Niles Land Co. v. Chemung Iron Co.

• Decision Date: 28 April 1916
• Docket Number: 4554.
• Citation: 234 F. 294
• Parties: NILES LAND CO. v. CHEMUNG IRON CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

234 F. 294

NILES LAND CO. v. CHEMUNG IRON CO. et al.

No. 4554.

United States Court of Appeals, Eighth Circuit.

April 28, 1916

John C Weadock, of Detroit, Mich. (Stearns & Hunter, of Duluth Minn., Nelson Sharpe, of West Branch, Mich., and Leo N Sharpe, of Philadelphia, Pa., on the brief), for appellant.

Wm. W Billson and A. L. Agatin, both of Duluth, Minn., for appellee Chemung Iron Co.

Frank B. Kellogg, C. A. Severance, and Robert E. Olds, all of St. Paul, Minn., and Frank D. Adams, of Duluth, Minn., for appellee Oliver Iron Mining Co.

Before HOOK and ADAMS, Circuit Judges, and REED, District Judge.

ADAMS Circuit Judge.

This was a bill brought by the Niles Land Company, the appellant, against the Chemung Iron Company and the Oliver Iron Mining Company, the appellees, to enforce forfeiture of a lease made by it on May 1, 1902, to the Chemung Iron Company, and by the latter subsequently assigned to the Oliver Company, demising to the Chemung Company the W. 1/2 of the N.E. 1/4 and N.W. 1/4 of the S.E. 1/4 of section 27, township 58 N., range 20 W., situated in the county of St. Louis and state of Minnesota, for the term of 50 years, and to secure a cancellation of the lease, on the ground that the defendants failed to keep and perform one of the covenants of the lease, as a consequence of which the right of forfeiture accrued.

The lease was in the usual form of iron mining leases, containing, among others, these covenants:

(1) 'In consideration of this license, the party of the second part (the lessee) hereby agrees to work the mine or mines now or hereafter discovered on said lands in a good workmanlike manner, during the existence of this license, and also hereby agrees to pay to said party of the first part a royalty on all iron ore mined or removed from said land of twenty-five (25) cents per gross ton while this license is in force. Said royalty shall be due and payable on the twentieth (20th) days of April, July, October, and January of each year during the time this license is in force for all the ore mined and removed from said land during the three months preceding the first day of the month in which payment is to be made as aforesaid.'

(2) 'The party of the second part, having heretofore explored said lands, now represents that iron ore exists therein, and in consideration of this license hereby agrees to pay said party of the first part a ground rent for the year ending May 1, 1903, of $12,500, after May 1, 1903, the sum of $18,750 per annum while this license is in force and not surrendered whether iron ore exists in paying quantities in said lands or not.'

(3) 'Said ground rent shall be paid semiannually on the twentieth days of July and January of each year: Provided, that if the royalty paid in any year to the said party of the first part shall be equal to or exceed the sum of said ground rent, then said royalty shall be in lieu of said ground rent, and should the royalty paid in any year be less than said ground rent said party of the second part agrees to pay such further amounts as ground rent as will, with such royalty paid, amount to said ground rent. All sums paid as ground rent in any year shall be credited on the royalty which may be in excess of said ground rent in any succeeding year or years.'

(4) 'Said party of the second part shall also, on or before the twentieth day of each month in each year this license is in force, furnish a written statement to the party of the first part of the entire quantity of iron ore or other minerals removed from said premises during the preceding calendar month as near as the same can be ascertained. * * * '

(5) 'The party of the second part shall pay all taxes and assessments, ordinary and extraordinary, general and specific, which may be assessed on said lands and on the iron ore and other minerals mined thereon while this license is in force.'

(6) 'The said party of the second part may surrender this license any time by giving fifteen days' notice in writing to said party of the first part, and by executing, acknowledging and recording a surrender of such license in the register of deeds of said county of St. Louis, and by paying up in full all royalty, rent, taxes or assessments that may then have accrued according to the terms hereof.'

(7) 'In case said party of the second part shall fail to make monthly reports of the ore removed, or shall knowingly make false reports of the quantity, kind, grade, of the iron ore removed from said lands, or fail to work such mine or mines in a good workmanlike manner or fail to pay the ground rent or royalty to said party of the first part when due as aforesaid, without demand from said party of the first part, then, in either of such cases, the party of the first part may declare this license forfeited, null and void, by giving written notice to the party of the second part.'

Plaintiff averred in its bill that under the lease the express obligation was imposed on the defendants, and each of them to work the mine or mines of ore then existing and those thereafter to be discovered within a reasonable time after the making of the writing, and to continue to do so during the term of lease as long as iron ore could be found, and that on failure of the defendants to so work the mine the lease was forfeitable at the instance of the plaintiff. And it averred that the defendants have not worked the mine or removed ore from the leased premises, except for explorative purposes, and have not paid to the plaintiff any sums of money, except the semi-annual ground rent pursuant to the terms of the lease. And it further averred that the defendants thereby have so failed to work the mine that a right of forfeiture of the lease accrued to the plaintiff prior to January 20, 1912, and that on that date it gave due notice to defendants that it had exercised that right...