Kelley v. Ohio Oil Co., 57 Ohio St. 317 (1897)
57 Ohio St. 317
US-DOC-21265280
locator
Case details
Bluebook Citation
Kelley v. Ohio Oil Co., 57 Ohio St. 317 (1897)
Full caption
Kelley v. The Ohio Oil Company.
Country
United States
Jurisdiction
Ohio (OH)
Decided
Dec. 14, 1897
Petroleum oil — Nature of — Realty in earth — Becomes personalty, when — Rights of adjoining land owners as to oil leaving one tract and entering another.
1. Petroleum oil is a mineral, and while it is in the earth, it forms a part of the realty ; and when it reaches a well and is produced on .the surface, it becomes personal property, and belongs to the owner of the well.
2. ' Whether such oil percolates through the rock, or exists in pools or deposits, it forms a part of that tract of real estate in which it tarries for the time being; and when it • leaves one tract and enters another, it becomes a part of the realty of the latter, and thereby the owner of the former, loses all right to the oil while it remains away from his land.'
3. The drilling of wells by each owner of adjoining oil lands, along and near the division line, so that each may obtain the amount of oil contained in his lands, is known as “ pro- ' tecting lines,” and such protection affords a certain and ample remedy to prevent one operator from obtaining more than his share of oil..
(Decided December 14, 1897.)
Error to the Circuit Court of Hancock county.
The plaintiff in error was plaintiff below. The cause came on for hearing in the circuit court on appeal, upon the following petition and supplemental petition:
The defendant is a corporation formed and organized under the laws of Ohio.
“One John F. Hastings, of Findlay, in said county, is owner in fee seized and possessed of one hundred and sixty-five acres of valuable mineral oil land, in Findlay, Ohio, and .more particularly designated as the west half of the northwest quarter of section No. 1, and the east half of p. 318the northeast quarter of section No. 2, in township one, north range, ten east, and that plaintiff has a contract and agreement with said Hastings whereby plaintiff has the right to operate said lands for oil, and take the oil from said land, yielding to said Hastings, a portion or royalty of the oil so produced, the balance to be retained by plaintiff as his own property, and in virtue of said contract, plaintiff is now at work on said land, has two wells completed and a rig- up and ready to begin the drilling of a third well thereon. That said Hastings’ land is joined on the east and west by lands now in the possession and control for oil purposes of the defendant, on which they now have producing oil wells; and the east eighty acres of said Hastings’ farm is joined on the .south by mineral oil lands owned in fee by the said defendant, and on which also the defendant has producing oil wells.
“That underlying the land of said Hastings, and the lands so adjoining the same on the south and west and east, as aforesaid, is a formation of porous sand or Trenton rock, so-called, which is permeated with valuable mineral oil; that the nature of said mineral oil deposit is such, that when in the process of operating, an oil well is drilled from the surface down into and through said oil-bearing rock, and the usual pumping appliances attached to and employed on said well to extract oil therein, the oil will be drawn to said opening from a long distance through said porous rock, and all the oil within a radius of from two hundred to two hundred and fifty feet surrounding such well, will be drawn to and extracted by means of such well, so that in order to drain and exhaust all the oil in the land it is only p. 319necessary to drill the wells from four to five hundred feet apart.
“The defendants, well knowing the premises and designing wilfully and unlawfully to extract the mineral oil from in and under the said Hastings’ land, by means of surface operations on the land so owned and controlled by them, in fraud and violation of the plaintiff; ’s right, and from motives of unmixed malice, have located a line of oil wells along the entire east line of said farm, and upon and along- the said south line of the east eighty acres of said farm, which wells are so located just twenty-five feet from the line of Hastings’ land, and just four hundred feet apart, all of which wells so located, the defendants threaten and intend to drill at once, with the design and to the unlawful intent and purpose of aforesaid.
“That in view of the well-known tendency of said wells to drain a large extent of territory immediately surrounding them, it is the custom and almost- universal practice of oil operators when operating adjoining lands, to locate their wells at least two hundred feet from the line of lands, in order that so far as reasonably practicable, each operator’s well shall draw its supply from his own land, and not unnecessarily disturb or detract from the oil mineral wealth of the adjoining lands.
