Ray v. Wes. Penn. N. Gas Co.

• Decision Date: 05 January 1891
• Docket Number: 108,133,109,134
• Citation: 138 Pa. 576,20 A. 1065
• Parties: JAMES RAY v. WEST. PENNA. N. GAS CO.; JAMES. A. SMILEY v. WEST. PENNA. N. GAS CO.; EVA C. AGERTER v. T. J. VANDERGRIFT; JOHN MERTZ, JR., v. T. J. VANDERGRIFT
• Court: Pennsylvania Supreme Court

20 A. 1065

138 Pa. 576

JAMES RAY v. WEST. PENNA. N. GAS CO.;

JAMES. A. SMILEY v. WEST. PENNA. N. GAS CO.;

EVA C. AGERTER v. T. J. VANDERGRIFT;

JOHN MERTZ, JR., v. T. J. VANDERGRIFT

Nos. 108, 109, 133, 134

Supreme Court of Pennsylvania

January 5, 1891

Argued October 21, 1890.

Argued October 30, 1890

APPEALS BY DEFENDANTS FROM THE COURT OF COMMON PLEAS OF WASHINGTON COUNTY, AND THE COURT OF COMMON PLEAS NO. 1 OF ALLEGHENY COUNTY.

Nos 108, 109, 133 and 134 October Term 1890, Sup. Ct.; courts below, Nos. 162, 163, May Term 1890, C.P., Washington County; Nos. 187, 188 June Term 1890, C.P. No. 1, Allegheny County.

On March 14, 1890, James A. Smiley and James Ray brought actions of assumpsit against the Western Pennsylvania Natural Gas Company, to Nos. 162, 163 May Term 1890, in the Court of Common Pleas of Washington county, for the recovery of certain sums alleged to be due from the defendant to the plaintiffs respectively, in accordance with the provisions of certain oil-and gas-leases granted by the respective plaintiffs to the defendant.

In the action brought by Smiley, the lease sued on was dated August 4, 1888, and demised to the defendant, for the sole and only purpose of drilling and operating for petroleum oil and gas and for the term of two years or so long thereafter as oil or gas should be found in paying quantities, a certain tract of land in Cross Creek township, Washington county, in consideration of certain royalties and rents reserved, and certain stipulations specified therein. The action was based upon the following provisions of said lease:

"The said second party hereby agrees, in consideration of the said lease of the above described premises, to give said party one eighth of all the oil or mineral produced and saved from said premises, and further agrees to give $500 per annum for the gas from each and every well drilled on the above described premises, in case the gas is conducted and used off the above described premises." . . . .

"Said second party agrees to pay to said first party $250, within ten days from the execution of this lease; said second party further agrees to pay a further sum of $250, within six months from the execution of this lease, which said first and second sum of $250, is to be a credit on first gas well if completed in one year from the execution of said lease; and if said well is not completed within said period, then second party agrees to pay a further sum of $250, which is to be a credit upon the rental of said well if completed within the period of one year from that date, and so on continually every six months during the continuance of the term herein specified."

"The said sum of $500 gas rent shall be paid within one month from the time said gas is conducted and used off the premises above described, all moneys to be paid in advance at First National Bank, Washington, Pa.; and a failure to complete one well, or to make any of such payments within such time and such place as above mentioned, renders this lease null and void and to remain without effect between the two parties."

The plaintiffs' statement of claim averred that the defendant never completed a well upon the demised premises, and therefore became liable to pay to the plaintiff the following sums, to wit: $250 on February 4, 1889; $250 on August 4, 1889, and $250 on February 4, 1890; and that the action was brought to recover said sums, with interest. A copy of the lease was appended to the statement of claim.

The action of James Ray was brought upon a similar lease, dated July 7, 1888, the material parts of which appear in the opinion of the Supreme Court. The statement of claim filed was similar in its form and averments to that of Smiley. It set forth that the claim sued for consisted of $53 due January 7, 1889; $53 due July 7, 1889; $250 due October 7, 1889, and $53 due July 7, 1890, with interest on each of said sums from said respective dates.

