Opinion
No. 41769.
May 29, 1961.
1. Minerals — lessor and lessee — evidence — covenants in lease not violated.
Evidence justified Chancellor's finding that petroleum products coming on lessors' lands adjacent to demises premises used for refining and storing of petroleum products came from source other than lands covered by lease containing covenant against damaging of adjoining lands and that, though some such products came upon demised premises by subterranean route and gravitated, in spite of efforts of tenant, such occurrence was not within contemplation of parties or within covenant against damaging adjoining lands.
Headnote as approved by Jones, J.
APPEAL from the Chancery Court of Yazoo County; THOS. D. OTT, Special Chancellor.
Satterfield, Shell, Williams Buford, Jackson; Bridgforth Love, Yazoo City, for appellants.
I. The complainants may not prevail in equity unless they meet the burden of proving the allegations of the bill of complaint concerning the fulfillment of their covenants as to the use of the leased premises, without which the leases would cease and determine. Boyd v. Thornton, 13 Sm. M. (21 Miss.) 338; Chiles v. Gallagher, 67 Miss. 413, 7 So. 208; Jones v. Rogers, 85 Miss. 802, 38 So. 742; Taliaferro v. Ferguson, 205 Miss. 129, 38 So.2d 471; Secs. 1323, 1324, Code 1942; Griffith's Mississippi Chancery Practice, Secs. 212, 217.
II. By the provisions of the "E" lease there was leased to appellee, Paluxy Asphalt Company, two tracts of land for a term expiring on February 14, 1971, unless sooner terminated under its terms. No part of the leased premises was assigned to appellee, The Southland Company, and only the Paluxy Asphalt Company is interested in the "E" lease, subject to liens of the Mercantile National Bank at Dallas. The lease provided: "4. It is agreed that the leased premises are leased and let exclusively . . . for the sole purpose of transporting, storing, refining and marketing crude oil and its products; and, in connection with such operations, it is understood and agreed that second party may make any necessary and proper erections, improvements or excavations necessary therefor (excavations for a disposal pit for water and other waste products whether deleterious or not coming from the normal operations of such refinery, but limited to Tract No. 2 ((the 8.59 acre tract)) above described) . . .
"5. The second party agrees that it will so use the leased premises as not to damage or affect in any way the adjoining lands of first parties and will prevent any water, oil and all other waste products in said disposal pit from flowing on or from otherwise reaching the adjoining lands or nearby lands of first parties; and a breach of its covenant to so use the land shall authorize first parties at their election to terminate this contract and authorize re-entry or to sue second party for damages for the breach thereof; and it is agreed that this clause shall be binding upon the assignees and successors of all parties hereto and construed a covenant running with the leasehold."
III. The appellees' use of the lands let under the "E" lease damaged the adjoining lands of the appellants, resulting in a breach of the covenant of the appellee-lessees.
IV. Appellants' lands adjoining the "E" lease west of the 8.59 acre tract have been severely damaged by appellees' use of the 8.59 acre tract.
V. Physical re-entry by appellants unnecessary. Cross v. Carson (Ind.), 8 Blackf. 138, 44 Am. Dec. 742; Yazoo M.V.R. Co. v. Lakeview Traction Co., 100 Miss. 281, 56 So. 393; 32 Am. Jur., Sec. 870 p. 737.
VI. This suit was brought by the appellees. The burden is fully upon the appellees to establish and prove themselves the real owners of the leaseholds and to deny and disprove the claims of appellants. On the issue as to the "E" lease, the appellees are met by their clear and continuing violation of the condition of the lease. There is no conflict of evidence on the issue. The Chancellor's decree is manifestly wrong and should be reversed. The prayers for confirmation of title and cancellation of appellants' claims could only be denied, unless the Court rewrite the contract of the parties. This Court should here dismiss the bill of complaint as to the "E" lease, deny a confirmation in appellees of the leasehold it evidences and refuse to cancel appellants' claims thereto. The action should not be qualified as to the fixtures, plant, buildings and attachments to the soil on the "E" lease (appellants have never claimed title to personal property as distinguished from fixtures, and no issue as to personal property is presented in this case), and the Court should deny a confirmation in appellees of title to the fixtures, plant, buildings and attachments to the soil on the "E" lease and should refuse to cancel appellants' claims thereto.
