tion, thereby depriving persons of their lib-son other than discrimination against the
erty and property by an interference with Chinese, refused to grant the licenses to the
their rights which is neither necessary to the petitioners and to some 200 other Chinese
protection of others nor the public health." subjects, while granting them to eighty peo
He contends that the ordinance vests ar- ple who were not such subjects and were
bitrary power in the mayor to grant or re-working under precisely the same condi-
fuse a license to sell cigarettes, and that tions. Such an ordinance, so executed, was
such arbitrary power is a violation of the held void by this court. Speaking in that
amendment in question.
case of the general right to grant licenses
in regard to occupations or trades, Mr. Jus-
tice Matthews, in delivering the opinion of
the court, said:

He claims also that he has been denied
the equal protection of the laws, because in
other kinds of business, where licenses are
granted to persons engaged in any trade or "The ordinance, therefore, also differs
[186]occupation, no *member thereof is "singled from the not unusual case, where discretion
out and subjected to the absolute supervi-is lodged by law in public officers or bodies
sion of an irresponsible magistrate while his
neighbor is protected in his right by the cus-
tomary safeguards of the law."

It seems somewhat doubtful whether the plaintiff in error is in a position to raise the question of the invalidity of the ordinance because of the alleged arbitrary power of the mayor to grant or refuse it. He made no application for a license, and of course the mayor has not refused it. Non constat that he would have refused it if application had been made by the plaintiff in Whether the discretion of the mayor is arbitrary or not would seem to be unimportant to the plaintiff in error so long as he made no application for the exercise of that discretion in his favor and was not refused a license.

error.

to grant or withhold licenses to keep tav-
erns or places for the sale of spirituous li-
quors, and the like, when one of the condi-
tions is that the applicant shall be a fit per-
son for the exercise of the privilege, because
in such cases the fact of fitness is submitted
to the judgment of the officer, and calls for
the exercise of a discretion of a judicial
nature."

The ordinance in question here does not grant to the mayor arbitrary power such as is described in the above-mentioned laundry case, but the provision is similar to that mentioned in the foregoing extract from the opinion in that case. In the case at bar, the license is to be issued if the mayor is satisfied that the person applying is of good character and reputation and a suitable person But, assuming that the question may be to be intrusted with the sale of cigarettes, raised by him, we think the ordinance in provided such applicant will file a bond as question does not violate the Fourteenth stated in the ordinance, as a security that he Amendment, either in regard to the clause will faithfully observe and obey the laws of requiring due process of law, or in that pro- the state and the ordinances of the city with viding for the equal protection of the laws. reference to cigarettes. The mayor is The case principally relied upon by the bound to grant a license to every person fulplaintiff in error is that of Yick Wo v. Hopkins, 118 U. S. 356, 30 L. ed. 220, 6 Sup. Ct. filling these conditions, and thus the fact of fitness is submitted to the judgment of the Rep. 1064, relating to the regulation of laundries in the city of San Francisco. The officer, and it calls for the exercise of a disordinance in question in that case was held cretion of a judicial nature by him. There to be illegal and in violation of the Four- is no proof nor charge in the record that teenth Amendment, because, with reference there has been any discrimination against to the subject upon which it touched, it con- individuals applying for a license or any ferred upon the municipal authorities arbi- abuse of discretion on the part of the mayor. trary power, at their will and without re- Whether dealing in and selling cigarettes is gard to discretion in the legal sense of the that kind of a business which ought to be literm, to give or withhold consent as to per-censed is, we think, considering the characsons or places for carrying on a laundry, with reference to the competency of the persons applying or the propriety of the place selected. It was also held that there was a clear and intentional discrimination made against the Chinese in the operation of the ordinance, which discrimination was founded upon the difference of race, and was wholly Regulations respecting the pursuit of a arbitrary and unjust. It appeared that lawful trade or business are of very frequent both petitioners, who were engaged in the occurrence in the various cities of the counlaundry business, were Chinese, and had try, and what such regulations shall be and complied with every requisite deemed by the to what particular trade, business, or occulaw, or by the public officers charged with pation they shall apply are questions for the its administration, necessary for the protec- state to determine, and their determination tion of neighboring property from fire or as comes within the proper exercise of the po[187]a protection against injury to the public lice power by the state, and unless the reguhealth, and yet the supervisors, for no relations are so utterly unreasonable and ex728

ter of the article to be sold, a question for
the state, and, through it, for the city to de-
termine for itself, and that an ordinance
providing, *reasonable conditions upon the[188]
performance of which a license may be
granted to sell such article does not violate
any provision of the Federal Constitution.

