years for the purpose of mining; he has an absolute right of possession of all the surface necessary, and no one else can rightfully take out oil during the term, save under him. The whole of the oil, or only a part, may be taken under the lease, but whatever shall be taken is of the substance of the realty. He is not an absolute owner of the whole of the oil, as he would be were all the oil in place conveyed to him in fee."

Chamberlain v. Dow, 16 W. N. C. 532 (1884). A lease for the sole and only purpose of mining and excavating for petroleum and carbon oil, minerals and gas, to continue so long as oil shall be found in paying quantities, not exceeding a term of ninety-nine years, is a chattel real, and as such a partnership asset. Brown v. Beecher, 120, 590 (1888). Lease of land for fifteen years, with the sole and exclusive right and privilege during said period of digging and boring for oil and other mineral, and gathering and collecting the same from the land.

"The contract of February 3, 1882, between Cornen and Marsh is not a mere license, as in Funk v. Haldeman, 53 Pa. 229, for in that case the words of the grant amounted to neither a lease nor a sale of the land, nor of any of the minerals in the land. Funk's right was, therefore, declared to be a license to work the land for minerals, a license coupled with an interest which the licensor could not revoke. Nor does the contract of February 3, 1882, import a sale of all the oil, gas, and other minerals in the land absolutely; the cases of Caldwell v. Fulton, 31 Pa. 476; Sanderson v. City of Scranton, 105 Pa. 469, and others involving the same principle, do not, therefore, have any application.

"The contract referred to was a lease of the lands for a specified term, and for a particular purpose, at a fixed rent or royalty reserved out of the production. As to the legal force and effect of this writing there can, we think, be no doubt: it conveyed an interest in the land; in this respect it is distinguished from a license."

"But although the writing of February 3, 1882, is a lease, it conveyed to Marsh an interest in the land, a chattel interest, however;

the lease was a chattel real, but none the less a chattel."

Barnhart v. Lockwood, 152, 82 (1892). A lease by which the first party grants, bargains, demises, leases, and lets to the second party for eighteen years, described land, and gives and grants "the full, free, and exclusive possession of said piece of land during the term aforesaid, to bore, explore, and dig for oil," etc., in consideration of which the second party agrees to operate for oil and pay one-eighth of the oil obtained, is not a grant of property in the oil, but merely a grant of possession for the purpose of searching for and procuring oil.1

Wettengel v. Gormley, 160, 559 (1894). G., who owned three contiguous farms, demised the entire tract to T. for fifteen years, "for the purpose and with the exclusive right of drilling and operating for petroleum, oil, or gas," for which T. was to pay a royalty of one-eighth of the product. G. then died, by his will devising one of the farms to each of his three children. T. had drilled all of his wells on one

1 See also Venture Oil Co. v. Fretts, 152 Pa. 451; Plummer v. Hillside C. & I. Co., 160 Pa. 483, pp. 173, 174, below.

farm, and all of the oil produced was taken from these wells. It was held that each of the three children was entitled to such part of the royalties as the proportion which the acreage of his farm bore to the entire tract.

For the reason that an oil well may drain oil from other land than that into which it is sunk, "an oil lease partakes of the character of a lease for general tillage, rather than that of a lease for mining or quarrying the solid minerals. In the case of a coal lease, for example, the exact location, with reference to lines on the surface, of every pound of coal taken may be easily determined. The stratum of coal is as fixed and permanent in its character as are the strata of superincumbent rocks and earth. Its ownership as between several devisees, or heirs at law after partition made, is as easily determined as that of the surface. The removal of the coal from one purpart does not diminish or disturb that which underlies another. The lines that divide the surface divide, with absolute fairness to all concerned, the sub-surface, and secure to the several owners, with certainty, the mineral that belongs to each. The rules applicable to coal leases, or leases of land containing any other solid mineral, are, therefore, not always capable of application to leases for the production of oil or gas, because of the difference between the solid and the fluid minerals, and because of the different conditions under which they are found and brought to the surface.

"There is in this State no precedent that we are constrained to follow, and we cannot find that the question has been decided in any other of the oil-producing States."

Gale v. Petroleum Co., 6, 200 (1873). This was West Virginia. a lease of the land for one-fourth of the oil produced. The ordinary law of landlord and tenant was applied.

