Gulf Refining Co. v. Terry

142 So. 457, 163 Miss. 869, 1932 Miss. LEXIS 98

• Court: Mississippi Supreme Court
• Decided: June 6, 1932
• Docket: No. 29517.
• Status: Published

Opinions

Smith, C. J.,

delivered the opinion of the court.

This is an appeal from a decree of the court below, granted for the purpose of settling the controlling principles of the case.

The appellants are the successors in title to an oil and gas .lease executed in February, 1929, by the board of supervisors of Hinds county, authorizing the lessee to drill wells for oil and gas on a sixteenth section land, and to remove and appropriate any oil and gas found therein.

The iand is one of the sixteenth sections donated to the state by the national government for the benefit of its public schools. It is in the possession of the appellee, Terry, who claims under a lease which he holds by mesne conveyances, executed in November, 1846, by the public school trustees of the- township in which the land is situated, under a statute enacted on February 27, 1833, by which they were authorized to lease the sixteenth section lands “for the term of ninety-nine years,” and “convey the right, title, use, interest and occupation of said sections, or any such parts as may be leased to the lessee or lessees, for and during, and until the full end of the term of ninety-nine years.” The operative words of the lease are that: “In consideration of the premises, the said parties of the first part, as trustees as aforesaid, . . . have sold, leased, remised and to farm let the above described land to the said Moseley and his assigns for and during* the term of ninety-nine years.”

Terry is using the land for agricultural purposes. The appellants entered the land over Terry’s protest, and were preparing to drill wells thereon for oil and gas when they were excluded therefrom by Terry. Thereafter the appellants exhibited an original bill in the court below] setting up, in substance, the foregoing’, and praying that Terry be enjoined from interfering with their entry on the lands, drilling wells for oil and gas, and removing such as may be found therein.

The court below dissolved a preliminary injunction granted the appellants, and granted them an appeal to this court to settle the controlling principles of the case.

The question for decision is: May the owner of land, after leasing it for a term of years, without any restriction in the lease on the lessee’s right to the possession and occupation thereof, drill for and remove any oil or gas that may be therein, and thereby exclude the lessee of the land from the possession of so much thereof as may be necessary for the removal of the oil and gas therefrom? "We are clearly of the opinion that this question should be answered in the negative.

Boards of supervisors are now vested by statute with the supervision and control of sixteenth section land, and under chapter 318, Laws of 1926, now appearing as sections 6)762 and 0763, Code of 1930, they are authorized to lease such lands “for oil, gas, and mineral exploration and development.” Leases made under this statute confer on the lessees no greater right to enter sixteenth section land for .“oil, gas, and mineral exploration and development,” than the lessor, the state, has. And the lease to the land here in question made in 1846, under which the appellee, Terry, claims, vested in the lessee and his successors in interest every right which the statute under which it was executed authorized the public school trustees to convey.

Those rights were fixed when the statute was enacted and the lease executed; and, if the words used in the statute and lease had a fixed meaning when the one was enacted and the other made, that meaning must be given them here. Dantzler Lumber Co. v. State, 97 Miss. 355, 53 So. 1, 6, wherein a lease executed under this statute was under consideration; and Daily v. Swope, 47 Miss. 367.

The meaning of the term “land” was fixed by the common law centuries ago, and includes, not only the surface of the soil, but everything under and above it, unless it appears from the instrument in which it was used that the parties thereto intended for it to have a more restricted moaning. Dantzler Lumber Co. v. State, supra. In that case, wherein a lease executed by public school trustees under the statute hereinbefore referred to was under consideration, Judge Anderson, in a separate opinion, set forth with approval the following quotations from Coke and Blackstone: “ ‘It is elementary that “land” itself in legal contemplation extends from the sky to the depths. “The term ‘land’ includes, not only the ground or soil, but everything which is attached to the earth, whether by the course of nature, as trees herbage, and water, or by the hand of man, as houses and other buildings; and it has an indefinite extent upwards as well as downwards, so as to include everything terrestrial under or over-it.” ’ Coke, Litt. 4a. ‘Land comprehends all thing's of a permanent and substantial nature being a word of very extensive signification; also, if a man grants all his lands, he grants all his mines of metals, and his fossils, his woods, his waters, and his houses, as well as his fields and meadows.’ 2 Bl. Comm. 16-18.”.

