Advance Industrial Supply Co. v. Eagle Metallic Copper Co.

Decision Date22 March 1920
Docket Number3
Citation267 Pa. 15,109 A. 771
PartiesAdvance Industrial Supply Co. v. Eagle Metallic Copper Co. et al., Appellants
CourtPennsylvania Supreme Court

Argued March 1, 1920

Appeal, No. 3, Jan. T., 1920, by defendants, from decree of C.P. AdamsCo., Nov. T., 1917, No. 1, on bill in equity in case of Advance Industrial Supply Co., Inc., v. Eagle Metallic Copper Co., United Milling & Smelting Copper Co.Hamilton W. Shafer and the Blue Mountain Stone Co. Decree modified and affirmed.

Bill in equity for an injunction to restrain the mining and smelting of green stone from a quarry property.Before McPHERSON, P.J.

The facts are stated in the opinion of the Supreme Court.

The court below entered a decree awarding an injunction.Defendants appealed.

Error assigned was the decree of the court, quoting it.

The decree of the court below as thus modified is affirmed and the appeal is dismissed at the costs of appellants.

Wm Hersh and John H. Dahlke, with them Frank L. Stoner and Harry Brindle, for appellants.-- The undisputed facts in this case, and the express terms of the instrument itself, bring it within the doctrine recognized in all the decisions that when the grant does not convey all the coal or mineral, or provide for the payment of all, and the rights granted therein are limited, this does not constitute a sale of the product nor give to the grantee an exclusive right to the same: Johnstown Iron Co. v. Cambria Iron Co.,32 Pa. 241;Jennings Bros. & Co. v. Beale,158 Pa. 283;Funk v. Haldeman,53 Pa. 229;Clement v. Youngman,40 Pa. 341;Grubb v. Grubb,74 Pa. 25;Denniston v. Haddock,200 Pa. 426;Reynolds v. Smith,70 Pa.Super. 194;McMillin v. Titus,222 Pa. 500;Girard Trust Co. v. D. & H. Co.,246 Pa. 161;Johnstown Iron Co. v. Cambria Iron Co., 32 Pa. 241.

John D. Keith, for appellee, cited: Lehigh, etc., R.R. v. B. & P. Ry.,228 Pa. 350;Caldwell v. Fulton,31 Pa. 475;Miles v. N.Y., etc., Coal Co.,250 Pa. 147;Lehigh C. & N. Co. v. Harlon,27 Pa. 429;Timlin v. Brown,158 Pa. 606;Plummer v. Hillside Coal, etc., Co., 160 Pa. 483.

Before BROWN, C.J., STEWART, MOSCHZISKER, FRAZER, WALLING, SIMPSON and KEPHART, JJ.

OPINION

MR. JUSTICE SIMPSON:

On July 20, 1914, plaintiff, a corporation engaged in quarrying, milling and marketing green stone for commercial purposes, entered into an agreement with two of the defendants, the Eagle Metallic Copper Company and the United Milling & Smelting Copper Company(which latter was the owner of all the capital stock of the former), by which plaintiff was given rights in certain lands of the first mentioned company.These lands are not specifically described in the agreement, but, from evidence produced by defendants themselves, the court below found as a fact: "It seems clear that these two tracts [of 52 acres and 125 acres respectively, not necessary to be here more fully described] are the lands which were the subject-matter of the lease."This finding was not excepted to, and it must now be deemed conclusive of the fact.

By virtue of the agreement plaintiff entered into possession, erected a plant and other buildings, later erected two other plants, opened up several quarries, and obtained and milled green stone from both of said tracts.Still later, on September 7, 1917, the United Milling & Smelting Copper Company, with the approval of the Eagle Metallic Copper Company, entered into a written agreement with one E. Howell Mutchler, giving to him an exclusive right, for fifty years, to quarry and remove green stone from the tract of one hundred and twenty-five acres; and he, with the approval of the defendant companies, assigned all his rights thereunder to the third defendant, Hamilton W. Shafer.The latter prepared to quarry and remove green stone from the last mentioned tract, whereupon plaintiff filed the present bill, averring its exclusive right to the green stone in both of the tracts, and praying an injunction and other consonant relief.The court below granted the injunction and defendants now appeal.