The defendant filed affidavits of defence in these two cases, identical in form, making the following averments:

"1. That under the lease nothing more than the oil and gas right in the land demised were granted to the defendant; that the whole of the remaining estate in said land remained in the plaintiff; that the defendant never, from the time of the execution of the said lease to the present, entered into possession of the premises or any part thereof; that the plaintiff at the time of the execution of said lease was in possession of the whole of said premises, and has so remained in possession ever since, and was so in possession at the times the several sums of money sued for in this case fell due under the said lease; that the lease by its terms, upon failure to make any one of these payments, became ipso facto null and void, and that there was no further liability upon the defendant to pay or perform.

"2. That the contract was made in the state of Pennsylvania; that the laws of the state of Pennsylvania in force when it was made, entered into and became a part of the contract between the parties; that it was then a part of the law of Pennsylvania that the non-payment of any instalment of money, or the non-performance of any covenant by the party of the second part, in an agreement of the kind sued on, containing a condition and forfeiture clause, such as in the agreement sued on, ipso facto ended and determined the contract, both as to the lessor and lessee, so that no action whatever could be brought on the said contract by the lessor against the lessee; that, relying upon that being a part of the law of Pennsylvania, which entered into and became a part of the contract sued on, the defendant entered into and made this contract with the plaintiff, and that it would not have done so had the rule of law been otherwise; that to now change or reverse that law, and hold that the non-payment would not determine the contract except at the option of the lessor, would be an impairing of the obligation of the contract as against the defendant, and would be in contravention of § 10, article I., of the federal constitution, which provides that no state shall pass any law impairing the obligations of a contract.

Rules for judgment for want of a sufficient affidavit of defence were taken by the respective plaintiffs, which, after argument, the court, McILVAINE, P.J., made absolute, in an opinion holding that the cases were ruled by Wills v. Natural Gas Co., 130 Pa. 222. Judgments having been entered, the defendant took the appeals to Nos. 108 and 109, specifying in each case that the court erred:

1. In making absolute the rule for judgment.

2. In not discharging said rule.

To Nos. 187 and 188, respectively, of June Term 1890, in the Court of Common Pleas No. 1 of Allegheny county, Eva C. Agerter and John Mertz, Jr., brought actions of assumpsit against T. J. Vandergrift. In each of said actions the plaintiffs' statement of claim set out an oil-and gas-lease of land in Allegheny county, granted by the plaintiff to the defendant, on November 20, 1886, for the term of two years and as much longer as oil or gas should be produced or found in paying quantities, and containing the following stipulations:

"It is agreed that the party of the second part shall pay to the party of the first part one dollar a day from the date of this lease until a well is completed on the above described premises, said amount to be paid in monthly payments, made direct to first party or deposited to his credit in the Diamond National Bank, Pittsburgh, Pa.; and a failure to make said payments or to complete a well on said premises renders this lease null and void and of no effect between the parties hereto."

Each of said statements of claim averred that the lease therein mentioned continued in full force, without cancellation, surrender or abrogation, during the full period of two years from its date, and thereby the defendant during all that period had the exclusive right of drilling and operating for petroleum and gas upon the demised premises, but that he did not complete a well during said two years; wherefore, the plaintiff became entitled, according to the terms of the lease, to have and demand from the defendant the sum of one dollar per day, for and during the period of two years from the date of the lease, amounting to $730. Copies of the respective leases were appended to the statements of claim.

The defendant in these actions filed affidavits of defence setting up the same matters that are set forth in the affidavits filed by the Western Pennsylvania Natural Gas Company, in the actions brought against it, and substantially in the same language. An additional defence was set up by the affidavit filed in the action brought by Eva C. Agerter, in substance as follows:

"That the relation of landlord and tenant, and no other contractual relation, ever existed between the plaintiff and defendant; that, at the time of the signing of the instrument of writing sued on, the plaintiff was the owner of the land and premises purported to be granted and let by said writing, and has ever since been the owner of the same; that, at said time, she was and still is a married woman; that she never acknowledged said writing separate and apart from her husband, and never acknowledged it in any manner before any officer authorized to take acknowledgment of deeds, etc., as required by the laws of this commonwealth; and therefore said writing was a nullity and not binding on either party."

Rules for judgment for want of a sufficient affidavit of defence having been made absolute, and judgments having been entered in favor of the plaintiffs, Agerter and Mertz, respectively, the defendant Vandergrift took the appeals Nos. 133 and 134, specifying in each case that the court erred:

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