Ky. Harlan Coal Co. v. Harlan Gas Coal Co.

Decision Date11 October 1932
PartiesKentucky Harlan Coal Co. et al. v. Harlan Gas Coal Co.
CourtUnited States State Supreme Court — District of Kentucky

2. Principal and Agent. — Notice to agent of agreed line between land, and of surveys and map at time of negotiations for purchase of stock of corporation having lease, held notice to principal.

3. Principal and Agent. — Agent's physical possession of map when negotiating purchase of stock of corporation having lease was same as if principal had possession.

4. Vendor and Purchaser. — Purchaser having information of extraneous facts to put him on inquiry will be charged with notice of all facts which inquiry would have disclosed.

5. Corporations. — Knowledge of one purchasing all stock regarding boundary line of property must be imputed to corporation.

6. Vendor and Purchaser. — Possession of coal company held notice, to one purchasing stock of corporation owning adjoining land, of coal company's possession and claim.

7. Boundaries. — Where leaseholders agree on boundary, each relinquishing part and surrendering actual possession, they and those claiming under them are bound by line agreed on.

8. Boundaries. — Individual's act in accepting and paying for stock of corporation having lease with knowledge of previous agreement to adjust boundary line was election to abide thereby.

9. Boundaries. — Where one purchased stock of corporation having lease, with actual knowledge to his agent of dividing line between leases, he and successors in title held estopped to recover beyond such line.

10. Mines and Minerals. — Where trespasser willfully encroaches and mines mineral, value when appropriated is measure of recovery.

11. Mines and Minerals. — Where trespass is by innocent mistake, recovery is value of product removed from soil in place of reasonable and customary royalty.

12. Mines and Minerals. — To show trespass was "innocent mistake," trespasser must allege and prove facts showing his acts were not willful and knowingly committed or not intentional.

13. Mines and Minerals. — Agreement to locate line between leases by certain survey followed by occupancy of land according to survey was severance of relation of principal and agent between lessors and lessees, relieving lessors from liability for trespass committed by lessees.

14. Appeal and Error. Parties not objecting to depositions in trial court could not object in appellate court.

Appeal from Harlan Circuit Court.

B.M. LEE and FORESTER & CARTER for appellants.

JAMES H. JEFFRIES for appellee.

OPINION OF THE COURT BY JUDGE RICHARDSON.

Affirming on cross appeal, and reversing on original.

The Kentucky Harlan Coal Company and the Harlan Gas Coal Company are corporations, engaged in mining coal on adjoining lands. The title to its coal lands was acquired by the Harlan Gas Coal Company by three leases, one dated April 1, 1919, and executed by A.B. Cornett to James K. Griffin and Frank B. French; another dated April 20, 1912, executed by A. B. Cornett and the children of A.B. Cornett, including his son, D.B. Cornett, to Griffin and French, and the third one by A.B. Cornett, dated February 1, 1915, to the Harlan Town Coal Company. The Harlan Gas Coal Company is the successor in title to Griffin and French and the Harlan Town Coal Company, except a certain boundary known in this litigation as 35 acres, which was released to A.B. Cornett by the Harlan Town Coal Company prior to the time the Harlan Gas Coal Company acquired its title.

The action was originally instituted by the Harlan Gas Coal Company against the Kentucky Harlan Coal Company to recover damage for its alleged negligence in causing water from its mine to flow into and damage the mine of the Harlan Gas Coal Company. During the preparation of the case for trial, the Harlan Gas Coal Company claims that it discovered that the Kentucky Harlan Coal Company had entered and mined the coal under the 20.4 acres of land covered by its lease.

The appellants contend that the pleadings admit that the line between the property in controversy is a straight line, running north and south.

In its original petition, the Harlan Gas Coal Company averred "that defendant's said coal mining property lies adjoining and on the west side of plaintiff's said leasehold, * * * being a fairly straight line extending approximately in a north and south direction, the plaintiff owning and holding the leasehold properties immediately east of said line and defendant owning, holding and operating the coal mining properties immediately to the west of said line."

In its original answer the Kentucky Harlan Coal Company alleged that "the defendant through its subsequently acquired lease is the holder and owner of all the leasehold property and coal laying to the west of said Lewis Farmer patent line."

