Varner v. South Penn Oil Co.

Opinion by Trexler, J., The defendant, the South Penn Oil Company, operated certain oil and gas wells in Green County under a lease from Florence Blaker and George Blaker, her husband. The company, claiming that the wells were not productive, secured a reduction of the rental from George Blaker who was acting as attorney for the heirs of Joseph Varner to whom Florence Blaker had transferred the oil and gas royalties or rights, she as one of the heirs retaining her part. His authority to make the reduction is the matter to be determined. Originally the property belonged to Joseph Varner. His heirs entered into an agreement in regard to his real estate on September 16, 1896, and on the same day in furtherance of the agreement they gave George Blaker a power of attorney to make sale each month of all the oil of the estate and apply the proceeds of all the oil “which has run since the death of Joseph Varner and which may [549] be run hereafter” to the payment of the debts of decedent. This power of attorney made no reference to gas. The word lease is not mentioned. Evidently in the contemplation of the parties under the agreement and the power of attorney the oil which was to be sold was such as came from developed property and was running. At the time the power of attorney was given the only property of the estate producing oil was in West Virginia. We can find nothing in the power of attorney which authorized George Blaker to reduce the' royalty in the lease made by him and his wife. Letters of attorney are strictly interpreted and the authority is never extended beyond that which is given in terms, or that which is necessary and proper for carrying the authority so given into full effect: MacDonald v. O’Neil, 21 Pa. Superior Ct. 364; Califf v. First National Bank of Towanda, 37 Pa. Superior Ct. 412; Stokes v. Dewees, 24 Pa. Superior Ct. 471 (474). If we examine the other papers which appear in the case, we cannot find any authority in Blaker to reduce the rental. If it does not appear in the written agreements of the parties that he had such power, defendant’s case must fail. Blaker’s authority cannot be proven by his declarations. The lease for the oil and gas to the defendant company was made by Florence Blaker June 14, 1898, and was for a period of ten years. Prior to that she had obtained a deed for the eighty-four acres so'léased from the other heirs, the date of the deed being April 1, 1898. On March 25, 1899, all the heirs of Joseph Varner by agreement duly entered into provided that the royalty and rentals arising from oil and gas on the lands of the said decedent should be divided among said heirs and should belong to them for the term of five years beginning April 1,1898, “notwithstanding any division or conveyance of said lands or any part of them that shall be made......It being understood and agreed that the undivided lands of said decedent......shall remain in common to the said widow and heirs subject to the written [550] agreement between them of September 16, 1896.” The agreement provided further “that no party to this agreement to whom any parcel of said land shall be conveyed, as aforesaid, and which is subject to this agreement, shall be at liberty to refuse to lease the same during this five years period from April 1, 1898, provided he is offered ordinary oil and gas lease by some responsible party of $1 per acre, or more, per annum, in advance for the same; and if any party to this agreement shall refuse to lease his said land so conveyed j:o him, when these terms and conditions are offered to him, it is hereby jointly and severally agreed that Geo. W. Blaker, be, and he is hereby empowered, as our, and each of our attorney in fact for said purpose, to enter into a lease of said premises for oil and gas with some responsible oil or gas company upon the aforesaid conditions, hereby ratifying and confirming what he may or shall do in the premises, as our said attorney; the terms of the said lease not to extend beyond April 1, 1903.” Mrs. Blaker in compliance with this agreement deeded to the other heirs their proportionate share of the rights under the lease of the defendant company. It will be noticed that there is nothing in the provisions of the agreement above quoted which would authorize Blaker to reduce the rental stipulated in the lease. His power in the premises was contingent upon a refusal of any party to whom a parcel of land should be conveyed refusing to make an ordinary oil and gas lease if offered to him at one dollar an acre or more per annum. The facts before us do not show conditions as set forth in the agreement above quoted. It may also be noted that the terms of said lease, except as to undivided lands, were not to extend beyond April 1,- 1903, and therefore his authority to reduce the rental, if he ever had any, ceased, the reduction of the royalty being made long after the expiration of said five years. The provisions of the said agreement that all moneys coming to or accruing by reason of said agreement shall be paid to George W. Blaker, gave him undoubted power to col [551] lect, but we cannot see bow tbe words can be construed to mean that be should bave tbe right to reduce tbe royalties. We bave come to tbe conclusion that the power of attorney and tbe agreement of 1896 bad not in contemplation tbe exercise of any such powers as George W. Blaker assumed in reducing tbe royalties. We do not think tbe agreement of March 25, 1899, in any of its provisions authorized such act on bis part or amplified tbe powers which be bad under tbe agreement of 1896. Tbe court in its charge stated that Blaker bad authority from tbe Varner heirs to lease lands in West Virginia and Pennsylvania, but tbe paper purporting to give such authority, dated Nov. 23, 1897, was not executed. We conclude that tbe court erred in bolding that tbe plaintiffs could only recover tbe reduced royalties and that tbe case must go back for retrial. Tbe judgment is reversed and a venire facias de novo awarded.