When Does a PA Conveyance of "Surface" Include Oil and Gas (and When Does It Not)?



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When Does a Pennsylvania Conveyance of "Surface" Include Oil and Gas (and When Does It Not)?

In Yuscavage v. Hamlin, 137 A.2d 242 (Pa. 1958), the Pennsylvania Supreme Court held that a deed conveying "all the surface and right of soil? conveyed "all the surface and right of soil" and the oil and gas estate thereunder. In Fulton v. Brown, No. 12642 CD 2006, 2009 WL 7166112 (C.P. Indiana 2009), the Court of Common Pleas of Indiana County was faced with a case in which parties disputed whether a deed conveying "surface" also conveyed the oil and gas under that surface. The Fulton court distinguished Yuscavage and ruled that it did not.

Indiana Court of Common Pleas Judge Gregory A. Olson determined that Yuscavage reached its result based upon the broad language of the habendum clause in the deed giving rise to that case. The Yuscavage habendum stated that the deed conveyed ?all the estate, right, title, interest, property, possession, claim and demand whatsoever? of the grantors. Yuscavage ruled that the purpose of a deed habendum was to state with precision what estate passes under the deed and that the language of the habendum may enlarge, limit or otherwise vary the estate suggested by the granting clause of the deed.

In the Fulton case, on the other hand, the deed contained no habendum to expand the plain meaning of the word "surface." Thus, Judge Olson determined that standard rules of construction required the application of the plain meaning of the word "surface" and the deed was held to convey only surface. Judge Olson entered summary judgment in favor of those claiming under the grantor in the deed that was held to convey only surface. The Pennsylvania Superior Court affirmed Judge Olson's opinion per curiam and without opinion 4 A.3d 700 (Pa. Super. June 25, 2010). On February 9, 2011, the Pennsylvania Supreme Court (also per curiam) refused to review the case. No. 294 WAL 2010, 2011 Pa. LEXIS 309 (Pa. February 9, 2011).

Judge Olson's reading appears to be appropriate. The lesson of this case is that lessees and title examiners need to carefully examine instruments purporting to convey any interest other than a full fee to determine the existence of a classic habendum clause and, if present, the probable impact of the wording of the habendum upon the statement of the interest conveyed in the granting clause.

Should you have questions about this or any matter involving energy law, please contact the Energy Group at Steptoe & Johnson PLLC.