Guffey v. Clever

• Decision Date: 04 January 1892
• Docket Number: 230
• Citation: 23 A. 161,146 Pa. 548
• Parties: J. M. GUFFEY v. A. P. CLEVER ET AL
• Court: Pennsylvania Supreme Court

23 A. 161

146 Pa. 548

J. M. GUFFEY v. A. P. CLEVER ET AL

No. 230

Supreme Court of Pennsylvania

January 4, 1892

Argued November 2, 1891

APPEAL BY DEFENDANTS FROM THE COURT OF COMMON PLEAS NO. 1 OF ALLEGHENY COUNTY.

No. 230 October Term 1891, Sup. Ct.; court below, No. 97 June Term 1890, C.P. No. 1.

To the first Monday of April, 1890, J. M. Guffey brought trespass against A. P. Clever and Charles Scarborough. Issue.

At the trial, on March 3, 1891, evidence was submitted of the following facts:

On August 10, 1888, A. P. Clever demised a lot of about fifty acres in Stowe township, adjoining another tract of the lessor, to G. C. Garnier and S. S. Smith, for the production of gas and oil, without any provision extending the covenants of the lease to the heirs, executors and administrators, or assigns of the parties. It was provided, however, that "in case oil or gas is found on said premises as aforesaid, then the said parties of the second part shall have the refusal, for the term of three months, of the other lands of the said parties of the first part lying in the same locality, on terms for the lease thereof that may be equal to the best terms offered by any other person or persons therefor."

On December 4, 1888, Garnier and Smith assigned the lease and the leasehold created thereby to J. M. Guffey, the plaintiff herein; and on February 12, 1889, A. P. Clever and J. M Guffey executed an instrument under seal extending the time for completing the well then drilling on the premises, in consideration of which said Guffey agreed to pay to said Clever an increased and graded royalty, "to be paid in addition to all royalty or other payments provided for in said lease, and said lease shall remain in full force in all particulars in which the same is not hereby modified."

The well when completed proved to be a good producer, and on April 23, 1889, Guffey sent a letter to Clever notifying the latter that he would take a lease on the adjoining tract of one hundred seventy-nine acres, on the terms provided for in the supplemental agreement of February 12, 1889. Thereupon on April 29, 1889, Clever sent to Guffey the following letter "J. M. GUFFEY, ESQ.:

"Dear Sir: In answer to yours of April 23, 1889, I beg leave to say that I have an offer to lease the other lands owned by me in the same locality as your fifty-acre lease from me, to wit, a farm in Stowe township, containing one hundred and seventy-nine and one half acres, for one eighth of the oil and a bonus of twenty thousand ($20,000) dollars, and one thousand ($1,000) dollars per annum for each gas well from which gas may be utilized. In this offer I have reserved nine and one half acres, upon which no wells are to be drilled without my consent in writing. This lease is to continue for five years, and as long thereafter as oil or gas is to be found in paying quantities: Provided that one well shall be put down through the oil-bearing rock in that district, and completed within sixty days after the date of the proposed lease; and a second well completed within seventy days after the date of said proposed lease; and a third well completed as aforesaid within eighty days after the date of the said proposed lease. These three wells are to be located by me and a condition of the lease is that the strongest and heaviest casing shall be used from the surface to a distance of fifty feet below the coal, and such casing shall be permitted to remain in the well after abandonment, for the purpose of protecting said coal. The gentleman making this offer is Mr. Peter Goettman, of Atwood street, Oakland Pittsburgh. If you desire the property under the terms of your lease of August 10, 1888, you are hereby required to notify me of such intention within ten (10) days, and comply with the above terms on or before the end of three months after the date upon which you struck oil on your lease with me of August 10, 1888."

Thereupon, on May 10, 1889, a lease was executed and delivered by A. P. Clever to J. M. Guffey in consideration of twenty thousand dollars paid in cash by the latter, demising the one hundred ninety-seven acre tract for oil and gas production upon substantially the same terms as were set out in the foregoing letter. Guffey had made no inquiry of Goettman as to whether the representations of the letter were true or not, but accepted the lease of the adjoining tract on the faith of said representations.

