The State v. The Ohio Oil Company

• Decision Date: 10 March 1898
• Docket Number: 18,476
• Parties: The State v. The Ohio Oil Company
• Court: Indiana Supreme Court

49 N.E. 809

150 Ind. 21

The State v. The Ohio Oil Company

No. 18,476

Supreme Court of Indiana

March 10, 1898

From the Madison Circuit Court.

Reversed.

W. A Ketcham, Attorney-General, Merrill Moores, D. W. Scanlan, M A. Chipman, S. M. Keltner, E. E. Hendee, F. Winter and Blacklidge & Shirley, for appellant.

R. R Stephenson, Geo. Shirts, W. R. Fertig and M. F. Elliott, for appellee.

OPINION

McCabe, J.

The State of Indiana, by her Attorney-General and the prosecuting attorney of the Madison Circuit Court, brought suit against the appellee, the Ohio Oil Company, seeking to enjoin it from wasting natural gas. The circuit court sustained the defendant's demurrer to the complaint for want of sufficient facts to constitute a cause of action, and the plaintiff, electing to abide said demurrer, and refusing to amend its complaint or to plead further, the court rendered judgment that the plaintiff take nothing by its complaint and that defendant recover costs. Upon this ruling alone the State assigns error.

The substance of the complaint is, that for many years heretofore there has been underlying Madison, Grant, Howard, Delaware, Blackford, Tipton, Hamilton, Wells, and other counties in Indiana, a large deposit of natural gas, utilized for fuel and light by the people of those counties and of many other counties and cities in Indiana, including Indianapolis, Ft. Wayne, Richmond, Logansport, Lafayette and others of the most populous cities of the State, to which cities the gas is conducted, after being brought through wells to the surface of the ground, by pipes and conduits, by means of which many hundreds of thousands of the people of Indiana are supplied with gas for light and fuel. The natural gas underlying the counties named, and other portions of Indiana, is contained in and percolates freely through a stratum of rock known as "Trenton Rock," comprising a vast reservoir in which the gas is confined under great pressure, and from which it escapes, when permitted to do so, with great force. The fuel supplied by the natural gas thus obtained is the cheapest and best known to civilization, and the value of the natural gas deposit to the State and its citizens is many millions of dollars. Since the discovery of the gas deposit in 1886, vast sums of money have come into the State, and have been invested in building up large manufacturing interests, and vast sums of money belonging to the people of Indiana have been invested in similar enterprises, causing a great increase of population, principally in the territory underlying which gas is found. Many cities in and adjacent to the gas territory, including those named, are almost wholly dependent for fuel supply upon natural gas, and for that reason the people of Indiana have become and are greatly interested in the protection and continued preservation of the gas supply. Many millions of dollars invested in manufacturing and other properties in and near the gas territory are wholly dependent for their continued operation and for the permanent value of their property upon the gas supply. Their location and establishment in the gas territory was due to the presence of natural gas underlying it, without which such enterprises could not be operated at a profit, and in the event that the supply of gas is exhausted in the territory, many of such manufacturing enterprises (in which thousands of citizens of Indiana find employment at remunerative wages) will be compelled to suspend operations. Their employes will be thrown out of employment, and many of them, being wholly dependent upon their labor for support, may and will become charges upon the State and its municipal subdivisions. The property of the manufacturing enterprises and the vast investments depending on them and related to them will become worthless, and the owners will be driven to remove to other parts of the country, taking away from Indiana great wealth now invested in these enterprises. In the cities named, and in all the territory known as the "Gas Belt," the inhabitants have for years used practically no other fuel than natural gas. Their houses in many instances, are constructed with a view to the use of natural gas, and will have to be differently equipped before other kinds of fuel can be used. The cost of natural gas as fuel to the people in the gas belt, who number several hundreds of thousands, is very much less than that of any other fuel that has ever been, or can be procured by them, and to the other inhabitants of the State using natural gas it has become and is a source of great convenience, comfort, and increased happiness because of its cheapness, convenience, and cleanliness as fuel. Many small villages in and near the gas territory have within a few years become flourishing and opulent cities. The State's wealth and its revenues derived from taxation on account of such increased population and the various interests that have been fostered and supported by natural gas have been greatly increased, and will, in the event gas is exhausted, be correspondingly curtailed. The State of Indiana, relying upon the permanent supply of gas, has, at great expense, equipped many of its public institutions, including the State-house, the Central and other hospitals for the insane, the asylums for the blind and deaf and dumb, the institution for the care of the orphans of American soldiers and sailors, and other public institutions, owned and maintained by the State of Indiana and its various subdivisions, together with the court-houses in many counties, and a vast number of public schools, for the use of natural gas as fuel, by which the cost of maintaining the public buildings and institutions named has been materially lessened, and the comfort and happiness of their inmates and occupants immensely increased. Natural gas exists in large reservoirs, or a series of reservoirs connected with each other, underlying the gas territory, and the diminution or consumption of natural gas taken from any part of them affects or reduces correspondingly the common supply. If the gas supply is accordingly husbanded and protected it will last for many years, and continue to supply the various interests named with abundant fuel, and the population, wealth, and other material interests of the State will continue to be benefited and enhanced, and the comfort, enjoyment, and happiness of the people of the State greatly increased.

