Ohio Oil Co. v. Daughetee

• Decision Date: 16 June 1909
• Citation: 88 N.E. 818,240 Ill. 361
• Parties: OHIO OIL CO. v. DAUGHETEE et al.
• Court: Illinois Supreme Court

240 Ill. 361

88 N.E. 818

OHIO OIL CO.

v.DAUGHETEE et al.

Supreme Court of Illinois.

June 16, 1909.

Appeal from Circuit Court, Clark County; E. R. E. Kimbrough, Judge.

Suit by the Ohio Oil Company against N. P. Daughetee and others, in which Rhinehart C. Daughetee and others filed a cross-bill. From a decree dismissing the original bill and granting the prayer of the cross-bill, complainant appeals. Affirmed.Golden, Scholfield & Scholfield, for appellant.

Frank T. O'Hair and Davison & Bartlett, for appellees.

DUNN, J.

The appellee N. P. Daughtee is the owner in fee of 190 acres of land in Clark county. His sister, Sydney A. Stephenson, died in 1895, owning 60 acres adjoining it on the south, which by her will she devised as follows: ‘I give and devise and bequeath to Nathaniel P. Daughetee, trustee, in trust, and to his successors forever, all my estate, real, personal and mixed, of whatever kind or nature soever, of which I may die seized or possessed, to have and to hold, manage, rent, lease and control, in trust, for the uses and purposes following: To pay the expenses of such trust and for necessary repairs and taxes, and to pay over the annual proceeds therefrom to my nephew, Rhinehart C. Daughetee, for and during the natural life of him, the said Rhinehart C. Daughetee, with remainder over to the heirs of the body of said Rhinehart C. Daughetee upon his death, provided he die leaving a child or children or descendants of child or children, equally, share and share alike, to them and their heirs forever. In the event of the death of said Rhinehart C. Daughetee without issue of his body then surviving, then and in that event I give, devise and bequeath all the rest, residue and remainder of my estate, real, personal and mixed, to my brother, Nathaniel P. Daughetee, and his heirs forever.’ On June 3, 1904, N. P. Daughetee entered into a written contract with a copartnership doing business under the name of Hoblitzell & Co., whereby he granted to them all the oil and gas in and under both his own 190 acres and the 60 acres held by him in trust, together with the right to enter thereon at all times for the purpose of drilling and operating for gas and oil, and to erect and maintain all buildings and structures and lay all pipes necessary for the production and transportation of oil and gas, with a right of way over and across said premises to the place of operation, and the exclusive right to remove any machinery or fixtures placed on said premises, doing the least possible damage to said premises, and with the right reserved to the grantor to use the premises for tillage and for all other purposes not inconsistent with the object of the lease. The contract was for the term of five years, and as much longer as gas or oil was found in paying quantities. Hoblitzell & Co. within two years were to complete a test well, and if gas was found in sufficient quantities to transport, they agreed to pay a stipulated price therefor, and to furnish gas to heat and light one dwelling. If oil was found in paying quantities, the grantor was to have one-eighth of all oil produced and saved, to be delivered in the pipe line with which the grantees should connect their wells. In case no well was completed within 24 months, the grantees agreed to pay an annual rental of 25 cents per acre, and, in case no paying well was completed within five years, the contract was to be null and void. The grantees agreed to complete one test well in Westfield district No. 1 on or before the 30th day of September, 1904, or forfeit all rights under the contract. Hoblitzell & Co. complied with the contract on their part, and on November 10, 1905, assigned it to the appellant, the Ohio Oil Company. Four producing wells have been drilled on the land, but none on the 60 acres held in trust. On September 18, 1907, Daughetee made a similar contract with E. B. Adams for the 60 acres, for a rental of one-sixth of the oil, and $150 for each well located. Under the contract with Adams, Jesse Johnson and Virgil Johnson were proceeding to drill for oil on the 60 acres when the appellant filed its bill in the circuit court of Clark county for an injunction against Daughetee, Adams, and the two Johnsons. Rhinehart C. Daughetee, and his infant son, Homer Daughetee, filed a petition to be made defendants, and, having been permitted to answer the bill, they, together with N. P. Daughetee, individually and as trustee, then filed a cross-bill, in which they set up the facts substantially as above stated and prayed for a decree canceling the original lease between Hoblitzell & Co. and N. P. Daughetee, as far as the same related to the 60 acres. Upon a hearing, the original bill was dismissed and a decree was rendered upon the cross-bill canceling the original lease as to the 60 acres because of want of authority in the trustee to make it, and enjoining the appellant from prosecuting the development of any oil or gas well on said premises, from which decree this appeal is prosecuted.

N. P. Daughetee had possession and control of the 60 acres under his sister's will as trustee. He had no present beneficial interest in the land. His only authority to contract in regard to its possession or use was derived from the will, which gave him the right to manage, rent, lease, and control the land, but no authority to sell or mortgage it or any part of it. The power of control and management given him was during Rhinehart C. Daughetee's lifetime for the purpose of paying necessary repairs, taxes, and expenses and of paying the net annual proceeds to him. The only management and control contemplated was that which had to do with the annual proceeds of the land. The authority of the trustee was to grant ordinary farming leases in accordance with the ordinary terms of the neighborhood, but...