VII. This is not an ordinary case where a question arises of the right of a tenant to remove trade fixtures after the expiration of his term. In this case, because of the wrongful act of the lessee in violating the conditions of his lease, the lessee has himself destroyed his tenancy and the right to removal. We find no Mississippi case where this question is directly raised. The general rule is that a tenant loses his right to remove fixtures from the real estate if by any act or omission he had forfeited his interest under the lease. Liverpool, London Globe Ins. Co., Ltd. v. Fuston, 179 Miss. 809, 176 So. 113; Love v. Union Cent. Life Ins. Co., 168 Miss. 412, 150 So. 794; McMath v. Levy, 74 Miss. 450, 21 So. 10; Tate v. Blackburne, 48 Miss. 1; Waldauer v. Parks, 141 Miss. 617, 106 So. 881; Weathersby v. Sleeper, 42 Miss. 732; 6 A.L.R. 2d 322.
VIII. The salient feature of the four leases is the limitation upon the leasehold estate granted in each. The covenant which comes into play here is that: "This property is leased and conveyed to the lessee for the purpose of erecting and operating an oil refinery . . . and in the event the lessee discontinues and abandons said operations this lease shall thereupon terminate and expire." The appellees discontinued and abandoned the operations of an oil refinery on the leased premises on August 20, 1958.
IX. The law determining when operations have been abandoned. Columbus G.R. Co. v. Dunn, 184 Miss. 706, 185 So. 583; In re Boston Terminal Co., 71 F. Supp. 472; James v. Gulf Refining Co., 206 Miss. 781, 41 So.2d 2; Rea v. Glenn, 133 Cal.App. 82, 24 P.2d 204; Smith v. Hoboken R.W. S.S. Connecting Co., 328 U.S. 123, 90 L.Ed. 1122, 66 S.Ct. 947, 168 A.L.R. 497; 49 U.S.C.A., Sec. 1 p. 18; 1 Am. Jur., Secs. 9, 13 pp. 7, 9; 1 C.J.S., Sec. 3 p. 8.
X. The overwhelming weight of the evidence shows that an intention to abandon had been formed and was executed on August 20, 1958, terminating the four leases.
XI. The intangible, unexpressed mental intent of Mr. Constantine does not meet the requirements of law. Tate v. Blackburne, supra.
XII. The overwhelming weight of the facts and circumstances in evidence support Constantine's statements, made to his employees and others, that he was abandoning or had abandoned operations August 20, 1958; as opposed to his conflicting statement made at the time of the trial claiming an undisclosed, secret intent to reopen the refinery. Tate v. Blackburne, supra; Sec. 10013-06, Code 1942.
XIII. Mechanical mixing requiring the services of two employees at the plant (also called blending) is not the operation of an oil refinery in accordance with the covenant of the leases. Clark v. Grisham, 219 Miss. 532, 69 So.2d 376; Grissom v. Livingston, 213 Miss. 424, 57 So.2d 144; Hunt v. Gardner, 147 Miss. 374, 112 So. 7; Rubel v. Rubel, 221 Miss. 848, 75 So.2d 59, 47 A.L.R. 1410; Williams v. Batson, 186 Miss. 248, 187 So. 236.
