Campbell v. Smith

Decision Date13 March 1913
Docket NumberNo. 21,993.,21,993.
Citation180 Ind. 159,101 N.E. 89
PartiesCAMPBELL v. SMITH et al.
CourtIndiana Supreme Court

OPINION TEXT STARTS HERE

Appeal from Circuit Court, Delaware County; J. G. Leffler, Judge.

Action by John W. Smith and others against Julia E. Campbell and others. From the judgment, the defendant named appeals. Reversed, with directions.

Transferred from the Appellate Court under section 1405, Burns' Ann. St. 1908.

Myron H. Gray, of Muncie, and Jesse R. Long, of Chicago, Ill., for appellant. Griffith & Ross, of Detroit, Mich., and Abram Simmons and Frank C. Dailey, both of Bluffton, for appellees.

MYERS, C. J.

Appellant was on May 20, 1897, the owner in fee simple of 120 acres of land in Delaware county, Ind. On that date, she and her husband executed a lease on said real estate to the Rock Oil Company “for the purpose and with the exclusive right of drilling and operating for gas and petroleum.” The lease, among other things, provided that “the party of the second part is to have and to hold the said premises for and during the term of five years from the date hereof, and as much longer as oil or gas are found in paying quantities, or the rental paid thereon.” It was further provided that the Rock Oil Company “shall completea well on the above-described premises within one year from the date above, or, in default thereof, pay to the parties of the first part, for such delay, a yearly rental of $60 on the said premises from the time of completing such well, as above specified, until such well shall be completed”; and the Rock Oil Company “agree to drill an oil or gas well within one year from the above date, or forfeit to the parties of the first part $50.” The lease also provided for furnishing gas free of cost for household use on the premises, so long as the lease is in force. The lease was recorded in Delaware county June 4, 1897.

This action was instituted by the Rock Oil Company and certain individuals, who had, by assignment, acquired a half interest in the first lease to recover alleged damages for the invasion of their alleged exclusive right of a grant to enter and possess the oil in the leased field. The defendants were Mrs. Campbell, the Lily Oil Company, and the Indiana Pipe Line Company. There was judgment against the two former, and ancillary proceedings in attachment were sustained. This appeal is by Mrs. Campbell alone.

The complaint is in two paragraphs; one counting upon an alleged invasion of appellees' common-law rights, without counting on the contract, and the second paragraph counting upon the written contract. The sufficiency of each paragraph was unsuccessfully challenged by demurrers for want of facts to constitute causes of action; and error is here predicated upon those rulings. The facts, upon proper request, were found specially by the court, and conclusions of law stated; but as the findings closely follow the allegations of the complaint, and the determination of the question as to the findings and conclusions necessarily determine the sufficiency of the complaint, it will not be necessary to consider the complaint. Marion State Bank v. Gossett, 175 Ind. 211, 213, 93 N. E. 996;Goodwine v. Cadwallader, 158 Ind. 202, 61 N. E. 939.

The material findings are the execution and recording of the lease; that payments were made as rentals under the lease in the sum of $60 per annum annually up to and including April 13, 1903, and a payment of $50 June 17, 1898, by way of forfeiture under the terms of the lease; that on March 26, 1904, appellant served a written notice on the Rock Oil Company to the effect “that the lease for gas and oil, made by the undersigned to the Rock Oil Company, bearing date May 20, 1897, on (the described property), will not be extended beyond the period for which extension has been made, and assented to, to wit, May 20, 1904, or delay in operation on said premises be delayed beyond such period. Nor will a money consideration be received and accepted for further extension or delay in operation thereon. You are hereby notified and required to proceed with all reasonable promptness and dispatch to operate for oil and gas on said premises, under penalty of forfeiture of all rights and privileges under said instrument of lease.”

No well was drilled for oil or gas by the Rock Oil Company, or any one else, until the middle or latter part of April, 1904, at which time the plaintiffs caused a derrick and drilling machinery to be placed on said real estate, and proceeded to drill a well which was shot with nitroglycerine on the 18th day of May, 1904; and no pipes or pipe lines were placed on said real estate, and no oil or gas was produced or saved therefrom prior to the 18th day of May, 1904; that gas for household purposes was never delivered to Julia E. Campbell or her tenant or tenants on said real estate, and no request was made therefor other than that contained in the notice of March 26, 1904; that no gas was produced from said well which was shot on the 18th day of May, 1904, and the only oil produced therefrom was run into the lines of the Indiana Pipe Line Company, as follows: On June 24, 1904, 158.89 barrels; on August 6, 1904, 167.37 barrels; on the 19th day of May, 1904, the well was cleaned out and tubed, and a small quantity of oil pumped from it on the 20th day of May, 1904; on the 19th day of May, 1904, the well produced only water when pumped, and thereafter, when it produced oil, it produced it in small quantities, and suddenly stopped and produced large quantities of salt water, with the result that the salt water smothered the oil and prevented the well from producing the oil-that, immediately after the well was completed, shot, and started to pumping, the plaintiffs provided at said well sufficient machinery of proper character for pumping and operating the well, and erected tanks for the reception of oil from the well before the well was completed; after it had started to pump the well, it was continuously pumped night and day, until some time during the month of August, 1904, and that during all the time plaintiffs made a good-faith effort to procure oil from the well, and operated the same in a skillful manner to endeavor to either make the same a paying well, or ascertain whether the well was a paying well, or not a paying well; that the well so drilled was drilled to a depth of 1,240.5 feet, and said depth was a proper depth for finding oil in the deep pay in that territory, as shown by the successful deep pay wells theretofore and thereafter drilled in that territory; that the plaintiffs paid out and expended in and about the work of drilling and completing the well on and before the 20th day of May, 1904, the sum of $1,677.25, and after the 20th day of May, 1904, they expended for machinery and other equipment for operating the well, and completing the same, and in operating the same, $3,704.89; but, of the machinery so purchased, they removed from the premises, after the same had been placed on said premises machinery of the value of $1,551.22. The amount expended by the plaintiffs in drilling the well and equipping the same for operation and in operating the same was the sum of $3,830.92.

