West Virginia Transp. Co. v. Ohio River Pipe-Line Co.

• Decision Date: 17 November 1883
• Citation: 22 W.Va. 600
• Parties: WEST VIRGINIA TRANSPORTATION CO. v. OHIO RIVER PIPE LINE CO. et als.
• Court: West Virginia Supreme Court

22 W.Va. 600

WEST VIRGINIA TRANSPORTATION CO. v. OHIO RIVER PIPE LINE CO. et als.

Supreme Court of West Virginia.

November 17, 1883

Submitted Sept. 15, 1883.

JOHNSON, PRESIDENT, Absent.^[a1]

1. An oil transportation company entered into an agreement with a land-owner, whereby the land-owner for a valuable consideration granted to the company and their assigns the exclusive right of way and privilege to construct and maintain one or more lines of tubing for the transportation of oil through and under a tract of land containing two thousand acres, which agreement was signed sealed and delivered by the land-owner.

HELD:

By the true construction of this instrument it operated first as a grant of right of way for such tubing for the transportation of oil through said tract of land, and secondly, it was intended to operate as a covenant, whereby the land-owner agreed, that he would not himself transport oil from or through this tract of land nor grant rights of way to any other person or company to lay tubes for the transportation of oil through said tract of land, whether the oil was produced on said tract of land or not. (p. 616.)

2. Such agreement was vaild and binding on the land-owner and his assigns, so far as it operated as a grant of right of way for such tubing through said tract of land, but so far as it was intended to operate as a covenant, that the land-owner would not himself transport oil from or through said tract of land nor grant rights of way to any other person or company to lay tubes for the transportation of oil through said tract of land whether the oil was produced upon it or not, this agreement was inoperative, null and void as contrary to public policy, being an attempt to impose an unreasonable restraint upon trade. (p. 617.)

3. As a general rule any trade or business may legally have imposed on it by contract a partial restraint, as the extent of territory, over which it is permitted to extend. Such restraint, when valid, varies with the character of the trade or business. In some sorts of trade or business it may be a large extent of country, hundreds of miles in dimensions, in which a party may contract not to carry on his business; but in other sorts of business the restraint would not be valid if it were attempted by the contract to extend it beyond the bounds of a single town; and there are some sorts of business, which the law will not allow to be restricted at all by contract. (p. 618.)

4. Whenever the Legislature by statute-law has authorized any person or corporation to condemn the lands of others in order to carry on its business, the courts will regard this as a legislative declaration, that this character of business is such, as that the public has so great and direct an interest in, that the courts must hold it as contrary to public policy to permit any restriction of it by private contract. (p 625.)

5. A contract, by which an exclusive right of way is granted through any land, however small the parcel, is void, so far as the right is attempted to be made exclusive, as contrary to public policy and as in direct conflict with the State's right of eminent domain. (p. 627.)

6. A landlord may by contract under seal impose on the lands, which he leases, burdens, which will not only be binding on the tenant but also on sub-tenants, they being covenants real running with the land. But except between landlord and tenant no burdens can be imposed on lands by any covenant of the owner, which will run with the land and bind any grantee of the land; for such covenants are personal and are not covenants real running with the land. (p. 632.)

7. An agreement by a land-owner, that the products of his land shall be transported to market by a certain common carrier, is not a covenant real and does not run with the land or bind any subsequent purchaser of the land. (p. 632.)

8. A court of equity would not enforce the performance of such covenants by a subsequent purchaser of the land, though he bought the land with full notice of the existence of such covenant. (p. 636.)

