is that such a lease confers no vested estate in oil or gas in the earth, but at most confers only a right to search for oil and gas, and that only when oil or gas shall be found in paying quantity and marketed does any estate vest in the lessee, and that no estate ever vested under the first lease, because the gas found was not in paying quantity. This lease does not limit its term by requiring that oil or gas shall be found in paying quantity, as leases usually do. It says that the lease shall endure "five years from this date and as long thereafter as oil and gas, or either of them, is produced therefrom by the party of the sec ond part." So this lease contains nothing in terms allowing the lessor to end it because oil or gas is not found in paying quantity; and, if there were such provision, I should regard it as made in the interest of the lessee to protect him from payment of the annual sum for a gas well, if insufficient in quantity, and not as intended to give the lessor right to terminate the lease against the lessee's will, he treating the quantity as sufficient and electing to pay. What right has Evans to say that no estate vested by reason of insufficiency of gas, when the lease makes no such provision, and the lessee chooses to regard it as sufficient and pay as if it were? And again it has been held, even when such a clause is in the lease, that it is with the lessee to say whether the product is in paying quantity. Urpman v. Lowther Oil Co., 53 W. Va. 501, 44 S. E. 433, 97 Am. St. Rep. 1027; Thornton Petroleum & Gas, § 119. So held in Summerville v. Apollo Gas Co., 207 Pa. 334, 56 Atl. 876, and by Judge Goff in Kellar v. Craig, 126 Fed. 630, 61 C. C. A. 366; Young v. Oil Co., 194 Pa. 243, 45 Atl. 121, is notable for this construction of such a clause. It says that the operator has election to say whether it will pay. It is useless to argue that a lease does not vest right to oil and gas in place, and therefore no right vests of any character, if the quantity is too small to pay. No one says that the lease carries title to these minerals, even after a paying well has revealed them; but an estate, a right of value then vests, that is, right to retain possession of the land for operation and to go on to sever the minerals from the land and convert them into personalty. When this well was found, the lessee had right, if he chose, to keep possession and pay the annual rental. He had a vested right. Evans was only entitled to the rental. Title vested. He gets the same pay as if the well produced a larger quantity. There is really no evidence that it was not a paying well. The cross-bill alleges that it was, and this is to be taken as true on demurrer. Evans for seven years so treated it, for he received seven annuals of $200, knowing that the gas was not being marketed, knowing the status of the well. Though the gas was not marketed, the well was being used to comply with the lessee's covenant to furnish Evans gas for his use. The law is that "the right to declare a forfeiture must be distinctly reserved, proof of the happening of the event on which the right is to be exercised must be clear, and the party entitled to do so must exer cise his right promptly. Thompson v. Christie, 138 Pa. 230, 20 Atl. 934, II L. R. A. 236. Will equity allow Evans to wait and wait, drawing large sums of money yearly, and then at the eleventh hour suddenly forfeit? Is he not estopped? Such acceptance of money by Evans, knowing all the facts, is forcible against him as an estoppel in a court of equity. Hukill v. Myers, 36 W. Va. 639, 15 S. E. 151. * * Moreover, there is evidence going to show that the gas was, in fact, in paying quantity. * Title having vested, the lease contains no clause that forfeits it. It is argued not definitely, but virtually, that failure to drill other wells forfeits. We have frequently held that, where there is no express provision requiring additional wells, but only an implied one, this will not forfeit. Core v. Petroleum Co., 52 W. Va. 276, 43 S. E. 128; Kellar v. Craig, 126 Fed. 630, 61 C. C. A. 366. I have never been reconciled to the doctrine that for failure to drill additional wells the lessor must sue at law for damages, and equity will not cancel unless for draining from nearby territory, and thus exhaust oil in the leasehold involved. I have asked: How many actions must the landlord bring? How can damages be measured? How can we see into the depth of the earth? But it has been so held. The reason is that equity will not, as a rule, enforce a forfeiture of an estate. It will not especially insert such a clause when the parties have not inserted it, especially when they did insert forfeiture for failure to drill or pay commutation, but did not insert forfeiture for failure to drill additional wells. As to duty to drill additional wells for gas, the Pennsylvania Supreme Court has held, practically, that