Hamilton v. Foster

• Decision Date: 03 January 1922
• Parties: HAMILTON et al. v. FOSTER.
• Court: Pennsylvania Supreme Court

116 A. 50

HAMILTON et al.
v.
FOSTER.

Supreme Court of Pennsylvania.

Jan. 3, 1922.

Appeal from Common Pleas, Allegheny County; J. A. Evans, Judge.

Suit by Fannie Hamilton and another against D. A. Foster. From a decree dismissing plaintiffs' bill, plaintiffs appeal. Decree affirmed, and appeal dismissed.

Argued before MOSCHZISKER, C. J., and FRAZER, WALLING, SIMPSON, KEPHART, SADLER, and SCHAFFER, JJ.

Leonard K. Guiler, M. W. Acheson, Jr. (of Sterrett & Acheson), and Charles Alvin Jones, all of Pittsburgh, for appellants.

A. M. Simon and John C. Bane, both of Pittsburgh, for appellee.

SIMPSON, J. Beginning at least as early as 1907 and lasting until 1920, when this litigation began, the Fidelity Title & Trust Company of Pittsburgh had full charge and control of a farm belonging to plaintiffs. It leased and sold portions of the property, divided a part thereof into building lots, collected rents, paid taxes and other charges, and, as "attorneys in fact," sent to plaintiffs, at regular intervals, statements of account, thereafter applying the balances as plaintiffs directed. In a few comparatively trivial things they did not fully agree with the trust company, but such differences were always adjusted before the matter was communicated to others; plaintiffs doing nothing in regard to the property, save by and through the trust company, with whom they advised when requested and at whose in-

116 A. 51

stance they executed deeds, leases, and other papers. It is not necessary to determine whether the agency arose and was continued because of a letter of attorney given to the trust company by plaintiffs, as remaindermen, and by the then life tenant, who has since died, or was simply the result of a long-continued course of conduct; it suffices that the relation existed during the period stated, and that, so far as third parties were concerned, all arrangements in relation to the property were made with the trust company acting for plaintiffs, and not with plaintiffs themselves.

Because much of the property was a continuing expense and not a source of revenue, the trust company, at plaintiffs' request, entered into negotiations with defendant, resulting in a lease, dated October 31, 1918, drawn by it, but executed by plaintiffs and defendant personally, whereby plaintiffs "granted, demised, leased and let unto [defendant], his heirs, executors, administrators, and assigns, all the oil and gas in and under all that certain tract of land, and also said tract of land hereinafter described [being most of the farm, including the part laid out into building lots] with covenants of general warranty that [plaintiffs] had the sole right to convey the premises to [defendant], with the exclusive right of drilling and operating thereon for and producing oil and gas, and all rights necessary, convenient, and incident thereto; such in part as the right to construct and maintain buildings, telegraph, telephone, and pipe lines leading from adjoining lands, on and across this leasehold and other lands of [plaintiffs], and similar rights for roadways, and the right to use water, oil and gas from the premises for operating purposes; * * * also the right of subdividing and releasing the whole or any part" thereof, the lease to "remain in force for the term of ten years * * * and as long thereafter as oil or gas is produced from the premises or as operations continue for the production of oil and gas." On the margin of the lease is written, inter alia:

"It is understood and agreed that no wells are to be drilled on the plan of lots laid out upon the portion of the tract covered by this lease."

It will be noted that (with an exception not necessary to consider) this is a grant of all the oil and gas in and under the entire tract, including the plan of lots, and is also a lease of the tract itself, and gave to defendant as plenary powers in the use of the land, and the ownership of the oil and gas under it, as plaintiffs themselves previously had. Westmoreland Natural Gas Co. v. De Witt, 130 Pa. 235, 251, 252, 18 Atl. 724. 5 L. R. A. 731.

Defendant fully complied with the terms and conditions of the lease. He promptly bored two wells upon the property, each outside of the plan of lots, and obtained from them gas in paying quantities. With the intention of drilling a third well, he cut away some of the trees and thick undergrowth on a hilly part of the farm, at a point which he believed was outside of the plan, but before any boring was done an employee of the trust company informed him this was a mistake. Because of what he had been told, defendant expressed a doubt on the subject, but, rather than have a dispute regarding it, said he would not sink a well there, and would remove the derrick and machinery to another part of the property. The employee suggested, however, it would be wiser, before doing this, to call upon and advise with the trust officer of the trust company. When he did...