“That the defendant’s holding on the east, consist of about one hundred and sixty acres in a body, and on the south, a very large tract, to-wit: several hundred acres, and there is in the defendants operating said land for oil, no sort of necessity or excuse for the defendants to locate their said wells so unusually near the Hastings line, as p. 320there are no wells at all on the Hastings’ east or south line, except the wells operated by the defendant, which are more than two hundred feet from the defendant’s line, and by plaintiff’s contract with Hastings, which is of record well known to the defendant, no well is to be drilled by the plaintiff within two hundred feet of the exterior line of the farm unless it becomes necessary in order to protect the line ; so that the only motive of the defendant in so locating its said wells, was to injure the plaintiff and to get the oil which would be available to him in his operation of said farm. •
‘ ‘If the defendants are permitted to extract the plaintiff’s oil in the manner as aforesaid, the plaintiff will suffer irreparable injury and will have no adequate legal remedy, for the reason that it will be impossible to determine the exact proportion of the product belonging to the plaintiff.
“Wherefore, the plaintiff prays that a temporary restraining order issue, enjoining the defendant from drilling and operating any oil well twenty-live feet, or at any point within two hundred feet,of the line of said Hastings’ farm, unless it should become necessary to approach nearer in order to protect the line, and that on the final hearing that said injunction be made perpetual.”
“And now comes the plaintiff by leave of this court, and for a supplemental petition and in addition to the allegations of the original petition, alleges that since the dissolution of the temporary injunction granted in this action, the defendants have proceeded and located and drilled, and are now operating for oil, or about to begin operating twelve oil wells, nine of which are at the points stated in the petition; and three of which are on p. 321the Reimund farm adjoining the Hastings farm on the west; all of which wells are so completed and operating by means of pumping appliances, and all which wells are so operating about twenty-five feet from the lines of said farm.. That all of said wells are oil producing wells of greater or less capacity ; and that by means thereof, the defendants are daily extracting large and valuable quantities of mineral oil, a large part of which mineral oil is so drawn and extracted from the deposits thereof in the land of said Hastings, and which oil the plaintiff has, by his contract with said Hastings, the right to take and use and enjoy.
“That said wells draw their supply so indiscriminately from the -mines and lands of said Hastings and of the. defendants, that it is impossible to distinguish that of the defendant from that of the plaintiff, but all of said oil is so being taken by the said defendant and converted to its own use.
“Wherefore, in addition to the prayer of the petition, the plaintiff prays that the defendant be required to account to the plaintiff for the oil so taken ; that the amount thereof be ascertained and that the plaintiff may have a decree in judgment against the defendant therefor and for all proper relief.”
The circuit court was of opinion that the petition and supplemental petition failed to state a cause of action against the Oil Company, and therefore refused to hear any evidence, and found from the pleadings in favor of the' defendant, to which plaintiff excepted.
George H. Phelps, for plaintiff in error.
Coal or mineral oil £ ‘is a part of corpus of the estate and is not mineral feres naturae.'1’’
Now it is the distinguishing characteristic of that which is ferae naturae, that it is not and cannot in its nature become the property of any owner until it is captured and reduced to actual possession.
It is manifestly wrong for the owner of adjoining land to secure the oil which is the property of his neighbor, and if he can accomplish such result by a well against the line of his neighbor, thereby divesting him. of his title, the greater is the necessity for equitable restraint against unnecessary operations which in law will effect that unallowed result. 1 Pom. Eq. Sec., 423.
That this right to lateral support is as sacred as any other right incident to the land and as much under the protection of the law is abundantly sustained by the authorities. Ballard’s Ohio Law of Real Prop., sec. 359; 41 Ohio St., 352; 34 Ohio St., 644.
The fact (if it is a fact) that such property is in its nature more susceptible to injury by the oil operations of the adjoining land, increases rather than diminishes the deg’ree of care and caution required of the adjoining proprietor in the use of his land for such special purpose. Horner v. Watson, 79 Pa. St., 242; 48 Ohio St., 60.
The right of man to take water is a usufructory as contradistinguished from a property right. 47 Ohio St., 336.
Petroleum or rock oil is a mineral substance in solution. 16 Am. and Eng. Ency. of Law, 221.
For all purposes of this action, the plaintiff and defendant must be regarded as the owners and p. 323operators of adjoining mines. Collins v. Gas Co., 131 Pa. St., 143; Coal Co. v. Tucker, 48 Ohio St., 58. Angel on Water Courses, 7 Ed., 189; 17 American and Eng. Ency. of Law, 178; Gill v. Weston, 110 Pa. St., 313.
When, as in this record, it is admitted that oil deposits underlie this entire land surface, that is the end of all merely legal theories based upon the supposed uncertainty of the result of a well drilled therefor. Frazier v. Brown, 12 Ohio St., 249.
