Jolynne Corp. v. Michels

446 S.E.2d 494, 191 W. Va. 406, 1994 W. Va. LEXIS 92
CourtWest Virginia Supreme Court
DecidedJune 15, 1994
Docket21822
StatusPublished
Cited by8 cases

This text of 446 S.E.2d 494 (Jolynne Corp. v. Michels) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jolynne Corp. v. Michels, 446 S.E.2d 494, 191 W. Va. 406, 1994 W. Va. LEXIS 92 (W. Va. 1994).

Opinion

NEELY, Justice:

The Jolynne Corporation appeals a jury verdict in the Circuit Court of Upshur County holding valid an oil and gas lease on Jolynne’s property leased to Donald G. Mi-chels and INCO 3, Inc. (hereinafter Mr. D. Michels). Jolynne maintains that, because of misleading instructions, the jury failed to find the oil and gas lease abandoned even though the evidence shows that Mr. D. Mi-chels produced no oil or gas under the lease for at least 10 years. Mr. D. Michels maintains that the lease was not abandoned and that David R. and Lynne W. Rexroad, Jo-lynne’s predecessors in interest, had acknowledged the lease’s validity by various actions including notation of the lease in their deed. Because the evidence shows that the lease expired under its own terms and under the circumstances of this case, the equitable defenses are not applicable, and we reverse the circuit court.

*409 On 6 June 1958, the Conference Board of Trustees of the Evangelical United Brethren Church granted an oil and gas lease to Franklin E. Michels (hereinafter Mr. F. Mi-chels) on a one hundred twenty-two (122) acre tract that the Church owned in the Buckhannon District of Upshur County. The lease’s initial term was for two years and then “as long thereafter as the said land is operated by the Lessee in the search for or production of oil or gas_” The lease provided that the lessor would receive free gas up to one hundred thousand cubic feet per year and would pay wholesale rates for additional gas purchased. The “measurement and regulation [of the Church’s gas use] shall be by meter and regulators set at the tap on the well or line by the Lessee.” The lease provided that a one-eighth ($) royalty was to be paid to the Church and stated that “the Lessee shall have the right at any time to surrender this lease, or from time to time any part or parts of the leased land.... ” In 1958, Mr. F. Michels assigned the lease to INCO 3, Inc., a closely-held corporation owned by Mr. F. Michels and operated by his sons, and after a successful gas well was drilled, production began. In 1965, except for fifty (50) acres surrounding the producing gas well, Mr. F. Michels released the rest of the tract from the lease. Donald G. Michels, an appellee, is the successor in interest of his father, Franklin E. Michels. 1

According to the record, the Church used the property as a church camp and, until 1972, used the well’s gas to heat its buildings. Between 1959 and 1972, Mr. F. Michels paid or credited royalties to the Church; the Church paid Mr. F. Michels for an amount for gas used in excess of 100,000 cubic feet; and Hope Natural Gas Company purchased gas from the well. 2 However, no evidence suggests any gas was produced after 1973 until the Fall of 1982 when Mr. Rexroad, the Church’s successor in interest, repaired the well and began using the well’s gas. Between 1973 and 1982, no royalties were paid, the lessee’s tax returns indicate no sales, and the Church purchased gas from a commercial gas company. 3 The well’s road became overgrown with small trees and briars, and the well fell into disrepair and became rusty. In approximately 1978, because of a gas leak, the Church closed some of the well’s valves. About 1980, the Church ceased holding meetings on the property.

Between 1973 and 1982, the well received little attention from the lessee. Although the 1974 estate appraisement for Zelma Michels, the wife of Franklin and mother of Donald Michels, noted her ownership of a working interest in the well, the 1980 estate appraisement for Franklin Michels failed to note any interest in the well although noting his interests in other wells, leases and gas companies. Mr. D. Michels testified in about 1979 he unsuccessfully attempted to sell the well's gas to a brick company and about a year later he contacted the Church concerning donating the well.

By deed dated 31 May 1982, the Board of Trustees of the West Virginia Annual Conference of the United Methodist Church 4 conveyed the 122 acre tract to Mr. Rexroad. The 1982 deed contained the following:

*410 This conveyance is expressly made subject to any easements visible on the ground and to the following:
4. Oil and gas lease dated June 6,1958, and of record in said Clerk’s office in Oil and Gas Lease Book 35, at page 125, granted to Franklin E. Michels, which said oil and gas lease has been partially released by virtue of releases recorded in said Clerk’s office in Release Books 57 and 58, at pages 317 and 40, respectively. -
Reference is hereby expressly made to all of the instruments hereinabove mentioned and described for a further description of the property hereby conveyed and for a more particular description of all the terms and provisions of said instruments which are hereby incorporated herein by reference.
Subject to the above-mentioned rights of way, easements, agreements and leases said parties of the first part covenant that they will warrant specially the property hereby conveyed....

On 20 September 1982, Mr. Rexroad conveyed an undivided one-half interest in the property to Lynne W. Rexroad, his wife. In 1982, before the Rexroads serviced the wellhead, no gas could be produced because of the well’s condition and no service lines were connected to the well. The Rexroads were billed $1,500 for their 1982 well service and gas line work. Shortly after the Rexroads’ repairs, Mr. D. Michels, in December 1982, had the well partially swabbed at a cost of $3,464.86. 5 However, even after the swabbing, no meter was installed and except for the Rexroads’ use of the gas, no gas was used or sold. In about 1984 Mr. Rexroad negotiated with Mr. D. Michels to purchase the lease but no agreement was signed.

In 1986, Wayne Davis, the President of the West Virginia Canine College, Inc. an inter-venor defendant below, began renting a portion of the Rexroads’ tract and using the well’s gas without an additional payment. The Canine College trains handlers and dogs for the Narcotic Detector Dog Program and Police Patrol Program. During 1987, the Rexroads and Mr. Davis unsuccessfully negotiated for the sale of the entire 122 acre tract. Apparently, during the sale negotiations, Mr. Rexroad prepared two Adjustments to Appraisal that said that “the gas well is owned by others_” 6 Mr. Davis testified that before the sale, Mr. Rexroad told him that as the landowner Mr. Rexroad could file with the State to take the leasehold back or he could buy back the lease.

In July 1988, the Rexroads sold the surface of a 13.65 acre portion of their 122 acre tract to the Canine College.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Klein v. McCullough
West Virginia Supreme Court, 2021
Shirley v. Shirley
525 S.E.2d 274 (Supreme Court of Virginia, 2000)
Travis v. Alcon Laboratories, Inc.
504 S.E.2d 419 (West Virginia Supreme Court, 1998)
Begley v. Peabody Coal Co.
978 F. Supp. 861 (S.D. Indiana, 1997)
Petition of Shiflett
490 S.E.2d 902 (West Virginia Supreme Court, 1997)
Marshall v. Elmo Greer & Sons, Inc.
456 S.E.2d 554 (West Virginia Supreme Court, 1995)

Cite This Page — Counsel Stack

Bluebook (online)
446 S.E.2d 494, 191 W. Va. 406, 1994 W. Va. LEXIS 92, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jolynne-corp-v-michels-wva-1994.