McKee v. Colwell ( 1898 )

Opinion by

Orlady, J.,

The construction of the leases in this case is to be made in the light of Glasgow v. Chartiers Oil Co., 152 Pa. 48, and McMillan v. Philadelphia Co., 159 Pa. 142, in which Judge Williams of the Supreme Court most convincingly declares the distinctions between an option and a contract of sale, which cases clearly determine these leases as options, revocable at the pleasure of the lessee. In the first lease it is agreed that three wells shall be drilled, provided that gas or oil be found in the first well, and in the second lease, that two wells shall be drilled, provided that gas or oil be found in the first well; but there is not in either lease any covenant that upon failure to drill a well he will pay the rental. By the terms of the leases it is optional with the defendant to pay the rent as it becomes due in order to avoid a forfeiture. The condition in regard to the wells to be drilled depends upon whether the first well is productive, and not upon the condition that they shall be drilled within three months. The lessee can either drill a well within three months or pay the rent stipulated for in the agreement, or he can elect to do neither, when the leases become forfeited.

The appellee assigned his interest in the leases on July 19, 1894, and on September 11, 1894, Wick became the owner of them with the knowledge and consent of the plaintiff. On January 1,1895, Wick assigned them to Roberts, who on October 24, 1895, surrendered all rights therein and delivered them by mail to the plaintiff, who has since then retained them, with the authority to “ do as you please with them.” On June 20, 1895, Wick paid to the plaintiff $20.00 on one lease and f5.00 on the other, five months after he had assigned them to Roberts. .

The payments made by Mr. Wick after he had transferred his rights in them, cannot affect the liability of the appellee, whose rights were fixed before that event, and the appellee is not shown to have had any knowledge of the payments being-made, nor did he ratify them after he knew of their payment.

The conclusion reached by the learned judge below in holding that the leases in suit are not similar to the one in McMillan v. Philadelphia Co., 159 Pa. 142, and that Glasgow v. Chartiers Oil Co., 152 Pa. 48, controls this case is, to our minds, correct, and the judgment is affirmed.