Wilmore Coal Co. v. Brown

• Decision Date: 29 September 1906
• Docket Number: 26.
• Parties: WILMORE COAL CO. v. BROWN et al.
• Court: U.S. District Court — Western District of Pennsylvania

147 F. 931

WILMORE COAL CO. v. BROWN et al.

No. 26.

United States Circuit Court, W.D. Pennsylvania.

September 29, 1906

W. H Ruppel and D. L. Krebs, for plaintiff.

H Snowden Marshall and E. T. McNeelis, for defendants.

ARCHIBALD District Judge. ^[1]

This is a bill to remove an alleged cloud on the plaintiff's title. In the years 1878 and 1880, the defendant J. Willcox Brown, a resident of Baltimore, Md., secured a large number of mining leases, aggregating about 16,000 acres, in different tracts, of various sizes, in Somerset county, Pa as well as a like number in the adjoining counties of Indiana and Cambria, nineteen of which, of the Somerset lot, covering some 2,400 acres, are involved in the present suit. These leases were indentures under seal, and severally undertook for the consideration, in some cases of $5 and in some cases of $10, to grant, bargain, and to sell to the said J. Willcox Brown, his heirs, executors, administrators, and assigns, 'all the iron ore, coal, cement, and fire clay, and all other minerals of every kind,' under the different tracts described, 'including the privilege of boring any number of wells and taking therefrom, by such means as are or may be most practicable, petroleum, carbon, or coal oil, also any salt water that may be found on the premises and manufacturing the same into salt,' together with the full and exclusive right, liberty, and privilege of mining, taking, and carrying away the said iron ore and other minerals, and of using such stones, earth, and water as might be necessary or required for conducting the mining operations. A few acres were reserved around buildings, and enough coal for the grantor's own use, and in some cases such as he might sell to his neighbors. The leases were to run for 99 years; the grantors covenanting at the end of that time to execute other leases of like tenor, for a similar term, renewable forever. In consideration whereof it was agreed by the grantee that on the expiration of every three months, whenever any ore or other minerals were mined, quarried, or otherwise reduced to possession and removed from the premises, he would render to the grantor, his heirs, executors, and assigns, a true and correct account thereof, paying for every ton of iron ore ten cents; for every ton of coal, cement, fire clay, or other minerals than iron, five cents; and for every hundred barrels of petroleum or coal oil, and every one hundred bushels of salt, five per cent of the net profits. The leases were duly acknowledged and put on record in the office for the recording of deeds in Somerset county, Pa., in July, 1880. A copy of one, as a type of all, although they differ in some minor particulars, is reproduced in the margin. ^[2]

The section where these leases were located was entirely undeveloped at that time, except for farming, and was discredited as coal or mineral territory by the State Geological Survey. There was no railroad into it, and in view of this it was provided, in somewhat varying terms, in all but four of the leases here in controversy, that unless one was built within five years they should be null and void. As to those where no such provision appears, it is charged in the bill that there was a verbal undertaking to the same effect by the defendant's agent at the time of securing them. But this is denied in the answer, and the evidence to sustain it is unsatisfactory; and they must therefore be taken as they stand. A railroad being a recognized necessity, however, the defendant Brown, in addition to his leases, busied himself with getting rights of way, some 64 of which he secured; 7 of these being from parties whose leases are involved in this suit. The railroad which he had in contemplation was to start at Johnstown, Pa., on the main line of the Pennsylvania Railroad, and run up Stony creek, and Paint or Shade creek, to the old Rockingham furnace at the head of the latter, and thence southeasterly, by other waters, in the direction of Hagerstown, Md.; and it was in general conformity with this that the rights of way were taken. No such railroad, however, was ever built. But in 1880 the Baltimore & Ohio Railroad constructed a branch from their line at Rockwood, Pa., northerly about 40 miles, through the center of Somerset county to Johnstown, which followed down Stony creek a part of the way, by the mouth of Shade and Paint; and when it was being laid out the defendant Brown put his rights of way at the service of the Baltimore & Ohio engineers, although none of them were made use of.