it does not exist in gas as in case of oil, because of the difference. A small oil well can be used; a gas well of slight pressure will not enter a gas line. McKnight v. Manufacturers' Gas Co., 146 Pa. 185, 23 Atl. 164, 28 Am. St. Rep. 790. That was for both oil and gas, but development seemed to show the section to be gas territory, as in this case; but we express no opinion as to this. We only say there can be no forfeiture for mere failure to drill more wells. It is argued that failure to market the gas forfeits the lease. So it was claimed in Summerville v. Apollo Gas Co., 207 Pa. 334, 56 Atl. 876, as to a lease for two years "and as much longer as oil and gas are found in paying quantities," and the court said that the lessor had no right to forfeit at the end of two years because during that time no oil or gas had been marketed. "It may be that for some time the lessee was not able to find a purchaser for the gas, but that was not the affair of the lessors. They were not interested in the proceeds of the sale of the gas. Their rights under the agreement extended only to the receipt of a stipulated annual rental for each well, and the free use of gas for domestic purposes. Beyond this the question of whether or not the quantity of gas was profitable was for the decision of the lessee. It may be that the final disposition of the product of the well was such as to amply remunerate it for the delay in finding a market." There is no evidence that the well was not in paying volume. * * * Therefore we reverse the decree, and dismiss the bill filed by the McGraw Company, and we decree that the lease in the record specified dated the 20th day of March, 1907, from Hugh Evans and wife to the McGraw Oil & Gas Company, be canceled, annulled, and set aside as to the rights of the Crystal Ice Company, Robert M. Kennedy, the South Penn Oil Company, and all other parties having rights derived under and by virtue of the lease in the record specified, dated the 20th day of September, 1899, made by Hugh Evans and wife to U. S. Ditman and J. C. Gawthrop; and this cause is remanded to the circuit court of Taylor county for further proceedings. Section 3.-Other Mining Leases. PLUMMER v. HILLSIDE COAL & IRON CO. et al. 1894. SUPREME COURT OF PENNSYLVANIA. TRESPASS q. c. by Emma A. Plummer against the Hillside Coal & Iron Company and the Lackawanna Coal Company, Limited. Judgment for defendants. Plaintiff appeals. Affirmed. * * * * WILLIAMS, J.-The learned counsel for the appellant states the point in controversy very fairly and clearly in the opening sentence of his printed argument. He says, "The contention in this case is confined to the effect and subsequent history of the Calendar lease dated the 1st of October, 1828." His position is that the lease granted only an incorporeal right to the lessee, to be exercised upon the premises covered by the lease. The appellees, on the other hand, contend that it granted the coal in place, under the land, absolutely. The words of the instrument upon which this question depends may be put together thus: "Samuel Calendar doth lease and to farm let to Thomas Merideth * all the land that he now holds, * and the lease is to continue for the term of one hundred years from this day. Possession of the leased premises shall extend only to their use as a coal field. The lessee shall have full power and possession to search for coal anywhere on the leased premises, in any manner he may think proper, to raise the coal, when found, from the beds; to enter and carry away coal; and to sell the same for his own benefit and profit. He may occupy whatever land may be useful or necessary as coal yards, for roads for transporting the coal; and in case it may prove necessary for securing the full enjoyment of the premises aforesaid as a coal field, as ** ** * * * aforesaid, then the said Samuel covenants and agrees to execute such further writings as counsel learned in the law may deem proper." The purchase money or price of the coal is fixed at $200. If the coal proved abundant, and of a given thickness, then another $100 was to be paid. In addition to this the sum of $1 per annum was to be paid, as rent. The lessor reserved out of this grant the right, for himself and his heirs, to take coal for their own use, so long as they should reside on the land. This instrument contemplated a sale of the coal under the leased premises at a fixed price, to be increased $100 if the quantity of coal reached the proportions described in it. The right of removal was to be exercised within 100 years. The fact that the instrument is in the form of a lease is not material, when the character of the transaction is apparent. Kingsley v. Iron Co., 144 Pa. St. 613, 23 Atl. 250; Montooth v. Gamble, 123 Pa. St. 240, 16 Atl. 594. A written contract, though not under seal, granting the privilege of digging all the coal or ore on the