Guffey v. Stroud

SPEER, J.

J. R. Stroud owned a valid gas lease on a certain 100-acre tract of land in Limestone county known as tbe Welch tract. Ira L. Guffey and De Armand Bros, afterward acquired a valid oil lease on tbe same land. Guffey and bis' associates drilled a well on tbe land, wbicb well did not produce oil but did produce gas in large quantities. Stroud, claiming that tbe defendants were using and wasting gas from the well, filed suit for an injunction and in tbe alternative for a receiver to conserve tbe gas produced. Tbe defendants answered that tbe plaintiff’s lease was void and that be should be enjoined from further interfering with them in tbe control of their well and in tbe alternative for an equitable adjustment of tbe rights of tbe parties and specially that they be compensated for drilling tbe well and developing tbe gas under principles of equity. Tbe trial court found that tbe defendants bad expended in drilling tbe well tbe sum of $23,134.50 and that they were equitably entitled to -be reimbursed to tbe extent of one-half of that sum, for wbicb be gave judgment after allowing a credit for $420, the value of gas used by them from tbe well. Upon appeal by plaintiff tbe Court of Civil sAppealg reversed tbe judgment and remanded tbe cause. 3 S.W.(2d) 592.

Tbe opinion by Chief Justice Gallagher for tbe Court of Civil Appeals is, we think, an admirable disposition of tbe ease. Little can be added to the points discussed by him. Tbe gist of tbe opinion is embodied in tbe following excerpt: .“Their first proposition is, in substance, that their situation is analogous to tbe situation of a joint owner of land who, without tbe consent or co-operation of another joint owner, discovers oil on such land and produces and sells tbe same. Their second proposition is, in substance, that their situation is analogous to tbe situation of one who in good faith discovers, produces, and sells oil from land wbicb be believed at tbe time to be bis own, but which in fact belonged to another, when called to account to tbe owner for tbe oil so produced and sold. Tbe third proposition is, in substance, that since appellant, by tbe filing of this suit invoked tbe aid of a court of equity to restrain them from using or wasting said gas, be is in turn required ‘to do equity’ by allowing them to be fully compensated for all sums expended by drilling and equipping said well out of tbe sale of gas produced thereby.”

These respective contentions were overruled, and we think justly so.

Undoubtedly Guffey and bis associates bad tbe right to drill tbe land in their quest for oil. Tbe right to take tbe oil carried with it by implication tbe right to tap tbe gas pockets and to bring to tbe surface so much of tbe gas as was necessary in tbe proper drilling for oil. Tbe grant of tbe oil carried with it a grant of tbe way, surface, soil, water, gas, and tbe like essential to tbe enjoyment of tbe actual grant of tbe oil. It cannot be said that all use of, or interference with, tbe gas in place was wrongful as against defendant in error. Tbe rule in Sbylock’s case is not controlling. Portia’s judgment and tbe playwright’s English have given us a beautiful story, but its law is vicious. Tbe bond for a pound of flesh, if valid, did carry with it by necessary implication of law as much Christian blood as was necessary to be shed in tbe operation. But tbe well having been a failure as an oil well, plaintiffs in error have no right to use it as a means, or permit it as an occasion, for tbe taking of defendant in error’s gas. Defendant in error, never having contracted for tbe drilling of tbe well and indeed never having tbe power or right to prevent it, cannot be held liable for its cost upon either tbe principle of implied contract or estoppel. Tbe only possible theory upon wbicb be could be held for such expense is that of the equity wbicb would arise from appropriating tbe services and expenditures of plaintiffs in error in mining bis gas. Evidently it was to review this feature of tbe case tbe writ of error was granted.

Defendant in error has never,' by any overt act, accepted tbe well or in any wise appropriated it to bis own use so as to imply a promise to pay for it or to obligate himself upon any principle of equity to do so unless tbe suit filed in this case is of such a nature as to have that effect. His petition, after setting forth tbe facts hereinbefore shown, alleges that be is tbe sole owner of all tbe gas in and under tbe land, and that the defendants were taking tbe gas therefrom in violation of bis rights, and that be is entitled to a writ of injunction restraining them “from entering upon said land and from taking therefrom tbe gas in and under same and from interfering in any way with tbe gas in and under said land, and that upon final trial said injunction be made'permanent.” In tbe alternative he prays for the appointment of a receiver during tbe penden-cy of this cause “to take charge of tbe land and gas and all equipment connected therewith and for general and special relief in law and equity.” It will be observed that tbe only final judgment sought in tbe case was one of injunction for tbe protection of tbe exclusive right of tbe plaintiff to take or use tbe gas, tbe prayer for a receiver being in tbe alternative only in tbe event tbe temporary restraining order was denied. Under no construction can the suit be interpreted as an appropriation of the gas well or as an expression of willingness to accept it or use it. Upon the plainest principles of justice, if defendant in error should appropriate the labor and expenditure of plaintiffs in error in thus developing the gas, he would be bound both in law and equity to pay them the reasonable value of their services and improvements, and that, too, we think, unconditionally and not necessarily or at all, to be contingent upon future production. Bui in seeking the relief he has sought in this case, he is clearly within his legal and equitable rights. In asking that plaintiffs in error be enjoined from interfering with gas that properly belongs exclusively to him, he is asking no more than his plain and just legal rights. He is seeking no advantage or profit, or affirmative relief, and therefore cannot be said to come into court with unclean hands.

The plaintiff below very carefully limited his prayer for the appointment of a receiver to the alternative that the court should refuse his prayer for a writ of injunction. It is well settled that this method of seeking relief is allowable. It is not an election to appropriate the defendant’s service and material upon equitable principles, but is an express election enjoining him from appropriating or wasting plaintiff’s gas—a thing he has a clear right to do. To compel en equitable settlement between the parties would be to elect for the plaintiff, where he has, and has exercised, the right to elect for himself. For the principles of equity to apply the plaintiff must in some way have elected to appropriate the defendant’s well. This he has not done.

Moreover, the court did not, at any time, grant the plaintiff’s prayer for the appointment of a receiver to any extent. On the contrary, the receiver was appointed upon the petition of the. defendants, subsequently presented, and upon their pleadings expressly denying the plaintiff’s right to the gas; the contention being that his gas lease was void. So that the operation of the well by the receiver cannot, in any sense, be said to be the assertion of a claim to its use by defendant in error, but rather to the claim of plaintiffs in error to the exclusive right to the gas produced therein. If upon final termination of the receivership defendant in error receives the production of the well and to this extent the benefit of plaintiffs in error’s labor and materials, it is so because of no voluntary act on his part seeking to appropriate the same, but is the result of plaintiffs in error’s wrongful insistence that they owned the well and were entitled to appropriate the gas produced therefrom. This is not such conduct on the part of defendant in error as would in equity raise any just claim on the part of defendants' in error to compensation for the well.

It is the plaintiffs in error’s right upon abandoning their drilling for oil to draw their casing and remove their equipment from the ground and it would be their duty to so plug the well as to prevent the escape and waste of defendant in error’s gas and otherwise remove the danger of the hole becoming a menace to the owner of the fee. What would be the subsequent rights of the defendant in error to open the well and take the gas, or the right of plaintiffs in error to so plug the well as permanently to destroy it, are questions not before us for decision.

We recommend that the judgment of the Oourt of Civil Appeals be affirmed.

CUR)ETON, C. J.

The opinion of the Commission of Appeals is adopted and the judgment of the Court of Civil Appeals affirmed.