Case ID: ohio-law-abs_6/html/0264-01.html
Source: Caselaw Access Project
Author: {"author": "ALLREAD, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HOCKING COAL & OIL CO. v. PRESTON OIL CO.
    Ohio Appeals, 2nd Dist., Franklin Co.
    No. 1614.
    Decided Nov. 17, 1928.
    First Publication of This Opinion.
    Syllabus by Editorial Staff.
    570a. GAS AND OIL LEASES — 1277. words and Phrases.
    Where lease gives lessee “right to use off of said farm, for such purposes as it may desire, casing head gas, (being gas produced from oil wells on the premises) free of all rent or royalty/’ lessee has right to market the same or refine its constituents for market purposes.
    Error to Common Pleas.
    Judgment affirmed.
    W. G. Hahn, Bellefontaine, and Chas. S. Drugan, Columbus, for Coal Co.
    Eagleson & Laylin, Columbus, for Preston Oil Co.
   FULL TEXT.

ALLREAD, J.

The parties stand in the same relation here as in the court below.

Plaintiff, an owner of certain real estate, seeks in the second cause of action to recover of defendant as lessee under a gas and oil lease for casing head gas marketed from the oil wells upon the real estate leased.

The gas and oil lease provided for prospecting for gas and oil on the said premises. In the event oil or gas was found, the lessee-agreed to deliver in pipe lines one-eighth .of the oil produced and for every gas well $50.00 royalty every three months. '

A demurrer to the second cause of action was sustained and final judgment was rendered upon the demurrer for the defendant.

The following clause in the lease is directly involved:

“The second party (defendant) its suc-cessdrs and assigns shall have the right to use off the said farm for such purposes as it may desire casing head gas (being gas produced from oil wells on the premises) free of all rent or royalty.”

In the same clause and immediately following appears this cluase:

“In consideration whereof the lessors may lay lines to any well producing gas on said land to take gas free for their own use for heat and light in dwelling houses on said land out of any surplus gas over and above what the second party, its successors and assigns require to operate the farm and subject to the use, operating, pumping and right to abandonment of the well by the second party.”

The latter clause is not directly involved but it is claimed to have a bearing upon the eon- ' struction of certain words in the clause which directly involves casing head gas.

Casing head gas is a by-product arising out Of the operation of an oil well. It is different in many respects from dry gas as produced in á regular gas well. Casing head gas being liberated from oii contains gasolene and is valuable in the market for the extraction of gasolene.

The clause dealing with casing head gas confers upon the lessee the right to use said gas off of said farm for such purposes as it may desire free from all rent or royalty.

Counsel differ (1) as to the scope of the word “use”; (2) as to the meaning of the words “off of’said farm,” and (3) as to the clause “for such purposes as it may desire.” These words and clauses must be considered together. The word “use” when the context is taken is. not limited to any particular use on the .farm. Indeed the context is to the contrary. The right is expressly given to use the casing head gas off the farm. This would be inconsistent with the limited use for power and light in the operation of the wells. Further the words “as it may desire” are descriptive of the use as applied to casing head gas and is’ inconsistent with the limited use as contended for. These words have the same effect as the words “fee simple” in a deed. The absolute right so given to the lessee to use the casing head gas off the farm for such purposes as it may desire would include the right to market the same or refine it into its constituents for . market purposes. •

We are unable to reach the conclusion that the primary clause dealing expressly with, casing head gas should be cut down or changed by the succeeding clause. The words “use” in these clauses ’ were not intended to be synon-omous and each is governed by its own context. The two clauses in respect .to the word “use” are entirely different. The - first clause grants the right in broad terms to the use of casing head gas off of. the farm. The second clause reserves the right of the lessee to use gas for operating purposes on-the farm. The first clause deals exclusively with casing head. gas; the latter deals specially with gas from gas wells which may or may 'not be. casing head gas. In any construction of the latter clause we think the primary clause above quoted expressly relating to casing head gas clearly grants the casing head gas used off the farm for any purpose desired by the lessee and this would include the right to market the same.

(Ferneding and Kunkle, JJ., concur.)