Chicago & Allegheny Oil & Mining Co. v. United States Petroleum Co.

The opinion of the court was delivered, by Agnew, J. ‘The original bill in this- case prayed for a decree of forfeiture of the lease held by the defendants, and for the appointment of a receiver for the lessee’s share of the oil. The amended bill avers breaches of the covenant in the lease, and a [90] forfeiture thereby, states thaP an action at law has been brought to enforce the forfeiture, and that this bill is in aid thereof, and then prays for an account of all the oil, and for the appointment of a receiver as before, and in the mean time that the defendants shall be restrained from taking and disposing, of any oil obtained upon the land. The prayer for an account being withdrawn, the relief prayed for is the appointment of a receiver of the defendants’ portion of the oil and an injunction to restrain the defendants in the mean time, that is, until the suit at law is determined. The agreement of 16th March 1864, is manifestly a lease for years of the corporeal tenement, with an added exclusive right to bore for, obtain and take the oil found, returning as rent onefoulrth of the product to the lessor. To obtain and take the lessee’s share of the oil is not waste, but a rightful act under the lease, unless it be forfeited by its own terms. The defendants are in the peaceable possession of their own term, and have at a vast expenditure of money and labor of themselves and their sublessees fitted up the premises and procured the oil, and have regularly delivered to the plaintiffs their share in payment of the rent, except certain limited quantities, small in comparison with the entire product, which are fairly the subjects of doubt apd controversy, and have been for the most part found by the master in favor of the defendants. It is also noticeable that when this lease was made it was unknown to what extent oil would be obtained, and clearly without any anticipation of the immense flow which afterwards occurred. More than one hundred wells have been bored, one of which yielded the enormous quantity of seventeen hundred barrels in a single day, while the aggregate quantity is stated in the bill at three hundred and forty thousand barrels. If we reflect upon the utter impossibility of procuring the barrels, filling and hauling them away, the immense amount and extraordinary flow of this most subtle and inflammable product, wholly unanticipated at the time of the contract, we discover at once that the parties themselves were compelled to abandon the literal terms of the lease, and to resort to expedients and substitutes in lieu thereof. Thus we cannot avoid perceiving that the alleged breaches are of exceedingly doubtful character, depending upon an attentive consideration of the facts to be inquired into in the suit at law. The master, upon a careful examination of the evidence, having resolved these matters of doubt favorably to the defendants, we cannot say there is any well-grounded presumption that a forfeiture has occurred. Possibly it may have taken place, but under the circumstances we are by no means convinced of the forfeiture. Without it there can be no waste, and the tenant’s appropriation of his own share is rightful. What, then, are we called upon to do ? Simply to appoint a receiver to take into custody and to deprive the lessee of his share [91] of the product until the plaintiffs can see whether they will be successful in obtaining a judgment of forfeiture in a doubtful case. No receiver is asked for the landlord’s portion, and plainly because as to it the purpose is to require delivery without interruption. The actual purpose is to take into custody that which will be mesne profits in the event of establishing the forfeiture. Look at the case in any direction, and all that is in it is to obtain our assistance in giving effect to an alleged forfeiture, and to restrain the defendants from the exercise of their legal rights under the lease, while the plaintiffs are engaged in -experimenting at law for the forfeiture. It is not for the protection of a clear and well-defined right, and to prevent an irremediable injury which may ensue if we do not intervene, nor is it the ordinary case of one who shows an equitable right in the subject of custody, and asks the court to interfere for its security until the termination of litigation. The appointment of a receiver is the exercise.of a power in aid of a proceeding in equity, and is the subject of sound discretion. The court must be convinced that it is needful and is the appropriate means of securing a proper end. Such an appointment is a strong measure, and not to be exercised doubtingly. Where a party is clothed with title and possession such as are conferred by a 'lease in writing, and is in the enjoyment of rights apparently legal, a receiver will not be appointed unless under urgent and peculiar circumstances. The plaintiff must show a clear right in such a case, or a primé facie, with such attending circumstances of danger or probable loss as will move the conscience of a chancellor to interfere. Finding no such elements in this case the bill is dismissed, and the costs ordered to be paid by the plaintiffs.