In that case the state had filed a bill in equity to cancel a conveyance by a board of supervisors to the lessee of a sixteenth section of the trees growing thereon. The conveyance was made by the board under the provisions of section 4702 of the Code of 1906. The question presented for decision was whether that statute, which authorized the sale of the trees, violated section 211 of the Constitution of 1890, which, requires the legislature to enact such laws as “shall provide that the sixteenth section lands reserved for the support of township schools shall not be sold, nor shall they be leased for a longer term than ten years for a gross sum.” In order to decide the question, it became necessary for the court to determine the meaning of the term “lands” as used in the Constitution. A majority of the court admitted that its usual meaning was as there set forth by1 Judge Anderson; but held, giving its reasons therefor, that it was used in that section of the Constitution in a more restricted sense, and was not there intended to include trees growing on the land. The meaning of the term “land” there set forth in Judge Anderson’s opinion is so universally approved that a conveyance of land is always held to vest in the grantee not only the surface thereof, but everything' over and under it, and a conveyance of any separate part thereof, whether. over or under the surface, must be executed in accordance with the provisions of the statute of frauds.

In Moss Point Lumber Co. v. Harrison County, 89 Miss. 448, 42 So. 290, 873, this court held that a lease to six-< teenth section land, under the statute hereinabove referred to, created, between the state and the lessee, the relation of landlord and tenant, and therefore the lessee could not so use the land as to destroy or impair the value of the state’s reversion. We are not concerned here, however, with what use the lessee can make of the leased premises, but with his right to the exclusive possession thereof.

Under the common law in vogue when this lease was executed, there being no provisions in the lease to the contrary, it conveyed to the lessee the right to the exclusive possession and occupation of every part of the land, with which possession and occupation the .landlord has no right to interfere. Moreover, the lease containing no provision to the contrary, there arises from it by implication a covenant for the quiet enjoyment of the leased premises by the lessee against the lessor and all persons claiming under him. This covenant is broken the moment the possession of the lessee is invaded by the lessor for any other purpose than to discharge an obligation the lessor may owe to the lessee or to the public; or to restore such destroyed improvements as the lessor has the right to restore. All of this- is so universally held by the courts to be the law now, and to have been such at the time this lease was made, that the citation of au-' thorities therefor would be supererogatory.

But it is said, in substance, that a lease to land, in the absence of a provision to the contrary, does not confer on the lessee the right to remove and dispose of any valuable mineral, including oil and gas, that may be therein; which for the purpose of the argument we will assume to be true, though it may be — as to which we express no opinion — that a lessee has the right to use the minerals in the land for certain purposes. From this it is also said, in substance, that a qualification or exception to the rules hereinbefore announced arises, which is, that the lessor has the right to enter the leased land and remove the minerals therefrom, and to exclude the lessee from the possession of so much of the surface of the land as may be necessary for that purpose. In other words, the case presented is said, in substance, to be the same as if the lessor had expressly reserved to himself the oil and gas that might be contained in the land; from which reservation it is said that an easement in the landlord to enter and remove the oil and gas arises because of the necessity therefor.

There can be no merit, in our judgment, in this contention, for as we have hereinbefore demonstrated, the lease does convey to the lessee the right to the exclusive possession of all of the land, including that under as well as that composing the surface thereof. What use the lessee can make of things lying under the surface, as I have hereinbefore stated, is of no consequence here; the question here being only his right vel non to the possession thereof.

The same result would follow, and for the same reasons, even if the common law as heretofore understood should be so modified as to cause such a lease to vest in the lessee the right only to the surface of the land, and not to possession of things above and below the surface.

It must not be overlooked that the implication here claimed is not of a grant, but of a reservation in a grant, between which there is a clear distinction. 19 C. J. 920, wherein it is said, in subdivision (a) of note 74, that: “There is a clear distinction between implied grants and implied reservations. — (1) Howley v. Chaffee, 88 Vt. 468, 93 A. 120, L. R. A. 1915D, 1010. (2) And this distinction is well founded in principle and well supported by authority. Howley v. Chaffee, supra. (3) ‘As a grantor cannot derogate from his own grant, while a grantee may take the language of the deed most strongly in his favor the law will imply an easement in favor of a grantee more readily than it will in favor of a grantor.’ Wells v. Garbutt, 132 N. Y. 430, 435, 30 N. E. 978.”

