Balfour v. Russell

167 Pa. 287 | Pa. | 1895

Opinion by

Mr. Justice McCollum,

■ We think this case was correctly decided in the court below. The plaintiff leased the land in dispute to John A. Snee, for the purpose of exploring for and obtaining oil or gas. The lease was for three years or while oil or gas was produced from the demised premises in paying quantities. The continuance of the lease beyond three years was contingent upon the production of oil or gas in such quantities within that time. Snee drilled two wells; one of them was not worth operating and he abandoned it, the other produced oil in paying quantities. He then assigned his interest in the lease to the defendants who drilled two wells, with a like result. All the wells were drilled within the three years and as two of them were paying wells the learned court below thought they were sufficient to continue the lease while oil was obtained from them at a profit. It is conceded that this is a correct view of the case if the producing wells are upon the demised premises. The plaintiff however contends that these wells are on land expressly excepted from the lease. Is this contention sound and consistent with a fair construction of that instrument? We think it is not. In the first place it is not in accord with the construction adopted by the parties, and under which rent was paid for three years. The land on which the producing wells were drilled is admittedly a part of the seventy acres described in the lease and on which the lessors paid rent at the rate of three dollars per acre. If the parties had understood that the lease included only sixty-six acres the lessor would not have exacted and the lessees would not have paid rent on seventy acres. If the language of the lease fairly raised a doubt respecting the intention of the parties their interpretation of it during the definite term of three years would be entitled to great if not controlling influence in the decision of the question before us. But this is not all that is opposed to the plaintiff’s present contention. He expressly consented in writing to the drilling of one of the producing wells, acquiesced in the drilling of the other and received his share of the oil in accordance with the provisions of the lease. During the definite term allowed for the development of the property he permitted the lessees to drill these wells without an intimation of his present claim. If he then entertained the view of the lease which he now advances in aid of his suit his silence was misleading and the purpose of it fraudulent. He must have known that the lessees would not have drilled the wells under, such an interpretation as he 'now insists upon, because it ren-' ders the time consumed and expenditures incurred in drilling1 them of no account in determining their rights under the lease.' It is an interpretation which makes the time and labor so ex-, pended operate as an extinguishment of these rights and a devel-. opment of the plaintiff’s property without compensation to the parties by whom the development was accomplished. Surely such results cannot be tolerated unless there is a clear warrant' in the lease for a construction which produces them. But there' is no such warrant in the lease. The so-called exception or res-, ervation is nothing more than a restriction upon the lessee’s right respecting the location of wells on the seventy acres included in it. It is a stipulation that the lessor may designate the boundaries of “ four acres around the buildings ” within which the lessee shall not drill wells without his written consent.. When such consent was given, and the work done under it: resulted in the establishment of a well which produced oil in paying quantities the effect of it upon the rights of the parties, under the lease, was the same as if it had been drilled outside of the boundaries designated by the lessor. This is a construe-' tion which Harmonizes with the understanding of the parties as manifested by their coqduct during the definite term, and which, independent of their interpretation of their contract', best accords with the language and object of the instrument which defines their lights. ‘ '

Judgment affirmed.