Cronan v. Castle Gas Co., Inc.

512 A.2d 1, 354 Pa. Super. 381, 90 Oil & Gas Rep. 111, 1986 Pa. Super. LEXIS 11087
CourtSupreme Court of Pennsylvania
DecidedJune 9, 1986
Docket01550
StatusPublished
Cited by9 cases

This text of 512 A.2d 1 (Cronan v. Castle Gas Co., Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cronan v. Castle Gas Co., Inc., 512 A.2d 1, 354 Pa. Super. 381, 90 Oil & Gas Rep. 111, 1986 Pa. Super. LEXIS 11087 (Pa. 1986).

Opinions

OLSZEWSKI, Judge:

This appeal arises from a final decree and judgment, entered November 2, 1984, dismissing appellants’ excep[384]*384tions to the Findings of Facts, Conclusions of Law, and Decree Nisi of the Court of Common Pleas of Indiana County. Appellants had filed exceptions to the court’s order of June 18, 1984, denying the requested injunction against appellee and refusing to grant monetary damages. A brief recital of the facts of this case will be helpful.

Appellants, Samuel R. Cronan and Dorothy A. Cronan, purchased a tract of land from Joseph M. Frye, et ux., by deed dated November 29, 1972. This deed contained the following reservation clause:

EXCEPTING AND RESERVING to M.V. Lias all of the oil and gas in, under and upon the said premises for and during the term of his natural life as excepted and reserved in the recital deed.

Similarly, the deed by which Frye had purchased this tract from M.V. Lias in 1971 contained the following reservation clause:

EXCEPTING AND RESERVING to the grantor herein all the oil and gas in, under and upon the said premises for and during the term of his natural life. Upon his death said oil and gas interest shall forthwith pass to and be vested in the grantees herein named, their heirs and assigns.

In 1963, Lias had entered into a ten-year oil and gas lease with the Manufacturer’s Light and Heat Company. This lease was recorded, but no activity was conducted on the land. On September 28, 1972, Lias entered into a ten-year oil and gas lease with Columbia Gas Transmission Corporation. This lease was to take effect on April 2, 1973. On or about June 15, 1980, appellee entered appellants’ land for the purpose of drilling gas wells. Appellee constructed a roadway and two well sites, one of which was actually drilled. Subsequent to the drilling, the well was outfitted and treated, the roadway was backfilled, and any trees that were disturbed were cut and stacked for the appellants. Appellants brought this action alleging damage to their land, crops and timber.

[385]*385Initially, we are faced with the question of whether the exception and reservation clause in the subject deed excepted and reserved to the grantor/life tenant (M.V. Lias) the right to enter into a subsequent oil and gas lease and to produce oil and gas thereunder without the joinder of the remainderman. As a general rule, a life tenant cannot produce oil and gas without the joinder of the remainder-man, as such independent production would constitute waste:

Absent special conditions (e.g., the existence or threat of drainage, the opening of mines before the creation of the life estate, a power of consumption of the corpus given the life tenant or the creation of the life estate without impeachment of waste), the life tenant is without the right to develop the minerals, either personally or through a lessee, by reason of the fact that this constitutes waste.

Oil and Gas Law, Williams & Meyers, Vol. 2, page 636.1, Sec. 512.1. It is a recognized exception to this rule that a life tenant may operate oil and gas wells, mines and quarries if they were opened before his life estate began. See Crozer’s Estate, 336 Pa. 266, 9 A.2d 535 (1939); Knox’s Estate, 328 Pa. 177, 195 A. 28 (1937). In such a case, the Open Mine Doctrine entitles the life tenant to continue operation of the opened mine and retain the proceeds of such operation. This doctrine is justified by the principle that a life tenant is entitled to enjoy the land in the same manner as it was enjoyed before the creation of the life estate. Oil and Gas Law, supra, Vol. 2, page 646.1, Sec. 513.

In this case, however, the oil and gas mine was not physically opened before the life estate began. There had been no drilling though the land had been leased. This lease, despite the absence of actual drilling operations on the land, is sufficient to constitute the opening of mines under the Open Mine Doctrine. See Oil and Gas Law, supra, Vol. 2, page 648, Sec. 513. It can be determined from the granting of a lease that the grantor contemplated [386]*386the use of the land for the extraction of oil and gas, and the mine is considered open. Since Lias leased the oil and gas rights in 1963 for a ten-year period, and created a life estate in these rights when he sold the property to Frye in 1971, there was a lease of the oil and gas rights in effect when the life estate was created. Thus, the Open Mine Doctrine certainly applied at that point.

Appellants’ contention is that the expiration of the first lease in 1973 terminated the applicability of the Open Mine Doctrine, and Lias could not enter a new lease as such was not permitted by either the exception and reservation clause or existing law. It is uncertain under the Open Mine Doctrine how the expiration of the lease without actual production would affect Lias’ rights as life tenant to produce oil and gas. One commentator has reduced the argument to the following set of circumstances:

There is uncertainty as to the result if the lease, which existed at the time the life estate began, terminates after the life estate has begun. If emphasis be given to the grantor’s intention to the effect that he intended that the land be dealt with as he had dealt with it, it would follow that the life tenant, acting alone, would have the power to give a valid lease after the termination of an existing lease and would be entitled to all proceeds payable under such subsequent lease. If, on the other hand, emphasis be given to the factor that wells are drilled under the authority of an existing lease which is the equivalent of an open mine, then it is apparent that such authority for opening mines or drilling wells no longer exists after termination of the outstanding lease, and the life tenant, acting alone, would not be entitled to lease again and enjoy the proceeds of a subsequent lease.

The Law of Oil and Gas, Kuntz, 8.2, page 177. We find that the weight of existing law favors emphasis upon the grantor’s intent, and thus the Open Mine Doctrine continues in effect in this case.

Interpretation of the exception and reservation clause of the deed will determine the parties’ rights thereunder, and [387]*387in construing such an instrument the law provides that “our primary object must be to ascertain and effectuate what the parties intended.” Brookbank v. Benedum-Trees Oil Company, 389 Pa. 151, 131 A.2d 103 (1957); see Lawson v. Simonsen, 490 Pa. 509, 417 A.2d 155 (1980). A rule of construction of deeds provides that in ascertaining the intention of the parties, the language of the deed should be interpreted “in the light of the subject matter, the apparent object or purpose of the parties and the conditions existing when it was executed.” Brookbank, 389 Pa. at 157, n. 6, 131 A.2d at 107, n. 6. Looking to the intent of Lias in reserving a life estate in the oil and gas on the property, we find that it was his intention that the right to produce oil and gas would continue throughout his life tenancy. Thus, the granting of a second lease did not terminate the applicability of the Open Mine Doctrine.

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Cronan v. Castle Gas Co., Inc.
512 A.2d 1 (Supreme Court of Pennsylvania, 1986)

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Bluebook (online)
512 A.2d 1, 354 Pa. Super. 381, 90 Oil & Gas Rep. 111, 1986 Pa. Super. LEXIS 11087, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cronan-v-castle-gas-co-inc-pa-1986.