P. 2 ~ Continued - Pennsylvania court raises questions about Marcellus shale gas ownership
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The Superior Court's ruling
On appeal, the Pennsylvania Superior Court reversed the order of the trial court and remanded for further proceedings. Butler, 2011 WL 3906897, at *7-8.
The court emphasized that, when reviewing a trial court's grant of a demurrer, the court must accept as true all facts averred in the complaint and that "[w]here doubt exists as to whether a demurrer should be sustained, this doubt should be resolved in favor of overruling it." Id. at *3 (quoting Binswanger vs. Levy, 457 A.2d 103, 104 (Pa. Super. Ct. 1983)).
The court ultimately concluded that it was "unable to say with certainty that [the Powers heirs] have no cognizable claim based on the facts averred." Id. at *7.
In reaching its conclusion, the Butler court explained that when interpreting a deed, "[a] court's primary object must be to ascertain and effectuate what the parties themselves intended" and that "[t]o ascertain the intention of the parties, the language of a deed should be interpreted in the light of the subject matter, the apparent object or purpose of the parties, and the conditions existing when it was executed." Butler, 2011 WL 3906897, at *5 (quoting Consolidation Coal Co. vs. White, 875 A.2d 318, 326-27 (Pa. Super. Ct. 2005)).
The court further reasoned that Pennsylvania courts have recognized that the term "[m]ineral...may in any particular case have a different meaning, more extensive or more restricted, but such different meaning should clearly appear as intended by the parties." Id. (quoting Silver vs. Bush, 62 A. 832, 833 (1906)) (alterations in Butler).
The term "mineral" "may include any inorganic substance found in nature having sufficient value separated from its situs as part of the earth to be mined, quarried, or dug for its own sake or its own specific uses[;] [b]ut, though it may include all such substances, it does not necessarily do so." Id. "The cardinal test of the meaning of any word in any particular case is the intent of the parties using it." Id.
The Butler court reviewed and analyzed the leading Pennsylvania Supreme Court cases addressing the reservation of minerals, petroleum oil, and natural gas.
In Dunham vs. Kirkpatrick, 101 Pa. 36 (Pa. 1882), the court held that a reservation of "all minerals" generally does not constitute a reservation of petroleum oil.
In Silver vs. Bush, 62 A. at 833, the court held that a reservation of minerals underlying land did not include natural gas because, even though natural gas constitutes a "mineral" in the broadest sense of word, the plaintiff failed to present evidence that parties understood "minerals" to include natural gas or even that the term had acquired a usage in conveyances that would include gas.
In Highland vs. Commonwealth, 161 A.2d 390, 399 (Pa. 1960), the court held that to rebut the presumption that a reservation's use of the word "minerals" does not include petroleum oil or natural gas, "there must be clear and convincing evidence that the parties to the conveyance intended to include natural gas or oil within such word."
In addition, in Bundy vs. Meyers, 94 A.2d 724, 725-26 (Pa. 1953), the court held that a reservation of "oil" and "minerals of every kind" did not reserve rights to natural gas.
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