Texas American Energy Corporation v. Citizens Fidelity Bank & Trust Company
Supreme Court of Kentucky
736 S.W.2d 25 (Ky. 1987)
Texas American (plaintiff), successor to Western's gas-purchasing and storage business, pledged an interest in gas already extracted and held in Western's sealed underground storage reservoirs as security for a loan from Citizens Fidelity (defendant), and sought a declaration that the stored gas remained personal property, while Citizens argued it had reverted to a real estate interest requiring a real estate mortgage; the parties agreed the gas could not escape Western's defined reservoirs, and the trial court's ruling for Texas American was reversed on appeal.
Whether previously extracted gas or oil subsequently stored in underground reservoirs capable of being defined with certainty, and whose integrity can be maintained, remains personal property.