It is elementary in the law, as in equity and right reason, that the owner of land shall so use his own as not unnecessa/rily to injure that of the adjoining owner. Tiffin v. McCormack, 34 Ohio St., 638; Burgner v. Humphrey, 41 Ohio St., 340; Ballard’s Ohio Real Prop., section 359 and note. Horner v. Watson, 79 Pa. St., 242.
Any incidental injury resulting to either party by the operations of the other would under the law be clamnum absque injxiria. Bassett v. Salisbury Mfg. Co., 82 Am. D., 179; cited and commented on, 27 A. & E. Enc. of L., 428 and note.
Fraud is ever assuming new forms, but happily equitable principles are so capable of varied application that our courts are able to furnish relief against cheats of the newest invention. Yeoman v. Lasley, 40 Ohio St., 200 ; Pomeroy’s Equity J., section 111.
Courts will take judicial notice of the effect of such wells. Wettengill v. Gromly, 160 Pa. St., 559; Conger v. Moore, 65 Am. Dec., 528; Ohio State Geological Rep., 1890, pages 67, 68 and 84; 12 Am. & Eng. Enc. of Law, 178, 195 and 196.
And that said wells are unnecessarily so located and drilled is equally obvious in this record. 110 p. 324Pa. St., 313; 17 Am. & Eng. Enc. of Law, 178 and note.
Even in ordinary mining- operations it lias been held to be and manifestly is the duty of a person working near the boundary lines of his mine to take every precaution to avoid encroachment upon adjoining mines, and that if he takes ore from an adjoining mine he will be liable for trespass and equity will protect such mining property by injunction. Williams v. Coal Co., 37 Ohio St., 583; High on Inj., sections 468, 472; 15 Am. & Eng. Enc. of Law, 591; 10 Am. & Eng. Enc. of Law, 881 and notes; 5 Am. & Eng. Enc. of Law, 70-75; Wood on Nuisances, 119; Shearman & Redfleld on Negligence, section 717.
There is also a remedy in equity for an accounting ; Pom. Eq. sections 111 and 112, Subs. 7 and 8.
That there is a plain distinction between the solid and fluid minerals as respects the line and right to mine near the boundary is apparent and will be seen in the case cited, supra. 160 Pa. St., 559; 9 C. C. R., 34 Bull, page 519.
The rig-ht of the plaintiff to take oil from the Hasting-s land is in law (at least) an incorporeal hereditament. 4 C. C. R., 215; 8 C. C. R., 445.
It is the ordinary case of a tortious confusion of goods and the defendant is bound to account for the entire product. 2 Johnson’s Chanc. Rep., star pp. 62 and 108; 50 Am. Dec., 627; 54 Am. Dec., 582 and 591; 2 Ohio Leg. News, 341.
John Poe and James A. Troup, for defendant in error.
The single question presented by the record in this case, plainly stated, is, will the court enjoin the drilling of an oil well or oil wells by the owner p. 325on his own land, at the suit of the owner of contiguous lands, on the ground alone that the former may secure through his well some oil which used to lie within the lands of the latter ?
This is the sole question, for if the Ohio Oil Company in this case has a right to drill on its own lands, and to receive the oil which finds its way to the foot of its well from whatever direction it may approach it, then it will make no difference for what purpose or with what intent the well is drilled.
It need hardly be said that by title deeds, lands are conveyed to the lines, and that these lines are imbedded in as many perpendicular planes, which planes are the lateral boundaries of the thing conveyed.
Since the value of property consists in its use, to deprive one of its use is to confiscate the property and take away its value. Section 19 of Art. 1, Constitution of Ohio.
Much is said about the nature of petroleum oil, and quite a good deal of labor expended in efforts to find out whether it is part of the real estate in place, or whether it is not like the turkey and the deer, wild by nature, and belong-s to him only who first reduces it to possession. In the first place, it may be observed that those things which are termed in the books feres natures are animate not inanimate; these move themselves and do not wait to be moved by attraction, gravitation, or by any other force outside of themselves. A lake may receive its waters by percolating, oozing or filtering through the ground, and be furnished an outlet bjr similar processes, so that these waters as well while they compose the lake, as before they entered the basin and after they leave it, are “on p. 326the move, ’ ’ and so this modern philosophy stumbles at the problem of distinguishing between the waters of that lake and the flock of wild ducks as they float upon its placid bosom. And this same philosophy reaches the conclusion that inasmuch as both are “wild by nature” that neither is the subject of ownership until the water has been put into barrels and the ducks into game bags; and that the water no more than the ducks, as they swim, are conveyed by a deed of the land.
