Hammonds v. Central Kentucky Natural Gas Co.

Court of Appeals of Kentucky · 1934 · Property

Propertywild animalsgasownershipnatural resourcesnatural gasoil and gasferae naturae

Facts

Around 1919, the defendant exhausted gas from a 15,000-acre field in Menifee and adjoining counties, much of which it held under lease. It later brought gas from distant fields and forced it through old wells into the vacated underground reservoir, withdrawing it when desired. The plaintiff owned 54 acres within the boundary of that geological dome or basin, but had never leased her land to the company. She sued on the theory that the company had trespassed by placing gas in or under her property without her consent.

Issue

Whether a company that lawfully extracted gas elsewhere, acquired title to it as personal property, and then reinjected it into a natural underground reservoir remained the exclusive owner of that gas when it allegedly migrated under the plaintiff's unleased land. If not, could the plaintiff recover from the company for use of her property on a trespass-based theory?

Rule

Oil and gas are owned as part of the land only so long as they remain on or under it or subject to the owner's control; when they escape, title is lost. Gas that has been reduced to possession becomes personal property, but if it is restored to a natural underground reservoir, it returns to its original fugitive character as mineral ferae naturae, and the injector ceases to be the exclusive owner of the whole of it.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Blue Hollow Energy lawfully produced natural gas in western Oklahoma, compressed it, and injected it through old wells into a depleted underground gas-bearing dome near Lexington, Kentucky. Part of the geological structure extends beneath 40 acres owned by Nina Fowler, who never leased to Blue Hollow and sues for trespass-based compensation on the theory that Blue Hollow is storing its own gas under her land.

How should a court rule on Nina's theory?

Explanation. The majority held that gas brought to the surface becomes personal property, but when the producer restores it to a natural underground reservoir, it resumes its original fugitive character as mineral ferae naturae. If it then wanders beneath another's land, the injector is no longer the exclusive owner of the whole of it, so the neighboring owner cannot recover on the theory that the company is storing its own gas there as trespassory personal property.