The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1900-01-11
IMPORTANT DECISION

Of the Supreme Court Of Pennsylva-
mia Affecting OIL and Gas Interests.
The Rights Of Iessees.
A decision Of unusual Importance to
every person interested IN the oil and
gas business has been handed down by
the supreme court OF Pennsylvania 1t
was In the case Of Colgan against the
Forest OIL Company and settled ques-
ton that has been in doubt for long
time.
Colgan, the plaintiff. owned a farm Of
60 acres in Midtown district, on which
the Forest on Company held q lease
drawn In the usual way. Five wells
had been drilled under the lease on the
eastern part Of the tract. The company
also owned producing wells Of moderate
capcity on all the adjoining farms on
the north, west and south, located at
distances varying from 75 to 60 feet
from colgan's line. colgan insisted
that the western half Of his farm should
be developed by the drilling Of other
wells upon It, and asserted that he
could get others to drill the wells II the
defendant company would release that
portion Of the farm to him. The COM
pany declined to drin the additional
wells on the grounds that they were
under no obligations to do go. because
they did not believe paying wells could
be obtained on that part of the farm,
and declined also to release 1t to him
for the reason that they considered
they had complied with the require
ments Of the lease and had thereby
kept It in force as to the whole tract.
Colgan then filed a bill in the common
pleas court Of Allegheny county to COM
pei the-defendant company to drill on
the western part OF the farm or forfeit
the lease to him, and also to compel the
company to account for oil which he al
legged had been taken from the western
part of him farm through the wells on
adjoining farms. The court, after fully
hearing the evidence. made the decree
prayed for In the bill, but the supreme
court reversed 1t and orders the bill dis
missed. The opinion was written by
Judge Mitchell. In 1t he says:
This is bill in equity by lessor
against lessee for specific covenants, or
in the alternative for forfeiture OF lease
and also for an account. AS the cove
nants are merely implied and their ex-
tent depends altogether on oral evil
dence OF opinions. the case of relief is
wholly wanting In that precision and
certainty o. contractual duty which is
necessary to sustain the ordinary chan
Gerry decree for specific performance.
There is no relation Of special trust
or confidence between lessor and lessee
In gas or oil leases any more than in
any other. Like all other contracting
parties, they deal at arms length. each
for his own interest. So long as the
question is one Of business Judgmsnt
and management, the lessee is not
bound to work unprofltably to himself
for the profit Of the lessor. and the par
ties must be left. as in other cases, to
their own ways. II is only when
manIfestly fraudulent use OF the oppor-
tunlties ana control is shown, that the
courts are authorized TO interfere.
"As already said, defendants contract
obligation was to sink one well. 1t has
sunk Ave. One Of these. known as Col
gan No. s. 1t was desirable. in defend
ants judgment. to locate near the line
Of another lessor, Caldwell Defendant
accordingly consulted both plaintiff and
Caldwell. who both agreed TO the loca-
ton chosen, with notice from defendant
to plaintiff that II It proved a paying
well, plaintiff would in Justice to Cald-
well, put down another on caldwelrs
side Of the line as an offset. This was
done. The well on plaintiffs side Of the
line proved fair producer though 1t
declined after few weeks, and the
other well was then sunk on Caldwell's
side and proved about an equal pro-
Queer. This second well, known as
Caldwell No. 4. is the chief subject of
plaintiffs complaint and request for
an account.
ut is quite apparent. as the learned
judge reports. that each OF these wells
draws It's supply partly from the others
territory, but this was foreseen and an
express agreement made as TO the Local
ton of the first one, and the necessity
for the second as an Offset. The
plaintiffs bill therefore, on this branch.
is conclusIyely met by his own agree
ment beforehand to the conduct he now
complains or In cases Of this kind.
arising from conflicting claims as to the
territory from which the supply Of any
particular well is drawn. It is only when
the wells on adjoining territory are be-
Ing fraudulently used to drain the com
plaInnnts land that courts have any oc-
caslon to Interfere, The practical test
is to be found in the question OF the
outside wells, as for example the Cald-