Bubb v. Parker & Edwards Oil Co.

Citations

• 252 Pa. 26
• 97 A. 114
• 1916 Pa. LEXIS 563

Syllabus

<p>Contracts — Construction—Oil and gas lease — Ambiguous terms —Parol evidence — -Custom—Bill in equity — Injunction refused.</p> <p>1. In construing an indefinite or ambiguous contract, the construction placed upon it by the parties themselves is to be considered, and to this end it may be shown by declarations of either party that what such party understood at the time of its execution to be the scope and purpose of the contract is at variance with the construction that such party seeks to establish when the matter becomes the subject of subsequent litigation.</p> <p>2. In a suit in equity to enjoin defendants from operating a gasoline plant on land which they held under an oil and gas lease from plaintiff’s predecessors in title, it appeared that subsequent to the execution of the lease, plaintiffs conveyed to one of defendants under whom the other defendant held all the waste gas produced and saved from wells that were being operated under the lease, “together with all the rights necessary to the use and enjoyment of the same.” Defendants erected a gasoline extraction plant and used the waste gas for the extraction of gasoline. Plaintiffs offered parol evidence to prove that after the agreement conveying the waste gas was prepared but before it was signed, defendants stated that its purpose was to enable them to use the waste gas for the operation of gas engines to increase the flow of oil from the wells then in operation, and that upon the strength of this ¿assurance plaintiffs signed the agreement. Held, the lower court erred in excluding such evidence.</p> <p>3. In such ease where it appeared that when plaintiffs made the agreement the manufacture of gasoline from waste gas was in its infancy, so that there could have been no certain, uniform and notorious custom affecting grants of waste gas, it was error for the court, over plaintiff’s objection, to permit witnesses to state what in their opinion would be included under such a grant of waste gas, and to te