Estoppel by deed applies to gas lease, court rules

April 12, 2016 By Ben Seal
The Legal Intelligencer

Pennsylvania landowners cannot deny the validity of an oil and gas lease upon discovering that they did not have full rights to the property at the time the lease was conveyed, the Pennsylvania Supreme Court has ruled.

In a unanimous decision in Shedden v. Anadarko E&P, the justices found that the doctrine of estoppel by deed does not require detrimental reliance by a party receiving oil and gas rights.

In so ruling, the court affirmed a Superior Court decision granting Anadarko E&P Co. full oil and gas rights to a 62-acre property, half of which Leo and Sandra Shedden had sought to retain after learning they did not own the full rights at the time of the lease agreement.

The Sheddens conveyed, through a lease, their full title to all the oil and gas rights to their 62-acre property in Tioga County, Justice Debra M. Todd wrote for the court in the March 29 opinion. After discovering that they only owned half of the rights—an 1894 deed reserved only one-half—the Sheddens filed a motion to quiet title to the one-half interest and ultimately perfected their title to all the rights.

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