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Application of Pennsylvania’s Dunham Rule

By Paul R. Yagelski, Esquire

Do Two Separate Deeds Read Together Provide Clear and Convincing Evidence of the Conveyance of Oil and Gas?

In Jenkins v. P.P.& V. Corp., No. 692 WDA 2020, 2021 Pa. Super. Unpub. LEXIS 1629 (Pa. Super. June 21, 2021)[1], Defendant, P.P.& V. Corporation (“PPV”), appealed from a judgment on the pleadings in favor of David and Anne Jenkins (collectively “Jenkins”) in a dispute over oil and natural gas rights.  The parties disagreed as to whether PPV conveyed these rights to its successors in title, including Jenkins. The trial court, sitting en banc, unanimously determined that two deeds, when read together, transferred the oil and gas rights to Jenkins.  The Superior Court agreed and affirmed.

The oil and natural gas at issue in Jenkins lies beneath a plot of land in Cambria County, known as the “Boyle Tract.”  The parties agreed that on June 27, 1967, PPV acquired a one-half interest in the Boyle Tract’s oil and natural gas from the Cherry Tree Coal Company.  The parties also agreed that, on December 29, 1981, PPV executed a quit-claim deed to one Harry M. Keilman.  The parties disagreed on whether the PPV-to-Keilman Deed conveyed the oil and natural gas to Mr. Keilman and through him and other successors to Jenkins.

In relevant part, the PPV-to-Keilman Deed conveyed:

ALL the right, title and interest that [PPV] has or may have of, in and to all the coal and other minerals together with such rights now vested in [PPV] in all those certain parcels of lands situate in West Carroll, formerly Carroll, and in Susquehanna Township, Cambria County, Pennsylvania . . . Said grants being for an undivided one-half interest as set forth in parcels 8(a) and 8(b) in deed of Carrolltown Coal Company, R.W. Scollon and Helen B. Scollon, his wife, dated April 15, 1957 and recorded in Deed Book Volume 697 at Page 137.

The above deed incorporated part of the Carrolltown Coal Company-to-Scollons deed by reference.

The incorporated part of the Carrolltown Coal Company-to-Scollons deed specifically referred to oil and natural gas as follows:

8-Oil and Gas Rights.

(a) All the oil, gas and other minerals, under Grantor’s lands in aforesaid Township together with such rights as set forth in Agreement and Conveyance from T.F. Dougherty et ux to The Bloomington Company under date of 8/15/52 and recorded in Deed Book 645, Page 12 and being the same as granted to the Grantor herein as parcel “No. 28” in Deed of January 1, 1957, from The Bloomington Company to the Grantor herein.

(b) The Grantor herein further grants unto the Grantees herein all its title and interest to all oil and gas and other mineral together with such rights as now vested in the Grantor in all those certain parcels of West Carroll, formerly Carroll, and in Susquehanna Townships, Cambria County, Pennsylvania, as conveyed by The Bloomington Company to the Grantor herein by deed of January 1, 1957, and recorded in Deed Book 692, Page 314.

Mr. Keilman’s rights under the Boyle Tract passed to others, eventually passing to Jenkins on April 20, 2006.  Thirteen years later, on April 10, 2019, Jenkins filed a quiet title action in the Court of Common Pleas of Cambria County, Pennsylvania against PPV and the whole world.  They sought a declaration that they own in fee simple “the undivided one-half interest in the oil and gas rights” beneath the Boyle Tract.

PPV moved for judgment on the pleadings. An en banc panel in the Court of Common Pleas of Cambria County held that PPV conveyed its oil and natural gas rights to Mr. Keilman.  The court en banc also concluded that those rights eventually passed to Jenkins.  Writing for the unanimous court, Judge Patrick T. Kiniry denied PPV’s motion for judgment on the pleadings.

The following April, Jenkins moved for judgment on the pleadings and attached Judge Kiniry’s Opinion and Order as the primary basis for the motion.  A second en banc panel unanimously adopted the decision of the prior panel and granted judgment on the pleadings to Jenkins.  PPV appealed.

On appeal, PPV raised one issue.  Specifically, it asked, “Did the trial court err and abuse its discretion by [misapplying] the [Rule in Dunham & Schortt v. Kirkpatrick, 101 Pa. 36 (1882),] when it incorrectly expanded the meaning of the word ‘mineral’ in [the Jenkinses’] deed to include oil and gas without ‘clear and convincing evidence?”.  In considering the issue, the Superior Court noted that the interpretation of deeds presents a pure question of law.  As such, as with any question of law, the Superior Court reviewed the trial court’s construction of the deed de novo.  Murphy v. Karnek, 160 A.3d 850, 859 (Pa. Super. 2017).