It is charged that about May 25, 1897, the Ohio Oil Company, an Ohio corporation, as its name implies, caused a well to be drilled near Alexandria, Madison county, which produces natural gas and petroleum in large quantities. The location of this well is described, as well as that of five other wells drilled at about the same time as the one first named, all of which produce both natural gas and petroleum, and have done so ever since their completion. It is charged that, instead of securely anchoring the wells as drilled, so as to confine the gas produced by them within two days next after their completion, the defendant, ever since the completion of the wells, which have been completed for some time, has "unlawfully permitted the gas produced therein to flow and escape into the open air, whereby many millions of cubic feet of natural gas have been wasted and lost, and whereby the State's supply of natural gas has been greatly diminished, and the property of its citizens within the said gas territory dependent upon the continued supply of natural gas for fuel as aforesaid, has been greatly damaged and decreased in value." It is also charged that the defendant avows its purpose to permit the gas to escape continuously and indefinitely hereafter from said wells, and refuses to make any effort to confine it, and declares its purpose to drill other wells in the gas territory, and permit the gas therefrom to flow and escape into the open air, and that if the gas continues to flow from the wells, the supply of natural gas upon which the citizens of the State depend will be greatly diminished; that the pressure of gas as found in said Trenton rock will be greatly diminished, and that by the diminution of such pressure, water will accumulate in the rock stratum and ultimately and entirely displace and overcome the gas supply; that because of the wrongful acts of the defendant above described, heretofore committed and now continuing, its property and that of its citizens has been and will continue to be essentially interfered with, and the comfortable enjoyment of the lives of its citizens greatly interrupted. And plaintiff avers "that it has no adequate remedy at law for the redress of its grievances complained of; that it is impossible accurately to fix in dollars and cents the damage the plaintiff has sustained and will sustain by reason of the wrongful and unlawful acts of the defendant, if suffered to continue, and that the plaintiff's injuries on account thereof are and will be great and irreparable, and increase as said gas is permitted to flow, and the number of wells wherein the same is unconfined continues to increase; and that the ordinary remedies, though repeatedly resorted to by plaintiff, have proved ineffectual to restrain or check the wrongful action of defendant."

It is charged that the penalties provided by law for the unlawful acts above described are wholly inadequate, and that the defendant has openly defied, and continues to defy, the lawfully constituted authorities of the State in their efforts to enforce and recover in the name of the State the penalties provided by law for such wrongful acts committed by the defendant, and that injunctive relief is necessary in order to restrain the continued wrongful acts of the defendant, and that, unless the same is given, one of the greatest...