New York Coal Co. v. New Pittsburgh Coal Co.

• Decision Date: 05 June 1912
• Parties: NEW YORK COAL CO. v. NEW PITTSBURGH COAL CO.
• Court: Ohio Supreme Court

86 Ohio St. 140
99 N.E. 198

NEW YORK COAL CO.
v.
NEW PITTSBURGH COAL CO.

Supreme Court of Ohio.

June 5, 1912.

Error to Circuit Court, Franklin County.

Action by the New York Coal Company against the New Pittsburgh Coal Company. From a judgment of the circuit court reversing a judgment for plaintiff, it brings error. Reversed, and judgment of common pleas affirmed.

On the 26th day of May, 1894, the New York & Western Coal Company executed a lease to one Robert Stalter of certain property in Hocking county, Ohio, granting to him ‘the right and privilege to enter upon and by proper methods search and explore for coal that may be contained in, upon, or under said land and to dig, mine, and remove the same from said land, and for that purpose to construct, maintain, use, and operate all such mines, hoppers, machinery, structures, instrumentalities, and appliances as may be necessary and proper therefor.’ The lessee was to have and to hold said rights and privileges unto himself, his executors, administrators, successors, and assigns from the date of the execution of the lease until all the coal should be removed from the property, as therein provided. The lease then contained the following stipulation on the part of the lessee: ‘That he will within thirty days from the day of the execution hereof begin operations for the mining and removing of the coal aforesaid, and he will build and construct all necessary hoppers, trestles, and other structures and appliances for mining and removing said coal as herein provided, and that between the first day of July, eighteen hundred and ninety-four, and the first day of July, eighteen hundred and ninety-five, he will mine, properly screen with screens of the kind in general use at the mines in the Hocking Valley, Ohio, and remove from said lands not less than thirty thousand (30,000) tons of lump coal of two thousand pounds, and between July 1, eighteen hundred and ninety-five, and July 1, eighteen hundred and ninety-six, and during each and every period of twelve months thereafter he will mine, properly screen with screens of the kind in general use at the mines in the Hocking Valley, Ohio, and remove from said land not less than sixty thousand tons (60,000) of lump coal of two thousand pounds, until all the coal in, upon or under said land has been fully and entirely removed therefrom, including all pillars, supports and stumps which shall be all withdrawn and taken out; the said work and all of it to be done in a careful, economical and workmanlike manner, in all respects so as to save and put out the greatest practicable amount of lump coal contained in said property, said sixty thousand (60,000) tons to be mined and removed during the twelve months ending July 1, 1896, and each succeeding period of twelve months, to be distributed over the year in such way, that in no month shall less than thirty-five hundred (3,500) tons be so mined and removed.’ A royalty of 10 cents per ton was then fixed for the first five years of the lease, with a provision for an increase at every five-year period thereafter, according to the then current rate in the Hocking Valley, but in no event to be less than 10 cents per ton at any time. No change appears to have ever been made in the above rate, however. The said royalty was to be paid not later than the 20th day of each month for all coal mined and removed during the preceding month.

The lease then contains the following clauses, known as the minimum royalty clause, and the exception thereto, or saving clause, viz.:

‘And if said second party shall neglect or fail from any cause except as hereinafter provided, to so mine and remove the said minimum of thirty thousand (30,000) tons between July 1, 1894, and said July 1, 1895, or said minimum of sixty thousand (60,000) tons during each and every year thereafter, or said minimum of thirty-five hundred (3,500) tons during any month thereafter, he shall at the end of such year or month account for and pay to the first party such portion of the royalty per ton aforesaid that would then be due if said number of tons had been actually so mined and removed.

‘It is hereby understood and agreed by and between the parties hereto, that in case and so long as it shall be impossible to mine and remove said amount by reason of strikes, lockouts, fires, floods or any other cause beyond the control of the second party, lack of transportation facilities excepted, the said minimum shall not apply.’

Certain rights to use the timber upon the land for mining purposes were also granted to the lessee, as well as an option upon adjoining property of the lessor, under the same terms and conditions as those in the present lease, and, in addition, the lease contains the usual covenants for the protection of both parties.

