Steele v. Maher

• Decision Date: 26 February 1909
• Docket Number: 5-1909
• Citation: 38 Pa.Super. 183
• Parties: Steele v. Maher, Appellant
• Court: Pennsylvania Superior Court

38 Pa.Super. 183

Steele v. Maher, Appellant

No. 5-1909

Superior Court of Pennsylvania

February 26, 1909

Argued May 13, 1908 [Syllabus Matter] [Syllabus Matter] [Syllabus Matter] [Syllabus Matter]

Appeal by defendant, from judgment of C.P. Indiana Co.-1903, No. 208, on verdict for plaintiffs in case of P. W. Steele, Administrator of Sarah J. Miller, deceased, et al., v. Thomas Maher.

Assumpsit to recover minimum coal royalties. Before Telford, P. J.

The facts are stated in the opinion of the Superior Court.

When Thomas Maher was on the stand, he was asked this question:

" Q. Had you any knowledge of the coal in the Freeport vein at that time, in what is known as the Upper Freeport vein?"

Counsel for plaintiffs ask the purpose of the question.

Mr. Barron: The purpose of this question is to show by this witness -- and we make this offer -- that at that time this witness was not acquainted with the conditions with respect to the mining of coal in the Upper Freeport vein and especially with respect to the mining of coal in this particular locality embraced in what is known as the Sarah Miller tract, and that he entered into the agreement in question here not knowing of these conditions and having no knowledge of either the quantity or the quality of the coal embraced in the tract in question.

Mr. Taylor: Objected to as incompetent, irrelevant and immaterial. It is also objected to for the further reason that this testimony is incompetent to affect the contract on which this suit is brought.

The Court: It appears to us that in this case the grant is absolute and exclusive, without regard to the contingencies. The lessee, the defendant, took his risk as to quantity or expense of operation and agreed to pay a definite, fixed minimum price or royalty for each year during the term after the expiration of the first year.

Under the authority of Timlin v. Brown, 158 Pa. 606, the objection to the character of evidence proposed must be sustained. The objection is therefore sustained. Exception.

To which ruling counsel for the defendant except, and a bill of exceptions is sealed to the defendant.

Mr. Banks: We propose to show by the witness on the stand, to be followed by the testimony of other witnesses to be called on behalf of the defendant, that the defendant was not acquainted with the premises or the coal thereunder embraced in the agreement at the time of entering into the same. Further, we propose to show that all the coal was mined and marketed under said land that was marketable. That the defendant paid the royalties up until November 7, 1901, and at that time gave notice to the plaintiffs that the coal under the premises had become exhausted and that he elected to deliver up the lease to the plaintiffs and abandon further operation: and that he has done nothing toward operating the mines on the premises since that time. This for the purpose of showing that all the coal under the premises that could be taken out has been taken out and that the coal under the premises has been exhausted, and that the plaintiffs have been paid for the royalties up until the abandonment of the mine by the defendant and have had notice of the abandonment; and to relieve the defendant from paying further royalties.

Mr. Taylor: The offer is objected to as incompetent and irrelevant.

The Court: The objection is sustained.

Mr. Barron: The defendant offers to prove that the defendant was not acquainted with the premises or the coal thereunder embraced in the agreement at the time of entering into the same other than that the face of the bluff of said tract showed certain outcroppings of coal. That the coal at that time had not been tested to the knowledge of the defendant nor did the defendant have the right to make said tests upon the surface above said coal, nor could he make any test except driving through said bluff where was the outcropping aforesaid. That the defendant having had no experience in mining in that seam of coal or in that locality and no knowledge of the coal under said tract other than as aforesaid, entered into said agreement wholly upon the strength of the quantity and quality of the coal that was supposed to exist under said tract and that could with profit be mined therefrom. That the defendant with others operated the mine on said premises for a period of ten years, at a total loss of $ 10,000. That he and others employed at a great expense the largest number of workmen that could possibly be used in said mine. That he and others mined whatever coal it was possible to mine until rock rolls, faults, and the thinness of the seam prevented them from proceeding further. That the business of mining said coal was conducted in an economical and business like manner. Also to prove by other witnesses who had charge of the work in the mine that the coal has been mined until exhausted. Also by experts in mining that they have examined the premises embraced in the agreement and that said premises do not contain coal in sufficient quantities to enable the defendant or other persons to mine or take away the minimum quantity of coal specified in the lease to be mined. That said mine at no time could be worked for enough to pay the royalties as they became due. That all the coal that can be mined without great loss to the operators has been mined and that the defendant and others have done all that can reasonably be expected to prove that the coal is exhausted from the premises.

