Thompson v. Christie
Thompson v. Christie
Opinion of the Court
OpmioN,
The contest in this case is between the holders of an unrecorded oil lease in possession, and the holder of a subsequent lease taken and recorded before the defendants went into possession and began operations on the land. The land was owned by Hugh McClelland, who made a lease to Jones and others for oil purposes in 1888. By the terms of the lease, Jones and others were to drill one test-well within two miles of the land within one year. If oil was found in paying quantities in the test-well, they were “to complete one well on the above-described premises within one year after the completion of said test-well, or, in lieu thereof, pay to the party of the first part forty dollars per annum until work is commenced.” There was no clause in the lease providing for re-entry or forfeiture. The title of the lessees, after passing through several intervening parties, lodged in the defendants, who went into possession in September, 1889, built a rig, and began to drill an oil-well.
The plaintiff claimed under a lease made and recorded in May, 1889. On the trial he gave his lease in evidence, showed the possession of the defendants, and rested.
Christie and others defended their possession under the first lease. To show their title they made an offer to prove that all the former owners of the Jones lease had agreed to assign it to them in September, 1889, had received part of the purchase money, and had put them into possession ; that in pursuance of this bargain an assignment was drawn up, signed and acknowledged by all the grantors, except one, on the 24th day of September, 1889, and by him in December, on the day after the
To show that this was not the case, they made- a further offer to prove by McClelland, both upon his cross-examination and again when called by them, the circumstances under which he made the lease to the plaintiff. Their offer was to show that McClelland went to the law-office of J. M. Thompson and W. C. Thompson, who were law-partners, and father and son, for advice in regard to the best manner to proceed in order to terminate the lease to Jones and others; that J. M. Thompson advised, as the cheapest and most expeditious method, the making of a new lease, and putting it upon record so as to secure priority over the unrecorded lease to Jones; that he suggested his son and law-partner as the person to whom the new lease should be made; that the lease was accordingly drawn by him and executed by McClelland for the express purpose oí being used to defeat the title of the holders of the Jones lease. These offers were competent, and the evidence should have been received. W. C. Thompson cannot profit by a lease-obtained for him by his law-partner, without being affected by notice of the facts brought to the attention of his partner during the negotiation and which formed the inducement to the lease: Bracken v. Miller, 4 W. & S. 102. Having notice, he took subject to the title of the holders of the first lease, notwithstanding the fact that their lease was not recorded: Swank v. Phillips, 113 Pa. 482. He stood, therefore, in the shoes of his lessor, and could not recover unless McClelland' could have done so if the action had been brought by him.
But there was no clause of forfeiture in the lease, and forty dollars per annum was fixed as the price of delay. McClelland could not have recovered in ejectment, therefore, because, by the terms of the lease, it was money, not the possession of the
The defendant’s fourth point drew attention to the position of the plaintiff, the kind of relief he was seeking, and the rules prevailing in courts of equity upon the subject of forfeitures. It was refused without any explanation of the subjects to which it referred. This was misleading. The rule undoubtedly is that the right to declare a forfeiture must be, distinctly reserved; that the proof of the happening of the event on which the right is to be exercised must be clear; that the party entitled to do so must exercise his right promptly; and that the result of enforcing the forfeiture must not be unconscionable. In this case the existence of the right was denied. There had been no attempt to exercise it except by means of the device suggested by counsel of executing a new lease. The lessees were in actual possession, and for several months had been engaged in the work of drilling a well on the premises. It would hardly be contended that, if McClelland was in a court of equity with a bill to reform this lease for the purpose of enabling him to assert a forfeiture upon the facts of this case, as they were shown, and as the defendants offered to show them, the conscience of a chancellor would be moved to aid him by a decree.
The sixteenth assignment of error is also sustained. The court was asked to say to the jury if they found that a verbal agreement providing for a forfeiture of the lease was made by Jones as the plaintiff alleged, yet if they also found that in
Reversed, and a venire facias de novo awarded.
Reference
- Full Case Name
- W. C. THOMPSON v. C. G. CHRISTIE
- Cited By
- 35 cases
- Status
- Published
- Syllabus
- [To be reported.] (a) In ejectment by the lessee in an oil-lease, the defendants claimed title, under a like lease prior in date to that of the plaintiff, but recorded after it; and, to show their own title, offered to prove that the former owners of their lease made the contract to sell it to them, received part of the purchase money, and put them in possession before the suit was brought. (b) They offered to show, further, that, before the suit was brought, they expended thousands of dollars in developing the property, and that their ' contract for the purchase was put in writing and signed by all the assignors but one, who assented to its terms and received his share of the money paid before, but signed the contract one day after the writ issued: 1. The offer was admissible in support of the title set up by the defendants ; and, upon the facts stated in it, they could successfully defend their possession, if their lease was a valid and subsisting one, unless the plaintiff, in taking the subsequent lease, acquired his title in good faith and without notice of the defendants’ rights. 2. To show that the plaintiff had not so acquired title, it was competent for the defendants to prove that the plaintiff’s law-partner, being applied to for advice how to terminate the lease hold by defendants, suggested the making of the second one to the plaintiff and putting it on record, to secure priority over the defendants’ unrecorded lease. 3. Although the plaintiff, when he took his lease, was ignorant of the existence of the prior one, he could not profit by the lease thus obtained for him, without being affected with notice of the facts brought to the attention of his partner during, the negotiations and forming the inducement to the lease. 4. Upon a covenant in an oil-lease, that the lessee shall drill a well within a specified time, and on failure so to do shall pay the lessor $40 per an-num until such well is commenced, the lessor cannot recover in ejectment for failure to drill the well, the lease containing no clause providing for a forfeiture of the lessee’s rights upon such failure. 5. The rule prevailing in equity is that, to enable a lessor to declare and enforce a forfeiture, the right so to do must be distinctly reserved; the proof of the happening of the event upon which it is to bo exercised must be clear; such light must be exercised promptly, and the result of enforcing the forfeiture must not be unconscionable. (c) The plaintiff submitted evidence of a parol agreement, contemporaneous with the defendants’ lease and on the faith of which it was signed, that the annual payments should commence one year earlier than stipulated for, and that upon failure to make the first of such payments the lease should he forfeited; but this was denied by the lessee who obtained the lease. {cl) For several months before the suit was brought, the defendants had been in actual possession engaged in drilling a well, and there had been no attempt to exercise a right of forfeiture except by the device of executing the new lease to the plaintiff, and the defendants proposed to show offers of payment refused by the lessor: 6. Upon the facts of the case as they were shown, and as the defendants offered to show them, the plaintiff would not be entitled to have the lease under which the defendants held reformed, to enable him to assert a forfeiture in this action, as in equity the conscience of a chancellor would not be moved to aid him therein. 7. Though a parol agreement for a forfeiture of the prior lease, for failure to commence the well or pay the rental, was entered into, yet an assignee of the lease for a valuable consideration and without notice of the agreement, would obtain and could convey a good title even to a vendee who had actual notice.