Manufacturers Gas And Oil Co. v. The Indiana Natural Gas And Oil Co.

• Decision Date: 28 June 1900
• Docket Number: 19,263
• Parties: Manufacturers Gas and Oil Company et al. v. The Indiana Natural Gas and Oil Company
• Court: Indiana Supreme Court

57 N.E. 912

155 Ind. 461

Manufacturers Gas and Oil Company et al. v. The Indiana Natural Gas and Oil Company

No. 19,263

Supreme Court of Indiana

June 28, 1900

Rehearing Denied Nov. 23, 1900.

From the Grant Circuit Court.

Reversed.

Rollin Warner, A. W. Brady and W. A. Ketcham, for appellants.

W. O Johnson, M. Winfield, Foster Davis, J. C. Blacklidge, C. C Shirley and Conrad Wolf, for appellee.

OPINION

Dowling, J.

In this suit the appellants sought to enjoin the appellee from using devices for pumping, and from employing any other artificial process or appliance for the purpose, or having the effect of increasing the natural flow of gas from the wells of the appellee, or through the pipes conveying and transporting the same.

The ruling of the court sustaining a demurrer to the complaint is the error assigned.

The appellants, the Manufacturers Gas and Oil Company, the Manufacturers Fuel Company, the Ball Brothers Glass Manufacturing Company, the Swayzee Glass Company, the Crystal Window Glass Company, and the Alexandria Window Glass Company, are corporations organized under the laws of this State, as is also the appellee, the Indiana Natural Gas and Oil Company. The complaint states that the two corporations first named are engaged, among other things, in supplying natural gas to manufacturing companies carrying on business at Muncie, Delaware county, Indiana, in which large amounts of capital are invested, and by whom 1,600 men are employed and paid, the value of the annual output of which is $ 3,500,000; that the pipe lines of the said Manufacturers Gas and Oil Company extend to, and some of its wells are situated at, a point about nine miles northwest of the city of Muncie, and fifteen miles from one of the lines and from some of the wells of the appellee in Grant county; that the pipe lines and some of the gas wells of the Manufacturers Fuel Company extend north from the city of Muncie about seven miles to about eighteen miles from the lines and wells of the appellee; that the Ball Brothers Glass Manufacturing Company has an annual output of $ 1,500,000, and that it employs 1,200 men, with a pay-roll of $ 42,000 per month; that the lines through which it is supplied with gas extend north from the city of Muncie about eleven miles to within a distance of about eighteen miles of the lines and wells of the appellee. Similar allegations are made as to the Swayzee Glass Company, the Crystal Window Glass Company, and the Alexandria Window Glass Company. It is further stated that each of the said manufacturing establishments requires a large quantity of fuel to enable it to carry on its operations; that natural gas is more desirable than any other kind of fuel, and that the plants of the said appellants were located and built especially with reference to the supply of natural gas in their vicinity, and are entirely dependent upon it. It is alleged that the appellee is engaged in the business of mining, collecting, and transporting natural gas from the natural gas fields in Indiana to the city of Chicago, in the state of Illinois, and that in the conduct of its said business it has established pipe lines for the transportation of natural gas through a great part of the counties of the State from Howard county to the northwestern boundary of the State, and that for the purpose of transporting such natural gas it has established, and is maintaining, one pumping station in the county of Jasper, and one in the county of Howard, and that it is intending and threatening, and, unless restrained by the court, it will establish another in the county of Grant, where it has located and drilled wells, and laid pipe lines connecting with its main pipe line to Chicago.