177 U. S.

travagant in their nature and purpose that
the property and personal rights of the citi-
zen are unnecessarily, and in a manner whol-
ly arbitrary, interfered with or destroyed
without due process of law, they do not ex-
tend beyond the power of the state to pass,
and they form no subject for Federal inter-
ference.

As stated in Crowley v. Christensen, 137
U. S. 86, 34 L. ed. 620, 11 Sup. Ct. Rep. 13,
"the possession and enjoyment of all rights
are subject to such reasonable conditions as
may be deemed by the governing authority
of the country essential to the safety,
health, peace, good order, and morals of the
community."

Whether there is or is not a delegation of power by the common council to the mayor is not in this case a Federal question.

We have no doubt that the ordinance, so far as the objection above considered is concerned, was clearly within the power of the state to authorize, and must be obeyed accordingly.

The other objection made to the validity

|jected to the operation of the power to regu late where a license is imposed for following the same, while the revenue obtained on account of the license is none the less legal because the ordinance which authorized it fulfils the two functions, one a regulating and the other a revenue function. So long as the state law authorizes both regulation and taxation, it is enough, and the enforcement of the ordinance violates no provision of the Federal Constitution.

There is no error in the record, and the judgment of the Supreme Court of Illinois is affirmed.

*OHIO OIL COMPANY Plff. in Err.,

บ.

STATE OF INDIANA.

(See S. C. Reporter's ed. 190-212.)

Constitutional law-taking private property without compensation-statute against waste of oil and gas.

of the ordinance is that the amount of the
license fee ($100) is an improper and illegal
interference with the rights of the citizen,
and is therefore a violation of the Four-1.
teenth Amendment.

The amount of the fee is fixed by the com-
mon council for the privilege of doing busi-
ness, and the text of the ordinance and the
amount of the fee therein named would seem
to indicate that it is both a means adopted
for the easier regulation of the business and
a tax in the nature of an excise imposed up-
on the privilege of doing it. In either case
the state has power to make the exaction,
and its exercise by the city under state au-
thority violates no provision of the Federal
Constitution.

[189] *The supreme court of Illinois has held that the city was authorized by the state law to impose the license fee.

In speaking of a license to do business, it was said in Royall v. Virginia, 116 U. S. 572, 579, 29 L. ed. 735, 737, 6 Sup. Ct. Rep. 510, 513: "The payment required as a preliminary to the license is in the nature and form of a tax, and is a due to the state which it may demand and exact from every one of its citizens who either will or must follow some business avocation within its limits, to the pursuit of which the assessment is made a condition precedent. It is an occupation tax, for which the license is merely a receipt, and not an authority, except in that sense, because it is laid and collected as revenue, and not merely as incident to the general police power of the state, which, under certain circumstances and conditions, regulates certain employments with a view to the public health, comfort, and convenience."

It is not a valid objection to the ordinance that it partakes of both the character of a regulation and also that of an excise or priv. ilege tax. The business is more easily sub177 U. S.

The restriction on the waste of gas and oll by owners of land, made by Ind. Acts 1893, p. 300, which provides that it shall be unlawful to permit the flow of gas or oil from a well to escape into the open air, without being confined within the well or proper pipes or other safe receptacle, for more than two days NOTE.-Property in petroleum oil or gas.

