Stokely v. State Ex Rel. Knox ( 1928 )

I think the construction placed upon the powers of the trustees of the insane hospital is too narrow and restrictive, and that it would be better to hold that the board of trustees had the power to execute the contract here involved.

Section 5768, Hemingway's Code 1927 (section 3187, Code of 1906), provides that the state insane hospital heretofore established shall continue to exist as a body politic and corporate, with all the privileges conferred and duties enjoined on it by laws; and it may "receive and hold and use, as required by law, all property, real and personal, belonging or which may be given to it for the purposes of its establishment." Section 5771, Hemingway's Code 1927 (section 3190, Code of 1906), as amended by the Laws of 1908, chapter 183, creates a board of trustees and provides that the control and management of the insane hospital shall be vested in such board. Section 5773, Hemingway's Code 1927 (section 3192, Code of 1906), provides that the trustees shall have charge of the hospital, and shall manage and direct its affairs and make all proper by-laws and regulations for its control and government not contrary to law.

The word "use" in the first section above named is a word of comprehensive signification, and, in my opinion, warrants the contract here involved. This word is defined in 39 Cyc. 845, as follows:

"Usefulness, utility, advantage, productive of benefit; the act of employing anything or applying it to one's service, application, employment, conversion to some purpose; the act of being so employed or applied; application, employment, conversion to some purpose, the act of using, employment, as of means of material for a purpose; application to an end, particularly a good or useful end; a synonym of benefit."

In the note to this volume cases are cited furnishing examples of the meaning of the word "use," and at the top of note on page 846 it is said:

"It is the ancient definition for every form of beneficial or equitable ownership. There is no more all-embracing term for any estate which is less than legal" (citing Matter of Scharmann, 63 Misc. Rep. 640, 118 N.Y.S. 687). "In its general and popular acceptation, the term refers to a temporary occupancy of land, rather than to an estate in it, coupled with the power of alienation. Fay v. Fay, 1 Cush. (Mass.), 93, 104."

The word "use" also has been defined in 29 Am. and Eng. Encyc. of Law, p. 439, as follows:

"To use is to make use of, to convert to one's service; to avail one's self of; to employ; to put to a purpose, as to use a plow, to use a chair, to use a book, to use time, to use flour for food; to accustom to and habituate. One of common meanings of the noun ``use' is usefulness, utility, advantage, productive of benefit. In the notes will be found a number of phrases in which the word ``use' or some of its derivatives which have been constructed by the courts."

At the top of page 444 of this last-named book, under "Gifts, Bequests, and Conveyances of Use of Property," I find the following:

"As a general rule the use of a thing does not mean the thing itself, but means that the user is to enjoy, hold, occupy, or have in some manner the benefit thereof. If the thing to be used is in the form of real estate, the use thereof is its occupancy or cultivation, etc., or the rent which can be obtained for its use. If it is money or its equivalent, generally speaking, it is the interest which it will earn. A wider signification, however, is sometimes given to the word,"

— and this book then states the nature of such enjoyment of property by the tenant for life.

It must be remembered that the insane hospital owns land in fee simple, and the evident purpose of the legislature was to permit authority to use this land in any legitimate way for the benefit of the hospital, and the legislature evidently only meant to restrict the alienation of the corpus of the soil itself. The word "use" therefore should be given its most liberal signification to render the land of the highest practical utilization to the institution.

The contract itself provides every reasonable safeguard to protect the state or the institution in the carrying out of the contract, and the terms therein imposed, or contracted for by the parties, are as liberal to the institution as is customary in such leases, as will appear from a statement in one of the cases collected on this proposition. The majority opinion relies upon the case ofStephens County et al. v. Mid-Kansas Oil Gas Co., 113 Tex. 160,254 S.W. 290, 29 A.L.R. 566. This case seems to hold that oil lying beneath the surface is to be treated as minerals, such as coal, iron, and the like. There is an important difference between oil and gas lying under the soil and minerals of the nature of coal, iron, etc. The latter are still, immovable, and can be removed only by going into the earth upon some point of the land and removing it. It cannot be removed in any other way. There must be an invasion of the soil by the person taking it, in order to remove it. While as to oil and gas, it may be taken from the land by an adjoining landowner, who may bore for it on his own land and draw or pump it from the reservoir, and thus extract oil and gas not only that which lies under his own tract, but also that which lies under contiguous tracts.

