Highland v. Com.

• Decision Date: 18 April 1960
• Citation: 400 Pa. 261,161 A.2d 390
• Parties: Cecil B. HIGHLAND, Jr., Trustee of the Penfield Coal & Coke Company, an out-of-existence corporation, and E. C. Metzner, Lessee, v. COMMONWEALTH OF PENNSYLVANIA, New Shawmut Mining Company, Sebastian C. Pugliese and Grace Pugliese, A. J. Palumbo and Sigismunda Palumbo, Ridgway National Bank, Bruce Isaacson, and John Bell, Successor Trustees Under the Will of N. T. Arnold, Devonian Gas and Oil Company, and New York State Natural Gas Company, Appellants. Appeal of NEW SHAWMUT MINING CO. Appeal of PUGLIESE et al. Appeal of PALUMBO et al. Appeal of RIDGWAY NATIONAL BANK et al. Appeal of DEVONIAN GAS AND OIL CO. Appeal of NEW YORK STATE NATURAL GAS CORP.
• Court: Pennsylvania Supreme Court

Page 390

161 A.2d 390

400 Pa. 261

Cecil B. HIGHLAND, Jr., Trustee of the Penfield Coal & Coke Company, an out-of-existence corporation, and E C. Metzner, Lessee, v. COMMONWEALTH OF PENNSYLVANIA, New Shawmut Mining Company Sebastian C. Pugliese and Grace Pugliese, A. J. Palumbo and Sigismunda Palumbo, Ridgway National Bank, Bruce Isaacson and John Bell, Successor Trustees Under the Will of N. T Arnold, Devonian Gas and Oil Company, and New York State Natural Gas Company, Appellants. Appeal of NEW SHAWMUT MINING CO. Appeal of PUGLIESE et al. Appeal of PALUMBO et al. Appeal of RIDGWAY NATIONAL BANK et al. Appeal of DEVONIAN GAS AND OIL CO. Appeal of NEW YORK STATE NATURAL GAS CORP.

Supreme Court of Pennsylvania.

April 18, 1960.

Rehearing Denied June 27, 1960.

Paul B. Greiner, Ridgway, Carl A. Belin, Clearfield, S. C. Pugliese, Pittsburgh, for appellants Pugliese, Palumbo and New Shawmut Min. Co.

B. R. Coppolo, St. Mary's, Dan P. Arnold, Chaplin & Arnold, Clearfield, John A. Metz, Jr., Pittsburgh, Driscoll, Gregory & Coppolo, St. Mary's, Joseph B. Mitinger, Metz, Cook, Hanna & Kelly, Pittsburgh, for Ridgway Nat. Bank, Bruce Isaacson and John Bell.

Anne X. Alpern, Atty. Gen., John Sullivan, Deputy Atty. Gen., Robert C. Derrick, Asst. Atty. Gen., Eugene G. Kitko, Clearfield, for appellant Commonwealth.

F. Cortez Bell, Jr., Bell, Silberblatt & Swope, Clearfield, Richard Bennett Gordon, Pittsburgh, for appellant New York State Gas Co.

Robert V. Maine, Du Bois, for appellant Devonian Gas & Oil Co.

Joseph J. Lee, Clarence R. Kramer, Clearfield, for appellee.

William H. Eckert, Pittsburgh, for Interested Person Under Rule 46.

Before CHARLES ALVIN JONES, C. J., and BELL, MUSMANNO, BENJAMIN R. JONES, COHEN and BOK, JJ.

BENJAMIN R. JONES, Justice.

The basic issue presented by these seven appeals concerns the ownership of the right to the natural gas underlying four parcels--approximately 3,784 acres-- of land situated in Huston Township, Clearfield County. The determination of this issue rests largely upon the construction and interpretation of the provisions of seven deeds and an examination of several judicial proceedings which resulted in the execution of two of these deeds.

On June 25, 1900, I. F. Richey et al., trustees of the Caledonia Coal Company, conveyed, inter alia, to one N. T. Arnold these four parcels of land--herein known as Parcels 1, 2, 3 and 4 ^*--said parcels being described as 'tracts', 'parcels' or 'pieces' of land. In addition to these four parcels of land, this deed (herein termed the Richey deed) purported to convey: (1) 'All the coal, coal oil, fire clay and other minerals of every kind and character in, upon and under' 15 described tracts of land; (2) 'All the coal, coal oil, fire clay and other minerals of whatever nature or character' under 8 described tracts of land; (3) several other tracts of land. At the end of the descriptive portions of this deed the following appeared: 'It is the intention of [Richey et al.] to convey * * * all the land, coal, coal oil, fire clay, natural gas, and other minerals and all rights vested in [Richey et al.] [under a certain prior deed] * * * Together with the right and privilege of entering upon such lands as are not conveyed * * * and taking away said coal, coal oil, natural gas, fire clay and other minerals of every kind and character * * * and to do * * * such * * * things thereon in such manner as may be necessary in the judgment of [Arnold] to successfully mine and take away said coal, coal oil, natural gas, fire clay and other minerals, * * *'. (Emphasis supplied). It is conceded by all parties to this litigation that, by the Richey deed-- the common source of title of all the present litigants--, title to all the natural gas rights under these four parcels of land became vested in Arnold.