That, underlying the counties in the northeastern and central part of Indiana, there was discovered, in the year 1886, a great reservoir of natural gas, located in the Trenton rock, at various distances from the surface of the earth, the counties of Delaware, Madison, and Grant, being located over the center of said reservoir, and said reservoir extending in every direction from the three counties aforesaid, and underlying the whole of Blackford, and parts of Jay, Wells, Howard, Tipton, Hamilton, Hancock, Henry, and Randolph counties, the supply of gas being greatest in the counties of Delaware, Grant and Madison; that said reservoir of natural gas is single, continuous, connected, and limited, situated in the Trenton rock underlying said several counties, and parts of counties, at a depth of from 900 to 1,000 feet below the surface of the earth; that the said Trenton rock is a porous substance which permits the passage of natural gas through it; that said gas is confined in said rock at a great pressure, which has diminished from 325 pounds in 1886 to 165 pounds at the present time; that because the said reservoir is continuous, connected, and limited, any diminution, waste, destruction, or injury to any part of said reservoir decreases the entire supply of natural gas, and diminishes the pressure of all natural gas wells drawing from said reservoir, thereby injuring all other parts of the said reservoir; that beneath and around said reservoir is a vast body of salt water, which also is confined, and is subject to great pressure, and which, as the pressure on said reservoir of natural gas decreases, or is diminished, constantly tends to enter the said reservoir, and the wells drilled therein, and to destroy the same; that when the pressure within the said reservoir shall decrease to about 100 pounds, the effect will be to permit said body of salt water to enter said entire reservoir, and to destroy the same, with all the natural gas wells entering therein, or drawing thereon; that the gas wells of the appellants will be rendered entirely useless and worthless if the said reservoir is destroyed; that for this reason it is of the utmost importance to the appellants, and to all other manufacturing institutions in said gas districts, that no excessive, unauthorized, or unlawful use of said natural gas be made or permitted; that the appellee has located, and drilled, and draws natural gas from, a great number of natural gas wells in Grant and Howard counties, and has leased many thousands of acres of land in said Grant and Delaware counties, whereon it has not yet drilled wells, but it expects, intends, and gives out that it will drill gas wells on said lands; that much of the land so leased, for the purposes aforesaid, lies in the immediate vicinity of the said wells owned by the appellants, respectively; that all of said wells already drilled by the appellee penetrate to, and draw from, said reservoir of natural gas, and all wells hereafter drilled upon said leased land will penetrate, and draw upon, the said reservoir; that the appellee, in violation of the rights of the appellants, and in violation of section two of an act entitled "An act to regulate the mode of procuring, transporting, and using natural gas, and declaring an emergency," which became a law by lapse of time, without the Governor's approval, March 4, 1891, has used, is using, and threatens to continue to use, artificial processes, or appliances, for the purpose, and which have the effect of increasing the natural flow of the natural gas from its wells through the pipes used for conveying and transporting the same, by maintaining and using at points in the counties of Jasper, Howard, and Grant, pumping stations, and other devices to the appellants unknown, by which the natural gas while being transported is forced into its mains and pipes at a pressure of 400 pounds to the square inch, and largely beyond the natural rock pressure of the natural gas at the wells; that by the use of such devices the back pressure upon the reservoir, which is essential to keep the salt water from entering the wells, and destroying the natural gas, is withdrawn, and the flow of gas from the wells, and in the pipes, is greatly increased, and the supply and pressure of gas in the reservoir greatly diminished, to the prejudice of the appellants, and of all other manufacturing interests in and throughout the said district; that in so forcing the gas through such pipe lines by such artificial processes, the appellee has drawn, and is continuing to draw, so heavily through its said wells upon the said reservoir as seriously to diminish the supply and pressure of gas therein, and to draw from the wells owned by the appellants and other manufacturers in said district the supply of gas upon which they are dependent for their continued operation; that, unless the appellee is restrained from piping said natural gas by pumping and other artificial appliances for the purposes and having the effect of increasing the natural flow of gas from any well, and of increasing and maintaining the flow of natural gas through the pipes used for conveying and transporting the same, the appellants and all other manufacturing interests located in the said gas district will suffer irreparable injury, their said wells will be wholly destroyed, and rendered entirely worthless, the value of their property will be destroyed in whole or in part, and they will be compelled to close down, and discharge their employes until such time as they can refit and reestablish their plants for the use of coal, and that even then the value of their property will be greatly diminished, etc.

The relief demanded is, that the appellee be perpetually enjoined and restrained from using devices for pumping, or any other artificial process or appliance, for the purpose or that shall have the effect of increasing the natural flow of natural gas from any of its wells, and from increasing and maintaining the flow of natural gas through the pipes used for conveying and...