XIV. The decree confirming in the appellees the respective interests in the four leases claimed by each and cancelling the claims of appellants to said four leases is without factual basis, was manifestly wrong and should be reversed as to the leasehold interests, but should be affirmed as to all fixtures, plant, buildings and attachments to the soil, no appeal being taken from said decree as to such fixtures, plant, buildings and attachments to the soil located upon said four leases. The final decree confirmed in the appellee, Paluxy Asphalt Company, "a good and valid title in and to and rights to possession of all improvements, fixtures, plant, equipment, buildings and machinery, and any and all personal property of any nature, kind or description, now or presently located on" all the leaseholds held by appellee, Paluxy Asphalt Company. It validated the liens of the intervenor, Mercantile National Bank at Dallas, on all the personal property located on all the leaseholds held by appellee, Paluxy Asphalt Company, (except merchandise inventories). It confirmed in the apellees, the partners composing the appellee, The Southland Company, any and all personal property, of any nature, kind or description, now or presently located upon the leased lands assigned to them. It validated the liens of the intervenor bank to any and all personal property (except merchandise inventories) on the leased lands assigned to appellee, The Southland Company. It cancelled the claims of appellants as to all said personal property. The final decree is erroneous as to the "personal property" for the reason that it was not set up in the pleadings at all or either side, and was not an issue under the pleadings in the cause. Barker v. Jackson, 90 Miss. 618, 44 So. 162; Griffith's Mississippi Chancery Practice, Secs. 166, 185, 186, 612.
Wells, Thomas Wells, Jackson; Henry Barbour, John Sharp Holmes, Yazoo City, for appellees.
I. Appellants' contention that the burden of proof was on complainants, appellees here, concerning the fulfillment of the lease covenants as to the use of the leased premises is out of place, and an academic inquiry, in this Court, and even if made before the Chancery Court would not have been well taken. Babcock v. Dangerfield, 98 Utah 10, 94 P.2d 862; Board of Suprs. of Franklin County v. Newell, 213 Miss. 274, 56 So.2d 689; City of Jackson v. Alabama V.R. Co., 172 Miss. 528, 160 So. 602; Javierre v. Central Altagracia, 217 U.S. 502, 54 L.Ed. 859, 30 S.Ct. 598; Memphis C.R. Co. v. Neighbors, 51 Miss. 412; Smith v. Fanning (Miss.), 25 So.2d 481; Smith v. Van Norman, 234 Miss. 526, 106 So.2d 897; Southeastern Express Co. v. Namie, 182 Miss. 447, 181 So. 515; Southern Naval Stores Co. v. Price, 202 Miss. 116, 30 So.2d 505; Vicksburg M.R. Co. v. Ragsdale, 54 Miss. 200; 19 Am. Jur., Secs. 63, 67, 84 pp. 524, 530, 546; 20 Am. Jur., Sec. 207 p. 205; 32 Am. Jur., Sec. 825 p. 702; 5A C.J.S., Sec. 1656(9) p. 521; 31 C.J.S., Sec. 124 p. 743; 74 C.J.S., Sec. 76 p. 120; Griffith's Mississippi Chancery Practice (2d ed.) Secs. 573, 576, 590 pp. 598, 603, 625.
II. The evidence in this case not only overwhemingly, but also conclusively, established that appellees Paluxy and Southland never discontinued or abandoned the operations of an oil refinery on the four leases involved herein.
A. As to the "four leases", i.e., as to all leases here involved except the "fifth" or "E" lease, the precise issue is as to whether or not such four leases were terminated by virtue of a breach of the terms set forth in the common or identical paragraph reading as follows: "This property is leased and conveyed to the lessee for the purpose of erecting and operating an oil refinery, * * * and in the event the lessee discontinues and abandons said operations, this lease shall thereupon terminate and expire.". Beatty v. Baxter, 208 Okla. 686, 258 P.2d 626; Board of Suprs. of Franklin County v. Newell, supra; Frost v. Gulf Oil Corp., 238 Miss. 775, 119 So.2d 759; Midwest Oil Corp v. Winsauer, (Texas) 323 S.W.2d 944; Thornton v. City of Natchez, 88 Miss. 1, 41 So. 498.
