Stapleton v. Columbia Gas Transmission Corp.

• Decision Date: 05 May 1981
• Citation: 2 OBR 16,2 Ohio App.3d 15,440 N.E.2d 575
• Parties: , 2 O.B.R. 16 STAPLETON et al., Appellants, v. COLUMBIA GAS TRANSMISSION CORPORATION et al., Appellees.
• Court: Ohio Court of Appeals

Page 15

2 Ohio App.3d 15

440 N.E.2d 575, 2 O.B.R. 16

STAPLETON et al., Appellants, v. COLUMBIA GAS TRANSMISSION CORPORATION et al., Appellees.

Court of Appeals of Ohio, Fourth District, Lawrence County.

May 5, 1981.

Syllabus by the Court

1. Where an oil and gas lease provides that the "lessors may have gas free of cost by laying the necessary line and making connection at their cost at such point as may be designated by lessees for light and heat in the mansion house on said premises," the term "in the mansion house" limits the right to receive free gas to one house only on the leased premises.

2. A free gas clause will be construed as a covenant running with the surface ownership of the leasehold tract, and not the mineral, gas and oil estate inasmuch as the surface owner of the house, or other building located thereon and entitled to free gas, is presumptively the one intended to be benefited unless a contrary intention appears from the wording of the instrument.

3. The right to receive free gas in a lease will be ordinarily considered personal to the lessors when the lease specifies the persons who are to receive the free gas and the lease is silent with respect to extending the terms and conditions of the lease to the contracting parties, heirs and assigns.

4. Where an oil and gas lease provides that the lessor shall receive free gas "in the mansion house," and the lessor conveys his interest in the part of the surface tract upon which the house (the mansion house) receiving free gas is located, but retains a portion of the surface leasehold tract, the new owner of the tract upon which the mansion house is located has the right to receive the free gas unless the right to receive free gas was excepted from the deed to the new owner.

Crowe, McCown & McCown and David H. McCown, Ironton, for appellants.

Klein, Slagle & Klein, Charles C. Klein, Ironton and James P. Holland, Charleston, W. Va., for appellee Columbia Gas Transmission Corp.

O. Clark Collins, Jr., Ironton, for appellees Carl and Lillian Ruggles.

STEPHENSON, Judge.

This is an appeal from a grant of summary judgment entered by the Court of Common Pleas of Lawrence County in favor of Columbia Gas Transmission Corporation (Columbia Gas) and Carl and Lillian Ruggles, defendants below and appellees herein, upon their motions for summary judgment and against Emogene and Larry Stapleton, plaintiffs below and appellants herein. The following errors are assigned:

"1. The Court erred in granting summary judgment in that there were some genuine issues of fact upon which there was no evidence and same [sic] upon which there was conflicting evidence.

"2. The Court erred in ruling that as a matter of law a purchaser of real estate upon which there is situated a house which house is using gas in violation of lease covenants is entitled to free gas rights in spite of a specific reservation in his deed denying him any rights to oil and gas.

"3. The Court erred in refusing to permit a lessor of oil and gas rights to recover damages due to unauthorized use by a subsequent owner of a portion of the surface of the land over and above the oil and gas rights.

"4. The Court erred in permitting a lessee of oil and gas rights to furnish free gas to a stranger to the lease and ownership of the gas and oil rights and further in failing to compensate the lessor for unauthorized usage condoned and contributed to by said lessee."

Appellants filed an amended complaint against appellees in the court below seeking, essentially, a declaration that they were entitled to free gas under a certain lease, an injunction against the Ruggleses and Columbia Gas prohibiting the use of the "free gas" by the Ruggleses, and monetary damages against Columbia Gas. After answering the amended complaint, appellees, by separate motions, moved for summary judgment relying on the lease, certain deeds attached to their motions, and a deposition of appellant Emogene Stapleton. The court below, on October 17, 1979, granted the motions.