On the 25th day of June, 1895, said Robert Stalter assigned and transferred to the Stalter Coal Company all his right, title, and interest in and to said lease and the premises covered thereby, with all the fixtures and improvements thereon, subject to the terms and conditions of said lease; and on the 15th day of May, 1900, said the Stalter Coal Company made a similar assignment and transfer to the New Pittsburgh Coal Company, the defendant in error herein. Both said assignments were made with the consent and approval of the New York & Western Coal Company, lessor, and were in writing, duly signed and acknowledged by all the parties in interest. On the 2d day of February, 1903, said New York & Western Coal Company sold, assigned, and transferred to the New York Coal Company, plaintiff in error herein, its successors and assigns, the said premises and lease, and all its rights, remedies, and interests in and under the same, together with all royalties reserved, and rents, income, and money due or to grow due thereunder, with interest. The original lessee, and his successors in interest as above set out, entered upon said property, and began and carried on mining operations thereon, under, and in accordance with the provisions of said lease and the several assignments thereof. The terms of said lease were duly fulfilled and all rentals paid by the lessee and his successors, until about the year 1903, when the present controversy arose. The New Pittsburgh Coal Company did not mine and remove from the premises the minimum amount of 60,000 tons of lump coal per annum, provided for in the lease, but fell considerably short of that amount, and refused to pay for the difference at the agreed rate.

In November, 1905, suit was brought against it, in the common pleas court of Franklin county, by the New York Coal Company, and, as set out in the amended petition, defendant only mined and removed 32,987 tons for the year ending June 30, 1903, 20,783 tons for the year ending June 30, 1904, 16,153 tons for the year ending June 30, 1905, 1,475 tons for the month of July 1905, 1,857 tons for the month of August, 1905, and 751 tons for the month of September, 1905. These amounts are admitted by defendant in its answer, and both parties agree that the royalty of 10 cents per ton was paid on the same; but plaintiff claimed the additional royalty upon 116,494 tons of lump coal that defendant should have mined and removed during said periods, as required by the minimum royalty clause hereinbefore set out, and defendant denied any liability therefor. A statement of the defenses set up in the answer, and of the questions raised and decided, will appear in the opinion.

The court of common pleas directed the jury to bring in a verdict in favor of the plaintiff for the amount claimed with interest, and entered its judgment accordingly. This judgment was reversed by the circuit court on error, and these proceedings are brought to reverse the judgment of the circuit court.

Syllabus by the Court

By a coal mining lease, the lessee was granted the right to search and explore for coal upon lands in Hocking county, Ohio, and to mine and remove the same, until all the coal, including pillars, supports, and stumps, should be taken out and removed.

The lease provided that the lessee should pay the lessor a royalty of 10 cents per ton upon all the coal mined and removed, but the lessee also agreed to mine and remove not less than 30,000 tons of lump coal the first year, and 60,000 tons annually thereafter.

It was further stipulated that should the lessee neglect or fail from any cause, except as thereinafter provided, to mine and remove the specified minimum tonnage, he should, at the end of each year, account for and pay to the lessor the unpaid portion of the royalty that would have then been due had said minimum been actually mined and removed.

This stipulation was modified by a saving clause ‘that, in case and so long as it shall be impossible to mine and remove said amount by reason of strikes, lockouts, fires, floods or any other cause beyond the control of the second party, lack of transportation facilities excepted, the said minimum shall not apply.’

The mine was operated by the lessee and his company for six years, and then assigned to the defendant, with the consent of the lessor.

After about two years of operation under the lease, the defendant made the claim that a certain portion of the mine was dangerous by reason of its geological formation which caused the roof to fall and imperil the men at work, and that there was no possible way of preventing the same; that it was exceedingly difficult to obtain miners to work in that part of the mine because of its dangerous condition; and that defendant was therefore unable to produce the required minimum tonnage by the usual and customary method of mining in the Hocking Valley district; wherefore defendant refused to pay the difference between the specified minimum royalty and the royalty at the agreed rate upon the tennage actually mined.

The said geological formation and dangerous condition of the roof, however, were apparent and well known for some time prior to the assignment of the...