McColl v. Bear Creek Coal Mining Co.

• Decision Date: 23 October 1913
• Citation: 143 N.W. 532,162 Iowa 491
• Parties: MCCOLL ET AL. v. BEAR CREEK COAL MINING CO. ET AL.
• Court: Iowa Supreme Court

162 Iowa 491

143 N.W. 532

MCCOLL ET AL.

v.BEAR CREEK COAL MINING CO. ET AL.

Supreme Court of Iowa.

Oct. 23, 1913.

Appeal from District Court, Dallas County; L. N. Hayes, Judge.

Suit in equity to cancel a mining lease because of the alleged abandonment thereof, and to quiet title. Decree for plaintiffs. Defendant the Beaver Creek Coal Company appeals. Affirmed.Halloran & Starkey, of Des Moines, for appellants.

White & Clarke, of Adel, for appellees.

PRESTON, J.

This action was commenced August 24, 1911. Plaintiffs owned 80 acres of land described in the contract. On June 11, 1908, they entered into a written coal contract in reference thereto, which all parties seem to have treated as superseded by another similar contract dated May 22, 1909. The terms of the two are similar, except that in the second the royalty to be paid by the coal company was reduced, as some witnesses say, because of difficulty expected in sinking a shaft and mining coal; others say because lessors could get their money for royalty quicker and they would rather have less royalty and get the money than wait several years. It was claimed that under the first contract the lessee had 25 years to develop the mine. The second contract contained a clause that work on development should commence within 90 days from the date of the contract. This lease was between plaintiffs and the Bear Creek Coal Mining Company, and was assigned by said company to the Beaver Creek Coal Company August 13, 1909. It was to run 25 years, unless sooner terminated. It contains the provisions hereinafter stated among others. The royalty is fixed and the time of payment thereof, and then reads: “But the liability of said second party (the lessee) hereunder shall cease upon the termination of this lease by forfeiture or otherwise.” It also provides: “2. The party of the second part shall have the right, within two (2) years from the date hereof, to enter upon said premises and drill and sink such prospect holes as to him may seem sufficient to determine the quality and quantity of coal underlying said premises and if coal or other minerals are not thus found to warrant, in his opinion, the mining and removing the same, then this contract shall cease and terminate, at the end of the two years, unless the party of the second part shall notify party of the first part of his election to continue. The party of the second part, his heirs, successors and assigns shall not be liable for any damages whatsoever to said property occasioned by such prospecting and mining and removing of said coal or mineral.” “12. The party of the second part, his heirs, successors and assigns, may at any time after two (2) years from the date hereof terminate this contract by notice in writing if coal cannot be mined at a profit or advantage.”

Some prospecting had been done before either lease had been executed, and prospecting was done on plaintiff's land and on some other lands in the neighborhood, also leased by the same lessees under like contracts, both before and after the first lease. It is claimed, and there is evidence tending to show, that when the second lease was executed the difficulties in the way of sinking a shaft and mining coal, because of drift sand and water, were known to both parties to the contract, and that these difficulties were discussed.

[1] Plaintiffs offered parol evidence, which was received subject to objection, as to certain statements by the lessees during the negotiations for the new lease, and at the time of its execution, that they would commencedeveloping the mine on plaintiffs' land as quick as they got the machinery there, and would prosecute the work after it began and take out coal; that, if they took the contract, they could develop the coal field at once; that, if they did not take this contract, they could not develop the field at once. The objection to this evidence was that it was incompetent and tended to vary the terms of the written contract. The writing did not specify any time for developing the mine or the diligence with which mining should be carried on after it was developed, further than the provision that work on development should commence within 90 days from the date of the contract. The contract being silent as to how mining should be carried on after it was developed, and when coal should be taken out, the evidence did not vary any of the terms of the writing. 1 Greenleaf, Ev. § 277; 1 Elliott on Ev. § 603; Bobzin v. Gould, 140 Iowa, 744, 118 N. W. 40;17 L. R. A. 274, note. Dietrich v. Stebbins, 100 Iowa, 426, 69 N. W. 564;Meader v. Allen, 110 Iowa, 591, 81 N. W. 799;Merriam v. United States, 107 U. S. 441, 2 Sup. Ct. 536, 27 L. Ed. 531. And we think the evidence was competent on the question of inducement to the execution of the second contract and the surrender of the first one, and to show what was contemplated by the parties when the lease was entered into. See cases above cited.