The nature of property in mineral oil or gas, including the question of the right to drill through coal of another owner and the nature of the interest in oil and gas leases, has been

exhaustively discussed in a note to Williamson

v. Jones (W. Va.) 25 L. R. A. 222. From the general rule that the property of the owner of cases there cited it may be laid down as the lands, in gas and oil, is not absolute until actually within his grasp and brought to the surface, but that, subject to the limitation not to make such use or waste of the product as will be injurious to the health of others, his power as owner to reduce to possession all or every part of the deposits without violating the rights legislature shall, in the interest of the public as consumers, restrict or regulate it by statute. These principles have been upheld in the more recent cases in which the rights of the owners of land to oil and gas under the surface have been considered.

of other surface owners is absolute until the

Petroleum oil is a mineral, and while it is in the earth it forms a part of the realty; but when it reaches a well and is produced on the surface it becomes personal property, and belongs to the owner of the well. Kelley v. Ohio Oll Co. 57 Ohio St. 317, 39 L. R. A. 765, 49 N.

E. 399.

Petroleum oll is a mineral within a reservation by deed of "all mines, minerals and metals in and under the land." Murray v. Allred, 100 Tenn. 100, 39 L. R. A. 249, 43 S. W. 355.

Petroleum oil in its place in the land is a part of the land itself. Williamson v. Jones, 43 W. Va. 562, 38 L. R. A. 694, 27 8. E. 411. Petroleum oil as it is found in the cavities of

729

after gas or oil shall have been struck in the well, does not take the private property of the owners of the land without adequate compensation, and therefore without due process of law, since the owner of the surface has no property right in the gas or oil until he has actually reduced it to possession, or, if he has any property right therein, it is a right in common with the coequal right of other land owners to take from the common source of supply, and therefore subject to the legisla tive power to prevent a destruction of the common property by one of the common own

2.

ers.

The doctrine that a land owner, although

*Statement by Mr. Justice White:
law enacted in 1893 by the state of Indiana
The title, preamble, and first section of a
(Acts 1893, p. 300) are as follows:
"An Act Concerning the Sinking, Safety,
Maintenance, Use, and Operation of
Natural Gas and Oil Wells, Prescribing
Penalties and Declaring an Emergency.
"Whereas, great danger to life and injury
to persons and property is liable to result
from the improper, unsafe, and negligent
sinking, maintenance, use, and operation of
natural gas and oil wells; therefore,

entitled to bore wells for natural gas and oil,
has no title to those substances as owner un-
"Sec. 1. Be it enacted by the general as-
til they are actually reduced by him to posses-sembly of the state of Indiana, That it shall
sion, is settled as a rule of property in the be unlawful for any person, firm, or corpora-
state of Indiana.

[No. 84.]

tion having possession or control of any
natural gas or oil well, whether as a con-
tractor, owner, lessee, agent, or manager, to

Argued December 18, 19, 1899. Decided allow or permit the flow of gas or oil from

April 9, 1900.

INS
N ERROR to the Supreme Court of the
State of Indiana to review a decision af-
firming a judgment sustaining a statute pro-
hibiting the waste of natural gas and oil.
Affirmed.

See same case below, 150 Ind. 698, 50 N.
E. 1125.

the rock is part of the realty, and embraced In the comprehensive idea which the law attaches to the word "land." Wilson v. Youst, 43 W. Va. 826, sub nom. Wilson v. Hughes, 39 L. R. A. 292, 28 S. E. 781.

Petroleum is to be regarded as real estate while it remains in situ, and consequently the Interest of a lessee in an oil lease cannot be

taxed as personal property. Carter v. Tyler County Ct. 45 W. Va. 806, 43 L. R. A. 725, 32 8. E. 216.

"Petroleum gas and oil are substances of a peculiar character They belong to the owner of the land and are part of it so long as they are on it or in it or subject to his control, but when they escape, and go into other land, or come under another's control, the title of the former owner is gone. If an adjoining owner drills his own land, and taps a deposit of oil or gas extending under his neighbor's field so that it comes into his well, it becomes his property." Brown v. Spilman, 155 U. S. 669, 89 L. ed. 305, 15 Sup. Ct. Rep. 247.

