Lehigh Zinc & Iron Co., Ltd., v. Trotter

• Decision Date: 30 June 1887
• Citation: 43 N.J.E. 185,10 A. 607
• Parties: LEHIGH ZINC & IRON CO., Limited, v. TROTTER.
• Court: New Jersey Supreme Court

10 A. 607

43 N.J.E. 185

LEHIGH ZINC & IRON CO., Limited,

v. TROTTER.

Court of Errors and Appeals of New Jersey.

June Term, 1887.

(Syllabus by the Court.)

On appeal from final decree of the court of chancery.

For opinion of Vice-Chancellor Bird, see 7 Atl. Rep. 650.

In 1881, Trotter was in possession of a leasehold estate in a mine, vein, or bed of Franklinite ore, situate at Franklin, Sussex county, New Jersey, under a lease made by one James L. Curtis, bearing date March 6, 1877, for the term of 30 years. By an indenture under seal, made June 2, 1881, Trotter covenanted to deliver to Heckscher 12,000 tons of Frankliniteore in monthly shipments of 1,000 tons or thereabouts. The agreement is set out in full in the report of the case of Trotter v. Heckscher, 40 N. J. Eq. 612-645. 4 Atl. liep. 83. The agreement, though made with Heckscher individually, was really for the benefit of individuals who afterwards associated themselves and formed a corporation under the name of the Lehigh Zinc & Iron Company, Limited, which engaged at Bethlehem, Pennsylvania, in the manufacture of oxide of zinc, and the production of a mixture of iron and manganese known as "spiegeleisen." On the sixth of August, 1881, Heckscher assigned the agreement to this company. Ore, such as was taken from the vein to which this mine belonged, was indispensable to the operation of the company's works, and a regular supply was necessary in the business. The agreement gave Heckscher, his associates and assigns, the option, at the expiration of the 12 months, of taking thereafter the same monthly quantity of ore for the remainder of the term of the lease under which Trotter held, or for a less time, upon giving notice in writing to that effect, and also the first option of purchasing on the same terms ore that Trotter might take from any adjoining mine or vein of which he might thereafter obtain possession.

May 10, 1882, the zinc and iron company gave notice in writing of the election to take a minimum quantity of 12,000 tons per annum, in regular monthly installments, for the remainder of the term of Trotter's lease, to-wit, until March 6, 1907. The ore was delivered by Trotter on board railroad cars at Franklin. The price to be paid was $3.75 per ton for every ton of ore containing, by assay, 26 per cent. of oxide of zinc, and a further sum of 50 cents per ton for every ton containing an additional 1 per cent. of oxide of zinc, or a proportional part of 50 cents for any fractional percentage in excess of the 26 per cent. The agreement also stipulated that Heckscher, his associates and assigns, should not be compelled to take or pay for any ore containing less than 26 per cent. of oxide of zinc, with proviso that, if the said mines should be incapable of producing the quantity of ore required by the agreement of at least 26 per cent. of oxide of zinc by assay, but should be capable of producing an inferior quality of ore, Heckscher, his associates and assigns, should have the privilege of taking any quantity of the said inferior ore at such rate as might be agreed upon between the parties; such price not to exceed $3.75 per ton, or the market value of said ore as mangan iron ore. Vice-Chancellor Bird and this court applied the same sliding scale downward, in estimating the price of ore containing less than 26 per cent. of oxide of zinc, which the agreement designated for estimating the increased price of ore in excess of that percentage, until in the descending scale the market price of such ore as mangan iron ore should be reached. Trotter v. Heckscher, 40 N. J. Eq. 631-654, 4 Atl. Rep. 83.