B. and C. Incorporeal Rights and Licenses relating to the Extraction of Oil and Gas.

Grants and leases of privileges and rights to bore for oil, and take the same from lands, like similar grants of mining privileges, confer incorporeal hereditaments or licenses, as the case may be. So also a grant or reservation of oil or gas in certain land, passes an incorporeal right only. This arises, as has been above explained, from the nature of oil and gas, which is such that a corporeal interest in them in place cannot be created.

The distinctions between incorporeal hereditaments and licenses are the same here as explained under those titles in Divisions III. and IV. of this chapter. But there is perhaps one important element wherein an incorporeal right to take oil or gas differs from an incorporeal right to take an ordinary solid mineral. The test of the latter is, that it is not exclusive of the right of the grantor. Incorporeal rights to the fugitive minerals, on the contrary, are, from the nature of these minerals, necessarily so.

But while the right to take the minerals is exclusive, the right to possess the land is not so, and this is the ground of distinction from that class of cases collected in the preceding section. A lease, therefore, of described land, with the right of boring for oil or gas, if it restrict the lessee's possession to these purposes, creates an incorporeal right, and does not pass a corporeal interest in the land.

The exclusion of others from boring for oil or gas may be extended by the terms of the lease to other land than that upon which the right to bore is given.1

Brown v. Spilman, 155, 665 (1895). T. leased to United States. B. "for the sole and only purpose of boring, mining, and excavating for petroleum or carbon oil and gas, and piping of oil and gas, over a tract of forty acres, "excepting reserved therefrom ten acres," for two years, or as long as oil or gas shall be found in paying quantities. The consideration was one-eighth of the oil produced, and two hundred dollars a year for each gas well. It was further provided that the lessor mightfully use and enjoy the said premises for the purpose of tillage, except such parts as may be necessary for said mining purposes, and a right of way to and from the place or places of said mining or excavating."

Shiras, J.: "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." The lease gave all the oil and gas under the entire forty


The effect of the so-called exception was to forbid the drilling of wells upon the ten acres. The lease covered the entire tract for gas and oil purposes, but restricted the operations to thirty acres. Westmoreland Co. v. De Witt, 130 Pa. 235, followed.

Shepherd v. McCalmont Oil Co., 38 Hun, 37 (1885). New York. N., the owner of land, entered into an agreement with W., by which he conveyed to him, his heirs, executors, administrators, and assigns, the exclusive right of entering upon any part of the said land, of erecting buildings, engines, fixtures thereon; the right of way to and from the same, for the purpose of searching for minerals; and to mine, bore, or excavate for oil, or any other valuable volatile or mineral substance; and to carry on such mining, etc., to any extent he might deem advisable, but not to hold possession of any part of the land for any other purpose. The consideration was one-tenth the product, and W. covenanted to commence boring or excavating, etc., within one year, or as early as practicable thereafter, as he might deem expedient, or forfeit all right under and by virtue of the agreement. N. reserved the right to till the land.

1 See below, p. 122, "Premises."

This was a license to W. and his assigns. It did not convey to him a corporeal hereditament. "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."


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Funk v. Haldeman, 53, 229 (1866). A conveyance Pennsylvania. of "the free and uninterrupted use, privilege, and liberty to go on to any part" of certain land, "for the purpose of prospecting, digging, excavating, and boring and erecting machinery necessary for prospecting, experimenting, or searching to find oil," etc., with the exclusive use of one acre about each well, and rights of way for himself, hands, and teams, tenants and undertenants, occupiers or possessors of said springs, mines, ores, or coal beds, in common with" the grantor, for which the consideration was $200, and in case of success, one-third of the product; in case of failure, the premises to revert to the grantor, passes not the minerals, etc., not an estate therein or in the land, but an incorporeal hereditament, a profit à prendre, a license coupled with an interest to work the land for minerals.