The Harlan Gas Coal Company made this response:

"The Kentucky Harlan Coal Company has been for some time past the holder and owner of all the leasehold property and coal lying to the west of said Lewis Farmer patent line to the north of the crest of Little Black Mountain * * * that the defendant does not hold or own any property of the original leasehold properties mentioned, described and claimed by the plaintiff herein, except such portion of same as lies north of the crest of Little Black Mountain, and between the easterly line of the Aaron Fountain 1,600 acre patent and the westerly line of the Lewis Farmer 600 acre patent No. 8093 * * * that the lease set up and described in its original petition and its reply herein, lap upon and conflict with the subsequently acquired lease of the Kentucky Harlan Coal Company, the total extent of said lap being 25 acres, more or less."

Thus it is shown that the appellant's contention in respect to the pleadings is incorrect.

By an amended petition, the Harlan Gas Coal Company made A.B. Cornett and D.B. Cornett defendants, alleging that the Kentucky Harlan Coal Company acquired title to the land claimed by it by leases from them and sought to recover of them by reason thereof.

The Kentucky Harlan Coal Company made its answer a counterclaim and cross-petition against the Cornetts, alleging that its right to mine the coal on the 20.4 acres was conferred by title derived by mesne conveyances from the Cornetts. It sought to recover of them whatever sum the Harlan Gas Coal Company should be decreed against it by reason of it having taken the coal from the 20.4 acres.

The court determined that the title to 16 acres of the 20.4, claimed by the Harlan Gas Coal Company, was prior and superior to that of the Kentucky Harlan Coal Company; that the Kentucky Harlan Coal Company had mined 64,000 tons on the 16 acres, and the profit to it was 18 cents per ton, amounting to $11,520. A recovery of this sum, with interest, was permitted against the Kentucky Harlan Coal Company and A.B. Cornett and D.B. Cornett, with directions that "thereafter" the amount be prorated between A.B. and D.B. Cornett, according to their respective interests in the 16 acres. The Kentucky Harlan Coal Company was given a judgment on its counterclaim against A.B. and D.B. Cornett for the $11,520 as a recoupment. This appeal is prosecuted by the Cornetts and the Kentucky Harlan Coal Company from this judgment.

It is conceded that the Harlan Gas Coal Company and the Kentucky Harlan Coal Company derived their respective title from a common source, and that A.B. Cornett and D.B. Cornett were parties to the conveyances from which their respective title was derived, except that portion of the land which was embraced by the lease executed by A.B. and D.B. Cornett and Hall under which the Kentucky Harlan Coal Company asserts title, which embraces a portion of the disputed 16 acres.

The Harlan Town Coal Company acquired title to coal land conveyed to Griffin and French. The Harlan Gas Coal Company was thereafter organized and acquired title of the Harlan Town Coal Company to the same land. D.B. Cornett, W.W. Lewis, C.B. Cawood, Williams Brothers, and A.B. Cornett incorporated the Harlan Gas Coal Company, the successor in title of the coal lands of the Harlan Town Coal Company. It was decided that the line between the coal lands owned by the Harlan Gas Coal Company and those adjoining it was "jagged," and that it was to the interest of all parties concerned to have it surveyed and the "jagged" line straightened. Henry Groos was agreed on by the interested parties to make the survey. He made it and furnished them with a map of the property. The owners of the adjoining lands and leases "operated the property according to that map." His map showed the boundary line between the properties, which was accepted by the lessees on three sides, the Harlan Gas Coal Company, the R.C. Tway Coal Company, and the Kentucky Harlan Coal Company; and they continuously operated their leases according to the line made by Henry Groos, until a survey and map was made by Fox during the pendency of this action. The Groos survey and map were completed in 1916. All of the stock in the Harlan Gas Coal Company was owned by W.W. Lewis, A.B. Cornett, D.B. Cornett, and C.B. Cawood, at that time. In August, 1917, they sold the entire stock in the corporation to Alexander Y. Malcomson; R.C. Hurd, as agent of Malcomson, conducted the negotiations and purchased the stock for him. During the negoaiations, D.B. Cornett furnished to Hurd, the agent of Malcomson, a copy of the Groos survey and map or blueprint, showing the coal lands as then claimed to be owned by the Harlan Gas Coal Company by virtue of its leases. After Malcomson became the owner of all the stock in the corporation he, in the name of the corporation, assumed ownership, actual possession, and operation of the coal lands owned by the Harlan Gas Coal Company at the time he so acquired the entire stock of the corporation.

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