Beginning on page 586 of 29 A.L.R., there is a case note by the editor in which are cited cases belonging to the majority rule upon the subject. However, there is a minority rule on page 589 in which are cited cases decided by the United States Supreme Court which hold differently, and which recognize a distinction between oil and gas, and other minerals such as coal, iron, etc.; and there are several cases which take the view that:

"Oil and gas are somewhat in the nature of animals feraenaturae or of waters percolating through the earth, and are of vagrant nature and liable to escape, and therefore that while in place they are not the subject of an absolute, but only of qualified, ownership until reduced to possession, and that there can be no transfer of title to them before they have been so reduced." Brown v. Spilman, 155 U.S. 665, 15 S. Ct. 245, 39 L. Ed. 304; Ohio Oil Co. v. Indiana, 177 U.S. 190, 20 S. Ct. 576, 44 L. Ed. 729, 20 Morr. Minn. Rep. 466; Walls v. MidlandCarbon Co., 254 U.S. 300; 41 S. Ct. 118, 65 L. Ed. 276; People's Gas Co. v. Tyner, 131 Ind. 277, 31 N.E. 59, 16 L.R.A. 443, 31 Am. St. Rep. 433, 17 Morr. Min. Rep. 481; Heller v. Dailey, 28 Ind. App. 555, 63 N.E. 490; Wagner v.Mallory, 169 N.Y. 501, 62 N.E. 584, 22 Morr. Min. Rep. 42;Shepherd v. McCalmont Oil Co., 38 Hun (N.Y.), 37; and other cases.

The reasoning of the Supreme Court of the United States upon this proposition in the several cases cited is very convincing, and seems to me to be, by far, the most reasonable view to take. I never feel lonesome, and seldom doubtful, when in company with the Supreme Court of the United States. Its Judges are usually of the most profound learning, and they are diligent in the examination and consideration of their cases. At page 247 of 15 S.Ct. of Brown v. Spilman (155 U.S. 669), the court said:

"The subject of the grant was not the land, certainly not the surface. All of that except the portions actually necessary for operating purposes and the easement of ingress and egress was expressly reserved to Taylor. The real subject of the grant was the gas and oil contained in or obtainable through the land, or rather the right to take possession of the gas and oil by mining and boring for the same. Petroleum gas and oil as substances of a peculiar character, and decisions in ordinary cases of mining, for coal and other minerals which have a fixed situs, cannot be applied to contracts concerning them without some qualifications. They belong to the owner of the land, and are part of it, so long as they are on it or in it or subject to his control; but when they escape and go into other land, or come under another's control, the title of the former owner is gone. If an adjoining owner drills his own land, and taps a deposit of oil and gas, extending under his neighbor's field, so that it comes into his well, it becomes his property. Brown v. Vandergrift, 80 Pa. 147; Westmoreland C. Nat. Gas Co.'s appeal (130 Pa. 235), 18 A. 724 (5 L.R.A. 731)."

In Ohio Oil Co. v. Indiana, 177 U.S. 190, 20 S. Ct. 576, 44 L. Ed. 729; 20 Morr. Min. Rep. 466, the court had occasion to consider the question as to the nature of the ownership of gas and oil beneath the soil in an attack upon the constitutionality of the statute enacted by the state of Indiana referred to in said case. It was there held to be unlawful to permit a flow of gas or oil from a well to escape into the open air, without being confined within the well or proper pipes, or other safe receptacle for more than two days after gas or oil shall have been struck. It was considered by the court in that case that if the oil and gas were the absolute property of the owner who had bored the well, and he was permitting them to escape, then it would be within the protection of the due process of law and equal protection clauses of the Fourteenth Amendment. At page 581 of 20 S.Ct. (177 U.S. 202), the court in this case said:

