Thomas Beck & Sons v. Economy Coal Co.

• Decision Date: 25 October 1910
• Parties: THOS. BECK & SONS v. ECONOMY COAL COMPANY
• Court: Iowa Supreme Court

127 N.W. 1109

149 Iowa 24

THOS. BECK & SONS v. ECONOMY COAL COMPANY

Supreme Court of Iowa, Des Moines

October 25, 1910

Appeal from Polk District Court.--HON. HUGH BRENNAN, Judge.

SUIT in equity for an injunction and an accounting under a mining lease. Trial to the court. Decree dismissing plaintiffs' petition. Plaintiffs appeal.--Reversed and remanded.

Reversed and remanded.

A. H McVey and Jos. D. Laws, for appellants.

W. N Jordan, for appellee.

DEEMER C. J. MCCLAIN, J., EVANS, J., (dissenting).

OPINION

DEEMER, C. J.

Plaintiffs, being the owners of an eighty-acre tract of land, entered into a contract with the defendant whereby they "leased to the party of the second part (meaning defendant) all the merchantable coal that is in or may underlie the surface of the land for the period of twenty years from and after the 24th day of May, 1904, unless otherwise terminated as herein provided." The instrument also granted the party of the second part the exclusive right to test, open, mine, and remove said coal, and further granted it the right to erect underground entries, railroads, and all necessary buildings and fixtures necessary to facilitate the mining and removal of said coal from said land with the right to remove said buildings and fixtures at the expiration of the lease, or whenever it shall become impracticable to further mine coal from said premises at a profit. The royalty or rental was to be upon each ton of coal mined from the land during the continuance of the lease, and a minimum guaranteed royalty was also provided on coal mined under the lease. Defendant agreed to commence the operation of said mine and the removing of said coal within five days from the execution of this lease, "and shall proceed in good faith regularly in the operation of said mine and the removing of said coal from said premises, and to remove all of the coal from said leased premises within twenty years from date of the beginning of this lease, at which time this contract and lease shall absolutely terminate and cease: Provided, however, that if notwithstanding the regular and faithful operation of the said mine during said twenty years, at the termination of said period the said coal beneath said premises shall not yet be fully exhausted, then and in that event the party of the second part shall have the right to a renewal of this lease for an additional period of ten years, or such lesser period as may be necessary to completely remove all of said coal." It was also agreed that defendant shall furnish to the party of the first part upon request of said first party a plat showing the extent and plan of said mine, which said plat shall be furnished semiannually thereafter upon the request of the party of the first part, showing the changes to date.

That the parties had in mind the possible use of the entries and shafts for taking coal from other lands is clear from the following stipulations made between them which we here quote from the lease itself:

It is further agreed that the party of the second part shall have the right to remove coal mined from adjoining land, not embraced in this lease, through the shaft located on the premises leased herein, in which case the party of the second part shall pay to the party of the first part a royalty of one percent per ton for all coal so mined and removed. It is further agreed that the party of the second part shall have the use of the surface of five acres of land during the continuance of this lease, free of charge, upon which to sink shafts, erect buildings, railroads, etc., and also a right of way over said leased premises for railroad tracks and switches, the said right of way to be included in said five acres, unless otherwise agreed upon; except, in case before the expiration of this lease the coal under said leased premises should become exhausted or mined out, the party of the second part should wish to continue the use of the surface occupied by his said tracks, shaft, buildings, etc., for the purpose of mining coal from adjoining leased lands, then and in that event the party of the second part shall have the right to the use of the surface of so much land as is necessary for that purpose, and shall pay to the party of the first part for said use the sum of ten dollars ($ 10.00) per acre during the continuance of this lease, in addition to the one percent royalty aforesaid. It is further agreed that the party of the second part shall have the right to remove the coal from the premises leased herein through a shaft located on any other land.

That the contract may be better understood we also quote the following:

It is further agreed that the party of the second part may sink such air and water shafts as may be necessary to properly operate said mine on said leased premises, using no more land than is absolutely necessary to such purposes, and causing as little inconvenience as possible to parties occupying the surface of said premises, and that the water removed from said mines on any part of said property shall be carried to some natural drainage by means of ditches and not permitted to overflow and collect on said land, and the party of the second part shall have the right of way over the surface of said leased premises to said air and water shafts, doing as little damage as possible. It is further agreed that if the party of the second part shall in any manner fail to comply with the terms and conditions of this lease, or shall fail to pay the sums of money falling due under the lease promptly when due, or in case there is a failure to operate the said mine for a period of twelve months at any one time, then and in that event this lease may be terminated at the option of the party of the first part upon sixty days' notice in writing of their intention so to do: Provided, however, that the failure to operate said mine for a period of twelve months at any one time shall not work a forfeiture of this lease in case such failure is due to unavoidable causes or strikes. It is further agreed that in the event of the coal becoming exhausted or too thin, or not sufficient in quantity to warrant its being mined at a profit, or through any other cause it be made to appear that it is not practicable to continue to mine the same without loss, the party of the second part may terminate this lease upon sixty days' written notice to the party of the first part of such intention.

At the time this lease was made, defendant had leases for mining coal from a tract of one hundred and sixty acres adjoining plaintiff's land on the west and on other tracts of land adjoining it on the north and east, and was operating a shaft located about the middle of the tract to the west from which an entry had been worked through to the north for the purpose of removing coal, the last of these extending over upon plaintiff's land about twenty feet beyond the western boundary, and this entry had been used for bringing coal from other entries to the north on land leased by defendant. When the lease in question was made, plaintiffs knew that defendant had thus encroached upon their land with its north and south entry, and they soon after exacted from defendant a settlement by way of royalty for the coal which had been removed in running this entry before the lease took effect. The defendant proceeded after the lease was executed to extend its main entry to the eastward, mining the coal under plaintiffs land, and continued to use the north and south entry for the purpose of bringing through it coal from the other land which it was mining to the north. This continued use of the north and south entry was known to the plaintiffs, who on two different occasions insisted on a right to have one percent per ton royalty on all coal carried through such entry from other land, but this alleged right was on each occasion denied by the defendant. The defendant did not open a shaft on plaintiffs' land, as it had a right to do, but proceeded under the privilege given to it in the lease to remove the coal from plaintiffs' land through the shaft which it had already constructed and was using on the tract of land to the west. After operations had thus been continued under the lease for more than two years, plaintiffs brought this action, asking, first, an accounting for royalty at the rate of one percent per ton on all coal thus transported through the north and south entry on their land from other land, and for an injunction to restrain defendant from transporting through said entry any coal from land not belonging to the plaintiffs. On the trial it was stipulated that the coal taken through this entry from other land amounted to 34,047 tons. It is conceded in argument that no damage whatever had resulted or was likely to result in the future from the transportation of coal from other lands through the entry on plaintiffs' land, and it is not claimed that the defendant had been in any way remiss in its duty as to mining coal from plaintiffs' land.

Whether the lease or contract from which we have quoted be treated as a lease or a grant is not necessary now to determine, nor is it necessary to determine what the rights of the parties might have been with reference to the use of the entries for mining coal from other lands had there been no express agreement with reference thereto. These questions are difficult of solution, and upon which we might not be agreed. No matter what the nature of the contract or the implied rights of the parties under the lease or grant which makes no reference to the use of the entries for mining coal from other lands, these things are clearly the subject of contract, and, if the parties do contract with reference thereto, their rights are to be determined from the terms of their...