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BITO BUCKS POTTER v. NATIONAL FUEL GAS SUPPLY CORP. (08/13/82)

filed: August 13, 1982.

BITO BUCKS IN POTTER, INC.
v.
NATIONAL FUEL GAS SUPPLY CORP., APPELLANT



No. 1710 Philadelphia, 1980, Appeal from Order of the Court of Common Pleas, Civil Division, of Potter County at No. 16 of 1979.

COUNSEL

Daniel F. Glassmire, Coudersport, for appellant.

D. Bruce Cahilly, Coudersport, for appellee.

Cavanaugh, Johnson and Lipez, JJ.

Author: Cavanaugh

[ 303 Pa. Super. Page 209]

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.

[ 303 Pa. Super. Page 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":

FOR AND IN CONSIDERATION of One and no/100 (1.00) Dollars to it in hand paid the receipt of which is hereby acknowledged, Penn Valley Resorts, Inc., . . . does hereby grant to the Sylvania Corporation, . . . its successors and assigns, a permanent, exclusive right of way and easement, for the laying, maintaining, operating, replacing, altering, changing the size, relocating and moving, at any time and from time to time, of one or more pipe lines . . . together with the right of unimpaired access to said pipeline and the right of ingress and egress on, over, and through Grantor's above described land for any and all purposes necessary and incident to the exercise by said Grantee of the rights granted hereunder, . . .

The right of way and easement shall be Sixty-six (66) feet in width. Grantor covenants and agrees that it will not impound water or construct buildings or structures of any type whatsoever on the above-described right of way strip. This shall be a covenant running with the land and shall be binding on Grantor, its heirs and assigns.

In addition to the above consideration, Grantee agrees to repair or to pay any actual damages which may be done . . .

If the Grantee exercises the right herein granted, it shall pay the Grantor as additional consideration for the grant hereunder the sum of Nine & 50/100 Dollars for

[ 303 Pa. Super. Page 211]

    each rod length of the first pipeline and a like additional consideration for each rod length of each additional pipeline from time to time laid pursuant hereto, and the Grantee to pay such additional consideration in lieu of any vendor's lien in respect thereto. In case no pipe is laid thereon and/or such payment per rod is not made within two years from the date thereof, this grant shall thereupon cease and determine. . . .

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.

In case no pipe is laid thereon and/or such payment per rod is not made within two years from the date hereof, this grant shall thereupon cease and determine.

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.

[ 303 Pa. Super. Page 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 ...


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