Shepherd v. McCalmont Oil Co.

This is an action brought to obtain a construction of an instrument conveying the right to enter upon land and bore for oil thereon; to establish the rights of the plaintiff in and under such instrument, and to forever restrain and preclude the defendants from operating on the said land or using the same for oil purposes. or preventing the plaintiff from using the same for such purposes.

On the 25th of January, 1865, one Hollis P. Newton, being then the owner in fee of a tract of land in Allegany county, as party of the first part, and one George W. Westbrook, as party of the second part, made and entered into a contract, sealed, acknowledged and recorded, in which the said party of the first part, for and in consideration of the covenants and agreements thereinafter contained on the part of the said party of the second part, and of one dollar in hand paid to the said party of the first part, granted and conveyed to the said party of the second part, his heirs, executors,, administrators and assigns, the exclusive right of entering in and. upon any part of said lands, and the right of erecting buildings, structures, engines and fixtures upon the same, and the right of way to and from the same for the purpose of searching for minerals; and to mine, bore or excavate for carbon, or rock, or petroleum oil, or any other valuable volatile or mineral substance, and to gather and preserve the same, and to carry on such mining, boring and excavating to any extent which he might deem advisable (but not to hold possession of any part of said land for any other purpose-*39whatever). The said instrument further provided that “in consideration of the above agreement from the party of the first part, the party of the second part agrees to render and deliver to the party of the first part the one-tenth part of all the oil or other valuable volatile or mineral substance pumped and gathered by them on said premises, in its crude state, to be delivered at the wells. The party of the second part further agrees to commence boring or excavating for oil or other valuable substances, within one year or as early as practicable thereafter as they may deem expedient, or forfeit all rights under and by virtue of this agreement. The said party of the first part, is to freely use and employ the said premises for the purpose of tillage, except that part which shall be actually necessary for said mining purposes and business aforesaid.” On 16th September, 1865, said Westbrook duly assigned the said contract to the plaintiff herein. On 27th February, 1867, said Newton, by warranty deed, conveyed the said land mentioned in said contract to Milton Reed and John 0. Reed. Said deed contained no reservation of or reference to said contract or to any rights of said Westbrook or the plaintiff, his assignee, thereunder, but was an absolute conveyance of the fee of the whole of said premises. On 11th June, 1881, said Reed conveyed the said premises to one Miner and others, and on 18th October, 1881, said Miner and others contracted to convey the same to the corporation defendant herein, which thereupon entered upon the land and has since been and now is in possession thereof. Neither said Westbrook nor the plaintiff herein ever entered upon the said premises or took any steps to exercise the rights secured by said contract or made any claim of right thereunder until after said conveyance from Reed to Miner, and in September, 1881, when plaintiff caused a load of lumber to be drawn on the ground about the time the defendant took possession. The defendant removed the lumber from the land and commenced to develop the property. This suit was commenced December 1, 1881, and was the first and only act on the part of the plaintiff or his assignor, Westbrook, except as aforesaid, indicating that he or they made any claim to the possession of said premises or that he or they intended ever to exercise the rights mentioned in said Newton contract. Said Newton, the original owner of the land, and his Said grantees and the persons claiming uuder and through him, including the defendant, *40remained in the actual and continual possession and occupancy oi the said premises, at all times subsequent to the date of said contract from Newton to Westbrook. Upon these facts- the court below found for the defendant, dismissing the complaint on the merits; and this appeal is from tñe judgment entered accordingly.

It is contended on behalf of the appellant that the contract in question is, in effect, a deed of all the oil underlying the land mentioned ; that the oil is a corporeal hereditament, and that the title thereto in fee passed to bim; that, therefore, no forfeiture can be worked by the act of the grantor or by abandonment or non-user on the part of the grantee; that plaintiff's estate under the instrument, his title to the oil and his right to mine for and appropriate it, can only be divested under some provision of the instrument itself; and that the forfeiture clause, under which operations were to be commenced “ within one year or as soon thereafter as practicable,” is a condition subsequent and could still be performed by Westbrook or his assignees, and that there had been no breach of the condition.

We are of the opinion, however, that the instrument in question amounts only to a license to Westbrook and his assignees to enter upon the land for the purposes of oil operations and to obtain the oil as taken therefrom by their operations and during their occupancy. We do not understand that there can be any property in rock or mineral oil, or that title thereto can be divested or acquired until it has been taken from the earth. (Funk v. Haldeman, 53 Penn. St., 229; Dark et al. v. Johnston et al., 55 id., 164.)

The remainder of the plaintiff’s argument in regard to the rights created by the instrument in suit, rests upon his unfounded premise that that instrument is a grant of the oil underlying the land as an-independent corporeal hereditament. This, as well as his contention in reference to the construction of the forfeiture clause, is answered by the opinion of Mr. Justice Haight, delivered at Special Term, in which we concur. The decision referred to in that opinion, to the effect that the owner of the fee being in possession is not required to enter upon himself in order to work a forfeiture of the rights of the grantee under such an instrument as that under consideration, is found in the case of Allegany Oil Company v. Bradford Oil Company (21 Hun, 26; affirmed, 86 N. Y., 638). The same case is authority for the position that the *41execution of tbe deed by Newton to Need was a sufficient declaration of bis intention to enforce the forfeiture, if any overt act or notice was required.

We think the judgment should be affirmed, with costs.

Judgment affirmed, with costs.