Wiser Oil Company v. Conley

380 S.W.2d 217, 21 Oil & Gas Rep. 35, 1964 Ky. LEXIS 285
CourtCourt of Appeals of Kentucky (pre-1976)
DecidedJune 12, 1964
StatusPublished
Cited by8 cases

This text of 380 S.W.2d 217 (Wiser Oil Company v. Conley) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky (pre-1976) primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wiser Oil Company v. Conley, 380 S.W.2d 217, 21 Oil & Gas Rep. 35, 1964 Ky. LEXIS 285 (Ky. 1964).

Opinion

DAVIS, Commissioner.

In Wiser Oil Co. v. Conley, Ky., 346 S.W.2d 718, we adjudged that T. J. Conley, who is the appellee here, should be allowed recovery for damage to his real estate resulting from appellant’s use of waterflooding process in exploitation of an oil and gas lease. Upon a jury trial in the Magoffin Circuit Court, appellee obtained verdict and judgment of $15,000, separated as $6,000 for damage to coal underlying the land and $9,000 for surface damage. The oil company appeals from the judgment, asserting error in these'respects: (1) The $6,000 award for coal damage was based on patently erroneous evidence, (2) the award for coal damage is flagrantly excessive and contrary to the evidence, (3) the $9,000 award for surface damage was found under an erroneous instruction permitting the jury to find permanent damage, and (4) the $9,000 allowed for surface damage is flagrantly excessive and contrary to the evidence.

As observed in our first opinion in this matter (346 S.W.2d 718), the original oil and gas lease was made in 1917. In the cited decision we recognized that appellants’ liability for damages is limited to those damages attributable to the new method of exploitation. Thus, it is not proper for any damages to be assessed which may have resulted from activities under the lease prior to the waterflooding process.

It was established that applicable mining safety regulations require that a pillar 200 feet square be left around each drilled oil or gas well. At the time of trial there were 24 wells on appellee’s land; eight of these had been drilled before the waterflooding method was employed. Since the water-flooding, sixteen wells have been drilled, of which eleven are water input wells and five are production wells. (There is some discrepancy in the evidence and in briefs whether there have been fifteen or sixteen new wells.)

For the appellee it was shown that more than thirty years ago he had mined some coal from his land for his own household use; there has never been any commercial coal mining on the tract. That mining operation is still available for viewing, and shows a coal vein of 29J/£ inches thickness at the mouth of the mine and 321^ inches at the back wall or facing. Appellee’s principal coal witness said that the coal seam had about one-half inch “of parting or Jack rock” at the drift mouth, and that the parting had increased to about 2j/¿ inches at a point 25 to 30 feet from the drift mouth.

The same witness for appellee gave his-estimate of the amount of the coal underlying the land, based on his estimate that the coal underlying the area would average 29 inches in thickness. On that basis, the witness estimated there were 34.1 acres of recoverable coal under the land before the waterflooding method was put in use. He reckoned that 70% of that total could have been recovered, and gave his evaluation of the coal at $19,935.80. In making this-calculation the witness conceded that he was using tonnage royalty as a factor, but said that he had made an allowance deduction of 20% for “future market.”

It was shown that three core drills had been made on the appellee’s land by Tom Burke; two of these test drills were at the instance of the appellants and one was performed for appellee. Core drill #1 reflected that seven inches was the maximum thickness of any coal seam found on the western portion of the land. Core drill #2 showed two seams on the eastern part of the land, one being twelve inches thick and another eleven inches; the latter seam was two feet below the former, reflecting a parting of two feet between the seams. The third core drill, performed for appel-lee, reflects five strata of coal: The first is 1 foot 4 inches at depth of 38 feet 7 inches; the next is 7 inches at depth of 50 feet 5 inches; the next is 3 inches at depth of 72 feet 8 inches; next is 4 inches at depth of 79 feet 1 inch; and the final stratum is 11 inches thick at a depth of *219 129 feet 3 inches. It was brought out that two logs made at the time of the drilling of some of the old wells reflected coal at thicknesses of three feet near one well and two feet near another; no coal was shown on the old well logs seen by appellee’s witness Combs.

Moreover, appellee’s witness Combs said that he could not advise any prospective purchaser to buy the appellee’s coal rights, as a commercially feasible project, based solely on the information which the witness had at hand. Yet, the witness was permitted to assume the presence of coal under the tract at an average thickness of 29 inches. In face of the evidence of the core drills, coupled with the admission of appellee’s expert witness that he based his estimates upon measurement at one place, considered with the statement of the same witness that he would not advise a client to purchase the coal rights without more investigation than the witness had made, we cannot escape the conclusion that appellee failed to carry his burden to offer evidence warranting belief that coal in commercial quantity lies under his land. It is fundamental that while it is the jury’s province to weigh the evidence, the court will direct a verdict where there is no evidence of probative value to support an opposite result. The jury may not be permitted to reach a verdict upon speculation or conjecture. Kentucky Transport Corp. v. Spurlock, Ky., 354 S.W.2d 509; Myers v. Walker, Ky., 322 S.W.2d 109; 18 Ky. Digest, Trial,

However, the appellants offered evidence relating to the quantity and quality of the coal underlying appellee’s land. Appellants’ witness Spaulding made what he admitted to be a speculative estimate of the recoverable marketable coal under the land. The witness expressed serious doubt that coal in commercial quantity and quality lies under the land except in the area of five acres around the old mine site. He then estimated that the value of the five acres is $50 per acre, and put a value of $1 per acre on the rest of the coal rights. In the opinion of Spaulding, one-half acre of the five acres valued at $50 was damaged, thus making his testimony fix $25 as damage for that, coupled with an overall damage of $1 per acre for approximately 68.59 acres. Taking into account the allowance of $25 for the half acre, this would indicate his estimate at $68.09 for the rest of the coal damage, or a total coal damage of $93.09. At the close of the case appellants offered to confess judgment for “the amount of damage fixed by Spaulding,’’ without specifying what the amount was. This offer was refused by appellee.

Since the evidence did not warrant submission of coal damage beyond the amount admitted by appellants, the court erred in permitting the jury to assess damages on account of coal in any sum greater than admitted by appellants. If the evidence is substantially the same on a new trial, the court will limit coal damage recovery to the amount so admitted by appellants.

The appellee’s farm was surveyed as containing 68.59 acres (as distinguished from 82.87 acres mentioned in the first opinion in this controversy). In asserting his damages to the surface, appellee presented evidence touching upon seven items of damage. We shall discuss them separately:

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Bluebook (online)
380 S.W.2d 217, 21 Oil & Gas Rep. 35, 1964 Ky. LEXIS 285, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wiser-oil-company-v-conley-kyctapphigh-1964.