Pittsburgh v. Pentress Gas Co..

• Citation: 84 W.Va. 449
• Parties: Pittsburgh and "West Virginia Gas Co. et al. v. PentressGas Co. et al.
• Decision Date: 16 September 1919
• Court: West Virginia Supreme Court

84 W.Va. 449

Pittsburgh and "West Virginia Gas Co. et al.

v.Pentress Gas Co. et al.

Supreme Court of Appeals of West Virginia.

Submitted September 10, 1919.

Decided September 16, 1919,

1. Improvements Willful Trespasser.

One who, with full knowledge of the facts which make his claim of title to land invalid, enters thereon and commits acts of trespass, is a willful trespasser within the meaning of the law, even though he may honestly believe that under such known facts tha law confers upon him good title. (p. 452).

2. Mines and Minerals Invalid Oil and Gas Lease Suit for Value of Oil Deduction of Expenses.

One who enters upon a tract of land under an oil and gas lease, with full knowledge of the facts which render the same invalid, and produces the oil therefrom, is not entitled, when sued for the value of the oil so produced and sold from the lands by the party having the superior Tight, to any deduction from such value because of expenditures made by him in producing and marketing such oil. (p. 454).

3. Damages Interest as Damages Conversion.

Where, in an action for damages, it appears that the complaining party was entitled to receive the fixed money value of property converted at a certain time, in ascertaining his damages at the time of recovery it is proper to add interest on such fixed value from the time of such conversion to the date of recovery, (p. 458).

Appeal from Circuit Court, Monongalia County.

Separate suits for injunction by the Pittsburgh & West Virginia Gas Company and others against the Pentress Gas Company, the Chartiers Oil Company, and others. Decrees for plaintiffs, and defendant Chartiers Oil Company appeals.

Reversed, and causes remanded.

Edward S. Craig, Cox & Baker, for appellant. Charles A. Goodwin and Glasscock & Glasscock, for appellees.

Bitz, Judge:

Plaintiffs are the successors in title to the lessee in two 'oil and gas leases executed by the owners of separate tracts of land lying in Monongalia county. These leases are indefinite in their term, and are what is commonly called "no term leases." They provide for the drilling of a well within a certain time, or for the payment of a certain sum of money quarterly in lieu of drilling. For a number of years the plaintiffs and their predecessors paid the commutation money in lieu of drilling and kept the leases alive in that way. At the end of one of the quarterly periods for which this commutation money had been paid the landowners notified the holders of the leases that the same were cancelled, and refused to receive the rental monies for the next quarter. This contention of the landowners was disputed by the holders of the leases. Shortly thereafter the owners of the land made other leases to the defendants, or their predecessors, covering the same tracts of land, and both plaintiffs and defendants thereupon made locations upon each of the tracts of land with a view to drilling for oil or gas thereon. In the one instance the landowner, and in the other the defendant, Pentress Gas Company, filed their bills in the circuit court of Monongalia county setting up the facts as aforesaid, and asking that the plaintiffs here be enjoined from drilling upon said land under the old leases, contending that the same were cancelled, and also be en Joined from interfering with the holders of the junior leases in their operations upon said lands. This injunction was granted, and while it was in force the defendants, claiming under the junior leases, drilled a well on each of the tracts of land, and produced oil therefrom. Upon a final hearing the circuit court perpetuated the injunctions and cancelled the senior leases. An appeal was prosecuted from those decrees, and this Court reversed the same, holding the senior leases valid and binding, and the junior lessors without right, and dismissed the bills. Johnson v. Armstrong and Pentress Gas Co. v. Monongahela Natural Gas Co., 81 W. Va. 399. Thereafter the plaintiffs brought these suits and invoked the jurisdiction of equity to enjoin the defendants, the holders of the junior leases, from further operations upon said lands, and to have an accounting and recovery of the money received by said defendants for the oil taken from the premises. The cases were submitted upon a statement of agreed facts, from which it appears that the defendants expended in the drilling of each of the wells more than the sum of five thousand dollars, and that they also expended in what is termed caring for, storing and transporting the oil from the wells on the premises, the sum of more than fifteen hundred dollars in each case, which sum so expended by them in drilling the wells and in marketing the oil it is asked may be set off against the amounts received for the oil produced. The court below declined to allow defendants credit for the cost of drilling the wells, but did allow them credit for the other expenses in connection with said oil, and in the one case this was sufficient to entirely offset the amount received for oil, and in the other to reduce such amount to an inconsiderable sum, The plaintiffs contend that the defendants in their.operations upon these lands were willful trespassers, and are not entitled to any credit for money expended by them in producing or marketing the oil which they sold from the lands, while on the other hand it is contended hy the defendants that they were acting in good faith, believing their rights superior to the rights of plaintiffs, for which reason they are entitled to credit for the expenses incurred in the production of the oil, and further, that even if this is not the case, under decisions of this Court cited by counsel, which will be hereafter refer red to, they are entitled to be credited in an accounting with such cost of production.

