Case Title: Bito Bucks in Potter v. Nat. Fuel Gas Supply

Citation: 303 Pa. Super. 208, 449 A.2d 652

Docket Number: 

State: pennsylvania

Court: Pennsylvania Supreme Court

Date: 1982-08-13T00:00:00Z

Document:
303 Pa. Superior Ct. 208 (1982) 449 A.2d 652 BITO BUCKS IN POTTER, INC. v. NATIONAL FUEL GAS SUPPLY CORP., Appellant. Supreme Court of Pennsylvania. Argued January 27, 1981. Filed August 13, 1982. *209 Daniel F. Glassmire, Coudersport, for appellant. D. Bruce Cahilly, Coudersport, for appellee. Before CAVANAUGH, JOHNSON and LIPEZ, JJ. CAVANAUGH, Judge: This is an appeal from a decree of the Court of Common Pleas of Potter County, sitting in equity, which determined the rights of the respective parties under a right of way agreement over certain private land. The propriety of such determination is now before us. *210 The facts are as follows. In April of 1973, Richard Way was employed by the appellant, National Fuel Gas Supply Company (National), to gain the necessary right-of-ways and easements over seven miles of private lands in order to lay its proposed pipeline. Mr. Way initiated negotiations with Penn Valley Resorts, Incorporated (Penn Valley), appellee's predecessor in title, to obtain a right-of-way and easement across Penn Valley's land. During these negotiations, Penn Valley was represented by its corporate president and largest stockholder, Edward Clancy. On April 18, 1973, Mr. Clancy signed, as witnessed by William J. Mullins, Jr., corporate secretary, the following "Right of Way and Easement": Within two years, on October 3, 1974, National, through its subsidiary, Sylvania, paid One thousand six hundred and ninety-one (1,691.00) dollars to Penn Valley under the terms of the right of way and easement agreement. In August, 1976, appellee's agents inspected the Penn Valley tract, prospective to its acquisition. In September, 1976, appellant's surveyors staked out the Penn Valley tract easement. On December 28, 1976, appellee, Bito Bucks in Potter, Inc., (Bito Bucks) acquired by deed a portion of the Penn Valley tract subject to the right of way and easement dated April 18, 1973. Following the receipt of a thirty day notice of entry from National, Bito Bucks filed an action in equity for an injunction to permanently enjoin National from entering appellee's land to construct a pipeline because an ambiguous forfeiture clause terminated its right of way and easement. The lower court agreed with appellee that the forfeiture clause was ambiguous. After a full evidentiary hearing, the lower court held that, although the appellant proved through his witnesses that each of the parties to the right of way and easement agreement held the same mutual understanding that the forfeiture clause requires National to either lay the pipeline or pay the roddage within two years, the subjective intent of the parties required that National lay the pipeline and pay the roddage within two years of the agreement. Thus the lower court granted the permanent injunction and this appeal followed. *212 Appellant contends that the evidence of the discussions prior to and at the execution of the right of way and easement agreement and the subsequent conduct of the parties, demonstrate that the roddage payment of $1,691.00 perfected a perpetual easement in National and failure to lay the pipeline within two years did not cause a forfeiture of National's easement rights. We agree and thus reverse the order of the lower court. It is settled that the same rules of construction apply to deeds granting easements as to contracts generally. Sigal v. Manufacturer's Light and Heat Co., 450 Pa. 228, 299 A.2d 646 (1973); Percy A. Brown & Co. v. Raub, 357 Pa. 271, 54 A.2d 35 (1947). The basic rule of construction for interpreting contracts was recently restated in Felmont Oil Corporation v. Cavanaugh, 300 Pa.Super. 520, 525, 446 A.2d 1280, 1283 (1982) (J. 1431/1978), quoting Wilkes-Barre Township School District v. Corgan, 403 Pa. 383, 386, 170 A.2d 97, 98-99 (1961): *213 We agree with the lower court that the forfeiture clause of the right of way and easement agreement is ambiguous. The inartful use of the conjunction "and/or" leads to two equally possible constructions: (1) that the pipeline must be laid and the roddage payment made within two years; or (2) that if either the pipeline is laid or the roddage payment is paid, then a perpetual easement was created. Thus, the lower court properly admitted oral testimony, not to vary the terms of the agreement, but to ascertain the mutual understanding of the parties. Castellucci v. Columbia Gas of Pennsylvania, Inc., 226 Pa.Super. 288, 294, 310 A.2d 331, 334 (1973) (emphasis added). However, we must conclude here that the trial judge's construction of the forfeiture clause is neither reasonable nor supported by the evidence since it clearly disregarded the intention of the parties. The testimony of Richard Way, employee of National was as follows: N.T., February 25, 1980, p. 5-6. (emphasis added). Further, the cross examination of Mr. Way by Mr. Cahilly (for Bito Bucks) was as follows: N.T., February 25, 1980, p. 11-12. Mr. Way succinctly summarized his understanding of the forfeiture clause that: N.T., February 25, 1980, p. 17. (emphasis added). The testimony of Frank McGuire, Vice President, shareholder and a director of Penn Valley was as follows: N.T., February 25, 1980, p. 32. Mr. McGuire also testified as to his understanding of the conversations at the time of the execution of the agreement: N.T., February 25, 1980, p. 39. Finally Mr. McGuire testified concerning his understanding of the effect of the roddage payment of $1,691.00 in October of 1974: N.T., February 25, 1981, p. 33. Since the objective intent of the parties as expressed in the right of way and easement agreement was ambiguous, the lower court should have looked to the subjective intent of the parties to the agreement through parol evidence. Our review of the record clearly demonstrates that the lower court disregarded the construction of the forfeiture clause the parties had agreed to. The subsequent conduct of the parties following the signing of the right of way and easement agreement remains uncontradicted as evidence of the parties' true intention. Penn Valley's acceptance of the check in October, 1975 and its failure to object when National, surveyed and staked the easement with notices of National's intent to lay the pipeline, indicate that the parties intended that the payment of the roddage created a permanent easement for National. Since the forfeiture clause is ambiguous and the parties' mutually understood that the payment of the roddage payment would create a perpetual easement, the order of the lower court is reversed. Reversed.