We think the authorities support the view that percolating water, and by like reason percolating 011 is a part of the real estate. Roath v. Discoll, 20 Conn., 533. Water standing or percolating in the soil is part of it. Wheatley v. Baugh, 25 Pa. St., 528.
Where a subterranean flow of water has become so well defined as to constitute a regular and constant stream, the owner of the land above through which it flows, may not divert or destroy it to the injury of the person below on whose land it flows. Brown v. Vandergrift, 80 Pa. St., 147; Brown v. Spillman, 152 U. S., 665; Frazier v. Brown, 12 Ohio St., 294; R. R. Co. v. Peterson, 14 Ind. Observe: The point is attempted to be made by plaintiff’s counsel that the lateral support is removed from the plaintiff’s oil, so that it sort of caves into the land of defendant and there is taken and used.
There can be no substantial claim based upon such ground:
1. Because the walls of the well do not cave, but there remains the 25 feet of solid rock between the well and plaintiff’s line, and the excavation is not sufficient to cause or permit a cave or the giving way of lateral support.
2. In the eases in which an action is maintainable for the removal of lateral support, reference is had to lateral support in which the law recognizes the correlative rights of adjacent owners, but never has an action been sustained for the removal of percolating fluids in which the law recognizes no correlative rights in the owners. If the law will not forbid its removal neither will the law, or equity, by mandatory injunction,, compel it to be left and not disturbed.
3. Percolating oil cannot in the nature of things form such lateral support as is referred to in the line of cases mentioned; being itself ‘ ‘on the move,” the idea of its forming a permanent lateral support cannot be entertained for a moment.
Burket, C. J. The question is not as to the motive, fraud or malice which may have induced the oil company to drill the wells sought to be én- ' joined. The only question of practical importance is, had the oil company the legal right to drill the wells ?
When a person has the legal right to do a certain' act, the motive with which it is done is immaterial.
The right to acquire, enjoy and own property, carries with it the right to use it as the owner pleases, so long as such use does not interfere with the legal rights of others.
To drill an oil well near the line of one’s land, can not interfere with the legal rights of the owner of the adjoining lands, so long as all operations are confined to the lands upon which the well is drilled. Whatever gets into the well, belongs to the owner of the well, no matter where it came from. In such cases the well and its contents p. 328belong to the owner or lessee of the land, and no one can tell to a certainty from whence the oil, gas or water which enters the well came, and no legal right as to the same can be established or enforced by an adjoining- land owner.
The right to drill and produce oil on .one’s own land is absolute and can not be supervised or controlled by a court, or an adjoining land owner. So long as the operations are legal, their reasonableness can not be drawn in question.
As was pointed out in Letts v. Kessler, 54 Ohio St., 73, it is intolerable that the owner of real property, before making improvements on his own lands, should be compelled to submit to what his neighbor, or court of equity might regard as a reasonable use of his property.
Petroleum oil is a mineral, and while in the earth it is part of the realty, and should it move from place to place by percolation or otherwise, it forms part of that tract of land in which it tarries for the time being, and if it moves to the next adjoining tract, it becomes part and parcel of that tract; and it forms part of some tract, until it reaches a well and is raised to the surface, and then for the first time it becomes the subject of distinct ownership separate from the realty, and becomes personal property, the property of the person into whose well it came. And this is so whether the oil moves, percolates, or exists in pools or deposits. In either event, it is property of, and belongs to, the person who reaches it by means of a well, and severs it from the realty and converts it into personalty.
While it is generally supposed that oil is drained into wells for a distance of several hundred feet, the is matter somewhat uncertain, and no right of p. 329sufficient weight can be founded upon such uncertain supposition, to overcome the well-known right which every man has to use his property as he pleases, so long he does not interfere with the legal rights of others.
Protection of lines of adjoining lands by the drilling of wells on both sides of such lines, affords an ample and sufficient remedy for the supposed grievances complained of in the petition and supplemental petition, without resort to either an injunction or an accounting.
The case of Coal Company v. Tucker, 48 Ohio St., 41, and Collins v. Chartiers Valley Gas Company, 131 Pa. St., 143, and other like cases in which some harmful substance was sent, conveyed or caused to go from the premises .of one to the premises of another, have no application here, because in this case, nothing reached the plaintiff’s lands from the premises of the defendant, and the only complaint is, that the oil company soused its own premises as to secure and appropriate to its own use, that which came into its lands by percolation, or by flowing through, unknown natural underground channels. This it had a right to do. While the drilled oil well is artificial, the pores and channels through which the oil reached the bottom of the well, are natural.
Judgment affirmed.