Indiana Natural Gas & Oil Company v. Beales

• Decision Date: 04 January 1906
• Docket Number: 20,757
• Citation: 76 N.E. 520,166 Ind. 684
• Court: Indiana Supreme Court
• Parties: Indiana Natural Gas & Oil Company v. Beales

76 N.E. 520

166 Ind. 684

Indiana Natural Gas & Oil Company v. Beales

No. 20,757

Supreme Court of Indiana

January 4, 1906

Rehearing Denied June 6, 1906.

From Superior Court of Madison County; Henry C. Ryan, Judge.

Suit by Idelia Beales against the Indiana Natural Gas & Oil Company. From a decree for plaintiff, defendant appeals. Transferred from Appellate Court under subd. 2, § 1337j Burns 1901, Acts 1901, p. 565, § 10.

Reversed.

W. O Johnson, Brownlee & Browne, Blacklidge, Shirley &amp Wolf and Lovett & Slaymaker, for appellant.

Joseph L. Custer and Orlo L. Cline, for appellee.

OPINION

Jordan, J.

Appellee, on February 13, 1903, instituted this suit in the Grant Circuit Court to quiet title to certain real estate situated in Grant county, Indiana, and thereby annul and cancel a certain gas-and-oil lease in controversy and of record in the recorder's office of said county, which, as alleged in the complaint, was a cloud on appellee's title. Upon change of venue the cause was tried in the Superior Court of Madison County. There was a finding in favor of appellee, and a decree was rendered quieting her title to the real estate involved and appointing a commissioner to enter a cancelation of the lease on the margin of the record in which said instrument was recorded. The motion for a new trial, stating the statutory grounds, was denied, and this ruling is assigned as error.

The evidence given upon the trial, as exhibited by the record, establishes beyond dispute the following facts: On March 29, 1888, John Roush was the owner in fee of the real estate in question, situated in Grant county, Indiana, and on said day he, together with his wife, executed to Leonard H. Best a certain gas-and-oil lease upon said land. Through several assignments appellant, on July 1, 1892, became the owner and holder of this lease. The instrument in question was recorded in the proper record in the office of the recorder of Grant county on April 11, 1888. On December 16, said Roush and his wife conveyed the leased premises to appellee, Idelia Beales, and she from that time has continued to be the owner thereof.

The lease stipulates and recites that the lessors, Roush and wife, leased to the lessee, Leonard H. Best, his administrators and assigns, the real estate therein described, being the same as that described in the complaint, "for and in consideration of the sum of $ 10.75, and for the further consideration hereinafter mentioned, and on account of the covenants hereinafter contained, for the purpose and with the exclusive right of drilling, mining and operating for petroleum, gas or any mineral substances on said land, and appropriating said products so obtained to his own use and benefit, except as hereinafter provided, and removing the same for the term of twelve years, and so long thereafter as petroleum, gas or mineral substances can be procured in paying quantities, or the payments hereinafter provided for are made according to the terms and conditions attaching thereto." The instrument then provides that the lessee shall have sufficient water and wood on the premises for drilling and mining operations, and the right to erect upon and remove from said premises all necessary building machinery, tanks, pipe-lines and other property necessary for the prosecution of said business, with the right of way for the pipe-lines and for operations. It is further provided that the first party (the lessor) shall have one-eighth part of all petroleum or mineral substances obtained. That if gas alone is found in sufficient quantities to make it profitable to pipe the same to other localities the grantor, or lessor, shall receive $ 100 per annum for each gas-well and sufficient gas to heat and light his dwelling on said premises; said payment to be accepted by the party of the first part (the lessor) as a full consideration and in lieu of any other royalties. No part of the premises leased was to be used for the purpose of mining for minerals, petroleum or gas, except by the lessee. The lease contains the following provision:

"The party of the second part agrees to commence operations for said drilling or mining purposes within one year from the execution of this lease, or in lieu thereof, for delay in commencing such operations, and as a consideration for the agreements contained herein, thereafter pay to said party of the first part [lessor] $ 21.50 per annum, payable in advance on March 29 in each year, until such operations are commenced and a well completed. A deposit to the credit of the party of the first part [lessor] in the Marion Bank of Marion, Indiana, shall be considered a payment under the terms of this lease. Should said party of the second part fail to make such payments or either of them, within thirty days from the time the same is due, then this lease shall be null and void, and of no effect."

The appellant company did not take possession of the leased premises, and no gas or oil well was drilled thereon by it or by any other person under said lease. Appellee, it appears authorized her husband to act as agent in collecting the rentals under the lease. It is shown that all payments required by said lease to...