This distinction was recognized in Dabney v. Child, 95 Miss. 585, 48 So. 897, where this- court quoted with approval from 11 Cyc. 1171, the following: “If the grantor intends to reserve any right over the tenement granted, it is his duty to reserve it expressly in the grant. To say that a grantor reserves to himself in entirety that which may be beneficial to him, but which may be most injurious to his grantee, is quite contrary to the principle upon which an implied grant depends, which is that a grantor shall not derogate from or render less effectual his grant, or render that which he has granted less beneficial to his grantee. Accordingly, where there is a grant of land, with full covenants of warranty, without express reservation of easements, the best-considered cases hold that there can be no reservation by implication, unless the easement is strictly one of necessity; for the operation of a plain grant, not pretended to be otherwise than in conformity with the contract between the parties, ought not to be limited and cut down by the fiction of an implied reservation.”

Moreover, we presume no one will deny that a right to a grantor cannot arise by implication that would destroy his grant, and that is exactly what can and may result here if the appellants’ claimed implied right exists. It is not definitely known whether this land contains oil and gas or not; what the lessor claims is the right to enter the land, drill wells therein, in order to ascertain whether it contains oil and gas, and, if it does, to remove it. In order to ascertain whether the land does contain oil and gas he may have to drill several wells, for it is well known that one may result in a “dry hole,” while another in reasonably close proximity thereto may disclose oil or gas. In order to drill one well only he must exclude the lessee from part of the land; and, if he has the right to drill one well, he has the right to drill as many as may be necessary to enable him to remove the oil and gas therefrom with reasonable dispatch. This might, and, if the land is of small area, would, result in the practical exclusion of the lessee from the land. Compare Moss v. Jourdan, 129 Miss. 598, 92 So. 689.

The decisions of this court dealing with the relative rights of the state and the lessee of sixteenth section lands, leased under the statute hereinbefore referred to, are not without value here. Those cases uniformly hold that the lessor has no right to enter the land and remove therefrom the timber growing thereon, although they further hold that the lessee has no right to cut and remove the timber thereon except for the purpose of putting the land in cultivation, and for certain other limited uses, such as for firewood, building fences, and the like.

Oil and gas are readily taking the place of wood for fuel, and, if the result thereof is that the lessee has the same right to use oil and gas that may be in the land for fuel as he has to use the timber on the land for that purpose, those cases are controlling here.

But they are not without value, even if it should be held that the lessee has no right to use the oil and gas in the land for any purpose. The limited right which the lessee has to use the, timber growing on the land would have been fully protected in the cases heretofore submitted to the court, dealing with the "relative rights of the lessor and the lessee to the timber, by permitting the lessor to cut and remove the timber, provided he left remaining on the land sufficient thereof for the purposes for which the lessee had the right to use it. But the court did not so hold; but, on the contrary, held that the lessor is without- the right to cut and remove any of the timber, although the leases had many years thereafter to run.

The rule applied in Chartiers Block Coal Co. v. Mellon, 152 Pa. 286, 25 A. 597, 18 L. R. A. 702, 34 Am. St. Rep. 645, relied on by the appellants, did not involve the relative rights of the lessor and the lessee in oil and gas contained in the leased land. There the owner of» the land conveyed the coal therein, with the right to enter upon the surface and appropriate so much thereof as might be necessary to remove the coal. Afterwards the owner leased the land for oil and gas purposes, and the lessees were preparing to drill weds through the coal, in order to reach the oil and gas that lay beneath it, when they were sought to be enjoined from so doing by the owners of the coal. The court held that the lessees of the oil and gas privileges had the right to drill the wells. The principle applied there was the familiar one that, where the owner of land granted a portion of it to another, leaving other land of the grantor to which he can have access only by passing through the land granted, the right so to do is reserved by necessity to the grantor by implication. In the language of Judge Sanborn in Kemmerer v. Midland Oil & Drilling Co. (C. C. A.), 229 F. 872, at page 886:

