Logan Natural Gas & Fuel Co. v. Great Southern Gas & Oil Co.

Citations

• 126 F. 623
• 14 Ohio F. Dec. 225
• 1903 U.S. App. LEXIS 4349

Syllabus

<p>L Oil and Gas Leases — Implied Covenant to Develop the Property— Abandonment by Delay.</p> <p>Leases were executed by owners of lands purporting to grant the same to an oil company for the purpose only of operating thereon for oil and gas, in consideration of a royalty to be paid the lessors, so long as oil and gas should be found thereon in paying quantities. No other time was stated for the termination of the grant, nor was any time fixed for the commencement-of operations. Reid, that it was an implied condition of such leases that the lessee should drill wells and commence operations thereunder within a reasonable time, and that its failure to take any steps to that end for four years entitled the lessors to treat the contracts as abandoned, and to lease to other parties.</p> <p>2. Same.</p> <p>The fact that under a provision of such leases the lessee issued to the lessors what were denominated “first mortgage bonds’’ for a certain amount per acre, with interest payable from its net profits, reserving the right to cancel the same and abandon the leases, did not affect the right of the lessors to treat the leases as abandoned, although they had not returned the bonds, where they had received no payments thereon, such bonds not being negotiable nor of any validity after the leases were terminated by the act of either party.</p> <p>8. Same — Rights oe Lessee — Jurisdiction op Equity to Protect.</p> <p>A lessee under an oil and gas lease, although out of possession, may maintain a suit in equity in a federal court to protect his rights thereunder by enjoining the removal of oil or gas from the premises by a claimant under another lease, the effect of which would be to destroy his estate, and, having acquired jurisdiction for that purpose, the court may retain it to settle the question of title as between the parties, and to cancel defendant’s lease as a cloud on complainant’s title.</p>