T. W. Phillips Gas & Oil Co. v. Manor Gas Coal Co.
T. W. Phillips Gas & Oil Co. v. Manor Gas Coal Co.
Opinion of the Court
Opinion by
The appellee is the owner of the Pittsburgh seam of coal underlying the surface of a piece of land for which the appellant has a lease for oil and gas. Appellee’s title was acquired prior to the appellant’s, and the appellee, under its deed, had the right to mine out all the coal conveyed without liability for damage to the surface. The bill in this case was filed to prevent interference with the drilling for oil and gas, to define the fair terms upon which the drilling might be done to pre
No notice, except such notice as might come from the occupation of a piece of land, was given to the appellee of the intention to drill for oil and gas by the appellant. On October 18th, Mr. Cameron, general superintendent of the Westmoreland Coal Company, requested the representative of the appellant to submit a blue print giving the location of the proposed well to be drilled on the Brinker tract, and to state by letter how it was to be drilled. This request was immediately complied with by a letter fully explaining the proposed drilling, but the Westmoreland Coal Company was not the owner of this tract of land and the appellant could have ascertained who owned the land. Believing that the Westmoreland Coal Company owned the land, the appellant, without any further effort to ascertain ownership, proceeded to complete the erection of the derrick it had started. This was accomplished about December 23d. Three days before that date a notice was received from the appellee ordering the drilling to cease at the place then being drilled as the well would pass through the active workings of its mines, and if the drilling was persisted in it would be prevented. Appellant promptly
The right to drill for oil or gas is a property right not dependent on the will or caprice of the owner of the in
, The court correctly stated the law that the “lessees have the right to bore through the coal or the mined-out portions of the coal in order to reach the oil or gas below the coal strata, but that in doing the drilling for this purpose, the rights of the coal owner must be properly observed, and the golden rule of business kept constantly in mind.” The location of the well should have been the subject of an amicable agreement, if possible, and when the parties failed to agree, it then became a matter within the sound discretion of the chancellor, to be designated with due regard to the rights of both parties. While the Supreme Court in the case of Chartiers Block Coal Co. v. Mellon, supra, was not willing to hold that the location of the well could be determined by a chancellor within the equitable powers of the court, stating as their belief it was for the legislature to enact some method whereby a site might be selected, yet for twenty-five years the legislature has failed to act and during that time the lower courts have, Avithin their equitable poAVers, made the selection. The appellant does not object to this, and as it has a legal right to drill through the coal, we see no reason why a court of equity should not enforce it. The procedure adopted by the
While the appellant did not make a proper effort to agree with the appellee on the location, some effort was máde and it should not be forced to institute a new action when all lights may be adjudicated in the present proceeding. The appellant does not lose such right to relief because it did not select one of the several blocks of unmined coal offered by the appellee. That offer should be taken in connection with the testimony as to the value placed on the coal; it was indefinite and required the action of the court before it could have been accepted.
The decree of the court below is modified in that the bill is reinstated and leave is given to the appellant, within sixty days, to endeavor to agree with the appellee upon the fair terms and the place where the drilling might be done, and if the parties are unable to agree, the appellant may present the matter to the court below, who shall, from this testimony, determine the location and the fair terms upon which the well might be drilled. In the event of the failure of the appellant to make any effort to agree with the appellee as indicated herein, then the bill to be dismissed, and the decree of the court below as thus modified is affirmed at the cost of the appellant.
Reference
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- Mines and mining — Oil and gas lease — Drilling well through coal — Relative rights of owners — Equity. Where coal under land is sold with right to mine out all the coal without liability for damages to the surface, and the owner of the surface subsequently executes an oil and gas lease to another person, the lessee has a right to drill a well through the coal to reach the oil and gas. It is his duty, however, to make a proper effort to agree with the owner of the coal as to the site of the proposed well. If he makes such an effort, without success, he may file a bill in equity, and the court may then in the exercise of a sound discretion, determine the location and the fair terms upon which the well may be drilled. If, in such a case, a bill has been filed, and it appears that the owner of the coal, through all his dealings with the owner of the lease had stood upon his supposed right of preventing any drilling whatever, and the owner of the lease has made some, but not an adequate effort to reach an agreement, and the court below dismisses the bill, the appellate court will direct that the bill be reinstated, with directions that the plaintiff shall make an effort to reach an agreement upon fair terms within a time staled but that if he does not succeed, the court shall from the testimony already taken determine where the well may be located, and the terms upon which it may be drilled.