B. What the Chancellor had a right to believe, and did believe, as to the statements of Mr. Constantine as to whether he intended to discontinue and abandon the operations. Board of Suprs. of Franklin County v. Newell, supra; Harper v. Wilson, 163 Miss. 199, 140 So. 693; Mutual Life Ins. Co. of N.Y. v. Rather, 221 Miss. 527, 73 So.2d 163.
C. Under the law, the record conclusively shows Paluxy and Southland never "discontinued and abandoned" the operations of an oil refinery. Albritton v. City of Winona, 181 Miss. 75, 178 So. 799, 115 A.L.R. 1436, 303 U.S. 627; Board of Suprs. of Franklin County v. Newell, supra; Buck v. City of Macon, 85 Miss. 580, 37 So. 460; Columbus G.R. Co. v. Dunn., 184 Miss. 706, 185 So. 583; In re Boston Terminal Co., 71 F. Supp. 472; Jackson v. Coleman, 115 Miss. 535, 76 So. 545; James v. Gulf Refining Co., 206 Miss. 781, 41 So.2d 2; People v. Morris, 334 Ill. App. 557, 79 N.E.2d 839; Rea v. Glenn, 133 Cal.App. 82, 24 P.2d 204; Smith v. Hoboken, R.W. S.S. Connecting Co., 328 U.S. 123, 90 L.Ed. 1122, 66 S.Ct. 947, 168 A.L.R. 497; Thornton v. City of Natchez, supra; Title 30, Code of Fed. Reg., Sec. 222.3(c); Sec. 10013-02(g), Code 1942; 5 Corbin on Contracts, Sec. 550; Williams Meyers' Manual of Oil Gas Terms, definition of "refiner".
III. When the covenants of the "E" lease are construed in accordance with settled principles of construction, no forfeiture of the lease can be adjudged under the facts established by the record and as found to exist by the lower court. Board of Suprs. of Franklin County v. Newell, supra; Citizens Bank of Hattiesburg v. Grigsby, 170 Miss. 655, 155 So. 684; Oliver v. Board of Suprs., 211 Miss. 447, 51 So.2d 766; Soria v. Harrison County, 96 Miss. 109, 50 So. 443; Thornton v. City of Natchez, supra; Williams v. General Insurers, Inc., 193 Miss. 276, 7 So.2d 876; Zambroni v. State, 217 Miss. 418, 64 So.2d 335; 12 Am. Jur., Sec. 436 p. 1016; 17 C.J.S., Sec. 320 p. 742; 91 C.J.S. 514, term "use"; Webster's Twentieth Century Dictionary, definition of words "source" and "use".
IV. Argumentatively assuming a forfeiture of the "E" lease, in no event has there been a forfeiture of the appellees' title to the buildings and improvements constructed on the "E" lease. Anderson-Tully v. United States, 189 F.2d 192; Connolly v. McLeod, 212 Miss. 133, 52 So.2d 473; Garner v. Stuart Co., 222 Miss. 290, 75 So.2d 747; Hamilton v. Charlebois, 63 N.D. 504, 248 N.W. 676; Hines Motor Co. v. Hederman, 201 Miss. 859, 30 So.2d 70; Opperman v. Littlejohn, 98 Miss. 636, 54 So. 77; Reader v. Christian (Texas), 234 S.W. 155; Waldauer v. Parks, 141 Miss. 617, 106 So. 881; Weathersby v. Sleeper, 42 Miss. 732; Anno. 6 A.L.R. 2d 322; 22 Am. Jur., Secs. 61, 64 pp. 776, 780; 51 C.J.S., Sec. 397 p. 1140.
APPELLANT IN REPLY.