GREEN, JUDGE, furnishes the following statement of the case:

The West Virginia Transportation Company, a corporation chartered by several acts of the Legislature of West Virginia, on August 7, 1882, presented its bill of injunction to the judge of the circuit court of Ritchie county, in which it alleged, that it was incorporated as an internal improvement company by three acts of the Legislature of West Virginia, passed respectively on February 26, 1867, (Acts of 1867, chapter 95,) February 26, 1868, (Acts of 1868, chapter 67,) and February 9, 1869, (Acts of 1869, chapter 10.) By its original charter, section 4, page 111, " The said company was authorized to purchase real estate and erect buildings and improvements thereon and use and hold the same; and further to have the right to purchase all necessary equipments and appendages, such as tubing, pumps, tanks, telegraph apparatus and all needful appliances appertaining thereto as may be necessary for the transportation of oil through said tubing and branch-pipes for the accommodation, convenience and purposes of said company." By section 5 the said company was authorized by condemnation to acquire the right of way or fee simple in the land. Section 7 regulated its charges for the transportation of oil through such tubing. The Legislature by section 12 reserved the right to alter, amend or repeal this act. By chapter 67 of Acts of 1868, page 63, this charter was amended and " said company authorized to construct and maintain a line or lines of tubing, for the purpose of transporting petroleum or other oils through pipes of iron or other materials, in the counties of Wirt, Wood, Ritchie and Pleasants, to any railroad or other road or to any navigable stream or streams in or adjoining the counties aforesaid, and to transport from the terminus of said pipe or pipes petroleum or other oils in tanks, cars, boats or other receptacles belonging to said company, and to receive and hold said oil on storage, and to buy and sell said oils on commission or otherwise. And also power to enter and condemn lands and to acquire rights of way in the counties aforesaid, for the purposes of said company; and in such cases, when it may be deemed advisable by said company, it shall at its option have the power to acquire a sufficient right of way only for the purposes of said improvements over any such lands instead of the fee simple thereof." The act of February 9, 1869, provided the details, by which said company was to acquire by condemnation rights of way in said counties or the fee simple of lands, and provided that when the required steps had been taken, " the company shall hold the right of way or rights of way over, under or through the said lands or the fee simple as aforesaid, by good and indefeasible title."

The bill then states, that pursuant to the authority thus conferred upon this company it made on September 2, 1868, the following contract with E. L. Gale and Mary Gale:

" We, the undersigned, for and in consideration of the sum of one dollar, receipt of which is hereby acknowledged, do hereby grant unto the West Virginia Transportation Company, a company incorporated under special act of the Legislature of West Virginia, passed February 26, 1867, and their assigns, the right of way to construct and maintain one or more lines of tubing for the transportation of oil along, through and under the lands owned by the undersigned in Ritchie county, in the State of West Virginia; also the right to construct and maintain a telegraph along said tubing and the privilege to remove said tubing and telegraph at pleasure.

Witness our hands and seals this 23d day of September, 1868.

E. L. GALE, [SEAL]

MARY GALE, [SEAL.]"

The bill further alleges that subsequently on January 31, 1870, and October 25, 1873, said E. L. Gale and Mary Gale, his wife, granted to said company the exclusive right of way and privilege to contract and maintain one or more lines of tubing for the transportation of oil, water or other liquids along, through and under lands owned by them in the counties of Ritchie and Wood, also the right to construct and maintain a telegraph along said tubing and the privilege to remove said tubing at pleasure, which deeds are duly admitted to record. The two deeds were in all respects similar and the following is a copy of one of them:

" We, the undersigned, for and in consideration of the sum of one dollar, receipt of which is hereby acknowledged, do hereby grant unto the West Virginia Transportation Company, a company incorporated under special act of the Legislature of West Virginia, passed February 26, 1867, and their assigns, the exclusive right of way and privilege to construct and maintain one or more lines of tubing for the transportation of oil, water or other liquids along, through and under lands owned by the undersigned in Ritchie county in the State of West Virginia; also the right to construct and maintain a telegraph along said tubing, and the privilege to remove said tubing and telegraph at pleasure.

Witness our hands and seals this 31st day of January, 1870.

E. L. GALE, [SEAL]

MARY GALE, [SEAL.]"

The bill then alleges, that the lands mentioned in these three deeds were comprised in a tract of about two thousand acres lying principally in Ritchie county and known as the " Gale tract; " that acting under these deeds the company laid lines of tubing, erected pumping stations and tanks and other necessary appliances on said " Gale tract" to all the oil wells on said tract of land, said lines of tubing being several miles in extent and furnishing means of transportation for the oil produced from every well or set of wells...