“It seems clear that there is nothing in these decisions or in the opinions in them in any way tending to over throw the long and firmly established principles sustained and illustrated by the decisions and text-books to which reference has been made, to the effect that neither a lessor, nor his subsequent lessee can lawfully interfere with and disturb the exclusive possession of a prior lessee for years, without restriction, reservation, or exception, of an entire tract of land. They go no farther than to sustain the familiar principle that the sale and conveyance by the owner of a tract of land, while he still owns it and still has the right to the exclusive possession and use of 'the surface of it, of the coal in it or of the oil and gas in it, carries to the respective lessees, by implication, the right, as against the lessor and against each other, to such entry upon and use of the surface, and of the spaces containing the coal and the oil and gas, as shall be reasonably necessary to enable each of them to have access to and to remove the mineral granted to them. They do not hold'that after an owner has sold and conveyed or mortgaged, or leased for years, a tract of land without restriction to any specific purpose, and without any reservation, he or his subsequent lessees or grantees.for mining purposes, or for any other purposes, may lawfully assail the title or disturb the possession of the prior grantee, mortgagee, or lessee. They in no way challenge or deny these indisputable propositions: While one is the owner of a tract of land, he may separate it into different strata, and grant the right to one stratum to one party, and the right to another stratum to another party; but when he has parted with all his right and title to all of his tract he can no longer subdivide it, or grant any right in it. While one is the owner of the exclusive right to the possession of a tract of land, or even of the surface of it, he may grant by express lease, or by implication by means of mining leases, rights to the possession and use of parts of the surface of his tract. Hut the whole of the surface is greater than any of its parts and contains all of them, and after he has granted and covenanted to one by a lease for years the exclusive possession of the entire surface of a tract of land, or the exclusive possession of.the entire tract, he cannot lawfully grant to another by express leases, or by implication by means of mining leases, or in any other way, any right to the possession of any part of the surface of that tract during the term of the lease. ’ ’

That case (Kemmerer v. Midland Oil & Drilling Co.) is the only case deciding the exact question here presented that has been called to our attention. The majority of the court there held that the lessor of land for a term of years, in the absence of a provision in the lease to the contrary, has the right to enter upon the land and drill for oil and gas that may be therein. The fallacy of this holding was demonstrated by Judge Sanborn in a dissenting opinion, wherein, among other things, he said:

“A lessee for years of a tract of land! from the owner, without reservation, restriction, or exception, has the absolute right to the exclusive possession of every part of the surface and of every part of the land from the zenith to the nadir during the term of the lease. A stranger has no right to enter upon or in any way disturb the possession of such a lessee without his consent, and if he does so the lessee may maintain a suit, against him for appropriate relief. Neither the lessor nor any one by his subsequent authority, grant, or lease, has any such right: (1) Because by the lessor’s lease of the entire premises without exception or reservation he divests himself of all right to enter upon or to interfere in any way with the exclusive possession by the first lessee of every part of the surface of, and of every part of the entire, premises leased; and (2) because the law implies from his use of the word ‘let,’ or the word ‘lease,’ or any similar word in his lease, his covenant with the lessee that the latter shall enjoy the quiet possession of the entire premises leased, free from-any interference with or disturbance of his exclusive possession of every part thereof, either by the lessor or by any one claiming under him, and all subsequent lessees take subject to this covenant which runs with the land. So it is that a lessor and those claiming under him have much less appearance of right to enter upon and occupy any part of the leased premises, or to interfere with or disturb the exclusive possession of the first lessee, than an entire stranger, for they have no bettor right than such stranger, and he is not bound by any covenant of quiet enjoyment or subject thereto. And because the lessee in the case at bar first leased for years the entire tract of land here in question and every part, of it, and the lessee took possession of it under the lease before the lessor made the subsequent lease to the Midland Oil Company of the right to take and occupy the land for the purpose of prospecting for and removing oil and gas therefrom, my mind finds no way of escape which is to it either logical or reasonable from the conclusion that neither the lessor nor the subsequent lessee has any right whatever to enter upon or to occupy any part of the surface of the land first leased to Kemmerer, or any 'other part of that land, or to interfere with or disturb Kemmerer’s exclusive possession thereof during the term of the lease.”

"What we have above said is upon what in our opinion is the present state of the law, and what we must hold it to be, unless we are to resort to what, as we view it, would be judicial legislation. We express no opinion whether valid legislation might be enacted which would provide the right and the legal means and machinery whereby, upon notice to the tenant and a right to be heard, the court could prescribe a limited and reasonable portion of the leased premises upon which the landlord could drill a well for oil or gas, or make an entrance to a mine.

The equal division of the- court on the question of error vel non in the decree of the court below results in the affirmance of that decree. Consequently, it will be affirmed, and, as the appeal was granted for the purpose of settl ing the controlling principles of the case, the canse will be remanded.

Affirmed and remanded.