Summary
In Miles, the court was called upon to determine whether the subsurface owner had the right to store natural gas piped in from foreign fields in exhausted natural gas wells under the terms of a deed conveying to it "all the oil, gas and minerals in said premises, together with the right at all times to enter upon said premises and to bore wells,... and remove all oil, gas and minerals found thereon."
Summary of this case from International Salt Co. v. GeostowOpinion
December 21, 1970
Appeal from an order of the Supreme Court, Schuyler County, granting respondent's motion to strike the first affirmative defense of appellant's answer and denying appellant's motion for summary judgment and for dismissal of the complaint. In 1936 the Federal Land Bank of Springfield conveyed the land in question to respondent's predecessors in title by a warranty deed which reserved to the Federal Land Bank of Springfield, its successors and assigns: "all the oil, gas and minerals in said premises, together with the right at all times to enter upon said premises and to bore wells, make excavations, lay pipes and remove all oil, gas and minerals found thereon." In 1943 the Federal Land Bank conveyed by quit claim deed to one Harvey E. Crandall: "All the oil, gas and minerals located on the following premises, together with the right at all times to enter upon said premises and to bore wells, make excavations, lay pipes and remove all oil, gas and minerals found thereon". Crandall subsequently conveyed his rights in the instant property together with other properties to appellant. The instrument of conveyance from Crandall to appellant granted all of his interest in all of "those gas production properties" including specifically "gas storage rights". The natural gas under respondent's land was thereafter extracted to the point of exhaustion. Then in 1959 and 1960 appellant reopened and reconditioned the wells for the storage prior to sale of natural gas pumped in from foreign fields. The sole question argued on this appeal is whether by virtue of the conveyances involved appellant has the right to store natural gas piped in from foreign fields on the instant property. Special Term determined that there was a distinction between the right to extract minerals and the right to later use the same domes or strata once depleted for storage of gas piped in from foreign fields, found that no storage rights had been conveyed to appellant through the grant and reservation of the Federal Land Bank and, accordingly, granted the motion to strike appellant's first affirmative defense. We concur in Special Term's determination. The wording of the reservation and grant is clear and unambiguous in conveying rights solely relating to the production and transmission of gas from the property and cannot be construed as also covering the storage activity engaged herein by appellant. While a grant of production rights will include the right to conduct all operations necessary to extract those minerals ( Marvin v. Brewster Iron Min. Co., 55 N.Y. 538), such a grant alone cannot be construed to include the right to store gas piped in from foreign fields ( Banach v. Home Gas Co., 12 A.D.2d 373, mot. for lv. to app. den. 14 A.D.2d 458). Order affirmed, with costs. Herlihy, P.J., Reynolds, Staley, Jr., Greenblott and Sweeney, JJ., concur.