Wood County Petroleum Co. v. West Va. Transp. Co.

• Decision Date: 03 July 1886
• Citation: 28 W.Va. 210
• Parties: Wood County Petroleum Co. v. West Virginia Transportation Co.
• Court: West Virginia Supreme Court

28 W.Va. 210

Wood County Petroleum Co.

v.West Virginia Transportation Co.

*(Johnson, President, Absent.)

Supreme Court of Appeals of West Virginia.

Submitted June 17, 1886.

Decided July 3, 1886.

1. Natural or hydro-carbon gas, which issues by its own force from the earth, is not absolute property but the subject of qualified property only.

2. A landlord leased to his tenant certain premises for the purpose of mining and taking carbon-oil therefrom at a fixed royalty and for no other purpose; the tenant opened a well which produced both oil and hydro-carbon gas, the former in small quantities pumped from the well for which the royalty is paid, and the latter in large quantities, issuing by its own force from the well, and which is separated from the oil by the tenant, and by means of pipes conducted beyond the leased premises where it is either sold or appropriated by the tenant for his own use without accounting to the landlord therefor. In a suit brought by the landlord for an account and the value of said gas, Held:

The tenant is not accountable to the landlord for said gas or its value.

W. L. Cole for appellant. A. 1. Boreman for appellee. Snyder, Judge:

Edmund Gale and wife, the owners of a certain tract of land located in the "oil regions" in Ritchie county of this State, entered into an agreement with M. C. C. Church, dated January 17, 1871, by which they leased to him a specified portion of said land, "for the purpose of mining and excavating for rock or carbon oil" and "for said purpose only" for the term of fifteen years from said date, the lessee "to have the privilege of using sufficient wood from the premises to run the necessary engines for the purpose of pumping, excavating and protecting the oil, and timber to erect all necessary buildings for said purposes," and he is to commence operations within sixty days and proceed without avoidable delay and, if he fail to do so or to work or cause the premises to be worked for petroleum for ninety days without good cause or the written consent ot the lessors, the lease shall be deemed forfeited, and the lessors may enter without further notice. The lessors "are to fully use and enjoy the said premises for the purpose of tillage or any other purpose except that part which shall be actually necessary for the said mining purposes and a direct way over and across the premises to the place of mining or excavating oil." In consideration of said grant and demise the lessee is to pay and deliver to the lessors or their assigns one full equal fourth part of "all the carbon or rock oil pumped, raised or manufactured from or upon said premises during the whole term aforesaid." It is also stipulated, that "this lease is subject in all cases to the exclusive right of the West Virginia Transportation Company to transport oil and other liquids through pipes or tubing in, through or under the lands hereby leased;" and that "this lease may be assigned or sublet or transferred by the consent" of the lessors. The other provisions need not be stated.

By conveyances subsequently made by the said Gale and wife to Thompson Leach and others, doing business under the name ot The Wood County Petroleum Company, the latter became the owmers of said land with all the rights, remedies and royalties of the said Gale and wife in and to said leased premises. On February 12, 1883, the said Wood County Petroleum Company brought this suit against the said M. C. C. Church, The West Virginia Transportation Company and The Bradish Oil Company. The plaintiff's bill, among other matters not in controversy in this appeal, avers, that in the fall of the year 1882 the defendant, Church, or some one under him, drilled a well on said leased premises not with the expectation of obtaining oil but for the purpose of obtaining natural gas to be used as fuel in generating steam necessary to operate the engines and machinery used in the production and transportation of oil; that the well so drilled did at once and continues to produce large quantities of inflamable gas; that the defendant, The West Virginia Transporation Company, of which the said Church is the secretary, treasurer and general superintendent, is engaged in dealing in oil for profit and to some extent in producing oil, but its chief business is the transportation of oil for others as well as tor itself through lines of pipe or tubing and by means of steam machinery located at different stations, which lines of pipe or tubing are connected and extend to different points in said "oil region" and to the railroad and to the city of Parkersburg; that said Church is altso the president of the defendant, the Bradish Oil Company, which is a corporation engaged in producing and trading in oil for profit; that the plaintiff is not informed, whether said well produces any oil or not, but avers, that the gas produced therefrom is used for fuel as a substitute for coal and other fuels and has a market value, and by direction of said Church the said gas is conducted through the lines of pipe of said Transportation Company to its pumping stations, some of which are beyond the boundaries of the leased premises, and is there used and consumed in large quantities by said company as fuel for generating the steam to operate its machinery; that by like direction and means the said gas is used for operating oil-wells of the defendant, The Bradish Oil Company; that the gas so used and consumed by the defendant, Church, and said companies, is worth to them in the aggregate five dollars per day, and that they have been using the same continuously since November 1, 1882, and are still using it; that the plaintiff has demanded pay from said defendants for said gas, but they refuse to pay tor the same; that neither the said Church nor any one for him has reported the production of any oil from said well nor paid any royalty for such production; that neither the said Church, nor any other person under him, nor either of the said companies, has any right or authority to use or appropriate said gas or make the same a source of profit to him or them, and that the actings and doings of him and them in respect to said gas are wholly unauthorized by the provisions of the lease aforesaid and in violation thereof, to the great injury and damage of the plaintiff. The prayer of the bill is, that the defendant, may answer as to the value to them of the gas used by them, respectively, and for what purposes; whether any oil is produced from said well with the gas and, if any, what quantity; that an account may be taken of the value of said gas and a decree entered for the same against the defendants liable therefor; that the defendants may be enjoined from conducting any gas from said well or from disposing of or using the same in any manner. &c.

The injunction was awarded as prayed for in the bill.

The defendants, M. C. C. Church and The West Virginia Transportation Company, filed their joint and several demurrer and answer to the bill. The demurrer was overruled by the Court, and the plaintiff replied generally to said answer. These defendants in their answer say, that in the fall of the year 1882 the said West Virginia Transportation Company, in its own name and for its own benefit, undertook to develop said leased premises; that at that time the said well was not producing oil sufficient to pay for working it, and said company then deepened said well for the purpose of producing oil, and that from said well and another well contiguous thereto oil was and ever since has been produced in small quantities; that said well, in addition to the oil obtained therefrom, produced a considerable quantity of natural inflammable gas, which was up to the time ot the granting of the injunction used by said company for the purposes and in the manner alleged in the bill. They further aver, that the presence and issuing ot gas is, to a greater or less extent, a natural and inevitable incident to the sinking of all oil-wells, and that this has been verified by an experience of nearly twenty years in the region where said gas-well is located; that the said gas 214.

has been obtained from said well, because said company has drilled and operated the same in pursuance of the terms of said lease, and that it could not possibly have done so without occasioning the flow of gas; that, the said gas being thus the natural incident of the production of oil from said well and inseparable therefrom, the same belongs to said company; that the grant of the right to mine for oil only, necessarily...