Hoskins' Adm'r v. Kentucky Ridge Coal Co.

• Court: Supreme Court of Kentucky
• Writing for the Court: MOREMEN
• Citation: Hoskins' Adm'r v. Kentucky Ridge Coal Co., 305 S.W.2d 308 (Ky. 1957)
• Decision Date: 24 May 1957
• Parties: Betty L. HOSKINS' ADMINISTRATOR (Arthur Ward), Appellant, v. KENTUCKY RIDGE COAL COMPANY et al., Appellee.

Page 308

305 S.W.2d 308

Betty L. HOSKINS' ADMINISTRATOR (Arthur Ward), Appellant, v. KENTUCKY RIDGE COAL COMPANY et al., Appellee.

Court of Appeals of Kentucky.

May 24, 1957.

Rehearing Denied Oct. 18, 1957.

Claude P. Stephens, Prestonsburg, for appellant.

Lay & Knuckles, Pineville, for appellee.

MOREMEN, Judge.

The opinion in the first appeal may be found in Ky., 277 S.W.2d 57.

The Asher Coal Mining Company and Betty L. Hoskins each owned a large tract of land in Bell County with an adjoining boundary line. A dispute later developed concerning the exact location of this line. The area of the land involved was about ten acres.

In 1934, the Asher Coal Mining Company executed to Jack Whitfield and others a coal lease to a large boundary of land, which also included the disputed ten-acre tract belonging to Betty Hoskins. This lease was assigned to appellee, Kentucky Ridge Coal Company.

In 1936, 1937 and the early part of 1938, Kentucky Ridge Coal Company removed coal from the ten-acre tract, apparently under the assumption that they had a valid lease to the tract and the right to mine it. There was no indication on the surface of the land that this coal was being removed because appellee worked it from the adjoining tract.

In 1939, Betty Hoskins died intestate, leaving as her only heirs two daughters, Grace Harber and Hazel Carlson. Grace Harber was appointed administratrix of the estate.

On June 16, 1947, the United States District Court adjudged that the title to the disputed 10-acre tract had been vested in Betty Hoskins

On June 1, 1947, the daughters filed an action in the United States District Court and sought damages for the value of the coal removed. It developed that the coal had been removed during their mother's lifetime. Whereupon, Grace Harber, administratrix, intervened. She, however, had become a resident of Illinois and was removed as administratrix by order of the Bell County Court.

On November 11, 1949, appellant, Arthur Ward, was appointed administrator.

The United States District Court dismissed the intervening petition by Grace Harber on the ground that she no longer was a proper representative of the Hoskins' estate. This action was appealed--Harber v. Kentucky Ridge Coal Co., 6 Cir., 188 F.2d 62--and the court affirmed the ruling of the District Court. The opinion is dated April 13, 1951.

On April 23, 1951, the new administrator, Ward, filed this action in the Bell Circuit Court seeking damages for the removal of the coal.

The court held that the action was barred by the Statute of Limitations under subsections (4) and (12) of KRS 413.120 and subsection (3) of KRS 413.130 which read in part:

'KRS 413.120. 'The following actions shall be commenced within five years after the cause of action accrued: * * *

'(4) An action for trespass on real or personal property. * * * '(12) An action for relief or damages on the ground of fraud or mistake.'

KRS 413.130.

'(3) In an action for relief or damages for fraud or mistake, referred to in subsection (12) of KRS 413.120, the cause of action shall not be deemed to have accrued until the discovery of the fraud of mistake. However, the action shall be commenced within ten years after the time of making the contract or the perpetration of the fraud.'

The court in its conclusions of law, said:

'2. The pleadings by the plaintiff admitting that the trespass was committed more than five years before the institution of this action, the law presumes that Betty Hoskins knew of the trespass and the removal of the coal, Barlow v. Arnold [C.C.], 6 F. 351.

'To overcome this legal presumption, the plaintiff must allege and prove not only that the fraud and mistake was not discovered, but that it could not have been discovered sooner by reasonable diligence, but in no event can an action be maintained under these statutes after the lapse of ten years from the trespass and removal of the coal. Redding v. Main , 196 S.W.2d 887; Johnson v. Fetter , 7 S.W.2d 241; Graham's Administrator v. English , 169 S.W. 836; Blackburn's Administratrix v. Union Bank & Trust Co. , 108 S.W.2d 806.

'3. The statute of limitations began to run from the date of the removal of the coal. The death of Betty L. Hoskins did not stop it. This action, having been filed more than five and in fact more than ten years after the date of the removal of the coal, is now barred. Henderson v. Fielder , 215 S.W. 187.

'4. The coal in question having been mined in good faith, under bona fide lease contract, could not be and was not wilful trespass. North East Coal Co. v. Blevins [Ky.], 277 S.W.2d 45.'

It may be seen that the court's conclusions were based on these theories: (1) that the taking of the coal resulted from a trespass, ordinarily barred in five years; (2) that after a concealed trespass has been committed and the period of limitation has expired, a burden is upon the one who claims trespass to aver and prove that it could not have been discovered by the exercise of reasonable diligence; and (3) if a subterranean trespass has been committed and the trespasser had concealed that fact, the concealment is in itself a fraudulent act, such as is barred by the lapse of ten years from the time of the trespass (KRS 413.130) and no recovery may be had either for the trespass or the fraudulent act. There is authority for these assumptions.

Falls Branch Coal Co. v. Proctor Coal Co., 203 Ky. 307, 262 S.W. 300, 305, 37 A.L.R. 1172, is a leading case on this subject for there the court first accepted the rule that a cause of action for removing coal from beneath one's land through an opening on adjoining land accrues only when the trespass is actually discovered or when discovery was reasonably possible. This opinion also approved the thought that a mining operator should know his own boundary lines, and stated: 'If by mistake or any other reason it did invade the mineral estate of another and remove and appropriate the coal therefrom, good conscience required that it should disclose the fact and pay for the coal taken. Its failure to do this is in its effects a fraud upon the injured owner; and if he has no knowledge of the trespass and no means of knowledge, such a fraud, whether it be called constructive or actual, should protect him from the running of the statute.' After many cases were cited, the court summed it up this way 'The basis for the ruling in most of the cases so holding is that it was the duty of the trespasser to know when he crossed his line and became such, and it thereupon became his duty to notify the owner of the premises trespassed upon, and, if he remained silent and failed to do so, it was a constructive fraud, the same as positive fraud, by denying the trespass when inquired about it, and that...