Watford Oil & Gas Co. v. Shipman

Mr. Justice Vickers

delivered the opinion of the court:

Appellant had no right to a compulsory partition either of the oil and gas, considered separately. from the land, or of the land itself. The lease upon which it predicates its rights is not a conveyance of the interest of one co-tenant in- the common property or any part thereof. A lease of land to enter and prospect for oil or gas is a grant of a privilege to enter and prospect, but does not give a title to the oil or. gas until such products are found. . In the eye of the law oil and natural gas are treated as minerals, but they possess certain peculiar attributes not common to- other minerals which have a fixed and permanent situs. Owing to their liability to escape, these minerals are not capable of distinct ownership in place. Oil and gas while in the earth, unlike solid minerals, cannot be the subject of a distinct ownership from the soil. A grant to the oil and gas passes nothing which can be the subject of an ejectment or other real action. It is a grant, not of the oil that is in the ground, but to such part thereof as the grantee may find. (Barringer & Adams on Mines and Mining, pp. 30, 31; Dark v. Johnston, 55 Pa. 164; Shepperd v. McCalmont Oil Co. 38 Hun, 37; Wood County Petroleum Co. v. West Virginia Transportation Co. 28 W. Va. 210; Hall v. Vernon, 47 id. 297.) The right to go upon the land and occupy it for the purpose of prospecting, if of unlimited duration, is a freehold interest; (Bruner v. Hicks, 230 Ill. 536,) but such interest, being vested for a specific purpose, becomes extinct when the purpose is accomplished or the work is abandoned. (1 Current Law, 900.)

Aside from the imperfection in the title of the appellant above ■ pointed out there is another reason why a court of equity will refuse appellant the relief sought. The. lease in question contains the following clause: “It is expressly agreed that upon the payment of one dollar by the parties of the second part, their successors or assigns, to the party of the first part, their heirs or assigns, they shall have the right to surrender this lease for cancellation, after which all payments and liabilities thereafter to accrue under and by virtue of its terms shall cease and determine and this lease absolutely become null and void.” Under this clause appellant may surrender the lease for cancellation at any time and thereby relieve itself from all future liability under it. The option of appellant to terminate the lease at any time upon payment of one dollar deprives appellant of the right to specific performance, directly or indirectly, until it has performed the contract or placed itself in such position that it may be compelled to perform the contract on its part. If the relief here sought should be granted, appellant, under the cancellation clause of the lease, may nullify the decree by exercising its option not to proceed further. A court of equity will not do a vain and useless thing by rendering a decree settling the rights of parties which one of them may set aside at his will. (Page on Contracts, sec. 1619; Marble Co. v. Ripley, 77 U. S. 339; Express Co. v. Railroad Co. 99 id. 191.) In the case last above cited the court, on page 200, said: “But we need not pursue the subject further, because there is one provision of the contract in this case which is fatal to the relief sought. A court of equity never interferes where the power of revocation exists. The contract stipulates that after the first year it shall cease upon payment of $20,000, and interest. This might be made immediately upon the rendition of the decree. The action of the court will thus become a nullity.” See, also, 3 Pomeroy’s Eq. Jur. sec. 1405, and cases there cited; Bauer v. Lumaghi Coal Co. 209 Ill. 316.

Cases of this character are distinguishable from a line of cases in this and other States which hold that an option contract for the sale of real estate is valid and may be specifically enforced after the party holding such option has, within the time specified, elected to purchase and pays or tenders the purchase price. Such payment or tender supplies the element of mutuality, and neither party can thereafter recede from the contract. Such contracts have frequently been upheld and enforced in this State. (Estes v. Furlong, 59 Ill. 298; Perkins v. Hadsell, 50 id. 216; Hayes v. O’Brien, 149 id. 403; Guyer v. Warren, 175 id. 328.) While the power of revocation reserved in this lease has the effect of depriving appellant of equitable remedies in the nature of a specific performance, still the contract is not void for want of mutuality. The reservation of the right to cancel is not an infirmity which renders the contract void ab initio, but it deprives the party for whose benefit it is made, of relief in equity in the nature of a specific performance.

We find no error in the decree dismissing this bill. It will therefore be affirmed.

Decree affirmed.