I. This is a suit by the appellees as complainant and lessees to establish performance of their covenants contained in the "E" lease. Boyd v. Thornton, 21 Miss. 345; Citizens Bank of Hattiesburg v. Grisby, 170 Miss. 655, 155 So. 684; Oliver v. Board of Suprs., 211 Miss. 447, 50 So.2d 766; Thornton v. City of Natchez, 88 Miss. 1, 41 So. 498; Williams v. Williams, 167 Miss. 115, 148 So. 348; Griffith's Mississippi Chancery Practice, Secs. 32, 35, note 21d.
II. There are no issues of fact on this appeal concerning performance by the complainants-lessees-appellees of the covenants in the "E" lease.
III. Under any reasonable construction of the "E" lease, the complainants-lessees-appellees have failed to fulfill their covenant and are not entitled to a decree. Board of Suprs. of Franklin County v. Newell, 213 Miss. 274, 56 So.2d 689; Soria v. Harrison County, 96 Miss. 109, 50 So. 443; Williams v. General Insurers, Inc., 193 Miss. 276, 7 So.2d 876; Zambroni v. State, 217 Miss. 418, 64 So.2d 335; Anno. 109 A.L.R. 1267; 12 Am. Jur., Secs. 435, 436 p. 1016; 32 Am. Jur., Sec. 883 p. 749; 17 C.J.S., Secs. 312, 320 p. 742; 91 C.J.S. 518, "use"; Webster's New Collegiate Dictionary, word "use".
IV. The terms of the "E" lease are clear and explicit without proofs but the facts and circumstances surrounding its execution support the construction placed thereon by the appellants.
V. Having plainly violated the covenant which they gave for the protection of the appellants, the court below should have denied to appellees their prayer for confirmation of their title in the "E" lease and for cancellations of appellant's claims thereto. Further, such decree should not be qualified so as to exempt trade fixtures of improvements placed upon the "E" lease by the appellees. Anderson-Tully v. United States, 189 F.2d 192; Chicago Trust Co. v. 12-14 West Washington St. Bldg. Corp., 278 Ill. App. 117; Connolly v. McLeod, 202 Miss. 133, 217 Miss. 231, 52 So.2d 473, 63 So.2d 845; Garner v. Stuart Co., 222 Miss. 290, 75 So.2d 747; Hines Motor Co. v. Hederman, 201 Miss. 859, 30 So.2d 70; Opperman v. Littlejohn, 98 Miss. 646, 54 So. 77; Prins v. VanDerVlugt (Oregon), 337 P.2d 787; Reader v. Christian (Texas), 234 S.W. 155; Rinaldi v. Goller, 48 Cal.2d 276, 309 P.2d 451; Societa Italiana Di Mutua Beneficienza v. Burr, 71 F.2d 496, 26 Am. Bankr. N.S. 94; Tate v. Blackburne, 48 Miss. 1; Whipley v. Dewey, 8 Cal. 36; Anno. 6 A.L.R. 2d 322; 51 C.J.S., Sec. 317 p. 986.
VI. Proper disposition of the issue on the "E" lease. Tate v. Blackburne, supra; Anno. 6 A.L.R. 2d 322.
VII. The estate granted in the "four leases" is an estate for years, determinable upon the happening of a certain event, and not an estate for years on condition subsequent. First Universalist Soc. of North Adams v. Boland, 15 L.R.A. 231; Hall v. Eastman, Gardiner Co., 89 Miss. 588, 43 So. 2; Markey v. Smith (Mass.), 16 N.E.2d 20, 118 A.L.R. 274; 19 Am. Jur., Secs. 28, 36 pp. 486, 496; 32 Am. Jur., Sec. 825 p. 702; 2 Blackstone's Commentaries on the Law p. 109.