While plaintiffs were drilling the well, defendants had full knowledge that plaintiffs were drilling said well and expending money therefor, and made no objection to the drilling of said well by the plaintiffs, and had knowledge that the plaintiffs were running and operating said well, after it was so completed, for the purpose of procuring oil, and made no objection to plaintiffs' operating said well, and made no objection prior to June 10, 1904, when appellant filed her complaint in the Circuit Court of the United States for the District of Indiana against the plaintiffs to cancel said lease, to quiet title against the plaintiffs, who were claiming an interest by virtue of said lease and the improvements thereon; that the suit so filed by appellant was tried and determined, and a judgment rendered in favor of the plaintiffs in this action, dismissing the bill of complaint so filed by appellant, and rendering judgment against her for costs. Appellant appealed from the judgment which was affirmed by the Circuit Court of Appeals for the Seventh Circuit on the 2d day of January, 1907 (151 Fed. 191, 80 C. C. A. 467). Pending the litigation in the United States courts, appellant on the 7th day of November, 1904, her husband joining her, executed an oil and gas lease on the same land to the defendant Lily Oil Company, a corporation, and on the same day the latter company entered upon the real estate and drilled two oil wells thereon from which it produced between the 30th day of December, 1904, and the 9th day of December, 1905, 7,338.09 barrels of oil; that the oil was run by the Lily Oil Company into the lines of the defendant the Indiana Pipe Line Company, and on January 22, 1906, the Lily Oil Company sold 6,115.08 barrels of said oil, and appellant sold 1,223.01 barrels of said oil; that the value of the oil produced and sold was $5,442.42, less storage charges in the sum of $396.76, leaving a net amount, which the Lily Oil Company received, of $5,045.56; that the appellant received, for the oil sold by her, $1,088.47, less storage charges of $79.35, leaving a net balance, which appellant received from the sale of said oil, of $1,009.12; that on the 30th day of May, 1907, 84.78 barrels of oil, produced from the two wells prior to January 22, 1906, by the Lily Oil Company, was run into the lines of the Indiana Pipe Line Company, 70.65 barrels of which was placed to the credit of the Lily Oil Company, and 14.13 barrels to the credit of appellant, all of which yet remains in the care and custody of the Indiana Pipe Line Company; that the fair market value of all of said oil was 89 cents per barrel; that the defendant the Indiana Pipe Line Company is and was a corporation organized under the laws of Indiana at the time it received and transported said oil...

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5 cases
  • Frost-Johnson Lumber Co. v. Salling's Heirs
    • United States
    • Louisiana Supreme Court
    • 17 Febrero 1922
    ... ... Cas. 1913E, 836; Dark v. Johnston, 55 ... Pa. 164, 93 Am. Dec. 732; Bender v. Brooks, 103 Tex ... 329, 127 S.W. 168, Ann. Cas. 1913A, 559; Smith v ... Root, 66 W.Va. 633, 66 S.E. 1005, 30 L. R. A. (N. S.) ... In the ... very latest work on the subject, "Oil and Gas ... Rights" by ... 204, 177 P. 86, 3 A. L. R. 352; ... Frank Oil Co. v. Belleview Gas Co., 29 Okl. 719, 119 ... P. 260, 43 L. R. A. (N. S.) 487; Campbell v. Smith, ... 180 Ind. 159, 101 N.E. 89; Louisville Gas Co. v. Kentucky ... Heating Co., 132 Ky. 435, 111 S.W. 374; Gillespie v ... Fulton Oil ... ...
  • Swiss Oil Corporation v. Hupp
    • United States
    • United States State Supreme Court — District of Kentucky
    • 23 Marzo 1934
    ...United States v. Homestake Mining Co., 117 F. 481, 54 C.C.A. 303; Backer v. Penn Lubricating Co. (C.C. A.) 162 F. 627; Campbell v. Smith, 180 Ind. 159, 101 N. E. 89 (a well-considered opinion applicable to several phases of the case at bar); Pan Coal Co. v. Garland Pocahontas Coal Co., 97 W......
  • Swiss Oil Corp. v. Hupp
    • United States
    • Kentucky Court of Appeals
    • 23 Marzo 1934
    ... ... Homestake Mining Co., 117 F ... 481, 54 C. C. A. 303; Backer v. Penn Lubricating Co. (C ... C. A.) 162 F. 627; Campbell v. Smith, 180 Ind ... 159, 101 N.E. 89 (a well-considered opinion applicable to ... several phases of the case in hand); Pan Coal Co. v ... ...
  • Campbell v. Smith
    • United States
    • Indiana Supreme Court
    • 13 Marzo 1913
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