The building of this road, however, did not lead to the mineral development of that section, which came about a number of years later in quite another way. In 1892 to 1894, Robert H. Sayre and others began taking up coal lands in this territory, getting together about 18,000 acres, including much of that which is now in controversy, which they subsequently conveyed to the Wilmore Coal Company, which they had organized; and a year or two afterwards they sold out their interests in the company to Mr. Edward J. Berwind, president of the Berwind-White Coal Mining Company, who thereby secured their holdings, which he increased later to some 35,000 or 40,000 acres. Both Mr. Sayre and his associates, and Mr. Berwind after him, bought outright, at so much an acre, the coal which they purchased; that already leased to the defendant Brown being conveyed to them in fee by the original lessors or those who had succeeded to the title, in most instances without regard to the leases, but in some cases subject to them, the rights of the lessors being assigned, and in all with actual knowledge of them. Having got together this extended acreage, Mr. Berwind endeavored to induce the Pennsylvania Railroad to run in a branch, but they declined to do so; and he was compelled to undertake it individually, which he did at an expense of about $500,000. This and the development of the different properties for mining, which followed, involving about $1,000,000 more, extended over two or three years, and not until some time in 1897, therefore, was any mining done; but since that time it has been actively pursued, and an extensive business built up, the operations being conducted by the Berwind-White Coal Mining Company, under the Wilmore Coal Company, to whom a royalty of 10 cents a ton is paid.

In securing the leases in suit and others in that region, Mr. Brown did not expect to do any mining personally, and he has not, either by himself or others, nor has he paid royalties, at any time, on any of them; his purpose being to sell the leases to others or to transfer them to some company in which he had an interest, which would operate them. He sold some of his holdings in the southern part of the county in this way, and he made several attempts to interest parties in the others, including the New York Central Railroad people, the Erie people, and the Baltimore & Ohio. Learning of Mr. Berwind's purchases, he finally offered them to him, but without success; these negotiations ending in the spring of 1895, after which no others were undertaken. In 1892 certain of the leases were assessed and sold for taxes, but were redeemed by Mr. Brown, who paid some $1,500 to do so. They were sold again in 1896, but this he resisted, and succeeded in having the sale set aside by the court. Learning in 1902 that the Berwind-White Company were mining on certain of the lands which he had leased, he sent an engineer to investigate the matter, receiving from him a detailed and extended report which confirmed the information, upon which he took counsel with the idea of legal action. Some delay was experienced, however, with regard to this; the one-quarter interest, which he had assigned to the agent who secured the leases, being outstanding in the hands of various parties. But, these having been got into line, a corporation was organized-- the New Amsterdam Coal Company, defendant--to which all interests were transferred in exchange for stock; and in 1904 actions were brought by that company against the Berwind-White Coal Mining Company in the United States Circuit Court for the Southern District of New York for damages for taking the coal from six of the different tracts in controversy, following which in May, 1904, the present bill was filed. These are the general facts. Others will be referred to as we proceed. The question is whether, under the showing made, the plaintiff is entitled to the relief desired.

According to the law of Pennsylvania, by which the subject is necessarily governed, the so-called leases to the defendant Brown constitute a sale and conveyance of the coal and minerals in place. This is the effect of all the cases, from Caldwell v. Fulton, 31 Pa. 475, 72 Am.Dec. 760 down, and, if reiterated declaration is to count for anything, is not to be gainsaid or denied. Sanderson v. Scranton, 105 Pa. 469; D., L. & W.R.R. v. Sanderson, 109 Pa. 583, 1 A. 394, 58 Am.Rep. 743; Hope's Appeal (Pa.) 3 A. 23; Montooth v. Gamble, 123 Pa. 240, 16 A. 594; Fairchild v. Dunbar Furnace Co., 128 Pa. 485, 18 A. 443, 444; Kingsley v. Hillside Coal & Iron Co., 144 Pa. 613, 23 A. 250; Lazarus' Est., 145 Pa. 1, 23 A. 372; Timlin v. Brown, 158 Pa. 606, 28 A. 236; Plummer v. Hillside Iron & Coal Co., 160 Pa. 486, 28 A. 853; Lehigh & Wilkes-Barre Coal Co. v. Wright, 177 Pa. 387, 35 A. 919. 'It is now well established,' says Rice, P.J., in Hosack v. Crill, 18 Pa.Super.Ct. 90, affirmed 204 Pa. 97, 53 A. 640, 'that an instrument which is in terms a demise of all the coal in, under, and upon a tract of land, with the unqualified right to mine and remove the same, is a sale of the coal in place; and this, too, whether the purchase money stipulated for is a lump sum or is a certain price for each ton mined, and is called ...