Myers v. East Ohio Gas Co.

Celebrezze, J.,

dissenting. Although the majority is unable to specify the nature of the beast before this court, I write separately because, in my view, the terms of the supplemental gas storage agreement are nevertheless beastly-

A majority of this court today rejects the doctrine that a lease terminable at the will of one party is a lease terminable at the will of both parties. It is, however, conceded that this view has been adopted by the great weight of authority, and referred to as the prevailing law. Rather than accept or reject this well-recognized principle, the majority assumes a mugwumpian stance and proceeds to construct a presumption of mutual termination. This novel creation is to be employed when the lease agreement does not clearly and unambiguously state that it is terminable at the *129 ■will of only one party. Surprisingly, the majority refuses to apply its presumption herein, despite the fact that nowhere in the supplemental gas storage agreement is it clearly stated that East Ohio alone has the right to terminate.

One reason given for the singular position of the majority is that the prevailing view may unnecessarily block the grant of otherwise valid estates. I thus feel constrained to point out that, by its decision, the majority allows enforcement of an agreement which actually occasions the very situation which it purportedly seeks to avoid.

When appellees purchased the property here involved, there were three well sites located on the borders of the property. Attached to the wells were, and are presently, pipelines which connect with the larger pipelines of the East Ohio system. These pipelines lie approximately three feet below the ground.

Sometime prior to the date when the complaint seeking termination of the lease was filed, appellees became aware of East Ohio’s intention to drill up to five additional wells on their property. East Ohio’s geologist later testified that at least two of the proposed five new wells would be drilled in the center of Myers’ land, and that each well site would consist of a well head sticking up approximately three feet above the ground, upon which there would be an approximately 12 foot long cross pipe. In addition, nearby each well head would be a storage tank, approximately 12 feet in height and nine feet in diameter. The geologist indicated that these new wells would necessitate the laying of additional pipeline in a criss-cross pattern just below the Myers’ property.

From their compliant it is evident that appellees were quite naturally concerned that additional well sites and pipeline right-of-ways would damage and encumber their premises, preventing them from developing their property and, most certainly, impairing the marketability of the property. 5 It is the position of East Ohio, however, that as *130 long as it continues to pay to appellees the stun of $200 per well per year it may, under the terms of the supplemental gas storage agreement, continue to install well sites and lay pipelines, at its sole discretion, regardless of the effect upon the value of the property.

Although the instant case is one of first impression, it would appear that certain cases concerned with mining rights may be helpful in illustrating the proper way to resolve the differences between the parties before this court.

In Skivolocki v. East Ohio Gas Co. (1974), 38 Ohio St. 2d 244 , the issue centered upon the respective rights of parties possessed of a surface estate and the underlying mineral estate. Mining rights were granted in the deed conveying the mineral estate, and an option provided “* * * that for any and all surface used by the grantee, its successors and assigns, it or they shall pay at the rate of fifty dollars per acre.” This court held that the option did not give an unqualified right to use the surface, and specifically did not give grantee the right to strip mine. The court also commented, in footnote 1, at page 249, as follows: “This implied right of the mineral owner [to use as much of the surface as may be reasonably necessary to reach and remove the minerals] is best explained as a practical attempt to insure that both he, and the surface owner, can enjoy their respective estates. To construe the ‘right to use’ as including the right to strip mine would be to pervert the basic purpose of a principle designed to mutually accommodate the owner of the mineral estate and the owner of the surface estate in the enjoyment of their separate proper *131 ties. * * *” (Emphasis sic.) Accord Quarto Mining Co. v. Litman (1975), 42 Ohio St. 2d 73 .

UpoA consideration' of the policy expressed in'the‘two above-cited cases, Í would hold that two conditions be placed upon East Ohio in the exercise of the rights secured- under the supplemental gas storage agreement. First, -I would direct East Ohio to use only as much of the surface, or to drill and install only so many wells, as are reasonably necessary to inject and remove its gas. Second, if it becomes reasonably necessary to drill and install so many wells that there will no longer be a mutual accommodation of the. interests of East Ohio and the owners of the surface estate, I would order East Ohio to pay to appellees the actual value of the property it has so encumbered. In this instance the parties could either come to a private agreement upon a price for the property, or East Ohio could exercise its statutory authority 6 to take by condemnation such lands as are being used for gas storage purposes.

For the foregoing reasons, I dissent from the judgment rendered herein.

Because the supplemental gas storage agreement provided that gas could be injected into the subsurface sands “* * * either through wells *130 now located or hereafter drilled upon said premises * * * or by any other method or means whatsoever * * I think it apparent that a prospective purchaser of the Myers’ property would not be encouraged by the possibility that at any future date the gas company might decide to install additional well heads, storage tanks or pipeline upon the property, whether or not there was a genuine need for more well sites. Indeed, East Ohio’s geologist testified that without construction of the proposed five new wells the company could continue to inject and withdraw gas from the three existing wells which, as noted above, are located on the perimeters of the Myers’ property.

R. C. 4161.17 provides, in part, as follows:

"Any corporation organized under the laws of Ohio for the purpose of transporting, selling, or storing gas may appropriate for use,in connection with the establishment, operation or protection of á gas storage reservoir, whether located entirely or in part in a coal bearing township or elsewhere, any private property or interest therein ás is necessary for the establishment, operation or protection of such reservoir. * * *”