Moon v. Pittsburgh Plate Glass Co.

Black, J. The appellant sued the appellee upon a written instrument called a “gas lease”, which was made by the appellant and others, parties of the first part, whose interests had since been acquired by the appellant, to the Diamond Plate Glass Company, party of the second part, the assignor of the appellee, by the terms of which the parties of the first part “granted and contracted to the second party, their — 35 — heirs and assigns, one tract of land, twenty feet square, of” a certain parcel of thirty-six acres, — said tract of twenty feet square to be located by mutual agreement,- — “for the purpose and with the exclusive right of a gas well on said twenty-foot square tract. Said second party, their heirs or assigns, shall have the right of ingress and egress to and from said twenty-foot square, tract of land over said entire tract for the purpose of drilling, utilizing, and operating said gas well, and piping and conducting gas therefrom, including the erection of suitable sheds over said well, and the right to erect and remove any and all machinery or fixtures necessary to the drilling, repairing, and operating said well, and the right to put down water wells, and use sufficient water for said purpose. Said second party, their heirs and assigns, shall also have the right to the use of the highway adjoining any part of said entire premises for the laying of mains and pipes for the transportation of gas or oil. All pipes that are so placed on said premises in reaching said highway shall be of sufficient depth not to interfere with the cultivation of the soil, when it can be done.” Provision was made for payment for injury to buildings, fences, etc. The instrument proceeded as follows: “In consideration of said contract and other conditions, said second party agrees to deliver to said first party, during the continuance of this contract, natural gas, free of charge, necessary for domestic use for dwelling-house on said premises; said gas to be delivered in a main or pipe on a public highway nearest- to the principal dwelling-house now on said premises, where the same shall be received by the first party; ail necessary attachments to be made by the first party. Said second party agrees to furnish the gas as above indicated on or before the 1st day of Eebruary, 1891, unless prevented by unavoidable accident or delay. This contract shall be deemed, to commence at and run from the date of the signing thereof, and shall be deemed to- have terminated whenever natural gas ceases to be used generally for manufacturing purposes, or whenever the second party, — 36 — their heirs or assigns, shall fail to pay or tender the rental price herein agreed upon within sixty days of the date of its becoming due. And in the event of the termination hereof for any cause, all rights and liabilities hereunder shall cease and terminate. And as an additional consideration the said second party agrees to pay to said first party an annual rental of $100, each year, for each gas well drilled as aforesaid which produces gas in paying quantities sufficient for manufacturing purposes; said payments to commence and become due and payable on the 1st day of September, as to each of said gas wells, after the completion thereof, and to continue thereafter annually during the continuance of this contract. Until the drilling of a gas well on said premises by said second party, they shall pay to said first party an annual rental of $18, to be paid on the 1st day of September of each year, at the office of the Diamond Plate Glass Company, Kokomo, Indiana; all taxes on pipe lines or wells to be paid by second parties. Now, as a part of said contract, and as a further consideration thereof, the party of the first part covenant and agree, and hereby bind themselves, their heirs, executors, and assigns, not to drill, or suffer or permit others to drill, or put down, any other gas well or wells on any part of said entire thirty-six acre tract of land above described, during the continuance of said contract. This contract shall extend to and be binding upon the heirs, executors, and assigns of the parties hereto,” etc. The date of the signing of the contract was the 23rd of January, 1891. It was shown in the complaint that the Diamond Plate Glass Company on the 1st of April, 1895, assigned to the appellee said lease, its gas well on said premises, and all mains, pipes, and fixtures thereon; that the Diamond Plate Glass Company, under the contract, laid a large main, eight inches in diameter, along the north side of the highway, across the whole south side of said tract of land, for the transportation of gas, which main it maintained until it so transferred it to the appellee; that said Diamond Plate Glass — 37 — Company drilled a gas well on said land about November 1, 1893, under said lease, which well produced gas in paying quantities sufficient for manufacturing purposes from that date until some time in the fall of 1896, and the gas from said well was used for manufacturing purposes from that date until some time in the' fall of 1896, and the gas from said well was used for manufacturing purposes by said Diamond Plate Glass Company and the appellee until some time in the fall of 1896; that said gas was piped across said land by both of said companies from said well to said eight-inch main; that on the 1st o’f April, 1895, the appellee took possession, and since that date had been, and still was, in the possession and use of said land under said lease for all natural gas purposes contemplated by said lease, except that said gas well was abandoned by the appellee some time after September 1, 1896, although the pipe leading from said well to said eight-inch main is still maintained by the appellee, and is still used by it as a blow-off pipe, and said eight-inch main has been continuously, and still is, maintained and used by the appellee across the appellant’s said land for the transportation of gas. It is further alleged that natural gas has been used generally for manufacturing purposes ever