On the same date as the Richey deed Arnold and his wife made a conveyance to John Byrne, trustee for one Frank Byrne and one Frank Smith, the said John Byrne being empowered to explore for 'coal and other minerals' and 'to mine, take and carry away the same', 'to sell or lease the said lands and mineral rights', to pay the taxes and protect the 'lands and minerals' and to mortgage the 'lands, coal and minerals' to secure [Arnold] the purchase money or develop the property. Under the provisions of this deed (herein termed the Byrne deed) Arnold and his wife conveyed: 'All the coal, fire clay, limestone, iron ore and other minerals' in and under certain land in Huston Township, Clearfield County, said land being described by metes and bounds. In the Byrne deed between the descriptive and habendum clauses appeared the following: 'Together with all and singular the ways, water, water courses, mining rights, minerals, rights of way, rights, liberties, privileges, and appurtenances whatsoever thereunto belonging or in any way appertaining and the reversions, remainders, rents, issues and profits thereof, and all the estate, right, title, interest, property, claim and demand of [Arnold] * * * in law, equity or otherwise howsoever, of and to the same and every part thereof with the right and privilege of entering upon said land and taking away said coal, fire clay, iron-ore, lime-stone and other minerals hereby conveyed and to erect such structures, ways, buildings, railways and shafts thereon both up and down, to cut and fill the surface wherever needed for railways for such purposes, and to dig ditches and channels for waste water and to do those and such other things thereon in such manner as may be necessary in the Judgment of [John Byrne] and to carefully mine and take away such coal, fire clay, lime stone, iron ore and other minerals or any of them from the lands aforesaid.' (Emphasis supplied). In this deed Parcels 1 and 4 constitute the overlying land.

On July 30, 1900, Arnold and his wife conveyed by deed (herein termed the Hall-kaul deed) to one J. K. P. Hall and one Andrew Kaul 'all the coal, iron ore, lime stone, fire clay and other minerals' under a certain tract of land, 'All the Coal, Coal Oil, and other minerals of every kind and Character' under another tract of land; 'All the Coal, Coal Oil and all other minerals of every kind and character' under several other tracts of land; 'All the coal, fire clay, iron-ore and other minerals' under another separate tract of land and 'All the coal, and minerals' under still another separate tract of land. Following the descriptive clauses in this deed appeared the following: 'Together with right and privilege of entering upon said lands and taking away said coal, coal oil, fireclay and other minerals of every kind and character, and to erect such structures, ways, buildings, tramways and shafts thereon both up and down, to cut and fill the surface wherever needed for railways for such purposes, and to dig ditches and chanels for waste water, and to do those and such other things thereon in such manner as may be necessary in the Judgment of [Hall-Kaul], to successfully mine and take away said coal, iron ore, fire clay and other minerals or any of them from the lands aforesaid.' (Emphasis supplied). This deed includes the overlying land known as Parcels 2 and 3.

All the rights conveyed in the Byrne and Hall-Kaul deeds have now, by subsequent conveyances, become vested in the present appellants known as the New Shawmut group, ¹ a group which now claims all the natural gas rights under the four parcels of land.

Arnold died August 4, 1906, a resident of Elk County. Under his will--dated February 4, 1901--he gave his entire estate to certain trustees to hold, initially, for the benefit of his wife and three children and, ultimately, of the Methodist Episcopal Church. Under this will Arnold gave no authority to his executors to deal with his realty and instructed his trustees, inter alia: 'Neither shall any property be sold or leased for the production of coal, oil, gas or minerals without the written consent and approval of each and every Trustee, of whom there shall be not less than three capable of transacting business at all times'. ²

At the time of his death Arnold was heavily indebted. At the instance of creditors, the Orphans' Court of Elk County on February 10, 1909 directed his executors to seek court permission for the sale of Arnold's realty for the payment of debts. On February 26, 1909, the executors petitioned that court for permission to sell, at private sale, all Arnold's realty in Elk County for $48,000 for the payment of his debts and for authority to raise $152,000 from Arnold's realty situated in Clearfield County (as described in Schedule 'C' attached to the petition) 'for the purpose of paying the balance of the debts which are liens against the real estate of [Arnold]'. In Schedule 'C' were metes and bounds descriptions prefaced: 'Surface only'. On that same date the Orphans' Court of Elk County authorized the sale of Arnold's Elk County property for $48,000 and authorized the executors to raise $152,000 from Arnold's Clearfield County realty. On March 8, 1909 the executors asked the Orphans' Court of Clearfield County for permission 'To sell all of said land situate in [Clearfield County] described in Schedule 'C" for $152,000 and that court granted such permission. On May 27, 1909 the executors reported to that court the sale at private sale of all Arnold's real estate in Clearfield County for $152,000 to one B. F. Thompson and that court confirmed the sale.

On May 31, 1909 Arnold's executors made a conveyance to B. F. Thompson. By its provisions, this deed (herein termed the Arnold Executors' deed) conveyed, inter alia, to Thompson the 'Surface only' of certain tracts of land in Clearfield County described by 'metes and bounds', descriptions inclusive of Parcels 1, 2, 3, and 4. This deed conveyed items of realty numbered I-IX, inclusive, and the following prefatory language appeared before 'metes and bounds' descriptions of several of the items: Item I, 'All the...