Court Opinion

ID: 3923180
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:49:52.671401+00
Date Added: 2024-06-11T07:45:53.892179
License: Public Domain

On Appellee's Motion for Rehearing.
In appellee's motion for rehearing, the earnest contention is made that the agreement on the part of the original lessee to pay the sum of 50 cents per acre for the six months' extension of the time for beginning operations is a "covenant running with the land," and that therefore the assignee, appellant, would be liable therefor, even though the instrument conveyed in part the fee, and even though the assignee did not by apt words so bind himself. We do not understand the law upon this question to be so decided in this state. In G., C.  S. F. Ry. Co. v. Smith,72 Tex. 122, 9 S.W. 865, 2 L.R.A. 281, when the remote vendee of certain land adjoining the railway company's right of way sought to enforce a stipulation in the deed from his remote grantor to the railway, to the effect that, under certain conditions, the railway company should keep its right of way under lawful fence, etc., it is said:
"There has been much discussion in the cases turning upon this point `concerning express covenants and covenants in law, and which covenants run with the land and which of them are collateral and do not go with the land, and when the assignee shall be bound, without naming him, and where not.' In Spencer's Case, 3 Coke, 31, which is recognized as the leading authority upon this subject, the rule is said to be: `That when the covenant extends to a thing in esse part of the demise, the thing to be done by force of the covenant is annexed and appurtenant to the thing demised, and shall go with the land and bind the assignee though he is not bound by express words; but when the covenant extends to a thing which is not in being at the time of the demise made, it cannot be appurtenant * * * to the thing that has no being.' If the covenant be to erect or set up a new house and the like, it will not bind the assignees unless they be named in the covenant. * * * Those covenants which are held to run with the land and inure to the benefit of the assignee are such as generally affected the land itself and conferred a benefit on the grantor."
This holding was approved in Ft. Wayne, etc., Ry. Co. v. Board of Commissioners, 24 Ind. App. 519, 57 N.E. 148, and in Ruddick v. Railway,116 Mo. 30, 22 S.W. 500, 38 Am. St. Rep. 570. In the last-cited case the Supreme Court of Missouri says:
"Upon the execution by plaintiff of the deeds, the title to the strip of land embraced therein vested in the grantees, subject to be defeated by failure on their parts to comply with the conditions expressed in the deeds; that is, to furnish in the one case a pass to plaintiff, and in the other to plaintiff's wife and family. Upon condition broken, and entry for reason thereof, the title would revert to and become reinstated in plaintiff. * * * Plaintiff misconceived his cause of action, which occurs to us is either an action against the original grantees in the deeds for damages for failure to furnish the passes, as held in the case of Helton v. Railway Co., 25 Mo. App. 322, * * * or ejectment for condition broken, which would entitle him to rent for the use of the roadbed from the time of such entry."
In Eddy v. Hinnant, 82 Tex. 354, 18 S.W. 562, our Supreme Court, speaking through Justice Gaines, discussed the question now under consideration. This was a case where appellee was suing for damages for an ejection from appellant's train, and predicated his claim that appellant was liable upon the contention that the receivers of the Missouri, Kansas  Texas Railway Company, as assignees or vendees of the East Line Railway Company, were liable under a contract between the East Line Railway Company and appellee, whereby the railway company, in consideration of the conveyance of a right of way, had covenanted to issue to appellee a pass over its line. The court said:
"But in order to show a right of action in the present case, it was necessary for the plaintiff to prove, not only that the Missouri, Kansas Texas Railway Company bought the East Line Railway Company, but also that it assumed the obligation of the East Line Railway Company, or at least promised to perform the particular contract upon which the action in this case is based. If A. sell B. a tract of land upon which a vendor's lien exists in favor of C., the land may be subjected to the payment of the debt; but B. is not liable upon the contract for the purchase money, unless in his contract with A. he has assumed to pay it; nor would any recognition of the promise of A. to pay C. the purchase money, or any part payment upon it make him liable personally upon it."
In the cases cited by appellee in his motion, in so far as we have found time to examine them, we failed to discover any announcement in conflict with this holding by, the Supreme Court, or that made in our original opinion. In the case of Ruhnke v. Aubert, 58 Or. 6, 113 P. 38, by the Supreme Court of Oregon, the covenant held to run with the land concerned a water right which the court held was an easement, and carved a new estate out of that granted, operating as a regrant or reconveyance of the estate reserved, and that the subsequent grantee took the larger estate with notice of this right of use or enjoyment.
In Ford v. Oregon Elec. R. Co., 60 Or. 278, 117 P. 809,36 L.R.A. (N.S.) 358, Ann.Cas. 1914A, 280, also by the Oregon court, it was held that a subsequent vendee could *Page 251 
not enforce a stipulation contained in the deed of his grantor to the defendant railway company, conveying a right of way, to the effect that said railway company would stop its train at a point near the grantor's residence, the decision being based upon the principles of public policy. There are expressions in the opinion to the effect that, were it not for the consideration of the question of public policy, the court would be inclined to hold that the covenant would be enforceable. Pretermitting the consideration that these expressions are in the nature of dicta, and therefore are not judicial pronouncements, we are still confronted with the fact that in this case the compliance with the terms of the covenant would directly enhance the value of the land and affect its use and enjoyment, and therefore the dicta, even when construed as applied to the recited facts, cannot be said to be in conflict with the holdings in the cases to which reference has heretofore been made.
Appellee reminds us that this question is one of great importance in this state, and urges that:
"Under the construction of this lease contract by this court, all any person desiring to secure oil leases has to do to escape liability is to secure a dummy and take the contract in the name of such dummy, and then have such dummy transfer the same to the real owner, and, if this is done, under the decisions of this court the real owner gets all the benefits of the contract without any of the burdens or obligations thereof whatever."
We fully realize the growing importance in this state of questions and judicial constructions affecting gas and oil leases, but we do not apprehend such dire results from what we believe to be merely a restatement of the law as it has been in existence and recognized by our courts for many years. Nothing in this opinion, we think, will justify the conclusion that we have held that the appellant could drill for oil or gas on this land, and, having found either or both, could extract the same without being liable to appellee for his one-eighth part, in the way of a royalty. Upon appellant's failure to account therefor, appellee could successfully bring a suit for a cancellation of the contract for breach, and for the recovery of his property of the oil or gas used by appellant, for the reservation of title to one-eighth of the gas and oil is, indeed, a "covenant running with the land." He now has the right to cancel the lease, because of the breach; that is, the failure to pay the sum of money stipulated as a consideration for the extension of the rights conveyed to the original grantee under the terms of the conveyance. Further, such original grantee would be liable primarily for said sum. But we do not think because of a noncompliance by the grantee or his assignee with the agreement of the former to drill within the specified time, plaintiff could recover from the assignee a sum of money which said assignee has not obligated itself to pay.
The motion for rehearing is overruled.
DUNKLIN, J., recused as before.