Shearer v. Allegheny Land & Mineral Co.

165 S.E.2d 369, 152 W. Va. 616, 31 Oil & Gas Rep. 408, 1968 W. Va. LEXIS 183
CourtWest Virginia Supreme Court
DecidedDecember 20, 1968
DocketNo. 12686
StatusPublished
Cited by2 cases

This text of 165 S.E.2d 369 (Shearer v. Allegheny Land & Mineral Co.) 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
Shearer v. Allegheny Land & Mineral Co., 165 S.E.2d 369, 152 W. Va. 616, 31 Oil & Gas Rep. 408, 1968 W. Va. LEXIS 183 (W. Va. 1968).

Opinions

Calhoun, Judge:

This case, on appeal from a final judgment of the Circuit Court of 'Lewis County, involves a civil action in which Margaret A. Shearer, the appellant, seeks to recover from Allegheny Land and Mineral Company, the appellee, which hereafter may be referred to in this opinion merely as Allegheny, the one-eighth gas royalties which she alleges are due under an oil and gas lease entered into by the parties on March 6, 1959.

Margaret A. Shearer, hereafter sometimes referred to in this opinion as Mrs. Shearer, has been the owner and the occupant since 1918 of approximately 75 acres of land situate in Freemans Creek District, on the waters of Leading Creek in Lewis County, West Virginia. On March 6, 1959, she and her husband entered into an agreement with Allegheny Land and Mineral Company by which they granted to Allegheny the “exclusive right to drill, operate for and produce oil and gas” on the tract of 75 acres, more or less, owned by Mrs. Shearer. It is the alleged breach of that agreement by Allegheny which is the basis of this action.

The land owned and leased by Mrs. Shearer to Allegheny was at one time a part of a tract of 246 acres, more or less, owned by Charles L. Bush and his wife. On November 26, 1903, Bush and his wife executed a lease of the entire tract to Hope Natural Gas Company, which may hereafter be referred to in this opinion as Hope, for the purpose of oil and [618]*618gas development. The lease was for a term of ten years and for “as long thereafter as oil or gas, or either of them, is produced from said land”. By the terms of the lease agreement, Hope agreed to furnish to the lessors a specified maximum volume of free gas and, in addition, to pay them $75.00 “each three months in advance for the gas from each and every gas well drilled on said premises, the product from which is marketed and used off the premises, while the gas from said well is so marketed and used.” This oil and gas lease was duly recorded and the trial court found that the lease to Hope “has been in full force and effect since the date of its execution on November 26, 1903, up to the present time.” The fact that the Hope lease is valid and subsisting has not been challenged and is, therefore, not in issue in this case.

After the execution of the lease to Hope, Mrs. Shearer, through a series of mesne conveyances, obtained title by a deed of conveyance to 75 acres of the surface of this original 246-acre tract and title to the oil and gas under approximately 34 acres thereof. On March 6, 1959, Mrs. Shearer leased these 75 acres, more or less, to Allegheny for the purpose of oil and gas production. Under the lease agreement, the lessor was entitled to one-eighth royalty on all of the gas produced and marketed from the leased premises.

By terms of the lease from Mrs. Shearer to Allegheny, it was agreed that it should remain in force for five years “and as long thereafter as the said land is operated by the Lessee in the search for or production of oil or gas with the extension of term payment of rentals as hereinafter set forth.” The lease also granted to Allegheny incidental rights to store gas on the premises or by introducing the same into any sand or sands under the land, together with rights-of-way for pipe lines, structures, plants, houses, buildings for employees, tanks, stations, houses for gates, meters and regulators “for the production and transportation of oil and gas, and for the storage of any gas therein; * * *.” The lease contains the following provisions:

“Lessor hereby warrants generally the title to all oil and gas in and under the land hereinbefore [619]*619described and covenants that he will forever warrant and defend the leasehold estate hereby demised unto Lessee against the lawful claims and demands of all persons whomsoever, and that the Lessee shall have the exclusive, full, free and quiet possession of the said described premises for the purposes and during the term herein set forth.
* *
“In the event of notice of any adverse claim to the leased premises, or to any part of the rentals or royalties, the Lessee may withhold payment of the same until the ownership is determined by compromise or by final decree by a Court of competent jurisdiction.”

Prior to entering upon the premises, Allegheny caused the title of the leased premises to be examined and the examining attorney raised the question whether the premises leased by Mrs. Shearer were included in the 246-acre lease to Hope executed by Charles L. Bush and his wife. Upon the assurance of the “Lewis County Engineer” that the leased premises were not included in the Hope lease, the lessee entered upon the property and commenced drilling a well.

On September 7, 1959, when Allegheny had drilled to a depth of 750 feet, Hope notified Allegheny that it was trespassing and demanded that the drilling be stopped. Allegheny ceased its drilling operations at once. On September 8, 1959, Hope verbally agreed to assign to Allegheny its leasehold right as to the tract of 34.48 acres upon which the well was being drilled. The written assignment from Hope was executed and delivered to Allegheny on September 16, 1959, but was dated August 1, 1959, to evidence Hope’s authorization of Allegheny’s having gone upon the land on August 12, 1959.

On September 19, 1959, gas was discovered by Allegheny in paying quantities and drilling ceased. This was eleven days after Hope verbally agreed to make the assignment, and three days after the execution of the written assignment. On or about September 20, 1959, Mrs. Shearer was notified by officials of Allegheny of the negotiations with Hope and [620]*620that she would receive only the $300.00 rental per well as provided for in the Hope lease. This, we believe, was tantamount to notice to Mrs. Shearer by Allegheny that thereafter it was occupying the premises and continuing its drilling pursuant to the assignment to it of Hope’s paramount rights under its 1903 lease. On September 24, 1959, the well was fractured and gas was turned into the line on October 16, 1959.

On February 20, 1965, Margaret A. Shearer instituted an action in the Circuit Court of Lewis County against Allegheny. On May 7, 1965, the plaintiff filed her motion for summary judgment. The motion for summary judgment was submitted to the trial court for decision on the pleadings, exhibits, affidavits, stipulations and upon briefs and oral argument of counsel. In entering summary judgment for the defendant, the trial court held that the plaintiff and defendant were not landlord and tenant when the assignment was made, particularly when gas was discovered in paying volume, and that, regardless of the capacity in which Allegheny occupied the leased property, it was constructively evicted therefrom by title paramount in Hope and, being so evicted, Allegheny then had the right to take such assignment and to attorn to Hope and also to minimize damages.

In its written opinion, the trial court found that in 1918, “Margaret A. Shearer questioned the existence of a valid lease on her land and was advised by the Hope Natural Gas Company that it had a valid lease on the land owned by her dated November 26, 1903.” A letter written to her in 1918 by an official of Hope has been made an exhibit and a part of the record. The body of the letter is as follows:

“Dear Madam:
“Referring to your letters of Aug. 27 and Sept. 6th, offering to lease to this company tract of land conveyed by C. L. and Allie V.

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Related

United Fuel Gas Company v. Battle
167 S.E.2d 890 (West Virginia Supreme Court, 1969)

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Bluebook (online)
165 S.E.2d 369, 152 W. Va. 616, 31 Oil & Gas Rep. 408, 1968 W. Va. LEXIS 183, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shearer-v-allegheny-land-mineral-co-wva-1968.