Marshall v. Forest Oil Co. , 198 Pa. 83 ( 1901 )

Opinion by

Mk. Justice Bkown,

On August 28, 1895, A. H. Knauff, the owner of fourteen acres of land in Forward township, Butler county, granted to the appellant the exclusive right to drill and operate for oil and gas on it, for the term of ten years, “ and so long thereafter as oil and gas can be produced in paying quantities.” The consideration for this was $675, paid by the lessee at the time of the execution of the lease, and one eighth of all the oil and gas produced. The lessee agreed to commence operations within ninety days from the date of the lease, or after that period to pay the lessor $14.00 per month as a rental, until he should commence them. The lessee did not commence his operations at the expiration of the ninety days, but paid the rental to May 28, 1897. On the day preceding, May 27, he made a location and was about to commence, when, according to his testimony, he stopped in pursuance of an understanding with Knauff that, if he kept a man named Burr off the premises, the time for beginning work was to be indefinitely extended, and no rental was to be charged for the interval of inactivity. After May 27,1897, the lessee did nothing, and on May 22,1899, Knauff' leased the premises, for oil purposes, to S. S. Reeseman, who assigned the lease to the Forest Oil Company, the appellee. Subsequently, on October 20, 1899, Marshall, the appellant, brought ejectment against this company for the recovery of possession of the property. Service of the writ was accepted for Knauff, and, by leave of court, under plaintiff’s objection, he was made a party defendant. The verdict was for the defendants, and, on this appeal from the judgment entered, the court’s permission to make Knauff a party defendant to the suit, and its alleged failure to properly instruct the jury as to the forfeiture and abandonment of the lease by Marshall are assigned as error.

The writ was originally issued against the Forest Oil Company. as sole defendant. It was never actually served. Service was accepted for the company by its attorneys, and the sheriff received an acceptance of service from the attorneys of Knauff as “ party and owner in possession.” Return was made of these acceptances of service, and it was equivalent to a return that the sheriff had served the writ on Knauff. By section 2, act of April 13, 1807, 4 Sm. L. 476, it is provided that “ where any writ of ejectment shall be issued, and on the service thereof it shall appear to the sheriff that other persons not named in the writ are in possession of the premises or part thereof, such sheriff shall add the name of s.uch person or persons to such writ, and serve the same, and on return thereof, the prothonotary shall enter such additional defendants to the action and they shall be parties thereto.” Under this section, it was the duty of the sheriff, if it appeared to him that Knauff, though not named in the writ, was in possession of the premises, to serve the same on him, and the return of the acceptance of service for him was, as just stated, equivalent to actual service, and proof that it did appear to the officer that Knauff was in possession of the premises. What the court did was not to allow an amendment under the Act of May 4,1852, P. L. 574, by adding the name of a defendant omitted by mistake, but was carrying out the express provisions of the act of 1807; and at the time of the trial, the prothonotary was directed to do what he ought to have done when the writ was returned to him by the sheriff. The first assignment is not sustained.

The first point submitted by the plaintiff was, “ The plaintiff’s lease has not been forfeited by a failure to pay rentals.” Neither this nor the others were specifically answered by the court. The learned judge said of them all together, “The points above can all be answered in one answer. Before the plaintiff can recover the possession of the land described in the writ, he must convince you from the weight of the evidence that he has fully complied with the covenants in the lease and has done all he promised therein, unless he was released by the lessor, Knauff, or released from some of them by him as claimed by the plaintiff, which is a fact to be determined by you from the evidence.” In this general answer, the jury were instructed that there could be no recovery by the plaintiff, unless he had fully complied with his covenants in the lease and done all he had therein promised; and, in the general charge, the learned trial judge made clear what he meant in so instructing them. He told them that the plaintiff “ must commence the well or pay the rental, and unless ho has drilled the well, commenced it and followed it up with due diligence or paid the rental, he would not have the right to maintain this action of ejectment unless the owner of the land in some way released him from the covenants in the agreement. ... We say to you that this lease has no forfeiture clause in it, yet, nevertheless, Mr. Marshall could not enforce through the courts, a right of entrance upon that land until he would fully comply with his part of the contract ; that is, he would have to commence operations within the time fixed or pay the rentals, unless released by the man who had the right and power to do so; and that becomes a question. ... If you should find that there was no such arrangement as Marshall claims, by which the time for drilling was extended or rentals released, then we say to you the verdict must be for- the defendant, because Mr. Marshall cannot maintain an action of ejectment for the possession of this ground until he fully complies with his covenants in the lease.” By these instructions, the jury were unmistakably given to'understand that the failure of Marshall to pay the monthly rental, unless released from the same, was a bar to his right to recover. This was error, and the first point submitted by the plaintiff should have been affirmed. There is nothing in the lease providing that it should be forfeited by the nonpayment of the rental. The only forfeiture contemplated is that resulting from an abandonment of the lease and the removal of the lessee’s property from the premises; and the lessor could not have rescinded the lease because the lessee failed to pay the monthly rental. He had a right to enforce payment of the same by suit against the lessee for each monthly default, and, upon such default, in a short time any right of the latter in the leased premises would have been divested in proper proceedings by the former: Hooks et al.'v. Forst et al., 165 Pa. 238. There was no absolute covenant on the part of the lessee to develop the land. His agreement was that he would commence operations within a specified period, or thereafter pay a certain, fixed sum, monthly, as rental for the premises, which must be considered as damages to the lessor, liquidated by the parties to the lease, for the delinquency of the lessee in commencing his operations. The covenant of the lessee was to pay a certain consideration for the forbearance of the lessor, and not that the leased premises were to be held upon a certain condition, violation of which was to be forfeiture. The breach of the covenant as to the monthly rental was a breach of a promise to pay a consideration for indulgence, and for it the lessor could neither recover nor defend in ejectment. He could proceed for the collection of the rent due, and, upon failure to recover it, the lessee’s rights would be divested. This controversy would have been properly submitted to the jury on the question of Marshall’s abandonment of the lease; and his failure to pay the rental, and his general conduct in connection with the leased premises might all have been taken into consideration by the jury in determining the question of abandonment, which was one of intention: Aye v. Philadelphia Company, 193 Pa. 451; but, having been instructed that his mere failure to pay the rental, unless released from the same, was a bar to recovery, the jury may have been misled and their finding may have been based upon that instruction. It is not for us to say whether they found for the defendant on the question of abandonment or of nonpayment of rental. It is sufficient to know that, under the instructions, they could have found for the defendant, because he had not paid the rental; and they may have so found. As stated, this was error, and the case must be retried. The first, second and third points should have been affirmed, and in answer to the fifth, sixth and seventh, the court should have instructed the jury that whether there had been a forfeiture by abandonment of the lease depended upon the acts and intention of the lessee as they found them from the testimony. The eighth point need not be considered. The judgment is reversed and a venire facias de novo awarded.