Kellar v. Craig

• Decision Date: 05 November 1903
• Docket Number: 485.
• Citation: 126 F. 630
• Parties: KELLAR v. CRAIG et al.
• Court: U.S. Court of Appeals — Fourth Circuit

126 F. 630

KELLAR v. CRAIG et al.

No. 485.

United States Court of Appeals, Fourth Circuit.

November 5, 1903

V. B Archer and William Beard, for appellant.

A. D Follett, for appellees.

Before GOFF and SIMONTON, Circuit Judges, and KELLER, Disrict Judge.

GOFF Circuit Judge.

The appellant filed in the court below his bill in equity alleging the forfeiture of a lease made by him on the 16th day of August, 1898, for oil and gas purposes, to one I. M Latshaw. He set out in his complaint that he was the owner of the fee of the land-- about 217 acres-- and that he was in the actual possession of the same; that the lease referred to had become forfeited because of the failure of those claiming under it to comply with the express covenants therein contained; and that the same was a cloud upon his title, which he prayed might be removed by the decree of a court of equity; and that irreparable damage was being caused to his said land by the removal therefrom by the defendants of the oil found therein.

To this bill the defendants below filed a demurrer, which the court on hearing sustained, and entered a decree dismissing the bill. This action of the court is the error assigned-- the only question presented for our consideration. Appellant insists that the court below erred in holding that on the case made by the bill equity had no jurisdiction. The appellees contend that, if the complainant below has any ground of complaint or claim for damages, his remedy is in a court of law, in which full and adequate relief is provided for such matters.

Undoubtedly equity has jurisdiction of a bill the object of which is to remove a cloud upon the title of real estate owned by a complainant, thereby protecting him in his possession, which, as well as the legal title, must be alleged and proven. Frost v. Spitley, 121 U.S. 556, 7 Sup.Ct. 1129, 30 L.Ed. 1010; Orton v. Smith, 18 How. 263, 15 L.Ed. 393; Fussell v. Gregg, 113 U.S. 550, 5 Sup.Ct. 631, 28 L.Ed. 993.

The bill alleged the forfeiture of the lease, and that the defendants below were removing the oil from the land under the protection given them by such forfeited contract. This, in effect, charged the defendants were committing such acts as if not prevented would produce irreparable damage to complainant's realty by removing from it that which gave it value, thereby destroying the inheritance; and this, especially in controversies relating to mining, oil, and gas leases, has resulted in the modification of the rather strict rules formerly applied in the earlier English and American cases regarding the jurisdiction of courts of equity. These points are ably urged by counsel for appellant, and we think are sufficient to show the jurisdiction of the court below, unless other matters raised by the bill, and directly connected with the developments made by the defendants under the lease mentioned, demonstrate to the contrary.

We find from the bill that the defendants below were, when this suit was instituted, claiming under said lease, and that the same had been duly assigned and transferred to them; and that they had in use in connection therewith a large amount of casing, tubing, and other oil-well utensils, as also valuable engines and machinery, all of which were located upon the land, and were in constant use in the production of oil from a number of paying wells which they had drilled thereon during the period of time intervening between the date of the lease and the filing of the bill; that it was stipulated as follows in the lease, viz.:

'And it is further understood and agreed and made a condition of this lease, that the lessees and all persons holding under him or them, are to protect the lines of the premises hereby leased, and pay rental until oil is produced in paying quantities, and drill one well every two months after oil is produced in paying quantities until this lease and the premises hereby demised are well developed; and the lessees shall locate all wells adjacent to production as long as the wells on the adjacent territory are producing wells, and all such wells on the premises hereby leased shall be continuously kept in a proper condition for producing the largest quantity of oil during the time that such wells on the adjacent property are producing. And in case oil shall not be found on a part of this lease at a lesser depth than the Berea sand, then one well shall be drilled through the Berea sand; provided, further, that in case any well shall be put down on any of the lands adjoining the premises hereby leased by the lessees or others to and through the Berea sand, and the same shall not be incumbent on the lessees to drill a well on the premises hereby leased to and through the Berea sand. * * * It is further understood and agreed and made an express condition and stipulation of this lease, that a failure on the part of the party of the second part to comply with all the stipulations of this agreement as hereinbefore set forth, shall render this lease null and void and of no effect to the party of the second part, his heirs or assigns, and the party of the first part in case of such failure shall have the right at any

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