Butler citizen. [volume] (Butler, Pa.) 1877-1922, 1892-12-16

claim revsrses the former decisions Of the
Supreme Court in oil and gas lease cases
will be found below. A reading of it will con-
vince them that the Court does not reverse
itself as regards leases in which there is q
clear covenant on the part of the lessee
to pay a certain amount foc certain time.
GLASGOW V. CHARTERS OIL co.
(Supreme Court of Pennsylvania. Oct.
Is, 1892
OIL LEAsE-FoRFEITURE
One who takes an oil lease, conditioned
to be void unless he shall do something in
the way of development By putting down
a well within certain time, or unless he
pay so much per month in money, but
without coyenanting to do either, and who
in fact does nothing in the way OF develop
ment, and makes payment only for short
time, cannot be compelled to continue
such payments, but may insist on forfeit
ing his rights Ray V. Gas Co, 20 Att
Req 1065. 13S Pa. St. $40, di tinguished
Appeal from court of common pleas,
Butler county; Aaron L Hazen, Judge.
Action by John Glasgow against the
CHARTERS OF. Company to recover certain
payments alleged to be due under an
agreement of lease Judgment refusing a
motion asking for Judgment on account OF
an insufficient affidavit of defense. Plain
tiff appeals. Affirmed.
Williams, j. This appeal depends on
the construction that should be given to
the contract made By the parties on the
10Th day of June, 1890. 1t is called IAN
agreement of lease" An examination of
-, 1ha IN. ha of
the oil and gas under the grantor's tract of
land in Clinton township. Butler county,
and OF the right to 60 upon and operate
the land for oil and gas purposes. The
lease, or right granted, is TO continue tor
five years, and as much longer as oil or gas
shall be found in paying quantities on the
tract The consideration for the grant Is a
bonus OF 500. and a rent or royalty of one
eighth part of the oil produced. If gas be
obtained. the rental is fixed at $500 per
year for each we'll producing gas in
quantity sufficient To justify marketing it
rhe agreement then proceeds as follows:
Provided however, that this lease shall
become null and VOID, and all rights here
under shall cease and determine, unless a
we'll shall be competed on the premises
within one month from the date hereof or
unless the lessee shall pay at the rate OF
for each additional month, etc. There is
no express covenant, promise, or under
taking by the lessee to be found anywhere
in the agreement. A covenant to operate
within a reasonable time might be implied
from the nature of the instrument, but the
lessee has been careful to make no express
promise to operate the lease, or to do any
thing towards the development of the land
If he does nothing, the penalty for his in
action is fixed II is the forfeiture or loss
of his rights under the agreement. Bat, II
he thinks il an object to do so. he may pre-
vent the assertion OF this forfeiture By pay
ing 500 in advance of the lst day Of the
next month after the date of the contract,
and upon such payment, the right of for
feiture is postponed one month. This he
may do month after month as long as he
pleases, or until the end OF i've years. H.,
however, he puts down no well during the
first month, and pays no money in lieu OF
it, his rights are at an end, and the lessor
may assert the forfeiture. This looks like
an improvident agreement, and, as the
learned Judge Of the court below suggests,
may have been obtained by artifice; but no
fraud is alleged, and the question Is there
fore one of construction only. Its legal
effect is to confer on the grantee the right
to explore for oil on the tract described
IL he does not exercise this right within
one month, it il lost to him, unless he
chooses TO pay 500 in advance as the price
of another months opportunity 10 explore.
If he does exercise it, and finds nothing,
he is under no obligation to continue his
explorations. If he explores, and finds oil
or gas, the relation of landlord and tenant
or vendor and vendee is established, and
the tenant would be under an implied
obligation to operate for the common good
of bsth parties, andpay the rent or royalty
reserved. In this case, he did nothing in
the way of development, and, after the
payment of 500 per month for the delay
Tor short time, he ceased to pay. The
appellant contends that beca-se he might
pay under the terms Of the contract he
may he compelled to pay; but payment
was the means provided by the contract by
which the exercise of the right of the lessor
to assert forfeiture could be postponed.
If the lessee did not wish TO postpone the
exercise of such right, he had only to re-
frain from making the payment. This
case is not ruled by Ray V. Gas Co., 13e
Pa. st. 576, 20 Att. Rep. 1865, and kindred
cases. There the lessor had an election
whether to assert the forfeiture provided
for, or waive it, and proceed upon the
covenants Of the lessee. We said in these
cases that q lessee could not set up his
own broken covenants to shield him from
liability 1t was his duty to perform them.
If he failed, his lessor could elect in what
way to enforce tsem. He might assert The
forfeiture, and re-enter, or sue upon the
broken covenants. Unfortunately for the
plaintiff in this case. he has no covenants
on which to sue. The learned judge reach
ed correct conclusion, and the judgment
is affirmed.