The assignments of error are numerous; but since in the court below, and in their paper-book here, appellants state that "the construction of the agreement [of July 20, 1914, first above referred to] is the one question involved in this litigation"; and since it was also found as a fact, not objected to, that nothing was inserted in or omitted therefrom by fraud, accident or mistake, we will from this agreement alone determine the rights of the parties.

After reciting the ownership of the property by the Eagle Metallic Copper Company, one of the parties of the first part, and the desire of plaintiff, the party of the second part, "to purchase stone located on the property . . . and to have the right to mine, quarry, and crush said stone and [its willingness] to lease the property . . . for the above purpose," the agreement declares that the "party of the first part does hereby lease unto the party of the second part . . . so much of the land . . . located . . . below Gladhill's Station on the Western Maryland Railroad as may be necessary for the erection and proper maintenance of a crushing and milling plant, said land not to exceed ten acres in area, and the said party of the first part does further give unto the said party of the second part the right to quarry what is known as the 'green rock,' located at the head of the old tunnel, known as the 'tapeworm railroad tunnel,' and to obtain the said green rock from any other part of the property of the party of the first part, to be used in the plant erected on the property hereby leased, or in any other plant which said party of the second part may have now or cause to be erected during the existence of this lease."It further provides for certain payments to be made "for all material taken exclusively from the property of the party of the first part and milled in any of the plants of the party of the second part," and for a certain other sum to be paid for material taken from this and the adjoining property "until the said rock can be taken exclusively from the property of the party of the first part at this point."It also provides that "said party of the second part shall continue its operations in a proper manner and continuously as far as practical, and after the first six months' operation that approximately eight or more carloads of material per week will be shipped, . . . that all mineral-bearing rock of a commercial value which may be quarried or discovered in the quarrying of the green stone shall be and remain the property of the party of the first part without any expense attached thereto for the quarrying or handling of the same . . . that the operation herein provided shall be limited to a reasonable space consistent with the practical operations of the plant, and that all the material or refuse which the party of the second part does not ship shall be and remain the property of the party of the first part"; and that "this lease shall begin on the 20th day of July in the year 1914, and end on the 19th day of July in the year 1924."It further stipulates that "this lease shall immediately terminate" if operations are suspended for one year, that each party"agrees to fulfill the terms and conditions of this lease," and authorizes one of its officers to "acknowledge this lease," and he did "acknowledge the foregoing lease . . . and desired the same to be recorded as such."

It cannot be said the true construction of this agreement is entirely free from doubt, but since it was drawn by counsel for the defendant companies, and is their deed, all real doubts as to the extent of the grant must be resolved against them: Funk v. Haldeman,53 Pa. 229;Grubb v. Grubb,101 Pa. 11;Algonquin Coal Co. v. Northern Coal and Iron Co.,162 Pa. 114;Sheffield Water Co. v. Elk Tanning Co.,225 Pa. 614;Miles v. New York, Susquehanna & Western Coal Co.,250 Pa. 147;24 Cyc. 915.Thus tested we are satisfied the decision of the court below was correct.

If the agreement is to be construed a lease, which it repeatedly says it is, there is a presumption of a right of exclusive possession in the lessee (24 Cyc. 924, 1055; 16 Ruling Case Law 620) for it is the grant of an interest in the land and is not a mere license (Harlan v. Lehigh Coal & Navigation Company,35 Pa. 287); and, there being nothing to rebut this presumption, the decree below would be right.If it is to be treated, in accordance with the recital, as an agreement of purchase of the green stone, this also would require an affirmance of the decree.The presence of the minimum royalty clause, with a right to take as much more as desired, coupled with the requirement of a continuous operation, bears out the contention that the agreement constituted a...

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