Meridian National Bank v. McConica

4 Ohio Cir. Dec. 106
CourtHancock Circuit Court
DecidedMay 15, 1894
StatusPublished

This text of 4 Ohio Cir. Dec. 106 (Meridian National Bank v. McConica) is published on Counsel Stack Legal Research, covering Hancock Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Meridian National Bank v. McConica, 4 Ohio Cir. Dec. 106 (Ohio Super. Ct. 1894).

Opinion

Seney, J.

This action as presented by the facts as alleged in the pleadings, is one for the marshaling of .various liens; the liens as claimed growing out of the acts of the parties as well as by operation of law. Incidentally to the establishment of the various liens, and upon which, if they have any validity in law, the liens ■depend, is the question whether the property, or the money arising from the sale ■of the property, is the property of a copartnership firm, or is the individual property of the different members composing the firm. While these are probably the only issues tendered by the pleadings, the undisputed material facts in the case, as disclosed by the evidence, presents another question arising from equitable principles; not depending upon the doctrine of liens, as known to the law, but ■upon the right of partnership creditors to be first paid out of the partnership ■property or funds.

From the kind and character of the property, whether it is copartnership property or not, from the kind and character of the various claim liens, whether they are liens or not, from the lack of averments in the pleading, from the lack of testimony in the case, it has caused the court considerable trouble to arrive at a conclusion, so that exact justice may be done between the parties, that justice to be measured alone by legal and equitable principles. From what had been [107]*107disclosed upon the trial, it appears to a majority of the court there are other undisclosed facts which, if disclosed, might change the rights of the parties.

Be that as it may, it is the duty of the court to dispose of the case as it is, and not as it might have been.

On June 20, 1890, A. R. Rafferty and E. A. Townley granted unto defendant, W. B. Ely, his heirs or assigns, for a valuable consideration, all the oil and gas •in and under certain described premises, together with the exclusive right to ■enter thereon for the purpose of drilling and operating for oil, gas or water; to ■erect, maintain and remove all structures, pipe lines necessary for the production .•and storage of oil, gas or water, upon the following terms:

W. B. Ely agrees to drill a well upon said premises within thirty-seven days from this date ; should Ely fail to so drill, then this instrument to be null and void. Should oil be found in paying quantities upon the premises, Ely agrees to ■deliver to Rafferty and Townley, one-sixth part of all the oil produced and saved from said premises. Should any well or wells produce two hundred or more barrels a day, then Rafferty and Townley should receive one-third of the oil thus produced. All rights under this agreement shall end in twelve years from this date, •or as soon as Ely, or his heirs or assigns, have abandoned or cease to operate the •same, for a period of six months. (Other conditions are mentioned in this instrument that is not necessary to notice.)

On August 26, 1890, the said W. B. Ely, for a valuable consideration, assigned and transferred, by a written endorsement endorsed thereon, one-third of his interest in said written instrument to the defendant, T. H. McConica, and onéthird of his interest in said written instrument, to the defendant, W. B. ChubIbuck.

The instrument with the endorsements thereon, was duly recorded by the ■recorder of Hancock county, Ohio, in a book kept in the recorder’s office for that purpose.

Upon the threshold of the case, and upon which must be built the respective rights of the different parties herein, is the determination of the legal character oí this written instrument.

This court held m the case of Harrington v. Wood, 3 Ohio Circ. Dec., 475 that the construction to be given to this class of instruments was :

“That they are not-strictly a lease, but a license coupled with a conditional grant, convey sng the grantor’s interest in a gas well.”

The sixth circuit court held, in the case of Ohio Oil Co. v. Toledo, Findlay and Springfield Railroad Co., 2 Ohio Circ. Dec., 505.

“That these leases are in the nature of an incorporeal hereditament; that strictly •speaking, it is not a right in the land as such, but a right to enter upon the land, to sink its ■wells, and to take from underneath the soil, such oil as it may ñnd; to take it from the land, and to render a portion of it to the land owner ; the remainder to become its own, to dispose of it as it sees fit.”

The Supreme Court of Ohio in the case of Brick Company v. Pond, 38 O. S., 65, held as follows :

“A, by an agreement in writing, leased to B all the clay that is good No. 1 fire clay on his land described, for a term of three years, subject to the condition that B shall mine, oi «ause to be mined, or pay for not less than 2,000 tons of clay, every year, and shall pay therefor twenty-five cents per ton for every ton of clay, monthly, as it is taken away.
“Held, that this was a contract, which gave B the exclusive right to mine and remove all the good No. 1 fire clay that was on the land, and not a lease of the land itself.”

The only difference between the case at bar, and the one cited from 38 O. S., is, in the case at bar, the contract was for all the oil contained in the land; in the 38 O. S., it is for all the fire clay contained in the land of a certain quality. We .quote from the opinion of Johnston J., as found in 38 O. S., 71 :

[108]*108“The exclusive right to possession of the land, as far as it was necessary to mine and remove such clay was granted. This was not an exclusive possession of the whole tract, but only for mining purposes. The ownership of the land, with the right to the possession of the same, subject only to the right of possession for the purpose of mining and removing the clay, was in the owner. This was, therefore, a contract, for the privilege of mining and removing the kind of fire clay specified, as distinguished from a lease of the land.”

Does the fact that it was clay, instead of oil, change the character of its mining properties? It was held in 110 Penn., 317 as follows :

“Petroleum, it is a mineral substance, obtained from the earth, by a process of mining and lands from which it is obtained, may with propriety, be called mining lands.”

From these authorities it must be held that the written instrument in the case at bar, is not a lease of the land, but simply a contract, coupled with the license or grant, to obtain possession of the land, for the purpose of the contract. Its sole and only reference to the land, is the license to take possession.

On April 13, 1891, the defendants, Thomas H. McConica, Wm. B. Ely and W. R. Chubbuck, executed and delivered to Sylvester Finch, David B. Batchley and A. J. Ferrell, partners as S. M. Finch & Co., a written instrument, whereby they granted, sold, assigned, transferred and conveyed to Finch & Co. all their interests in the written instrument executed by A. R. Rafferty andB. A. Townley, to Wm. B. Ely, on June 20,1890, as before stated, together with three derricks, three oil wells complete, including casing, . rods and everything going to make up a complete outfit to said wells, including three stationary steam-engines, two boilers, four 250 bbl. tanks, 3,500 ft.

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Bluebook (online)
4 Ohio Cir. Dec. 106, Counsel Stack Legal Research, https://law.counselstack.com/opinion/meridian-national-bank-v-mcconica-ohcircthancock-1894.