Whether petroleum percolates through the rock, or exists in pools and deposits, it forms a part of that tract of real estate in which it lies for the time being, but when it leaves one tract of land and enters another It becomes part of the realty of the latter so that the owner of the former loses all right to the oil while it remains away from his land. Kelley . Ohio Oll Co. 57 Ohio St. 817, 89 L. R. A. 765, 49 N. E. 899.

Neither a landowner nor one acquiring oil rights in his lands has a right of action because of the drilling and operation of wells upon adJoining property, which draw the oil from his lands; but his remedy is to drill wells along and near the division line, so as to prevent the passage of such oil. Ibid.

And an owner of oil wells may use a gas pump in operating them, although by its pow. erful suction the production of his neighbor's 730

[190]

any such well to escape into the open air
without being confined within such well or[191]
proper pipes or other safe receptacle, for a
longer period than two (2) days next after
gas or oil shall have been struck in such well.
And thereafter all such gas or oil shall be
safely and securely confined in such well,
pipes, or other safe and proper receptacles."
wells is decreased, since the property of the
owner of lands in oil and gas is not absolute,
until it is actually within his grasp and
brought to the surface. Jones v. Forest Oil
Co. 194 Pa. 379, 48 L. R. A. 748, 44 Atl. 1074.

But the wasteful use of gas by burning it
for illuminating purposes in flambeau lights
may be restrained by statute. Townsend v.
State, 147 Ind. 624, 37 L. R. A. 294, 49 N. E.
14.

State v.

In declaring constitutional a statute making
it unlawful to waste natural gas by permitting
its escape into the open air for more than two
days after gas or oil has been struck, the Indi-
ana supreme court denies that in quoting in its
previous decisions from Westmoreland & C.
Natural Gas Co. V. De Witt, 130 Pa.
235, 5 L. R. A. 731, 18 Atl. 724, it has
adopted as law so much of the quotation as
reads: "They [the water, gas, and oil] belong
to the owner of the land and are part of it so
long as they are on or in it and are subject to
his control; but when they escape, and go into
other land, or come under another's control, the
title of the former owner is gone."
Ohio Oll Co. 150 Ind. 21, 47 L. R. A. 627, 49 N.
E. 809. The court held that the title to nat-
ural gas does not vest in any private owner
until it is reduced to actual possession, and
that therefore, the constitutional provision in
question was not an unwarranted interference
with private property. But the constitution-
ality of such a statute may be upheld without
deciding that an owner of land has no property
right in gas or oll until it is reduced to posses-
sion, under the rule laid down in the principal
case, that if such a right exists it is one in
common with the coequal right of other land-
owners to take from the common source of sup-
ply, and is therefore subject to the legislative
power to prevent the destruction of the common
property by one of the common owners.

177 U.S.

The remaining sections of the law in ques- | business therein. The cause of complaint tion are printed in the margin.t was thus stated: [192] *The issue which this record presents, on the subject of the law just referred to, is this: Did the enforcement of the first section of the statute produce as to the persons whose obedience to its commands were coerced by injunction, a taking of private property without adequate compensation; that is, did the execution of the statute amount to a denial of due process of law contrary to the provisions of the Fourteenth Amendment to the Constitution of the United States?