since the execution of said agreement, and is still so generally used. It is also alleged that said two companies have furnished gas for use in the dwelling-house on said land at all times as required by said lease; that the rental of $18 per year was duly paid by the Diamond Plate Glass Company until said gas well was drilled; that said last named company piaid $100 rental maturing under said lease on September 1, 1894, and the appellee paid $100 rental maturing under said lease on September 1, 1895; that the rental of $100 maturing on September 1, 1896, $100 maturing on September 1, 1897, and $100 maturing on September 1, 1898, with interest from the several dates when the same became due, is still due to the appellant, and wholly unpaid; wherefore, etc. — 38 — There was an answer in five paragraphs. The appellant presents here the action of the court in overruling her demurrer to each of the third, fourth, and fifth paragraphs of answer. In the third paragraph, pleaded as a defense to the claim for annual well rental, it was alleged, in substance, that on the 1st of September the gas well in question had ceased to produce gas in paying quantities sufficient for manufacturing purposes, and the appellee abandoned it, and that it has not since that date produced, and does not produce, gas in paying quantities sufficient for manufacturing purposes, or for any purpose whatever. In the fourth paragraph, pleaded as a failure of consideration as to the annual well rental, the same facts were pleaded as in the third paragraph, except that the pleading alleged that on the 1st of September, 1896, the well “ceased” to produce, etc., instead of alleging that at that date it “had ceased”, etc., and except, also, that in the fourth paragraph it was not alleged, as in the third, that the appellee abandoned the well. In the fifth paragraph the appellee pleaded, as a failure of the consideration for the lease, substantially the same facts as in the third paragraph. By the terms of the contract, it was to commence at and run from the date of signing (January 23, 1891), and was to be deemed terminated whenever natural gas ceased to be used generally, etc., and it appears from the complaint that it had not yet ceased to be so used. It appears, also, that possession was taken under the contract, and that the appellee still continued in possession. Various rights were contracted for, and various separate considerations were stipulated. The lessee was to commence to furnish gas for domestic purposes from the 1st of February, 1891, and to continue to furnish it during the continuance of .the contract. With this provision appellee has complied, and at the commencement of the suit it was still complying therewith. From the date of the contract until the drilling of a gas well, the party of the second part was to pay the party of the first — 39 — part an annual' rental of $18. This rental was to be paid on the 1st of September of each year. This provision, also, was complied with. The “annual rental of $100, each year” was to be paid for each gas well drilled which produced gas in paying quantities sufficient for manufacturing purposes. It would not be payable for a well which did not so produce gas, or which had ceased so to produce gas. But the periods in which this annual rental would accrue were to commence to run when such a well was drilled, at which time the rental which was to run “until the drilling of a gas well” would cease to accrue. The time of payment of the annual rental, Avhether of $18 or of $100, was to be the 1st of September; but the rent was to run, not from that date, but in the one case from the time of the signing of the contract, and in the other from the drilling of the gas well. No provision was made for any annual rental after a well had ceased to be profitable, unless, indeed, another profitable well should be drilled; but gas for domestic purposes was still to be delivered during the continuance of the contract. The well was drilled on the 1st of November, 1893, which ceased to be profitable on the 1st of September, 1896, or had ceased on that day, and which was abandoned by the appellee. The annual rent for the year from November 1, 1895, to November 1, 1896, which was due and payable on the 1st of September, 1896, has not been paid. It is to be regarded as rent for the use of land. Chandler v. Pittsburgh Glass Co., 20 Ind. App. 165. We are to determine the proper effect to be given to the language of the contract according to its ordinary meaning. If, adopting a rule like that in cases of eviction of a tenant, we should hold the appellee liable for the entire annual rent of $100, which by the terms of the contract was payable September 1, 1896, basing such decision upon the ground that this annual rent had become due at the time when the Avell Avas abandoned because of its ceasing to produce gas in profitable quantity, such rule would operate wholly to release — 40 — the lessee in a case where he had abandoned for such reason before the day of payment of the annual rent. There is in the contract, in effect, a stipulation analogous to a provision in a lease for the ceasing or the suspension of rent when the premises may become uninhabitable for a specified cause. To hold the appellee liable for a ratable part of the annual rent accrued at the date at which the well became unprofitable seems to be just to both parties, and in accord with their intent, as expressed by the terms of the contract. We think the appellant is entitled to recover such ratable portion of the annual rent of $100 for the use of the well up to September 1, 1896, but that her claim for rent for subsequent years can not be sustained, inasmuch as at such periods the well was not producing gas as contemplated by the contract, and had been abandoned. The third, fourth, and fifth paragraphs of answer were directed against the entire claim for gas well rental; therefore they were each insufficient on demurrer. The judgment is reversed, and the cause is remanded for further proceedings in accordance with this opinion.