PPV claimed that the 1981 deed it executed in favor of Mr. Keilman did not transfer PPV’s one-half interest to the oil and gas in the Boyle Tract.  PPV believed that because the words “oil and natural gas” did not appear in the quit-claim deed to Mr. Keilman, the parties did not intend to transfer those particular rights to Mr. Keilman.  According to PPV, “If the party’s intent had been to include a conveyance of oil and gas, surely they would have included those three simple but essential words.”  PPV’s Appellate Brief. at 10.

The Superior Court stated that when interpreting a deed, a “court’s primary object must be to ascertain and effectuate what the parties themselves intended.”  Ralston v. Ralston, 55 A.3d 736, 742 (Pa. Super. 2012) (quoting Consolidation Coal Co. v. White, 875 A.2d 318, 326-27 (Pa. Super. 2005)).  The Superior Court applied several principles when determining the intent of the parties in the deeds. First, the nature and quantity of the interest conveyed must be ascertained from the deed itself and cannot be orally shown in the absence of fraud, accident or mistake.  The court seeks to ascertain not what the parties may have intended by the language but what is the meaning of the words they used.  Second, the Superior Court must give effect to all the language in the instrument, and no part is to be rejected if it can be given a meaning.  Third, if a doubt arises concerning the interpretation of the instrument, it will be resolved against the party who prepared it.

The parties agreed that no material issue of fact existed.  The parties also agreed that the controlling case law came from the Pennsylvania Supreme Court in Highland v. Commonwealth, 400 Pa. 261, 161 A.2d 390 (1960).  Both parties cited similar portions of the Highland case in reliance on their respective positions; however, both parties disagreed as to how the case law should be applied.

The Highland court, relying on Dunham, held that, “if, in connection with the conveyance of land, there is a reservation, or an exception of ‘minerals’ without any specific mention of, natural gas or oil, a presumption, rebuttable in nature, arises that the word ‘minerals’ was not intended by the parties to include natural gas or oil.”  Highland, 400 Pa. at 276.  “As a rule of property long recognized and relied upon, the Dunham rule binds and controls the situation when the word ‘minerals’ appears in a grant, rather than an exception or reservation.”  Highland, 400 Pa. at 277.  “To rebut the presumption established in Dunham, that natural gas or oil is not included within the word ‘minerals’ there must be clear and convincing evidence that the parties to the conveyance intended to include natural gas or oil within such words.”  Id.

The Superior Court found that the PPD-to-Keilman Deed expressly included paragraphs 8(a) and 8(b) from the Carrollton Coal Company-to-Scollons Deed in the granting clause, which intentionally granted all the rights owned by the Grantor.  In Highland, the Supreme Court discussed rules applicable to the construction of deeds, among those, that “effect must be given to all the language of the instrument and no part shall be rejected if it can be given a meaning.”  Id. at 283.  The PPD-to-Keilman Deed provided clear and convincing evidence that a transfer of the oil and gas rights was intended by PPV, by clearly referencing paragraphs 8(a) and 8(b) from the Carrollton Coal Company-to-Scollons Deed as an interest being conveyed to the grantee in that deed.  Accordingly, the Superior Court gave effect to the specific reference of paragraphs 8(a) and 8(b) as an intentional granting of the oil and gas rights and found that the PPV-to-Keilman Deed effectively granted title to the undivided one-half interest in the oil and gas rights provided in paragraph 8 of the Carrollton Coal Company-to-Scallons Deeds.

The Superior Court noted that when read in conjunction, the two deeds left no room for doubt that PPV intended to grant Mr. Keilman, “an undivided one-half interest as set forth in parcels 8(a) and 8(b) in the deed of Carrollton Coal Company, R.W. Scollons and Helen B. Scollons, his wife, dated April 15, 1957, and recorded in Deed Book Volume 697 at Page 137.”  The interest set forth in paragraphs 8(a) and 8(b) of the Carrolton Coal Company-to-Scallons deed is one-half of the oil and natural gas beneath the Boyle Tract.  That oil and natural gas passed down the chain of title to Mr. Keilman to Jenkins.  Thus, the Superior Court affirmed the trial court holding that the trial court correctly entered judgment on the pleadings and quieted title to one-half interest in the oil and natural gas beneath the Boyle Tract in Jenkins.

If you have questions about your oil and gas rights, contact us online or call (412) 338-1124.

[1] This is a non-presidential decision governed by Pa Superior Court I.O.P. 6537.