"The confusion of thought which permeates the entire argument is twofold: First, an entire misconception of the nature of the right of the surface owner to the gas and oil as they are contained in their natural reservoir, and this gives rise to a misconception as to the scope of the legislative authority to regulate the appropriation and use thereof. Second, a confounding, by treating as identical, things which are essentially separate; that is, the right of the owner of land to bore into the bosom of the earth, and thereby seek to reduce the gas and oil to possession, and his ownership after the result of the borings has reached fruition to the extent of oil and gas by himself actually extracted and appropriated. In other words, the fallacy arises from considering that the means which the owner of the land has a right to use to obtain a result is in legal effect the same as the result which may be reached. . . . Does the peculiar character of the substances, oil and gas, which are here involved, the manner in which they are held in their natural reservoirs, the method by which and the time when they may be reduced to actual possession or become the property of a particular person, cause them to be exceptions to the general principles applicable to other mineral deposits, and hence subject them to different rules? True it is that oil and gas, like other minerals, are situated beneath the surface of the earth, but except for this one point of similarity, in many other respects they greatly differ. They have no fixed situs under a particular portion of the earth's surface within the area where they obtain. They have the power, as it were, of self-transmission. No one owner of the surface of the earth, within the area beneath which the gas and oil move, can exercise his right to extract from the common reservoir, in which the supply is held, without, to an extent, diminishing the source of supply as to which all other owners of the surface must exercise their rights. The waste by the owner, caused by a reckless enjoyment of his right of striking the reservoir, at once, therefore, operates upon the other surface owners. Besides, whilst oil and gas are different in character, they are yet one, because they are unitedly held in the place of deposit. InBrown v. Spilman, 155 U.S. 665, 669, 670, 15 S. Ct. 245, 247, 39 L. Ed. 304, 305, these distinctive features of deposits of gas and oil were remarked upon."

In the light of the above cases, the court has further discussed the question, but I will not take up space to set the language out in this opinion.

It is manifest, however, that wise husbandry of the state's property would require those in charge to act promptly, and secure such oil as might be found, before others occupying adjoining lands could tap the reservoir and withdraw from the earth the entire deposit of oil or gas, leaving the state with nothing.

At the time the contract here involved was made, there was much activity in buying leases in this territory, and great hopes were indulged that some well might be dug that would produce a gusher. There is still, in parts of the state, experimental drilling for gas and oil, and great hopes are entertained that this will be successful and oil may be struck. Should deposits be found near the state's property, or property belonging to the different institutions of the state, where no specific provision has been made to authorize contracts like those here involved, it will be possible for adjoining owners to extract all the oil or gas from the reservoir before the state could act, as it would be necessary to assemble the legislature and get specific authority at each institution to make contracts or to develop lands themselves. The risks involved in experimental development are great, and it is not likely that the state will enter that field. The contract in the present case is highly beneficial to the state, and is as liberal as any of those in the various decisions which have set out the contracts involved in them. Where the state owns land in fee, and no other person's rights are involved, liberal construction should be placed upon the power of the managing officers of these institutions, to utilize the land for any particular advantage.

It seems to me that the principle involved in the sixteenth section cases ought to be applicable in the present case.

In section 211 of the state Constitution 1890, preserving to the people the sixteenth sections for school purposes, sale of the lands was expressly prohibited, and, of course, the legislature could take no action prohibited by this section, but it was held in Dantzler Lumber Co. v. State, 97 Miss. 355, 53 So. 1, that the word "land" did not embrace the timber growing thereon, although by statute, and construction of the word "land" by this court, growing timber was part of the realty. The word "land" was given a particularly restricted meaning in that case, as embracing only the soil itself. That decision has been followed in numerous other decisions, and is the settled law of this state. It has enabled the utilization of the state's great asset of wealth, growing timber, for the benefit of the schools of the state.

If we could uphold the contract, that might be the means of bringing to the state great wealth, and still do no great, material harm, as all the risk and expense incident to the boring for oil were contracted to be borne by the appellant. It is hoped that the legislature will enact laws permitting proper contracts to meet the situation.