“Where a party conveys land to which he had no title, or a defective title, and afterwards acquired a good title, that title immediately inures to the benefit of the grantee,” according to Dixon v. Fuller, 46 A. 553 (Pa. 1900). This legal principle, enunciated by the Pennsylvania Supreme Court more than a century ago, represents the essence of the doctrine of estoppel by deed. Still alive and well, this same doctrine was applied in a notable Superior Court decision, Shedden v. Anadarko E&P, 2014 PA Super 53 (filed March 14, 2014). The result was that Anadarko E&P Co. subsequently secured the rights to more acreage that Leo and Sandra L. Shedden actually owned at the time the oil and gas lease agreement was executed. This case illustrates the critical need of a grantor to know the exact extent of his or her ownership interest when conveying an ownership or leasehold interest.
The facts are relatively straightforward. On May 23, 2006, the Sheddens leased oil and gas rights to Anadarko. The property is located in Tioga County, Pa., and the Sheddens represented the parcel to be 62 acres. The term of the lease was five years, with one option to extend for another five years. The lease stated that “if lessor owns less than all of the oil and gas rights in the premises, lessor shall be entitled to only a share of the rentals and royalties equivalent to the proportion of such oil and gas owned by lessor.” Critically, the lease also contained the following covenant of warranty provision: “Lessor covenants and agrees that … lessor has full title to the premises and to all the oil and gas therein at the time of granting this lease, and forever warrants title to the leasehold estate hereby conveyed to lessee, that lessee shall have exclusive, full and quiet possession of the premises.”
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