Page images
PDF
EPUB

the premises, and this right continued until the lessee made a formal surrender of the lease. Jamestown, etc., R. R. Co. vs. Egbert, 152 Pa., 53 (1892).

Sec. 186. Who may Set up Forfeiture.

Evans vs. Consumers Gas Trust Co., Ind., 673 (1891), 31 L. R. A., 673, follows the ruling of the Pennsylvania courts that the stipulation that the failure of lessee to perform shall render the lease void is inserted wholly for the benefit and protection of the lessor, and that it is optional with him to avail himself of it. The lessee cannot take advantage of his own default. Galey vs. Kellerman, supra; Doe, Bryan vs. Bancks, 4 Barn. & A., 401; Roberts vs. Davey, 4 Barn. & A., 664.

Sec. 187. Assertion of the Right by Children of the Lessor.

Where lands are leased for oil purposes with the proviso that grantee should commence drilling within a specified time, "or thereafter pay to party of the first part five dollars per month until work is commenced," the son of the lessor, in whose possession the leases came, cannot bring an action to recover monthly sums specified for failure to drill if he has previously declared the lease forfeited and refused to take from lessee the monthly instalment.

The assertion of forfeiture of the leases by the son does not preclude other children of the lessor who are minors, and for whom the elder son acted, from maintaining this action if his assertion of forfeiture was a fraud upon them and injurious to their

rights. But if, on the other hand, it was for their advantage to free their estate from the leases, the son ought not to be allowed to repudiate the entry and assertion of forfeiture. Wilson vs. Goldstein, 152 Pa., 524 (1893).

Per WILLIAMS, J.:

"The learned judge said upon this subject: We don't think one man, a brother, can wipe out the interest of minor heirs in that way.' But his sisters were heirs of the land, not of an action at law for a breach of a contract made with their father. The act of the brother *** did not wipe out' their estate or any part of it, but relieved it of the leases under which nothing had been done or was likely to be done, and placed them in a position where they could secure the development of their lands by a new lease, or make sale of them without embarrassment."

The lessors being an adult and the guardian of certain minors, a declaration by the guardian in relation to the lease, that the same was ended and void, and the lessors had no claim thereunder, was without effect toward relieving the assignee of the lease from liability for failure to perform the covenants of the lessee. Springer vs. Citizens' Gas Co., 145 Pa., 430 (1891).

Sec. 188.

Difference Between Striking Oil and Bringing
It to the Surface.

If the lease provides for prosecution to success or abandonment with due diligence and for a forfeiture in case oil is not excavated in paying quantities on or before a certain day, the mere striking of oil will not avoid the forfeiture in case it is not brought to the surface so as to be made available. Kennedy vs. Crawford, 138 Pa., 561 (1890).

Sec. 189. Physical Inability to Complete Well will not Avert Forfeiture.

Inability to secure workmen because of the extreme cold weather and consequent failure to complete the well within the time specified are not sufficient to prevent a forfeiture. Cryan vs. Ridelsperger, 7 Pa. Co. Ct., 473, C. P. Warren County (1887).

This case would certainly seem to come under the class of forfeitures which equity abhors. By the terms of the lease, one well was to be completed within five months from date of lease, a second one in one year, and a third in two years. The first two wells were completed according to agreement. The third was not, although, before the expiration of the two years, lessee placed upon the leased premises timbers for a complete carpenter's rig. He was then, as above stated, unable to secure workmen to erect the rig. All that the court (BROWN, P. 7.) said upon the point was:

"The lease as to this third was forfeited by the express agreement of the parties, unless some legal reason or excuse for noncompletion of the work is made to appear. * * * We think the excuse is not good. It does not appear that any unavoidable accident occurred, such as, under the terms of the agreement, would entitle the defendant to an extension of time."

No citations of authorities are made and no notices taken of the numerous decisions contra. The ruling is certainly severely technical, and the facts appear to come within the spirit of Fleming Oil & Gas Co. vs. South Penn Oil Co., 37 W. Va., 645, where it was decided that, if the place of the location of the well is fixed, the timbers provided, the contract let and the machinery ordered within the time, the mere fact that the impassable condition of the roads prevents the hauling of the machinery to the place where it is to

be used until after the expiration of the time limited for the commencement of the operation, will not justify a forfeiture.

And a recent decision of the Supreme Court of Pennsylvania follows the same line. In Henderson vs. Ferrell, 183 Pa., 560; S. C., 38 Atl. R., 1018 (1898), it was held that a lessee does not forfeit his rights, if, on the last day of the period allowed, he in good faith enters and commences operations on the premises preparatory to drilling a well, but is prevented by the lessor from proceeding therewith.

Sec. 190. Covenant to Complete a Well or Pay Rent Will be Enforced after Discovery that

Territory is Worthless.

In Springer vs. National Gas Co., 145 Pa., 430 (1891), the judgment was affirmed upon the opinion of the lower court, and the language of WICKHAM, P. J., delivering the opinion, is so apt as to call for its insertion here. The lease was for a term of years and contained a covenant that the lessee should complete a well within a certain time, or thereafter pay to lessors a certain sum annually until such completion. Defendant alleged that "soon" after the lease was executed, it was discovered that the territory was worthless for either oil or gas, and that, therefore, the first well was never completed. But this defence was adjudged insufficient, and the lower court, distinguishing the case from another decided at the same time, where the lessor was to be paid for oil or gas actually found and used, said:

"I do not think, however, that the fact of there being not oil or gas in the land, no matter how soon found out, could avail the defendant. The lessors were entitled to insist that this

fact should be made manifest in the very manner agreed upon, or to demand the sum stipulated to be paid for delay. The covenant on this subject is absolute and unqualified, and provides for the doing of nothing that is illegal or improbable. If a clear, positive covenant, like the one before us, to do a lawful thing or pay a certain sum of money for not doing it, can be evaded by showing that the performance of the act did not benefit the covenantee, it is hard to tell where we could properly stop in applying the rule. We might presently reach a point where an action for liquidated damages for breach of an agreement not to engage in a certain business within designated limits, might be defeated by proving that every one conducting the same business in the neighborhood had been losing money, and, for reasons shown, would probably continue to do so. *** That the contract may have proved a losing one to the lessee or his assignee, the defendant, is neither here nor there. To quote the popular saying, a contract is a contract' and no sufficient reason appears why the one under consideration should not be enforced." See, also, Fennell vs. Guffey, 139 Pa., 341 (1891); Same vs. Same, 155 Pa., 41 (1893).

for

Sec. 191. Conflicting Leases-Lease Dated Before, but Recorded After Another-Purchaser Value-Imputation of Knowledge.

The case of Thompson vs. Christie, 138 Pa., 230 (1890), is an important one from several points of view, and will repay a careful examination. It affords an excellent illustration of the effort that is frequently made in the oil business to set aside a prior lease and to substitute for it another taken by lessees, sometimes with knowledge of the first and the deliberate attempt to disregard it, and sometimes without notice, actual or constructive, the second lessee being left to suffer the consequences of the craft of his lessor or assignor.

The case was ejectment by the lessee in an oil lease, the defendants claiming under a like lease prior

« PreviousContinue »