The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-05-16
VALIDITY OF OIL LEASES
SUPREME COURT DECISION AROUsEs
/. GENERAL COMMENT.
Thousands OF Acres Held by Technical
Conformation to Contract crowned
on by the Court.

The decision of the Supreme Court in the
case of Riley r. Gadbury against the Ohio
and Indiana Consolidated Natural Gas
and Oil Company TO the effect that
whef tenant leases many tracts
of ground on consideration of pay
ing part OF the gas or oil produced and
marketed. and thers plugs the wells on part
of tfse tracts and Draws gas or oil from the
tracts obtained on more favorable terms.
that the title OF the lessor is good against
the tenants lease, aas aroused a good deal
OF comment among: oil and gas men OF the
state The case wds one where an attempt
was made to grant perpetual rights to oil
and gas, with q rental to be paid for the
oil aud gas produced. and a forfeit IL no
well should be sunk within specified time.
WILL was sunk .and then capped. The
company held that AZ had cOnformed to the
requirements OF tlie lease. The original
ownet claimed that II the company failed to
develop the land IL forfeited the lease. The
court:took the lattes view of the case.
Mary thousands ef Indiana oil lands are
being held by drilling well on the leased
property and then eapping. Territory has
been gtaken up Throughout the field more
rapidly than IL cOulh be developed, and the
Iesseess have devised the plan to hold their
gas and oil men believe generally that be-
causes tae lease invCsved In the suit was an
ynusal form Of Lease the decision ns ean mot
outline their fight with this idea, and will
force each property owner TO contest on his
particular lease III ne desires to have the
lease declared forfeited.
WHAT LOCAL MEN SAY.
Bensent Lyman. manager of the Con-
sumefs Gas Trust Company. says the de-
olson VIII not affect a single one of the
leases held by his company. which include
many thousands OF acres of gas and oil
lands; John r. Pearson, OF the Indian
apolis' Gas Company, made practically the
same statement. Bis company is paying
for al its leases in some manner. he says
He believes that every lease has its own
peculiar individuality and that a decision
of the Supreme Court on one form cannot
be made 10 cover all the others. Harry
Mount. OF Muncle. one OF the best oil
eutIIosfties I'm the State, says that several
Manifestations may be placed on the de-
cisions However. contract IS contract.
validate a contract made in good faith and
propeEly drawn Sorne believe that the de-
eisioni viii go far sowa1d protecting the
big OF companies.
The following comment is mfde the
decision by member or the Supreme
s.-'ha decision will not apply TO all gas
leases In fact, the instrument by which
ere RIGHT OF occupancy of this ground was
Transferred was not lease. il was an
arfemst 10 make a perpetual grant In IT
there was an implied condition 10 develop
<he 6rld. which was condition subse-
r-renfa and the failure TO comply with
which resulted IN tile forfeiture.
This case was clear cut and unques-
<to,edI There are msny forms OF leases, so
thaf this ruling would not apply TO all.
the raIing Is fundamental In this. how
ever. that when company leases territory
90 ofs or gas development, or secures IL
Under fofher form OF instrument. there Is
an imssI.ed condition TO develop the terri
<e~x sFhether IL be- condition subse-
r,,e~,t- nonperformarsce Of which viii re-
s,.;f IN forfeiture. or merely such condi-
~ er6unds for an action OF damages"