VIII. The Chancellor was manifestly wrong, in the light of the relevant and legally sufficient evidence, in his finding of fact, "there was no discontinuance or abandonment of oil refinery operations on the leased premises as to cause the leases to be terminated", if this finding is based upon the proposition that on August 20, 1958, Mr. Constantine actually had an intent to continue the refining operation through importations of crude oil from the Heidelberg area. Albritton v. City of Winona, 181 Miss. 75, 178 So. 799, 115 A.L.R. 1436; Board of Suprs. of Franklin County v. Newell, supra; Columbus G.R. Co. v. Dunn, 184 Miss. 706, 185 So. 583; Frost v. Gulf Oil Corp., 238 Miss. 775, 119 So.2d 759; Harper v. Wilson, 163 Miss. 199, 140 So. 693; James v. Gulf Refining Co., 206 Miss. 781, 41 So.2d 2; McCullough v. Swifton Consol. School Dist., 202 Ark. 1074, 155 S.W.2d 353; Mutual Life Ins. Co. of N.Y. v. Rather, 221 Miss. 527, 73 So.2d 163; Russell v. Town of Hickory, 135 Miss. 184, 99 So. 897; Tate v. Blackburne, supra; 22 C.J., Secs. 108, 114 pp. 173 note 39, 176; Griffith's Mississippi Chancery Practice, Sec. 42 p. 43.
IX. If the Chancellor's finding of fact, "there was no discontinuance or abandonment of oil refinery operations on the leased premises as to cause the leases to be terminated", is based upon the continuation of a blending operation of theretofore refined products upon the Paluxy site subsequent to August 20, 1958, there is no evidence to support such finding and such finding is contrary to the plain terms of the limitation in the "four leases". 15 U.S.C.A., Sec. 715; Sec. 10013-02(g), Code 1942; Glossary of Terms Used in Petroleum Refining, definition of word "refinery".
Prior to December 24, 1955, J. Herbert Hogue, Anne Hogue Darrington and Sarah Hogue Barbour had executed four lease agreements in favor of Paluxy Asphalt Company, a corporation, leasing to them for a specified term four separate tracts of land which were adjacent except for a public highway which traversed same. On these tracts Paluxy had erected a refinery. On October 24, 1955, each of these leases was renewed or extended for a period of fifteen years from February 14, 1956.
Each of the four leases contained the following provision:
"This property is leased and conveyed to the lessee for the purpose of erecting and operating an oil refinery, including the erection of buildings for housing trucks and automobiles used in connection with the lessee's oil refinery, and continued use of such buildings for said purposes shall be considered a part of the operation of said refinery, and in the event the lessee discontinues and abandons said operations, this lease shall thereupon terminate and expire."
On October 4, 1950, the same parties executed in favor of the same Company a lease containing two separate tracts, one consisting of 31.16 acres and the other of 8.59 acres (designated in the lease as tract No. 1 and tract No. 2, respectively) for a term of fifteen years from February 14, 1956.
This last lease will hereinafter be referred to as the "E" lease because a copy of it was attached as Exhibit E to the complaint hereinafter mentioned, and the first four leases, all being similar in character, will be called the "four leases".
The "E" lease contained the following provisions:
"4. It is agreed that the leased premises are leased and let exclusively to second party for the sole purpose of transporting, storing, refining and marketing crude oil and its products; and, in connection with such operations, it is understood and agreed that second party may make any necessary and proper erections, improvements or excavations necessary therefor (excavations for a disposal pit for water and other waste products whether deleterious or not, coming from the normal operations of such refinery, but limited to Tract No. 2 above described) and of housing its employees thereon. Further, it is agreed that such use shall extend to the benefit of second party, Paluxy Asphalt Company, and/or its affiliates or associates engaged in any phase of the aforementioned operations; and that, specifically subject to the terms of this lease, second party may sub-lease or sub-let a portion of such premises to outside parties performing any portion of the aforementioned operations.
"5. The second party agrees that it will so use the leased premises as not to damage or affect in any way the adjoining lands of the first parties and will prevent any water, oil and all other waste products in said disposal pit from flowing on or from otherwise reaching the adjoining lands or nearby lands of first parties; and a breach of its covenant to so use the land shall authorize first parties at their election to terminate this contract and authorize reentry or to sue second party for damages for the breach thereof; and it is agreed that this clause shall be binding upon the assignees and successors of all parties hereto and construed a covenant running with the leasehold."
