Ohio Oil Co. v. Indiana - 177 U.S. 190, 20 S. Ct. 576 (1900)

Rule:

As to gas and oil, the surface proprietors within the gas field all have the right to reduce to possession the gas and oil beneath. They could not be absolutely deprived of this right which belongs to them without a taking of private property. But there is a co-equal right in them all to take from a common source of supply, the two substances which in the nature of things are united, though separate. It follows from the essence of their right and from the situation of the things, as to which it can be exerted, that the use by one of his power to seek to convert a part of the common fund to actual possession may result in an undue proportion being attributed to one of the possessors of the right, to the detriment of the others, or by waste by one or more, to the annihilation of the rights of the remainder. Hence it is that the legislative power, from the peculiar nature of the right and the objects upon which it is to be exerted, can be manifested for the purpose of protecting all the collective owners, by securing a just distribution, to arise from the enjoyment by them, of their privilege to reduce to possession, and to reach the like end by preventing waste. The law of the State of Indiana protects private property and prevents it from being taken by one of the common owners without regard to the enjoyment of the others.

Facts:

Under a state statute that made it unlawful for any entity to permit the flow of gas or oil from a well to escape into the open air, the state brought a complaint against the oil company to enjoin it from allowing gas to escape from its wells into the open air. The trial court entered a decree granting a permanent injunction. The state supreme court affirmed the decree. 

Issue:

Did the enforcement of the provisions of the Indiana statute, as against the oil company, constitute a taking of private property without adequate compensation, and therefore amounted to a denial of due process of law in violation of the Fourteenth Amendment?

Answer:

No

Conclusion:

The court held that enforcement of the provisions of the statute did not constitute a taking of private property without adequate compensation and thus did not amount to a denial of due process of law in violation of the Fourteenth Amendment. The state law protected private property by preventing the waste of the common property of the surface owners in the reservoirs of gas and oil beneath the surface and prevented the gas and oil from being taken by one of the common owners without regard to the enjoinment of the others. While the surface owner had the right to appropriate and become the owner of the gas and oil found beneath the surface of his land, proprietorship did not take being until the particular subject of the right became property by being reduced to actual possession.