This evidence was denied by some of the witnesses for defendant. The president of the Beaver Creek Company testified: “I was not awful anxious to begin work within 90 days, but was anxious to satisfy Mr. McColl. He wanted to know when we could begin work. He asked me when I could start, and I asked him if we could buy the lumber from him if he thought that he could compete, and he said he could. Then I said that we could begin within 90 days. I do not know whether he wanted us to begin or not sooner, but to commence as soon as we could practically, and he was quite urgent about the beginning of this work, so that they might be sure that efforts were being made to open the mine. Mr. McColl wanted the coal mined and we wanted the coal mined. We had to get the coal in order to get our money back for sinking shaft. It would be to interest of all parties to get the mine opened up.” He was present during some of the negotiations between plaintiffs and the original lessees, and when the contract was signed.

[2] 2. The evidence just referred to is not very important perhaps, because it was the duty of lessee to prosecute the work with reasonable diligence, and a failure to do so is ground of forfeiture. Price v. Black, 126 Iowa, 304, 101 N. W. 1056;Worrall v. Wilson, 101 Iowa, 476, 70 N. W. 619;Hosford v. Metcalf, 113 Iowa, 245, 84 N. W. 1054;Woodward et al. v. Mitchell et al., 140 Ind. 406, 39 N. E. 437; 27 Cyc. p. 708; Gadbury v. Ohio, etc., 162 Ind. 9, 67 N. E. 261, 62 L. R. A. 895;Hawkins v. Pepper, 117 N. C. 407, 23 S. E. 434;Conrad v. Morehead, 89 N. C. 31;Petroleum Co. v. Coal, etc., Co., 89 Tenn. 381, 18 S. W. 65;Parish Fork Oil Co. v. Bridgewater, 51 W. Va. 583, 42 S. E. 655, 59 L. R. A. 566;Eaton v. Alleghany, etc., 122 N. Y. 416, 25 N. E. 981;Calhoon v. Neely, 201 Pa. 97, 50 Atl. 967;Venture Oil Co. v. Fretts, 152 Pa. 451, 25 Atl. 732;Logan Natural Gas Co. v. Great Southern Gas Co., 126 Fed. 623, 61 C. C. A. 359;Foster v. Elk Fork Oil Co., 90 Fed. 178, 32 C. C. A. 560;Aye v. Philadelphia Co., 193 Pa. 451, 44 Atl. 555, 74 Am. St. Rep. 698.

This last case is similar to this in some of its aspects. The lease in that case provided for the putting down of a test oil well and for what should be done if it produced oil in paying quantities. The court says: “But the other contingency, that it prove dry, is not provided for, and it is the omitted case that has occurred. The authorities are uniform that under such circumstances there is an implied obligation on the lessee to proceed with the exploration and development of the land, with reasonable diligence, according to the usual course of business, and a failure to do so amounts to an abandonment which will sustain a re-entry by the lessor.” In the case at bar, while the lease contemplated the prospecting for coal and mining it if found in paying quantities, it did not contemplate that the mining of the coal would be found under existing conditions to be absolutely impracticable and, that event having occurred, this case is brought within the principle of the case just referred to. The contract does provide that if the lessee, or its assigns, shall elect to mine and remove the coal, they shall do so within 25 years, but this does not give them 25 years to commence removing it.

[3][4] 3. It is claimed by the plaintiffs that it has never been determined whether coal can be mined at a profit or advantage, no attempt having been made to mine coal, and more than two years has expired; that no continuous work of development has ever been commenced and prosecuted on plaintiffs' land; that defendant Beaver Creek Coal Company did enter upon the work of sinking a shaft upon said land, but after sinking it about 60 feet entirely abandoned the same, and has not further prosecuted said work for a period of two years; that by reason of the premises it has abandoned and forfeited all rights under the contract.

The paramount issue in the case is whether there has been an abandonment. The evidence in the case was directed largely to this point. The evidence is substantially this, as shown by the different witnesses:

Defendant removed its machinery, some of the lumber, and other things about October, 1909, and has done nothing on the land since that time. No attempt has been made since that time to mine coal or carry on coal mining operations on this land. Some of the houses have been blown down and scattered around the ground and are still there. There is no evidence of operation on the land. The wreck and débris are all there, cinders, pipes, 2x4's, and boards scattered over the two or three acres, besides the dirt that was taken from the shaft.

Plaintiff A. M. McColl, who transacted substantially all the business for plaintiffs, testified as a witness that he had one or two conversations with the president of the Beaver Creek Company after the material was removed; that the plaintiff asked the president if they were going to do anything on the land, and the president said it was not worth doing anything...