Davies v. Iroquois Gas Corp.

161 Misc. 103, 292 N.Y.S. 111, 1936 N.Y. Misc. LEXIS 1561
CourtNew York Supreme Court
DecidedMarch 16, 1936
StatusPublished
Cited by1 cases

This text of 161 Misc. 103 (Davies v. Iroquois Gas Corp.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davies v. Iroquois Gas Corp., 161 Misc. 103, 292 N.Y.S. 111, 1936 N.Y. Misc. LEXIS 1561 (N.Y. Super. Ct. 1936).

Opinion

Norton, J.

On April 20, 1886, by an instrument in writing, one T. J. Kerr leased and granted to one Colin Scott the exclusive right, for the term of fifty years, to enter on certain farm lands, owned by Kerr in the town of Collins, Erie county, N. Y., and to lay pipe lines and drill for petroleum or other valuable substances thereon, together with the right to lay and operate pipes [104]*104for the transportation of oil or natural gas for the period of ninety-nine years. The lease provided that, If gas is obtained by party of the second part so as to be used for transportation, he will pay to the party of the first part a yearly rental of fifty dollars for each and every well so used on said land.” The lease also gave to the lessee “■ the right to. remove any machinery or fixture placed on said premises ” by the lessee or his assigns.

By mesne conveyances these plaintiffs have become the owners in fee of all oil, gas and minerals in that part of such Kerr lands as are in question herein, “ with the right to remove said oil, gas and minerals from said premises,” together with the appurtenances, and all the estate, title and interest in and to the oil, gas and mineral rights, to have and to hold the same forever, subject, however, to the rights granted by such lease, which lease, through the medium of several assignments, was transferred to this defendant July 1, 1912. It has held and exercised the rights granted by said lease ever since. During the period the lease has been in effect five wells for natural gas have been drilled on the leased premises, four of which proved to be unproductive, were abandoned and the casing and tubing in each such well were drawn and removed from the premises. One of such five wells, the one in question herein, drilled to a depth of about 1,650 feet in February, 1914, proved to be quite productive, first yielding over 1,700,000 feet of natural gas per day, and gradually shrinking its output until now it is yielding approximately 300,000. feet of natural gas per day, all of such output having been withdrawn from the premises and marketed by defendant during the twenty-two years it has been in production.

As the term of the lease has been nearing its end the parties have been negotiating, the plaintiffs to sell their fee in the oil, gas and minerals and the right to explore for and remove the same, which would include their interest in such producing gas well, and the defendant to buy the same; such negotiations progressed to the point where defendant offered $5,000 and plaintiffs asked $75,000 therefor. Then, on the failure of the parties to agree upon a price that one would give and the other take, the defendant stated its purpose to exercise, prior, to the expiration of the lease, the right granted therein “ to remove any machinery or fixture placed on the premises ” by drawing the casing and tubing of such producing gas well, claiming that such casing and tubing are fixtures, and after so drawing such casing and tubing from such gas well, stated its further purpose to plug the well, pursuant to the provisions of sections 308 and 309 of the General Business Law. The parties again entered into negotiations, this time for the purchase and sale of such casing and tubing in such producing well, [105]*105the plaintiffs offering therefor the reasonable value of the casing and tubing, which was refused by the defendant, it pricing such casing and tubing on the basis of its reasonable value, plus the cost of drilling the well and a portion of the cost of exploring that gas field, which negotiations ended as did the previous negotiations. Whereupon plaintiffs brought this action to procure a judgment permanently restraining the defendant from drawing such casing and tubing from said gas well and from plugging said gas well or otherwise injuring it, and in order to preserve such well intact and prevent injury thereto, and keep such casing and tubing in place therein until the determination of such action plaintiffs have made this motion for an order enjoining and staying defendant, its agents and employees, during the pendency of the action, from drawing such casing and tubing from such well and from plugging the well or otherwise injuring or destroying it.

Inasmuch as the defendant offered plaintiffs a substantial sum, viz., $5,000, for their title to the minerals, oil and gas in the lands, which offer defendant claims is in excess of the value of such title, and that defendant, as shown in its answering affidavits, has purchased other similar titles in nearby lands, paying therefor substantial amounts, and holds such titles as, and exercises the rights of, owner of such titles in fee simple, its contention that plaintiffs have acquired no title to the fee of such minerals, oil and gas on the leased premises under their grants, has little force.

Upon this motion the parties agree that the casing and tubing in the well are trade fixtures, but they differ as to whether they can be removed without doing serious injury to the fee that plaintiffs own in the minerals, oil and gas. In substance that difference is this lawsuit; it is the substantial issue involved herein. Taylor’s Landlord and Tenant (Vol. 2 [8th ed.], p. 549) concisely states the law as follows: “ The trade fixtures of a tenant remain personal property in the eye of the law so far as the right of removal is concerned. (Mass. Nat. Bank v. Shinn, 18 App. Div. 276; affd., 163 N. Y. 360.)"

But as Judge Hiscock said in Matter of City of New York (192 N. Y. 295, at p. 302): “ The familiar limitation upon the right to remove such fixtures is that the removal must be accomplished without substantial injury to the freehold.”

The fact that the lease here in question grants the right to the lessee to remove fixtures does not enlarge nor extend the lessee’s right to remove so as to allow a removal of a fixture to accomplish which will cause substantial injury to the freehold. Such is the holding in Matter of City of New York (supra, p. 303), where Judge Hiscock further says in substance that such a removal clause in [106]*106a lease does not convert into a removable fixture that which ordinarily would be a permanent, irremovable improvement to the freehold.” Again, citing authorities in support thereof, the court in Cohen v. Witteman (100 App. Div. 338, 342) reiterates the law as follows: “ The general rule is that trade fixtures can be removed. They are articles of personal property placed upon or annexed to the realty by a tenant for the purpose of carrying on a trade or business during the term of the lease and he has a right to remove them before the expiration of the lease, provided it can be done without destruction and will not materially injure the premises.”

In this instance there is a producing profitable gas well. The citation of authorities holding that the removal of casing, tubing, etc., from a non-productive well is warranted are not in point. No injury can be done to such well nor the freehold by such withdrawal. The drawing of the casing and tubing from the well here in question, followed by plugging it, would mean destruction of the well; it would no longer exist; and I am satisfied that the gas field or area in the immediate vicinity of the well would be seriously damaged thereby. The well in question is a gas well, drilled as such, in a gas field; it is not an oil well and is not in oil territory.

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Bluebook (online)
161 Misc. 103, 292 N.Y.S. 111, 1936 N.Y. Misc. LEXIS 1561, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davies-v-iroquois-gas-corp-nysupct-1936.