"But though we hold the papers in this instance to constitute a license and not a lease, it is a license coupled with an interest; not a mere permission conferred, revocable at the pleasure of the licensor, but a grant of an incorporeal hereditament, which is an estate in the grantee, and may be assigned to a third party. Even a parol license, without consideration, on the faith of which the grantee expends money, cannot be revoked at the pleasure of the grantor, but will be enforced in equity. LeFevre v. LeFevre, 4 S. & R. 241; Rerick v. Kern, 14 id. 271; and see Wood v. Leadbitter, 13 M. & W. 840, and cases in note.

"Though this proposition is doubted, perhaps denied, in some of the States around us, it is not to be doubted that where large expenditures have been made under a written license, rights are acquired which will be upheld both at law and in equity."

This incorporeal interest, while entire and indivisible at law, may be made divisible by the terms of the grant.

By the terms of the original grant the grantee's interest was to be enjoyed in common with the grantor, but when the latter, by a subsequent deed confirming the grantee's interest, arranges with him for a full development of the oil in the land, reserves to himself parts of the land in which to mine for oil in his own way, licenses the grantee to enter upon the unreserved parts to experiment for oil, to subdivide the premises into suitable lots for this purpose, and to assign and transfer them in whole or in severalty according to his pleasure, and obliges him to erect machinery and to diligently and energetically use all reasonable means to obtain oil, and on the faith of an exclusive interest, which the conduct of the grantors justify his holding, the grantee makes large expenditures, his interest within the unreserved portion of the land is exclusive, and the grantors can exercise no mining rights within those portions.

Dark v. Johnston, 55, 164 (1867). The owner of a farm and an island granted to another the right to search for oil on the island, and agreed, in case he was successful, to sell him the island for a certain amount. He further granted him the exclusive right to sink wells

on the farm, at a certain rent for each well, with a provision for the removal of machinery in case of failure.

This was a license personal in the licensee, which could not be revoked after the expenditure of money by him, but which he could not assign. Oil, like water, is not the subject of property, except in actual occupancy, and a grant of it passes nothing for which ejectment will lie.

Rynd v. Rynd Farm Oil Co., 63, 397 (1869). R. granted to W. the exclusive right to bore for oil on his farm, R. to have one-fourth of the product, and in case, after reasonable experiment, W. should be satisfied that oil could not be found in profitable quantities, the lease to determine and possession to revert to R.; should oil be found in profitable quantities, the lease to be perpetual; W. not to interfere with R.'s farming.

On part of the land boring had been profitable; on the rest, operations had been abandoned. R., alleging that they had not been successful, brought ejectment for that part.

Held, ejectment would not lie to test R.'s right to bore for cil; but it would if W. had occupied the land for other purposes or to a greater extent than allowed by the contract, the license having been acted upon as irrevocable.


Union Petroleum Co. v. Eliven Petroleum Co., 72, 173 (1872). A lease of the exclusive right and privilege of boring for oil, etc., upon the farm upon which the first party now resides," with rights of access and building; said boring to be done so as to do the least possible injury to the farm, lessee to pay $150 and one-third the product; holes to be such as to satisfy the parties, and lease to continue until annulled by mutual agreement. This was an incorporeal hereditament. The remedy for disturbance of the right was case. Ejectment would not


In an action for damages for disturbance of the right, defendants put in evidence a verdict and judgment in ejectment for the land. Held, not conclusive, and as it was not for the same subject-matter, irrevelant, unless the incorporeal right was derived from the party against whom the recovery was had.

Thompson's Ap., 101, 225 (1882). A. conveyed a tract of land to B., C., D., E., and F., for the purpose of boring for oil, etc., reserving to himself one-fourth of the oil produced. The grantees were to hold in undivided one-eighth parts, B., C., and D. having each two-eighths, E. and F. each one-eighth. B., C., and D. conveyed each one-half of his interest to G. and ten others, with a provision that they should be subject as to time, place, and manner of operation to the management and control of the majority in interest of the owners of the tract. G. afterwards conveyed to H. A majority in interest leased the tract to B. and C., their heirs and assigns forever, for the purpose of boring for oil, the grantees to retain one-half of the product. H. did not assign or assent to this lease. Held, H. held subject to the above provisions in the deed to G. and others, and was bound by the lease to B. and C., and consequently not entitled to a full share of three-fourths of the oil produced.

The interest conveyed by A. was not an estate in the land or minerals. It was an incorporeal right, a license. The grantees were engaged

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