The first question which naturally presents itself is, what was the status of the defendants in relation to these lands at the time they drilled, the(wells thereon? That they were trespassers there is no doubt, but as will be hereafter seen a willful trespasser is upon a different footing from one who can be said to be acting in good faith. The defendants contend that they were not willful trespassers because they honestly believed that their title was superior to that of the plaintiffs. They were cognizant of every fact affecting their rights or interests in the lands, as well as the rights and interests of the plaintiffs, and their contention of good faith rests upon the sole ground that they honestly misjudged the law. They believed that under the law the existing facts, of which they were fully informed, gave them the superior right. The plaintiffs did not acquiesce in this view, but on the contrary vigorously contested it and contended from the very beginning that they alone had right to drill for oil and gas on these lands. Can the fact that one acts under a misconception of the law characterize his acts as innocent? The presumption is that every man knows the law, and when he is fully informed as to the facts and makes a wrong application of the law thereto, ordinarily he will be bound by his acts to the same extent as if he had no misconception in regard to the law which controls. He is presumed to be as fully informed as to the law controlling under a given state of facts at one time as at another, and if he acts upon his own interpretation of the law he does so at his peril. In this case, as before observed, the defendants were fully informed as to the facts, and committed the acts which resulted in the extraction of the oil with this full knowledge, and with the further knowledge that their interpretation of the law was vigorously contested by the plaintiffs. It may be said that the defendants had such confidence in their judgment as to be willing to take the risk of an unfavorable decision. Entire good faith, it occurs to us, would have dictated to them that the proper course would be to wait until the controversy had been finally determined before expending large sums of money in drilling upon the land. This doctrine is fully discussed in the case of Chesapeake & Ohio Ry. Co. v. Deepwater Ry. Co., 57 W. Va. 641-695. jfrii that case the Chesapeake)' & Ohio Ry. Co., entered upon the lands under an order of the circuit court and spent large sums of money in constructing a tunnel. It was afterwards determined that the Deep water Railway Co. had the better right to the right-of-way in dispute, and notwithstanding the tunnel constructed by the Chesapeake & Ohio Ry. Co. was beneficial to the, Deepwater Ry. Co. in its operations, this Court denied any right to compensation for the money expended and the improvements made. It was there held that the Chesapeake & Ohio Ry. Co. could not be a bona fide occupant of the land, although it had entered thereon under an order of the court, believing its title to be good, because it had notice of all of the facts, being ignorant only of matter of law. The same doctrine was announced in Snider v. Snider, 3 W. Va. 200. And in Dawson v. Grow, 29 W. Va. 333, it was held that to entitle an evicted claimant to compensation for improvements put upon lands, he must have acted bona fide, and that one having knowledge of all the facts in regard to the title to the land, or means of knowledge, is not such bona fide claimant. In that case it was held that the recordation of the deed gave notice of the adverse claim, and that the one making improvements was charged with knowledge of such deed from the fact of its recordation alone. And in the case of Hall v. Hall, 30 W. Va. 779, it was likewise held that one evicted from land, claiming for improvements placed thereon, will not be entitled thereto unless he was a bona fide occupant, and that to be such bona fide occupant it must appear that he not only believed he had good title, and made the improvements in good faith under that belief, but it must be further shown that he at the time had reasonable grounds to believe his title good. If the title under...