That by reason of these facts the defendant found it necessary to abandon said premises and gave notice to the plaintiffs in December, 1901, of the abandonment and the reasons making the abandonment necessary.

Mr. Taylor: Objected to as irrelevant and incompetent.

The Court: The objection is sustained.

To which ruling counsel for defendant except, and a bill of exceptions is sealed to the defendant.

Mr. Banks: We would like the court to state the reasons for overruling the offer.

The Court: The offer is overruled for the reasons stated in sustaining the objection to the first proposition of proof of the defendant.

Mr. Keener: The defendant proposes to prove by the witness on the stand and others, as follows:

1. That owing to said coal having been exhausted the defendant availed himself of the clause of forfeiture in said agreement and made default in payment and gave notice to the said plaintiffs that he abandoned and surrendered said lease and elected to take advantage of said forfeiture.

2. That at the time of said forfeiture the said defendant surrendered the buildings on said premises to said plaintiffs, as provided for by the terms of said agreement.

3. That the defendant has fully performed all the covenants and conditions relating to the forfeiture of said agreement on the part of said defendant.

Mr. Taylor: Objected to as incompetent and irrelevant. The lessee under the contract in suit could not take advantage of the forfeiture clause, it being alone for the benefit of the lessors.

The Court: The objection is sustained.

To which ruling counsel for defendant excepts, and a bill of exceptions is sealed to the defendant.

The court charged in part as follows:

[By an article of agreement bearing date of November 7, 1890, the plaintiffs in this case conveyed to the defendant the coal underlying a certain tract of land situated in Harrison township, Allegheny county, in the following terms, substantially: " The said parties of the first part for and in consideration of the covenants and agreements hereinafter mentioned, have granted, conveyed, demised, leased and let, and by these presents do grant, convey, demise, lease and let for the period of twenty-one years from the date hereof, to the said party of the second part, his heirs, executors, administrators and assigns, the exclusive right and privilege of developing and mining all the coal in and underlying that certain tract of land, situated," etc.

In our view this clause discloses a manifest intention to sell, and to buy, the coal. A contract which is in its terms a demise of all the coal underlying a tract of land, with the unqualified right to remove the same, is a sale of the coal in place.]

[This being a sale of coal in place, as we have stated, there is nothing that we can find in this contract that relieved the defendant from the obligation to pay the minimum royalty whether the coal is mined or not. Nothing is stated about the exhaustion of the coal or the expensiveness of mining in the contract. It was the agreement that $ 400 minimum was to be paid annually during the life of the contract; and to this amount the plaintiffs are entitled from November 7, 1901, to November 7, 1902, which is admittedly unpaid.]

[In our view of this contract the clauses relating to forfeiture must be construed as for the benefit of the lessors. They are here, however, resisting the forfeiture. They alone, in our judgment, can enforce it.]

[In this view of the case it becomes our duty to direct a verdict for the plaintiff for the amount of royalty claimed, $ 400, with interest from the time it was due, November 7, 1902, amounting in all to $ 530.

For this amount you will find a verdict for the plaintiffs.]

Verdict and judgment for plaintiffs for $ 530. Defendant appealed.

Errors assigned were rulings on evidence, quoting the bill of exceptions; above instructions, quoting them.

J. N Banks and Frank Keener, with them McKee & Mitchell and A. J. Barron, for appellant. -- The failure to pay the minimum royalty of $ 400 yearly was to render the lease " absolutely null and void." This would indicate that the parties contemplated that if the minimum royalty of $ 400 was not paid annually the right of Maher should cease, and the lease revert to the lessors, and Maher be...