Colorado Fuel & Iron Co. v. Adams

• Decision Date: 09 October 1899
• Parties: COLORADO FUEL & IRON CO. v. ADAMS et al. [1]
• Court: Colorado Court of Appeals

60 P. 367

14 Colo.App. 84

COLORADO FUEL & IRON CO. v. ADAMS et al. ^[1]

Court of Appeals of Colorado

October 9, 1899

Appeal from district court, Arapahoe county.

Application for mandamus by the Colorado Fuel & Iron Company against Alva Adams (for whom C.S. Thomas was substituted) and others members of the state land board. From an order denying the writ, plaintiff appeals. Reversed.

While this suit is nominally a proceeding by way of mandamus to compel the state land board to issue a lease to the Colorado Fuel & Iron Company for coal-mining purposes on certain lands belonging to the state, we are quite well able to see from the record that it is in reality and in substance a controversy between the Colorado Fuel & Iron Company, under their claim of right to this lease, as against the Victor Coal & Coke Company, which holds a lease from the state, issued by the land board, to the same section. It is unnecessary to state in detail, or otherwise than in a general way, the inception of the claim asserted by the fuel and iron company. The fuel company went into possession in 1892, and continued to pay rent according to the terms of the original lease up to the time of the happening of the events appearing in this litigation. The fuel company owned or leased adjacent property, and thereon carried on what they have designated as the "Pictou Mine," wherefrom they have extracted large quantities of coal, and wherein they have prosecuted a large amount of development. Inclines drifts, levels, and raises have been run towards the disputed section, and have penetrated that land to quite an extent. It does not appear from the record that development was prosecuted in the disputed section to such an extent as to determine its value, or to admit the extraction of any large quantity of coal, though it would appear to be the evident purpose of the fuel company ultimately to exploit the section, and extract whatever coal may be found in it. This is relatively unimportant, except as it relates to one proposition, which will be more generally referred to in the opinion. The lease under which the fuel company claimed title expired on the 23d of March, 1897. On November 23, 1896, the company filed with the state land board an application to renew lease No. 5.244, which covered section 36, township 27 S., range 67 W., in Huerfano county, and offered to pay a royalty of 10 cents per ton on 600 tons minimum, and thereafter on all merchantable lump coal mined at the same rate. This application was supported by an affidavit made by Kebler, as the general manager of the company, stating that the corporation had made all reasonable efforts to reach the coal in section 36, and stating also that the coal in the upper vein in that section did not prove to be workable, being too thin, and the workings in that direction were practically abandoned. The affiant also states that the workings on the lower vein in the Pictou were being extended in the direction of section 36, and would soon reach it. Affiant further states that it is not practicable to work the mine from the surface at any point on the section, but only from adjacent ground, and that any coal on section 36 could be more advantageously mined through the entries in the Pictou, and by means of the plant of the company, than by any other method. The application went before the board, and was formally considered by that body at a special meeting which was held on the 30th of December, 1896. The records of the land board show that all members were present except Mrs Peavey, who was the superintendent of public instruction, and at that meeting the board transacted a very considerable amount of business. It passed on the application of the citizens of a town requesting the surrender to the United States government of a section, and a petition for a division of lands held under certificates of purchase, under which the board ordered a deed to be issued to petitioner for certain lands belonging to the state upon the surrender of the certificates. Then follows, according to the record, the application of the fuel company, in the following terms: "An application was presented from the Colorado Fuel & Iron Company for an extension of ten years of their lease, No. 5,244. The board ordered that upon surrender of said lease a new lease be granted to said company for ten years from this date, at a minimum royalty of two hundred dollars ($200) per annum; otherwise, upon the usual terms." Then follows an application for change of terms on lease No. 6,686. A resolution was then presented concerning a right of way fully described. This was all the business done at that meeting, and the proceedings are regularly signed and attested by the then governor, Albert W. McIntyre, the register, Meldrum, and his deputy. As stated, this was not a regular meeting provided for by statute or by the practice of the board, but was called to act on these several matters. There is considerable controversy respecting the giving of notice to all the members, it being insisted that Mrs. Peavey received no notice of that meeting. From the opinion of the court it would appear that it did not find as a fact that Mrs. Peavey failed to have notice, but, on the other hand, concluded from the evidence, as well as from presumptions attending the action of public officers, that there was no proof sufficient to justify a conclusion that notice had not been given to Mrs. Peavey. This will be further commented on in our opinion. Thereafter the Colorado Fuel & Iron Company sent its check for the half year's minimum royalty of $100, and $1 for recording fee, which was accepted by the then register, Meldrum. The royalty was not paid in cash, but no question was made by the register concerning the check, and it had theretofore been his custom to receive the checks of this company in payment of whatever was due the state and receivable by the land board, and such had been the general custom of the land office in regard to all payments by lessees or purchasers where parties were of known responsibility. The register thereupon notified the fuel company to prepare and file its bond for the faithful performance of its contract. The bond was prepared, sent, accepted, and filed. Subsequently a member of the board (who was then the attorney general), for some reason which is not wholly apparent, directed the register, or requested him, to delay the execution of the lease under the vote of the board, awaiting further action. Subsequently the Victor Coal & Coke Company, through its president, and probably through its general manager, addressed letters to the board, or some of its members, expressing a desire to obtain a lease on section 36. This was really the beginning of the controversy. In the letter they offered to pay a minimum royalty of $1,000 a year. Matters were delayed from time to time until subsequently, and in June, 1897, the matter of the lease seems in some fashion to have been put up at auction, and the Victor Coal & Coke Company bid $4,100, as the minimum royalty, and it, being the largest sum offered, was accepted by the board, and the lease of this section executed to the Victor Coal & Coke Company. The fuel and iron company constantly protested, and insisted on the execution of the lease which they had frequently demanded, but the board declined to do anything further in the premises. It must be here stated that the board in 1897 was not the board which acted in 1896. Its personnel was entirely changed, with the exception of the attorney general. There was a new governor, a new register, and a new superintendent of public instruction. It was this new board that undertook to reverse and set aside the action theretofore taken by the land board, and to issue the new lease. It may be stated that we do not regard the increased royalty offered by the Victor Coal & Coke Company as a matter which either necessarily or presumptively is one of greater advantage to the state, or one likely to bring them larger revenues, than would the new lease to the fuel company under the same terms as were contained in No. 5,244. It may be stated that under the terms of all mining leases issued by the state land board, and particularly under the terms of No. 5,244, the company operating the mine would be bound to pay 10 cents per ton on all merchantable lump coal extracted. It may be quite true that until the development was carried to a successful point, and the extraction of coal in large quantities begun, a greater immediate revenue would result to the state, though its ultimate profit must of necessity be the same, because the revenue is 10 cents per ton on whatever is taken out, and, if 41,000 tons be taken out, $4,100 would, of course, be the revenue.

There was no offer to return to the Colorado Fuel & Iron Company its check, or the money which it represented, for many weeks after its receipt, and not until the latter part of March, 1897. On the failure of the land board to execute the lease according to the apparent agreement as exhibited by the record, the fuel and iron company proceeded by way of mandamus to compel its execution. We need not refer to the alternative writ or to its terms, nor to the return or answer of the land board, nor to the stipulation of counsel under which these proceedings were carried to a conclusion. Thereon a hearing was had, and evidence introduced.

As already suggested, there was evidence given by Mrs. Peavey and her assistant with reference to the failure to serve notice of the special meeting, and evidence per contra. There was also much attempted to be offered, and some given, by some members of the land board, with reference to the reason for their failure to execute the lease in accordance with their recorded action. It...