On the trial, the plaintiff introduced evidence tending to show that the alleged offer, set forth in the letter with such particularity as to terms, was a mere pretence, and that the only genuine offer was one made by a Mr. Aiken, offering ten thousand dollars for a lease of the land on terms afterward to be agreed upon. There was testimony to the effect that Goettman was a man of means; that Scarborough, a son-in-law of Clever without means, induced Goettman to permit his name to be used as having made the offer on the terms given; that Goettman, not intending to become the lessee himself, was to "back" Scarborough as the lessee and to have Scarborough's name as security, and that for his kindness to Scarborough Goettman was paid forty dollars by Clever. The defendants introduced testimony to meet the case as presented by the plaintiff, and made various offers to prove the actual value of the one hundred seventy-nine acre tract, as an oil-producing farm, at the time of the lease to the plaintiff of May 10, 1889, for the purpose of showing "that the bonus paid by Mr. Guffey is not in excess of the value of the farm leased for oil and gas purposes, in the estimation of those who knew that territory in that regard at that time."

Objected to as irrelevant and incompetent.

By the court: Objections sustained; exceptions. to

At the close of the testimony the court, SLAGLE, J., charged the jury orally as follows:

[It is claimed by defendants' counsel that that assignment did not carry this agreement with it; that there is no clause in the lease authorizing an assignment of it, and that it is not made to the heirs, executors, administrators and assigns. A contract is, like any other property that a man owns, transferable. But I do not think that that is a material question in this case, because, subsequently, on the twelfth day of February, 1889, Mr. Clever entered into a contract with Mr. Guffey, in which they changed the terms of this lease to some extent, but provided further, that "said lease shall remain in full force in all particulars in which the same is not hereby modified;" and it seems to me that that would make an agreement between Mr. Clever and Mr. Guffey which would carry that clause with it.]

[But, even that is not material, because both these parties subsequently acted upon the theory that Mr. Guffey had the right to the option; as it appears in the testimony of Mr. Guffey and is not denied by Mr. Clever, in fact he admits it, that some time prior to the twenty-third day of April, 1889, he, assuming that he had this right, offered Mr. Clever five thousand dollars as a bonus for this property, which offer was not accepted. But on the twenty-third day of April he wrote a letter which is not now here and which I will have to give you from recollection; you have heard it read two or three times. In that letter, Mr. Guffey wrote to Mr. Clever substantially this: "You know that under the lease assigned to me I have a right to a lease of the balance of the property upon terms equal to those which may be offered by any other person. You will therefore notify me what offer you have, and I am ready to comply with my contract and take the lease upon the same terms." That is about the substance of the letter. Now, Mr. Clever, in answering that, did not say "No, you have no right to this lease under your assignment;" but, recognizing his right, (and if there was any dispute about it he ought to have stated it then and there,) recognizing that right, he says in the letter of April 29th, "I beg leave to say I have an offer to lease the other lands belonging to me in the same locality as your fifty acres," etc. Then he goes on to state all the terms, and states by whom that offer was made. So that, even if Guffey did not have a right under this lease and assignments, or under his agreement with Clever, to this option, they dealt upon that theory; and, therefore, if Mr. Clever made statements in reference to it, he was bound to make those statements truthfully, and if he made them falsely, and Mr. Guffey relied upon them and paid his money upon them, it would be deception for which he would be responsible.]

[It is claimed, however, that Mr. Guffey had no right to rely upon this statement of Mr. Clever as to this offer; that he was bound to hunt up Mr. Goettman and find out whether it was true or not; and failing to do that, he is not entitled to recover. There are some cases in which a man has no right to rely upon the statements of another. That is where it is a matter of opinion, or where the fact is one which is equally open to the party to whom the representation is made; but I do not understand that this is a case of that sort. In this case, the fact stated was one that was peculiarly within the knowledge of Mr. Clever. He stated it upon his own veracity, and Mr. Guffey was not bound to assume that he was telling what was not true. And it is not certain that if he had gone to investigate, he would have discovered the real truth. So, I say to you that, under the circumstances, he was not bound to go to Mr. Goettman, but had a right to rely upon what Mr. Clever said.]

[Then we come down to this statement in the letter as follows "The gentleman making this offer is Mr. Peter Goettman, of Atwood street, Oakland, Pittsburgh." That is admitted by Goettman, by Clever...