The following pertinent facts appear in the evidentiary material in the record that may be considered for summary judgment purposes ¹ (1) On March 12, 1930, Otho and Nettie Gillette entered into a lease granting to the Chartiers Oil Company the oil and gas in a ninety-eight acre tract located in Lawrence County, Ohio. The lease provided, inter alia, the following:

"If gas is found in paying quantities to the lessees and conveyed from the premises, the lessors may have gas free of cost by laying the necessary line and making connection at their cost at such point as may be designated by lessees for light and heat in the mansion house on said premises, to be used with economical appliances subject to approval of lessees. Said gas to be used at lessors' own risk, and lessees not to be in any way liable for insufficient supply of gas caused by the use of pumping stations, breakage of lines, or other causes, but nothing herein shall prevent the lessees from abandoning any well or wells and removing the pipe therefrom. The lessees agree to pay for all damages caused to growing crops by said operations.

" * * *

"It is agreed that all the conditions and terms herein shall extend to the heirs, executors, successors and assigns of the parties hereto."

(2) Columbia Gas is the successor to the original lessee, the Chartiers Oil Company.

(3) On September 14, 1945, the lessors, Otho and Nettie Gillette, conveyed to appellant Emogene Stapleton and her husband Hayden Stapleton, now deceased, the tract covered by the lease.

(4) In 1952 or 1953, the Stapletons began using the free gas for domestic purposes at their dwelling on the tract, although the free gas provision had not previously been exercised.

(5) On November 12, 1958, the Stapletons reconveyed forty acres of the original tract to the Gillettes, but, in the reconveyance, retained oil, gas and mineral rights.

(6) On May 12, 1958, the Stapletons conveyed to John and Mattie Stapleton a 1.21 acre tract.

(7) In 1959 John Stapleton extended a gas line from the residence of Emogene and Hayden Stapleton and also began using free gas to his newly built home on the 1.21 acre tract.

(8) On December 21, 1959, a conveyance of 0.28 acres was made by Emogene and Hayden Stapleton to Kenneth R. Hughes and Shelfie J. Hughes, the oil, gas and mineral rights being excepted and retained by the Stapletons.

(9) By deed dated May 2, 1961, Hayden and Emogene Stapleton conveyed a 50.14 acre tract to appellees Carl and Lillian B. Ruggles, excepting therefrom the prior conveyance of 1.21 acres to John and Mattie Stapleton, the prior conveyance of 0.28 acres to the Hugheses, and also excepting a specifically described 0.25 acre tract from the conveyance. Further excepted were "all the minerals and oil and gas underlying said premises." The tract conveyed to the Ruggleses included the dwelling which was receiving free gas under the lease.

(10) By deed dated May 15, 1961, John and Mattie Stapleton reconveyed the 1.21 acre tract to Hayden and Emogene Stapleton, ² established a home in the dwelling thereon and continued to use the free gas which was extended from the dwelling sold to the Ruggleses who also continued to use the free gas. ³

(11) In 1975 or 1976 a dispute arose as to who was entitled to receive the free gas. In effect, Columbia Gas elected to allow the Ruggleses and not appellants free gas privileges.

A beginning point in the resolution of this appeal is a determination of what the parties to the 1930 lease intended therein with respect to the free gas provision. Such provisions are not novel, are in general use and have frequently resulted in litigation, particularly in Kentucky and West Virginia. There is, however, a paucity of Ohio decisions.

Inasmuch as we view the provision in question as a covenant, the cardinal principle of interpretation is to ascertain the intent of the parties as that intention is reflected in the provisions of the instrument as a whole with resort, if necessary, to surrounding facts and circumstances at the time of execution. 15 Ohio Jurisprudence 2d Rev. 8, Covenants, Section 4.

We believe it self-evident that by the use of the term "in the mansion house" that only one such house was to receive free gas and it is not contended otherwise either below or herein. ⁴ Accordingly, when the Stapletons began the use of the free gas in 1952 or 1953, no other house was entitled to free gas. Thus, the 1959 extension of the gas line to the house located upon the 1.21 acre tract was unauthorized; and, had a dispute arisen at that point in time, Hayden and Emogene Stapleton would have prevailed. Thus appellants are not aided by the sole fact that when they acquired the 1.21 acre tract, the previous occupants of the house on that tract were utilizing free gas and had done so in the past.

Also necessary for resolution are the further questions of whether the parties to the lease intended the free gas provision to be personal to the lessors or whether it was intended to run with the land, and, if so, with the ownership of the surface or with the underlying oil, gas and mineral estate.

Outside Ohio such a provision as here considered is generally treated by the courts as a covenant which runs with the surface of the leasehold tract unless a contrary intention appears from...