275 Pa. 351 | Pa. | 1923
Opinion by
In 1895 plaintiff leased land known as the “Tucker Farm” for oil and gas purposes to O. W. Proper, who subsequently assigned his rights to defendants. The lease, however, contained no provision for utilization of casing-head gas obtainable from the premises. To authorize such use, plaintiff, in 1913, entered into an agreement with defendants reciting the desire of the parties to utilize this gas in the manufacture of gasoline and providing that plaintiff should receive from the sum realized the value of “one-eighth of all gasoline sold off the property, after deducting running expenses and wear of gasoline plant, divided pro rata according to the number of wells on adjoining farms connected on line.” At the time this agreement was executed defendants were operating oil wells on the Tucker property and also on the Bowman farm, adjoining plaintiff’s land, and on the Fleming and Cleland farms lying on the opposite side of the public highway, known as Preacher Road, on both of which latter properties they held leases and operated oil wells in connection with pumping machinery located on plaintiff’s land. The oil wells on the Jones farm, adjoining the Bowman farm but not plaintiff’s land, were operated by defendants by separate pumping apparatus located on the first named farm.
Following the making of the agreement of 1913, defendants proceeded to install and operate a gasoline manufacturing plant on plaintiff’s farm, connecting with it by gas-line wells on both plaintiff’s and the Bowman farms. Subsequent to the installation of the gasoline
The single question now before us is the meaning of the expression “adjoining farms connected on line” as used in the agreement. Whether tracts of land separated by a public highway may be considered as “adjoining” each other is doubtful and dependent somewhat on the circumstances under which the word is used. Accordingly, in ascertaining the intention of the parties, we may properly consider the contract in view of the circumstances existing at the time of its execution, the situation of the parties at that time, the necessities for which they naturally provided, the advantages each probably sought to secure and the relation of the properties in regard to which they negotiated: Lacy v. Green, 84 Pa. 514; Republic Trust Co. v. Hughes, 262 Pa. 159, 166. Following the construction of the gasoline works, connection was
The character of the properties, their location and surroundings, the circumstances under which the agreement of 1913 was made, clearly indicate the intention of the parties to be that the Tucker, Bowman and Jones farms were the “adjoining” properties intended to be covered by the agreement and should be operated as a unit for the purpose of manufacturing gasoline.
The court below properly limited the agreement to wells located on the Tucker, Jones and Bowman farms.
The decree of the court below is affirmed at the costs of - appellants.