tract in January, 1920. At that time a well had been drilled within their boundary, but no oil had been produced, though a showing of oil was found. That winter another well was drilled upon appellees' tract without objection from them. The following summer two more wells were drilled and a third one started. Appellee James W. Harrison was employed in the work of drilling two of these wells. On the first well he received $6 per day as tool dresser. The drilling machine was moved to a new location on the premises, and a fifth well started, but, owing to a controversy which arose between the drillers and the holders of the lease, the drillers ceased work on the fifth well, and moved their machinery from the lease, although appellants were then insisting that the drillers proceed with the work according to the contract between appellant company and the drillers for the completion of the fifth well. During the drilling of these several wells appellees made no objection whatever to the work of development.

About the middle of September, when the drilling machine was moved from the lands of appellees, the appellant company commenced to try to find another driller and to make other arrangements for the sinking of the other wells on the premises, but were unable to do so until about the end of December, when another drilling rig was moved onto the premises and begun to drill well No. 5. Appellee objected to this last well-drilling machine being moved upon their premises, and contended that the lease had expired. On the 6th of January following, and while the work of drilling was proceeding, appellees commenced this action against appellant, praying a cancellation of the lease under which appellants were proceeding, upon the grounds that the lease cast a cloud upon the title of appellees, and further praying that appellant be enjoined and restrained from trespassing on the lands. In the petition it is alleged that by the terms of the lease it would expire in 18 months from its date, which would be in the month of May, 1919, and that the same did expire on or about said date for the following reasons:

"Plaintiffs allege that there is not now and never has been, during the life of said lease contract, oil or gas, or either of them, 'produced upon the leased premises in paying quantities,' and in truth and in fact there has never been no production of any kind or character had upon any part of said 1,000 acres."

Appellant answered, and admitted that it was claiming the right to drill and develop the property under the lease contract, and averred:

"That there is production on this land, and that all of said wells have been drilled since plaintiffs purchased this land, and while they were living on said land they stood by, peaceably and without objection, and watched defendant spend thousands of dollars drilling on said land, and made no objection whatever, and that the said well was drilled only about two months before this suit was brought, and drilling would have continued, except for differences which arose between defendant and the contractors, which necessitated some litigation, and that, when the last well was drilled, p

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