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International Development Corporation v. Sherwood B. Davidge and Calvery Crary

August 11, 2011

INTERNATIONAL DEVELOPMENT CORPORATION, APPELLANT
v.
SHERWOOD B. DAVIDGE AND CALVERY CRARY, THEIR HEIRS, EXECUTORS, ADMINISTRATORS, SUCCESSORS, ASSIGNS AND UNKNOWN PERSONS CLAIMING ANY RIGHT, LIEN TITLE OR INTEREST BY, THROUGH OR UNDER THEM



The opinion of the court was delivered by: Mary Hannah Leavitt, Judge

Argued: June 6, 2011

BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE P. KEVIN BROBSON, Judge (P)

OPINION

BY JUDGE LEAVITT

International Development Corporation (International Corporation) appeals an order of the Court of Common Pleas of the 44th Judicial District, Wyoming County Branch (trial court) dismissing its action to quiet title to certain oil, gas and mineral rights located under land owned by the Pennsylvania Game Commission. The trial court held that the Board of Property has exclusive jurisdiction to adjudicate title in the mineral rights in question because the Game Commission asserts title to these mineral rights. Discerning no error in the trial court's decision, we affirm.

In August 2009, International Corporation filed a complaint to quiet title in certain oil, gas and mineral rights, which was followed in October 2009 with an amended complaint. The heirs of Sherwood Davidge and Calvery Crary filed preliminary objections to the amended complaint, asserting that they owned the mineral rights in question. The Thomas Family Trust filed a "response" to the amended complaint, asserting that Davidge and Crary exchanged their mineral rights for stock in a corporation that later went bankrupt. The Trust purchased the assets of the bankrupt corporation, including the mineral rights formerly owned by Davidge and Crary and now claimed by the plaintiff, International Corporation.

The Game Commission and the Treasury Department*fn1 intervened in the quiet title action and filed preliminary objections challenging the trial court's subject matter jurisdiction. Specifically, they argued that the Board of Property has exclusive jurisdiction over real property disputes involving land occupied or claimed by the Commonwealth. The Game Commission separately contended that oil, gas and mineral rights are not real property interests that can be litigated in a quiet title action.

There is no dispute over the Game Commission's ownership of the surface land in Wyoming County located above the mineral estate that is the subject of International Corporation's quiet title action. A deed dated February 11, 1921, conveyed this surface land from Central Pennsylvania Lumber Company to the Game Commission.*fn2 The 1921 deed expressly reserved "unto the proper owners thereof all oil, gas[,] coal and other minerals . . . as excepted and recorded in prior deeds" and excluded these mineral rights from the conveyance to the Game Commission. Reproduced Record at 8 (R.R.___). A prior deed, dated February 27, 1894, conveyed that same land from Sherwood Davidge and Calvery Crary, along with their wives, to Union Tanning Company. The 1894 deed reserved the oil, gas and mineral rights in Davidge and Crary. This is where the factual dispute begins.

International Corporation asserts that Davidge and Crary conveyed their reserved oil, gas and mineral rights to the United States Leather Company, the parent company of the Union Tanning Company, in exchange for stock at the time of the companies' reorganization. According to International Corporation, United States Leather Company later conveyed the mineral rights to another party, who, in turn, further conveyed the mineral rights. The final purchase was made by International Corporation. International Corporation cannot confirm the transaction by which Davidge and Crary exchanged their mineral rights for stock, explaining that the records of that particular transaction have been lost.

The Trust agrees that Davidge and Crary conveyed their oil, gas and mineral rights to United States Leather Company, leaving it the owner of both the surface and mineral estates. United States Leather Company conveyed the surface estate to Union Tanning Company, which later conveyed the surface estate to the Game Commission. However, the Trust maintains that the mineral estate was retained by United States Leather Company. When the Trust purchased the assets of United States Leather Company, it acquired the mineral estate, title to which is the subject of the quiet title action.

The heirs of Davidge and Crary assert that they own their ancestors' interests in the oil, gas and mineral rights, pointing out that there is no public record of these rights ever having been transferred to anyone. They note that the Game Commission's deed of title expressly reserved the oil, gas and mineral rights to Davidge's and Crary's heirs and assigns.

The Game Commission, the undisputed owner of the surface estate, acknowledges that any reservations of mineral rights established in prior deeds were expressly preserved in its 1921 deed. Nevertheless, the Game Commission also lodges the contradictory, and somewhat vague, claim that its deed did not exclude mineral rights because the deed conveyed the remainder and reversion interests of the grantor. The Game Commission argues that the reversion interests include the mineral estate. Alternatively, the Game Commission asserts that it owns the oil, gas and mineral rights by adverse possession because it has exercised exclusive control over the surface estate since 1931.

The Treasury Department asserts that regardless of which party's claim to the mineral rights prevails, it has the present right to administer the oil, gas and mineral rights under the Unclaimed Property Act. Davidge died in 1911, and Crary died in 1929. The Treasury Department notes that the oil, gas and mineral rights were not included in the wills of either Davidge or Crary. If they had owned these mineral rights at the time of their respective deaths, then the mineral rights passed to their heirs and, after remaining unclaimed for seven years, were subject to escheat to the Commonwealth. Likewise, the Treasury Department challenges the claims of the Trust and International Corporation as lacking the requisite documentation. The Treasury Department considers the oil, gas and mineral rights in question to be abandoned and thereby asserts custody under the Unclaimed Property Act.

The trial court sustained the jurisdictional preliminary objections of the Game Commission and the Treasury Department. It dismissed International Corporation's amended complaint on June 30, 2010, holding that disputes over interests in real property occupied or claimed by the Game Commission must be heard by the Board of Property. The trial court based ...


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