Et Ux. v. Eastern Oil Co..
| Decision Date | 16 March 1901 |
| Citation | 49 W.Va. 232 |
| Court | West Virginia Supreme Court |
| Parties | Harness et ux. v. Eastern Oil Co. et al. |
1. Oil Lease Lessors Joint Interest.,
T. B. H. and A. K. H., his wife, leased together in one lease two tracts of land lying contiguous to each other, one hundred and fifty-two acres belonging to T. B. H. and thirty-five and one-half to A. K. H., as one tract of one hundred and eighty seven and one-half acres, for oil and gas purposes. A well was bored on the one hundred and fifty-two acres; the proceeds cash rental for gas paid to both lessors, and receipted for by them jointly, and the royalty of oil run into the pipe lines to their joint credit. Held to be a joint lease of one tract of one hundred and eighty-seven and one-half acres, as between the lessors and lessee, (p. 243).
2. Lease Consideration Date of Payment.
Such lease being "in consideration of the sum of twelve hundred and fifty dollars, the receipt of which is hereby acknowledged, * * * parties of the first part do hereby grant unto * * *, second party, his heirs and assigns, all the oil and gas in and under the following premises," describing them, with the right to enter and drill and operate for oil, gas, etc., reserving to themselves one-eighth of the oil produced, to be run into pipe line to their credit. the production in paying quantities of either gas or oil, and the payment of gas rental or the delivery of one-eighth of the oil royalty, in the pipe line, as stipulated, will perpetuate the lease during the time of such production, (p. 243).
3. Lease Development Lessors' Remedy.
Lessors' remedy for failure on part of lessee to further develop the leased premises, or to properly protect the lines thereof from drainage through wells on adjacent property, is ordinarily by action at law for damages, (p. 247).
Appeal from Circuit Court, Pleasants County.
Bill by Thomas B. and Anna K. Harness against the Eastern Oil Company and others. Decree for complainants. Defendants appeal.
Reversed.
Van Winkle & Ambler, for appellants.
V. B. Archer and William Beard, for appellees.
Thomas B. Harness and Anna K. Harness, his wife, executed the following lease:
"In consideration of the sum of twelve hundred and fifty dollars, the receipt of which is hereby acknowledged, Thomas B. Harness and Anna K. Harness, his wife, of Pleasants County, West Virginia, first parties, do hereby grant unto M. Finnegah, of Pittsburg, second party, his heirs and assigns all the oil and gas in and under the following described premises, together with the right to enter thereon at all times for the purpose of drilling and operating for oil, gas or water, and to erect and maintain all buildings and structures and lay all pipes necessary for the production and transportation of oil, gas or water taken from said premises, excepting and reserving, however, to first parties the one-eighth part of all oil produced and saved from said premises, to be delivered in the pipe line with which second party may connect their wells, namely: All that certain tract of land situare in the district of Grant, county of Pleasants in the State of West Virginia, bounded and described as follows, to-wit: on the north by the Ohio river; on the east by lands of W. S. Harness, Sarah A. Bumgardner and Bell Bros.; on the south by lands of Bell Bros, and C. Williamson and Bull Creek; on the west by lands of Coffin, Alimass & Co. and Ambrozine Ross, known as the river farm of one hundred and fifty-two acres, belonging to T. B. Harness. And the back lands of thirty-five and one-half acres belonging to Anna K. Harness, containing one hundred and eighty-seven and one-half acres more or less, to have and to hold the above premises on the following conditions: Term of lease two years and as much longer as oil or gas is found in paying quantities. If gas only is found, second party agrees to pay two hundred and fifty dollars each year, quarterly in advance for the product of each well while the same is being used off the premises. Gas free for dwelling house purposes. No well shall be drilled nearer than ten rods to any building now on said premises, without the consent of first party. In case no well is completed within sixty days from this date, then this grant shall become null and void, unless second party shall pay to said first party one hundred dollars for each month, thereafter such completion is delayed. Rentals payable at the Second National Bank of Parkersburg. The second party shall have the right to use sufficient gas, oil or water to run all necessary machinery for operating said wells, and also the right to remove all its property at any time. And all conditions between the parties hereto shall extend to their heirs, executors, administrators and assigns forever. It is hereby agreed and understood that if the well now drilling on the Angus farm should make twenty-five barrels of oil per day for thirty days after completion then second party shall pay to first party an additional bonus of seven hundred and fifty dollars, if the first well on these premises shall produce twenty-five barrels of oil for thirty days after completion an additional bonus of five hundred dollars shall be paid. Now it is also understood that if the Angus well should produce less than twenty-five barrels of oil per day, and the second well on these premises should produce twenty-five barrels of oil per day, for thirty days after completion then second party shall pay to the first party seven hundred and fifty dollars, making the additional contingent bonus not to exceed twelve hundred and fifty dollars. And it is further agreed that the second party, his heirs or assigns shall have the right at any time to surrender up this lease and be released from all moneys due, and conditions unfulfilled, then and from that time this lease and agreement shall be null and void, and no longer binding on either party, and the payments which shall have been made be held by the party of the first part as the full stipulated damages for the non-fulfillment of the foregoing contract.