In the tenth subdivision of the agreement it was stipulated that Heckscher, his associates or assigns, should have power and authority to enter upon the mines and premises therein mentioned, and inspect and examine the same, and provide, if it should be necessary, such security and protection for the mines and their proper working as to Heckscher, his associates or assigns, should seem fit and proper. The fourth subdivision of the agreement is in these words: "That if, at any time during the continuance of this agreement, the said Charles W. Trotter, his heirs, executors, administrators, or assigns, shall fail for 30 days to deliver the monthly quantity of ore as above agreed upon, the said Charles A. Heckscher, his associates, executors, administrators, and assigns, may, at his or their option, after 30 days' notice to the said Charles W. Trotter, take possession of the mine, vein, lode, or bed of Franklinite ore, and all machinery, tools, and appliances necessary and required to be used in connection with said mine and works, and shall have the free and uninterrupted right and privilege of entering into and upon the said premises, and any and all parts thereof, and shall have the full and uninterrupted right and privilege of taking therefrom and applying the amount of ore above specified to his and their own use, charging to the said Charles W. Trotter the cost of said mining, and the delivery of said ores on board the cars, he, the said Charles W. Trotter, paying for the same. And the said Charles W. Trotter hereby, for himself and his heirs, executors, administrators, and assigns, guaranties that the said Charles A. Heckscher, his associates, executors, administrators, and assigns, shall have peaceable and uninterrupted possession of said mine, vein, lode, or bed of Franklinite ore until the inability or failure of the said Charles W. Trotter to supply said ore as agreed upon shall be satisfactorily removed. And during such occupation and working of said mine, vein, lode, or bed of Franklinite ore, the said Charles A. Heckscher, his associates, executors, administrators, and assigns, shall have the privilege and right either to employ the workmen there engaged, or to dismiss them, or any of them, and employ others."

The delivery of the ore under this agreement began in June, 1881. In May, 1882, Trotter stopped delivering ore, and on the twelfth of May, 1882, the company served a notice in writing that it would, after the expiration of 30 days, take possession of the mine and works, and all machinery, tools, and appliances necessary and required to be used in connection therewith, and take from said premises, and apply to their own use, the amount of ore specified, according to the terms of the agreement, and exercise every right, power, privilege, and authority given or implied under and by virtue of said agreement. On the 8th of June, 1882, Trotter filed a bill in the court of chancery against Heckscher and the zinc and iron company, praying an injunction restraining them from taking such possession, and for an account, the construction of the agreement, and for direction as to the delivery and assay of ore under said contract, and for general relief. In this bill it was averred that disputes had arisen as to the quantity and quality of the ore delivered, and the gravamen of the complaint was the company's refusal to pay for ore delivered, whereby the complainant was greatly embarrassed in his circumstances.

Upon filing this bill an interlocutory injunction was granted. To this bill the defendants filed an answer, and also a cross-bill. In the cross-bill it was averred that the defendants were entitled to take possession of the said mine and appurtenances under said contract, and had the right to hold possession thereof until the inability or failure of the complainant to supply said ore as agreed upon should be satisfactorily removed, with a prayer that an order or decree be made directing the defendants to take possession of said mine, with the appurtenances, machinery, tools, and appliances referred to in said contracts. On final hearing, it appeared that there were disputes between the parties as to the construction and meaning of the agreement, especially with respect to the manner in which the assay should be made, and as to the price to be paid for ore falling below the standard of 26 per cent. per ton. Upon final hearing, the vice-chancellor made a decree that the complainant should have an account and payment for ore delivered before the bill was filed; that he was entitled to suspend deliveries of ore until such payment; and that the defendants were not entitled to possession of the mine,—they not having accounted or paid for ore theretofore delivered to them; and that the complainant was entitled to an injunction against their taking such possession, and to the continuance of the same, unless and until order of the court to the contrary should be made.

On appeal, this court reversed the decree of the court of chancery, and decreed that, Trotter having failed to make the stipulated deliveries of ore for 30 days, the defendants became entitled to the possession of the mine on the eleventh of June, 1882, under the fourth clause of the contract, and that the record should be remitted to the court of chancery, to the end that the decree might be carried into execution. On application to this court to amend its decree, it was declared to be the opinion of this court that the effect of its decree was absolutely to dissolve the injunction restraining the defendants from taking possession of the mine, and to adjudge them to be entitled to the possession thereof, without prejudice to an inquiry, after possession was taken, into any change of the right of possession from matters arising since the bill was filed. Upon the remittitur of this decree, and the declaration of this court as to the effect thereof, the court of chancery, after reciting those proceedings, made its decree thereon "that the said injunction be dissolved, and that the said the Lehigh Zinc & Iron Company, Limited, are entitled to the possession of the mine mentioned in said pleadings, with the appurtenances thereto belonging, without prejudice to an inquiry after the said the Lehigh Zinc & Iron Company has taken such possession, into any change in the right of possession...