"Plaintiff says that for many years hereto fore there has existed, underlying the coun-[193] ties of Madison, Grant, Howard, Delaware, Blackford, Tipton, Hamilton, Wells, and other counties of the state of Indiana, a large subterranean deposit of natural gas, occupying a reservoir of large extent, with well-defined boundaries, and utilized for fuel and light by the people of those counties and many other counties and cities of Indiana, including Indianapolis, Fort Wayne, Richmond, Logansport, Anderson, Muncie, MarThe controversy was thus initiated: The ion, Kokomo, and others of the most popu state of Indiana, through its attorney gen-lous cities of said state, to which cities said eral, filed a complaint in the circuit court gas is conducted, after being brought to the of the county of Madison in the state of In- surface of the earth, through pipes and condiana, against the Ohio Oil Company, a cor-duits, by means of which many hundreds of poration organized under the laws of the thousands of the people of the state of Instate of Ohio, but authorized to carry on its diana are now, and have been for more than business in the state of Indiana, as it had ten years last past, continuously supplied complied with the regulations enacted by with gas for light and fuel; that said natural that state as to foreign corporations doing gas underlying the counties aforesaid and any of the provisions of this act shall be liable to a penalty of $200 for each and every such violation, and to the further penalty of $200 for each ten days during which such violation shall continue; and all such penalties shall be recoverable in a civil action or actions, in the name of the state of Indiana, for the use of the county in which such well shall be located, together with reasonable attorney's fees and costs of suit.

† Sec. 2. Whenever any well shall have been sunk for the purpose of obtaining natural gas or oil or exploring for the same, and shall be abandoned or cease to be operated for utilizing the flow of gas or oil therefrom, it shall be the duty of any person, firm, or corporation having the custody or control of such well at the time of such abandonment or cessation of use, and also of the owner or owners of the land wherein such well is situated, to properly and securely stop and plug the same as follows: If such well has not been "shot" there shall be placed in the bottom of the hole thereof a plug of well-seasoned pine wood, the diameter of which shall be within 1⁄2 inch as great as the hole of such well, to extend at least 3 feet above the salt-water level, where salt water has been struck; where no salt water has been struck, such plug shall extend at least 3 feet from the bottom of the well. In both cases such wooden plugs shall be thoroughly rammed down and made tight by the use of drilling tools. After such ramming and tightening the hole of such well shall be filled on top of such plug with finely broken stone or sand, which shall be well rammed to a point at least 4 feet above the Trenton limestone, or any other gas or oil bearing rock; on top of this stone or sand there shall be placed another wooden plug at least 5 feet long with the diameter as aforesaid, which shall be thoroughly rammed and tightened. In case such well shall have been "shot," the bottom of the hole thereof shall be filled with a proper and sufficient mixture of sand, stone, and dry cement, so as to form a concrete up to a point at least 8 feet above the top of the gas or oil bearing rock or rocks, and on top of this filling shall be placed a wooden plug at least 6 feet long, with diameter as aforesaid, which shall be properly rammed as aforesaid. The casing from the well shall then be pulled or withdrawn therefrom, and immediately thereafter a cast-iron ball 8 inches in diameter shall be dropped in the well and securely rammed into the shale by the driller or owner of the well, after which not less than 1 cubic yard of sand pumping or drilling taken from the well shail be put on top of said iron ball.

Sec. 3. Any person or corporation violating 177 U. S.

Sec. 4. Whenever any person or corporation in possession or control of any well in which natural gas or oil has been found shall fail to comply with the provisions of this act, any per son or corporation lawfully in possession of lands situate adjacent to or in the vicinity or neighborhood of such well may enter upon the lands upon which such well is situate, and take possession of such well from which gas or oil is allowed to escape in violation of the provisions of § 1 of this act, and pack and tube such well, and shut in and secure the flow of gas or oil, and maintain a civil action in any court of competent jurisdiction in this state against the owner, lessee, agent, or manager of said well, and each of them jointly and severally, to recover the cost and expense of such tubing and packing, together with attorneys' fees and costs of suit. This shall be in addition to the penalties provided by § 3 of this act.

Sec. 5. Whenever any person or corporation shall abandon or cease to operate any natural gas or oil well, and shall fail to comply with the provisions of § 2 of this act, any person or corporation lawfully in possession of lands adjacent to or in the vicinity or neighborhood of such well may enter upon the lands upon which such well is situate, and take possession of such well, and plug and fill the same in the manner provided by 2 of this act, and may maintain a civil action in any court of competent jurisdiction of this state against the person, persons, or corporation so failing, jointly and severally, to recover the costs and expenses of such plugging and filling, together with attorneys' fees and costs of suit. This shall be in addition to the penalties provided by § 3 of this act.

731