Andrews v. Andrews
Andrews v. Andrews
Opinion of the Court
Opinion by
This was a bill in equity, filed to secure an accounting for royalty due under an oil and gas lease. The controlling question is, Avh ether the lease Avas in force when the operations were carried on. Defendants contend that it had then been surrendered, and that they operated upon land to which, at the time, they had an absolute title.
Joseph Andrews owned a tract of land in Beaver County, Pennsylvania, which, upon December 24, 1901, he leased to three of his sons, the defendants, for the purpose, and with the exclusive right, of drilling for oiLand gas. The term of the lease was not fixed, but, in case oil or gas was discovered, it was to run as long as either
The clear purpose of the lessor was to have his land explored for oil and gas, and while the lessees did not expressly agree to operate, yet the obligation to do so arose by necessary implication. The inducement to the lessor was that he was to have one-eighth of all the oil produced. The lessor dealt liberally with the lessees, and gave them three years in which to complete one well, and even then he did not impose a forfeiture of the lease, as penalty for noncompliance. Had the lessor lived he no doubt would have insisted upon action by the defendants within a reasonable time, or have insisted upon a forfeiture in order to procure other and more energetic lessees. It is not. to be presumed that, in giving defendants title to the land subject to the lease, he intended to offer a premium for bad faith upon their part. Yet to sustain the view of the trial judge, means that the defendants, deeming it to their interest to do so, could remain passive, and refrain from operating for a few more years, and thus relieve themselves of the obligation to pay royalty under the lease, and take all the oil themselves. This would be to enable them to take advantage of their own wrong. True, they had the right to make an actual surrender of the lease at any time. But this would hardly be consistent with good faith, unless they actually intended to abandon the idea of drilling upon the land for oil and gas. It would not have been good faith to postpone the work with the idea of evading the payment of the royalty.’ As lessees of the farm they
The fifth, sixth, seventh and eighth assignments of error are sustained. The decree of the court below is reversed, the bill is reinstated, and it is ordered and directed that the record be remitted to th^ court below, for further proceedings in accordance with this opinion. The costs of this appeal to be borne by the appellees.
Reference
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- Syllabus
- Leases — Oil and gas lease — Construction—Surrender—Presumption — Wills—Intention. 1. The surrender of an oil and gas lease will not be presumed from the failure of the lessee to explore for oil and gas within a reasonable time from the execution of the lease if it appear that thereby thé lessee will be permitted to retain royalties to which otherwise the lessor or his assigns would be entitled. 2. The owner of oil land leased it to three of his younger sons with the exclusive right of drilling for oil and gas, and reserving a certain royalty; the term of the lease was not fixed, but in case oil or gas should be discovered the lease was to run as long as either was found in paying quantities; it was stipulated that one well should be completed within three years unless there should be unavoidable delay or accident, and that the lessee should have the right at any time to surrender the lease; that all the conditions between the parties should extend to their heirs, executors and assigns; thereafter the owner of the land died, having devised the farm to such sons by a will which further provided that “should oil or gas be found on the farm under the now existing lease, and by the lessees or any other lessees the......royalty shall be set aside as part of my estate and be divided among my two eldest sons and my three daughters, in proportion to sums each one has been willed by the foregoing indenture.” Eight years after the lease was made and seven years after testator’s death the sons completed a well and in subsequent years drilled other wells which resulted in the production of considerable oil. In a suit in equity brought by the executor of the testator for an accounting for oil produced under the lease, defendants contended that, as they were the owners of the farm, they had succeeded to the rights of testator as lessor and that from the lapse of time during which no wells had been drilled, a surrender of the lease would be presumed. The lower court dismissed the bill. Held, the plainly expressed intention of testator was to preserve the royalty as part of his estate, to be divided among his children, other than defendants; that to presume a surrender of the lease from the fact that the lessees had not opened the well within a reasonable time, would permit defendants to take advantage of their own wrong, and in the absence of evidence of a surrender as contemplated by the lease, the lease must be deemed to be in full force and effect, and the decree was reversed with directions to reinstate the bill.