In witness whereof, the parties hereto have hereunto set their hands and seals this 25th day of January, A. D. 1896.
Which was duly acknowledged and recorded. By a writing dated February 4, 1896, duly acknowledged and recorded, M. Finnegan, in consideration of nine hundred and thirty-seven dollars and fifty cents, assigned, transferred and set over to the Eastern Oil Company, its successors and assigns an undivided three-fourths part of said lease, and by another writing dated January 1, 1898, acknowledged and recorded, said M. Finnegan, in consideration of two thousand and fifty dollars paid, transferred and assigned to Charles 0. Amsler, among other leases, his remaining undivided one-fourth interest in said Harness lease, "together with all wells, casing, rigs, tanks, pipe connections and anything thereto belonging, subject however, to all the terms, conditions, royalties, rents and payments as far as the one-fourth (1/4) interest is concerned, in said leases contained, reserved and provided, to be observed, performed and paid by the lessees therein." The lessees entered into possession under the lease, and drilled two wells, one being a strong gas well and producing a small quantity of oil, but not sufficient quantity to make any further bonus payable to the lessors under the terms of the lease. The lessors paid the gas rental of sixty-two dollars and fifty cents per quarter, and it is stipulated and agreed in the record as a fact to which proof was waived, that the sum of one thousand two hundred and fifty dollars bonus mentioned in the lease of January, 1896, was paid in fact, and further that the quarterly installments for rental for gas from the Harness well No. 1, being sixty-two dollars and fifty cents each quarter had been paid in full up to that time (March 27, 1900), and that no such gas rentals were in default. At the June rules, 1899, of the circuit court of Pleasants County, Thomas B. Harness and Anna K. Harness, filed their bill against the Eastern Oil Company, a corporation, and M. Finnegan, alleging the fraudulent assignment of a part of said lease by Finnegan to the Eastern Oil Co., that the Eastern Oil Co. was operating extensively on a property adjacent to the leased premises and was using the gas from the well No. 1 on leased premises in the pumping and production of oil on the adjacent premises, and failed to test first well, which was a gas well and sprayed some five barrels of oil per day, and abandoned the second well and thereby forfeited their lease; that plaintiffs' premises, or the greater part thereof, was very valuable for oil, if properly developed would produce oil in paying quantities, but the premises were being drained by developments on contiguous and adjoining properties; that defendants made no attempts to develop the thirty-five and one-half acre tract and that the lease as to that was absolutely forfeited, and that the lease was a cloud on plaintiffs' title that should be removed by decree of the court; that defendants were not protecting the lines of the leased premises and prayed for the cancellation of said leases as to both tracts of thirty-five and one-half and one hundred and fifty-two acres as a cloud upon plaintiffs' title; that a special receiver be appointed with direction to take immediate possession of the premises and protect the lines and make such developments as the court shall deem necessary; that defendants be enjoined from any trespass or developments on...
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