vendor's land, is equivalent to a conveyance of the title to the coal or ore in fee. Fairchild v. Furnace Co., 128 Pa. St. 485, 18 Atl. 443, 444. Such a conveyance operates to sever the surface from the underlying stratum of coal; and after such severance the continual occupancy of the surface by the vendor is not hostile to the title of the owner of the underlying estate, and will not give title under the statute of limitations. To affect the title of the owner of the coal, there must be an entry upon his estate, and an adverse possession of it. Armstrong v. Caldwell, 53 Pa. St. 284. But the contention that a right to mine coal in the land of another is an incorporeal one cannot be successfully maintained. The grant of such a right is a grant of an interest in land. Hope's Appeal (Pa. Sup.) 3 Atl. 23. When the grant is, in terms or in effect, a grant of all the coal on the lessor's land, this amounts to a severance of the coal from the surface, and vests a title to the underlying stratum in the grantee. Sanderson v. City of Scranton, 105 Pa. St. 469. This underlying estate may be conveyed under the same general rules, as to notice, as to recording, and as to actual possession, as the surface. After such a severance the possession of the holder of each estate is referable to his title. The owner of the surface can no more extend the effect of his possession of his own estate downward than the owner of the coal stratum can extend his possession upward, so as to give him title to the surface, under the statute of limitations. The owner of the surface can be affected only by the invasion of the surface. The owner of the underlying stratum is not bound to take notice of the invasion of the estates that do not belong to him, but when his own estate is invaded he is bound to take notice. The conclusion thus reached disposes of the title by possession set up by the plaintiff, and of her right to recover in this case. The appellant cites Oil Co. v. Fretts, 152 Pa. St. 451, 25 Atl. 732; Menish v. Stone, 152 Pa. St. 457, note, 25 Atl. 732,—and other cases in which oil leases were considered, and the rights of the lessors and lessees defined. A lease granting to the lessee the right to explore for oil, and, in case oil is found in paying quantities on the leased premises, to drill wells and raise the oil, paying an agreed royalty therefor, has been held to convey no interest in the land, beyond the right to enter and explore, unless the search for oil proves successful. If it proves unsuccessful, and the lessee abandons its future prosecution, his rights under the lease are gone. So it might be with a similar lease of lands supposed to contain coal. If the lessee entered, explored the leased premises, and, finding nothing, gave up the search, he would no doubt be held to the same rules, upon the same provisions in the lease, as were applied in the cases cited. The difference in the nature of the two minerals, and the manner of their production, have, however, resulted in considerable differences in the forms of the contracts of leases made use of. When oil is discovered in any given region, the development of the region becomes immediately necessary. The fugitive character of oil and gas, and the fact that a single well may drain a considerable territory, and bring to the surface oil that when in place, in the sand rock, was under the lands of adjoining owners, makes it important for each landowner to test his own land as speedily as possible. Such leases generally require, for this reason, that operations should begin within a fixed number of days or months, and be prosecuted to a successful end, or to abandonment. Coal, on the other hand, is fixed in location. The owner may mine when he pleases, regardless of operations around him. Its amount and probable value can be calculated with a fair degree of business certainty. There is no necessity for haste, nor moving pari passu with adjoining owners. The consequence is that coal leases are for a certain fixed term, or for all the coal upon the land leased, as the case may be. The rule of Oil Co. v. Fretts, supra, is not capable of application to the lease made by Calendar to Merideth in 1828, for several reasons: First. The Calendar lease is, in effect, a sale of all the coal in the leased premises, and consequently a severance of the surface therefrom. Second. It is for 100 years. All idea of haste in development or operating is excluded by the terms of the instrument, and the time for commencing the work of mining is left to the discretion of the lessee. Third. The consideration of the grant was, not the development of the mineral value of the land, but the price fixed by the agreement, and actually paid to the lessor in money. Upon a careful examination of the several assignments of error, we are all of opinion that the judgment must be affirmed. Judgment will be entered accordingly. |