On October 1, 1950, Paluxy Asphalt Company subleased to the Southland Company, a joint venture, a portion of the leased lands.
On February 22, 1959, the lessors, by their attorneys, gave written notice to Paluxy Asphalt Company, Mr. E. Constantine, Jr., and Mr. Charles W. Else, both of whom were partners in the Southland Company, that the "four leases" above mentioned had terminated or expired, alleging that the Company had discontinued and abandoned the operation of the oil refinery located upon said property.
The lessors later filed suit in the chancery court asking cancellation of the "four leases" and also seeking to cancel the "E" lease on the ground that the provisions thereof, above quoted, had been violated. They also filed ejectment suits in the county court. The chancery court case was later dismissed.
Thereupon, Paluxy Asphalt Company, a corporation, and E. Constantine, Jr., Charles W. Else and Gilbert L. Bright, partners operating as the Southland Company, filed suit against the lessors seeking to quiet and confirm the leasehold interests conveyed by the leases above mentioned and also demanding damages for slander of title.
The lessors answered alleging a breach of the lease provisions hereinbefore mentioned and denying that the lessees were entitled to have their leasehold interest in either of said leases confirmed. Much testimony was taken both in an effort to prove such breaches and to show that there had been no such breaches.
After hearing the evidence, the special chancellor made a special finding of fact in which he held, as to the "four leases":
"There was no discontinuance or abandonment of oil refinery operations on the leased premises as to cause the leases to be terminated."
There was ample evidence to sustain this finding of fact.
He further found, as to the "E" lease:
"The petroleum products on the lands of the Defendants to the West of the 8 1/2-acre tract included in the `E' lease (Exhibit `E' to the Bill of Complaint herein) came from a source not that of the `E' lease itself, and that petroleum products were on the `E' lease itself, outside the pit, prior to the execution of the lease."
Appellants' evidence on the issue as to the "E" lease was devoted principally to an effort to establish that waste products from the lagoon or disposal pit erected on the 8.59 acres covered by the "E" lease were seeping, leaking, or being permitted to enter upon adjacent land of the lessors thereby damaging same. Much proof was taken pro and con on this issue and the chancellor found against the lessors and the lessors who are appellants here concede that there was sufficient evidence to sustain this finding.
Appellants insist, nevertheless, the evidence shows the petroleum products which were upon appellants' land came there in violation of the condition or provision above quoted.
Tract 1 covered by the "E" lease was adjacent to that part of the "four-lease" property east of U.S. Highway No. 3. Tract 2 of the "E" lease was some little distance west of that part of the "four leases" west of the highway. The railroad loading tracks, right-of-way for another highway and the main lines of the railroad were between tract No. 2 and the other lands covered by the five leases. The loading racks and the other property were higher than the lands covered by tract 2.
(Hn 1) The testimony showed, and the chancellor was justified in holding, that petroleum products on the lands of lessors west of tract No. 2 came from a source other than the lands covered by the "E" lease, and although some of such products came upon the lands in tract 2 by subterranean route and portions thereof gravitated in spite of efforts by appellees to minimize and prevent same, under appellants' farm land, that such occurrence was not within the contemplation of the parties and was not within the provisions or condition above quoted. There was also evidence to support the chancellor's finding that petroleum products were on said tract No. 2, outside the pit, before the lease was executed.
The chancellor further found that the appellees were not entitled to damages for slander of title, and there was no cross-appeal.
He entered a final decree quieting and confirming the interests of the appellees (including certain holders of deeds of trust who had intervened) in and to the leasehold interests and to the properties which had been placed or erected by Paluxy and Southland thereupon.
The chancellor was justified by the evidence in his finding and in the decree and the case is therefore affirmed.
Affirmed.
Lee, P.J., and Gillespie, McElroy and Rodgers, JJ., concur.