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SIEGEL v. ENGSTROM (11/14/67)

decided: November 14, 1967.


Appeal from decree of Court of Common Pleas of Warren County, Feb. T., 1965, No. 56, in case of Charles J. Siegel v. Arthur J. Engstrom, Irene H. Engstrom, Bernell E. Weldon et al.


John W. Beatty, with him Knox, Pearson & McLaughlin, for appellant.

H. Robert Hampson, with him Hampson and Hampson, for appellees.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice O'Brien. Mr. Justice Cohen concurs in the result.

Author: O'brien

[ 427 Pa. Page 382]

This appeal follows a final decree dismissing the plaintiff's complaint in equity after the court sustained defendants' preliminary objection on the ground of laches. Plaintiff sought to enjoin defendants from producing oil and gas on land owned by defendants, Engstroms, and to have the defendants render an accounting.

Plaintiff avers, in his complaint, that he and the Engstroms entered into a written oil and gas lease on

[ 427 Pa. Page 383]

August 23, 1962. The lease, which was recorded, was for a term of two years. It granted to the plaintiff the exclusive right to produce oil and gas from the 107-acre land of the Engstroms, and was to remain in force so long thereafter as oil and gas is produced from the premises, or as operations continue for the production of oil and gas.

The lease also provided that: "In case operations are not commenced within three months from this date [August 23, 1962], then this grant and all rights hereunder shall immediately become null and void as to both parties, and no declaration or notice on the part of either shall be necessary to forfeit or terminate the same, and no liability hereunder from either to the other shall result. Provided that second party may prevent such forfeiture or termination from Nov. 23, 1962, to Aug. 23, 1964 and no longer, by paying to the first party at the rate of one Dollars [sic] per acre per year until such operations are commenced."

The plaintiff, in compliance with the terms of the obligation, avers in his complaint, that he "tendered to the defendants, Engstrom, a check dated November 23, 1962, in the amount of $26.75, being one-fourth of $107.00, yearly rental, and said check was accepted and cashed by the defendants, Engstrom." Further averments were that: on or about February 21, 1963, another check for $26.75 was paid to defendants Engstrom which they cashed; that on or about May 23, 1963, the plaintiff tendered another check in the amount of $26.75 to the Engstroms, but they refused the check and subsequently returned it to the plaintiff; that on or about June 28, 1963, plaintiff was informed by counsel for the Engstroms, by letter, that they considered the lease terminated; that on or about August 13, 1963, by letter, the plaintiff's check of May 23, 1963, was returned to him; that on or about August 23, 1963, plaintiff tendered a check for $26.75 to the Engstroms,

[ 427 Pa. Page 384]

    but his transmittal letter was returned unopened, together with a letter from Engstroms' counsel dated September 13, 1963, in which letter plaintiff was given specific, formal and written notice that "if he attempted to exercise his legal rights under the terms of the said lease, or attempted to go on land owned by the defendants Engstrom he would be considered a trespasser."; that plaintiff continued to tender the subsequent rental payments to the Engstroms, all of which were refused and returned to the plaintiff; that "On August 29, 1963, the defendants Engstrom and the defendants Weldon entered into a gas and oil lease for the said premises, notwithstanding the fact that both parties had actual and constructive notice of plaintiff's prior rights to the said gas and oil on the premises."; that "on or about September 10, 1963, plaintiff gave formal written notice to defendant Weldon Producing Company of his rights under his prior lease"; that "on or about September 30, 1964, defendants Engstrom and defendants Weldon entered into another gas and oil lease for the said premises"; that some time prior to October 7, 1964, the defendants Weldon commenced drilling operations on the premises; that on or about October 7, 1964, plaintiff gave the defendants, Weldon, written notice to cease drilling operations on the premises; and that during the month of October, 1964, the drilling operations of the defendants, Weldon, ...

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