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Phoenix v. Graham

OPINION FILED JANUARY 30, 1953

GEORGE KENNETH PHOENIX AND ENOLA PHOENIX, PLAINTIFFS-APPELLEES,

v.

HERMAN GRAHAM AND W.R. MCCLUSKEY, DEFENDANTS-APPELLANTS.



Appeal by defendants from the Circuit Court of Clinton county; the Hon. WARD P. HOLT, Judge, presiding. Heard in this court at the October term, 1952. Reversed and remanded. Opinion filed January 30, 1953. Released for publication March 4, 1953.

MR. JUSTICE SCHEINEMAN DELIVERED THE OPINION OF THE COURT.

Plaintiffs, George Kenneth Phoenix and Enola Phoenix, are the owners of a farm of 128 acres. In 1940 they executed an oil and gas lease as to 40 acres, on which drilling brought in four producing wells. The wells also produced salt water, which was separated and deposited in pits dug for the purpose. In 1945 the defendants, Herman Graham and W.R. McCluskey, acquired the oil lease and continued operating for about 5 more years, then plugged and abandoned the wells.

In 1951 the plaintiffs filed this suit for damages, alleging that water wells on the farm had been contaminated with salt water, making them unfit for use, that this had resulted from the negligence of the defendants, and that the farm was without any fresh water. A jury returned a verdict for plaintiffs for $9,500 upon which judgment was entered and this appeal followed.

The grounds urged for reversal are: that there was no proof of negligence on the part of defendants; that plaintiffs acquiesced in the operations as conducted; that the verdict was grossly excessive; also that an alleged rule of the Department of Mines and Minerals was not before the court.

As to the last point, the complaint alleged the rule, the answer denied its existence and no proof was offered thereon. Accordingly, the supposed rule was not before the court. If it existed, it could be proved by a copy certified by the Director of the Department. Ill. Rev. St. ch. 104, par. 70, subpar. (d) [Jones Ill. Stats. Ann. 93.122, subpar. (d)].

The evidence was as follows: The lease granted the right to mine for oil and gas and "any and all rights and privileges necessary, incident to or convenient for economical operation." There was no provision concerning damages, except to growing crops.

The first appearance of salt water in the oil wells had occurred within a year after they were brought in. The original lessee had then installed a settling tank, called a gun barrel, in which the oil floated to the top and the salt water was removed from the bottom and diverted into the pits. The first lessee had provided three such pits, and they sometimes overflowed. The volume of salt water increased with passage of time, so that, shortly after defendants took over the operation, they had to dig a new and larger pit. The plaintiffs were consulted about this, and were not happy over it, but agreed that the proposed location of the new pit was acceptable, and it was constructed.

There is some dispute about the depth to which this pit was excavated, and whether it went down into sand or porous material, which would permit accelerated seepage. There was no expert testimony, or other evidence, as to what other means could have been adopted for disposal of the salt water, while still maintaining profitable operation of the oil wells. Other oil wells in the neighborhood had the same trouble, but nothing is said about methods used there or elsewhere for disposition of the brine.

It appears that plaintiffs' farm buildings were located on the 40-acre tract in question, and they had three water wells in the vicinity. These began to be salty soon after defendants established the large pit, and eventually became unusable. There were no water wells on the other 88 acres not under this lease.

The contaminated wells did not contain water of artesian source, but merely percolating surface water; they were very shallow, being around 13 feet deep. According to an expert witness called by plaintiff, this is rather shallow for good water, since filtration in 12 feet of ground is seldom sufficient to assure pure water. However, it was the only source which plaintiffs had used in their farming operations.

An expert witness for the defense testified to his examination of the log of each oil well on the 40 acres, and they showed the existence of fresh artesian water at various depths, the uppermost being only about 60 feet from the surface. There was also testimony that defendants had caused a letter to be sent to plaintiffs offering to provide them a well into this source of water. Plaintiffs denied receiving any such letter.

In preparation for trial, plaintiffs caused a couple of postholes to be dug and the water tested. These showed salt in the water at a depth of about 10 feet. They also showed greater contamination to the north than to the south, which agreed with the testimony that the natural drainage was to the north, and the percolating water would follow the same trend. Although the farm extended south from the pit nearly 1,000 feet, no test was made farther south than 150 feet from the pit, and none was made to the west, where plaintiffs' land extended for some 2,000 feet from the pit. There was some indication that plaintiffs had refused to permit defendants to make any tests on the land.

There was an area north of the large pit on which there was surface damage to the land by reason of the pit having overflowed, and a surface pool used by cattle had been rendered too salty for use.

The method of proving the amount of damages was by the testimony of real estate men who gave opinions as to the market value of the property before and after the contamination of the water. Their testimony was not confined to the 40 acres, but pertained to the entire 128 acres. In giving opinions as to the present value of the farm, they apparently assumed that the salt water had ...


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