Iams v. Carnegie Natural Gas Co.

Opinion by

Mr. Justice Brown,

We are of one mind that this case ought to have been submitted to the jury, and not having been misled by improper instructions we cannot interfere with their finding. The plaintiffs leased certain lands belonging to them in Greene county to Timothy Ross “for the purpose and with the exclusive right of drilling and operating for petroleum and gas,” the terms to be for two years or for such time as oil or gas should be found in paying quantities on the premises. Shortly after the execution of this lease Ross assigned the gas privilege to appellant, the terms of his contract with the plaintiffs being that all its conditions 'should extend to the heirs, executors and assigns of the parties to it. The court below was called upon to interpret the following clause in the lease, and to instruct the jury what facts would justify a finding in favor of the plaintiffs claiming under it: “ In consideration of said grant and demise the said party of the second part agrees to give or to pay to the said parties of the first part the full equal one eighth part of all the oil produced or saved from the premises, and to deliver the same free of expense into tanks or pipe lines to the credit of the first parties, and should gas be found in sufficient quantities to justify marketing the same, the consideration in full to the parties of the first part shall be five hundred ($500) dollars per annum, payable semi-annually in advance, for the gas from each well so long as it shall be sold therefrom, and gas free of cost for household use on the premises to be taken from a well on same.”

Operating under this lease the appellant bored a well upon the premises, from which gas was obtained. The learned trial judge, after explaining to the jury that only the gas privilege and the provisions relating to it were to be considered, proceeded to properly interpret the foregoing clause and instruct them as to their duty. He explained to them that they would first have to determine whether gas had been obtained in paying quantities, sufficient to justify the defendant in marketing it. They were told that the defendant would not be required to market the gas at a loss, but only at a reasonable profit; and in determining whether it could be so marketed, the distance to market, the expense of marketing and everything of that kind should be taken into consideration. Their attention was called to the evidence on behalf of plaintiffs showing that gas had been developed in quantities justifying the defendant in marketing it, and, on the other hand, to what the appellant had submitted as proof to the contrary. The jury found that gas had been obtained in sufficient quantities to justify its marketing. When so obtained by the exploring party the relation of landlord and tenant was established. The tenant was then under an “obligation to operate for the common good of both parties, and to pay the rent or royalty reserved: ” Glasgow v. Chartiers Oil Co., 152 Pa. 48.

The jury were further instructed that if they should find gas had been obtained in paying quantities the defendant was bound to market it, or show some good reason for not having done so. They were not persuaded that any such reason existed, and their finding under proper directions from the court in favor of the plaintiffs for the rental claimed cannot be disturbed.

The assignments of error are overruled and the judgment affirmed.