Berwind-White Coal Min. Co. v. Martin

ARCHBALD, District Judge.

This case was tried by the court without the intervention of a jury. Rev. St. U. S. §§ 649, 700 [U. S. Comp. St. pp. 525, 570]. The defendant presented a number of requests for special findings of fact and conclusions of law, but the court, without passing upon them, found generally that the plaintiff was entitled to recover. There can be no question as to the entire propriety of this course. The statute expressly provides that the finding of the court on the facts may be general or special, and you can no more compel the latter than you can require a special verdict from a jury. It is true that in Norris v. Jackson, 9 Wall. 125, 19 L. Ed. 608, it is said that, “if the parties desire a review of the law involved in the case, they must * * * get the court to find a special verdict which raises the legal questions”; but it is not to be understood from this that it can be exacted, all that is meant being that the court should be persuaded to do so. Neither is the alternative, which is there suggested, of presenting propositions of law, and requiring the court to rule upon them, of any greater obligation. The right to this has been asserted without success in a number of cases, and the practice must now be considered as settled to the contrary. Insurance Company v. Folsom, 18 Wall. 237, 21 L. Ed. 827; Cooper v. Omohundro, 19 Wall. 65, 22 L. Ed. 47; St. Louis v. Western Union Telegraph Company, 166 U. S. 388, 17 Sup. Ct. 608, 41 L. Ed. 1044; City of Key West v. Baer, 66 Fed. 440,13 C. C. A. 572; Consolidated Coal Company v. Ice Company, 106 Fed. 798, 45 C. C. A. 638. The facts of the case are not, therefore, before us, and the only question open on the record is the one of damages.

According to the declaration, the plaintiff sues for certain unpaid coal royalties claimed to be due on an agreement of mine lease entered into with the defendant in January, 1891. A copy of the lease is attached, and shows that it was for the term of 10 years, with the option of renewing for a like term, and gave the defendant company the right to mine and dispose of all the coal in a certain vein underlying a tract of land in Cambria county, Pa., the defendant covenanting on its part to pay a royalty of 10 cents a ton on all coal mined and shipped, and, except under certain conditions, to mine after the first year not less than 75,000 tons per annum, and as much more as practicable, paying royalty on the quantity named, whether mined or not; the royalty paid on coal not mined in any year to be credited on the excess, if any, above the minimum mined subsequently. It was further averred that the defendant took possession under the lease, opened a mine in the vein, and began the mining and shipping of coal therefrom during the first year; but that during the next and subsequent years it neither mined nor paid for the minimum, nor any part of it. The plaintiff thereupon claimed the yearly royalty of $7,500 for nine years covering .the period from January, 1892, to January; 1901, inclusive, amounting to $67,500, a credit of $100 a year for seven years being allowed as the rent of a house and stable erected on the land. The trial judge sustained this claim in full, including interest, and gave judgment for the plaintiff for $86,586.34. It is contended by the defendant that this was not warranted; that the action being for the breach of an executory contract, and the plaintiff having his coal still in place untouched, is not entitled to the royalty upon it as though it had been mined, but that a deduction must be made on account of it, and interest simply allowed on the annual installments which he would have received if mining had been carried on, amounting to some $17,000. The action is assumpsit, which, according to the state practice, covers also debt and covenant. It was treated by the court below as in the nature of the latter, and the stipulated annual installments of royalty as liquidated damages. It might equally stand as an action of debt, the obligation to pay being absolute, and the term ended; but, whichever way it be taken, the result is the same, the defendant being bound to pay in accordance with the agreement.

The absolute character of the obligation in such cases is well shown by the authorities. In Bamford v. Lehigh Zinc Company (C. C.) 33 Fed. 677, affirmed in 150 U. S. 665, 14 Sup. Ct. 219, 37 L. Ed. 1215, the defendant took a lease for 10 years of an abandoned zinc mine and concentration works on a specified royalty per ton, agreeing to pay in any event an annual minimum of $1,000. On taking possession and pumping out the water, it was found that the mine was practically destitute of ore, and payment was refused in consequence. On suit being brought for three years’ rent, the defendant set up a failure of consideration, but judgment was given against it. “The motive for the contract,” says Shipman, J., “was the hope of benefit which might arise to the defendant from the venture. The consideration for the undertaking to pay at least the sum of one thousand dollars annually was the use of a mine property and works of large cost and of doubtful value, but which might become of profit, and it received what it contracted for.” In Johnston v. Cowan, 59 Pa. 275, the plaintiff granted to the defendants the right to mine fire clay, for which they were to pay him 12 cents a ton, and mine 1,250 tons annually, $150 to be paid every six months, whether mining to that extent had been done or not. To a suit for four semiannual installments the defendants set up that they had never entered under the lease; but it was held that the right to mine was a privilege for which they were bound to pay whether they had availed themselves of it or not. “It is highly improper,” says Thompson, C. J., “to call the fixed sums to be paid, in the event of the minimum of coal not being taken, liquidated damages. It is the alternative price to be paid in an event which it was foreseen might happen; not as damages, but in payment for the privilege.” In Kemble Coal & Iron Company v. Scott, 90 Pa. 332, the defendants took an ore lease, and bound themselves to pay $10,000 every three years after the first, whether ore to that extent was mined or not. Disappointed in their expectations in regard to the land, and after spending considerable money to reach the ore upon it, they ceased operations, and endeavored to give up the lease; but it was held that they were responsible for payment of the stipulated minimum. In Timlin v. Brown, 158 Pa. 606, 28 Atl. 236, there was a lease of coal for 10 years on a royalty of half a cent a bushel, 10,000 bushels to be mined or paid for annually. After seven years the coal seam got so thin that the lessees stopped mining, and, the lessors having brought suit at the end of the term for the three years unpaid, it was held that they were entitled to recover regardless of the question of the exhaustion of the property. This decision is somewhat qualified in Boyer v. Fulmer, 176 Pa. 282, 35 Atl. 235, but it is the doctrine of the English cases (Marquis of Bute v. Thompson, 13 Mees. & Wellsby, 487; Jervis v. Thompkinson, 1 Hurls. & Norm. 195; Phillips v. Jones, 9 Simons, 519; Jeffreys v. Fairs, L. R. 4 Chan. Div. 448; Clifford v. Watts, L. R. 5 C. P. 577), and has the weight of authority elsewhere (Wharton v. Stoutenburgh, 46 N. J. Law, 151; Gilmore v. Ontario Iron Company, 86 N. Y. 455; Tod v. Stambaugh, 37 Ohio St. 469; McDowell v. Hendrix, 67 Ind. 513; Central Appalachian Company v. Buchanan, 73 Fed. 1006, 20 C. C. A. 33). It is also forcibly reasserted in the subsequent case of Lehigh & Wilkes-Barre Coal Company v. Wright, 177 Pa. 387, 35 Atl. 919, a bill to restrain the forfeiture of a coal lease, threatened on account of the nonpayment of royalties. By the terms of the lease an annual minimum of $4,000 was to be paid whether a corresponding quantity of coal, at the rate per ton agreed upon, was mined or not. The lessees paid this for a number of years in advance of their mining, until, as it was shown, they had paid for more coal than was left in the land, on account of which they claimed the right to stop; but it was held that they must continue to pay, regardless of this, if they proposed to retain possession. As this was a bill in which equitable considerations, if any, are entitled to prevail, it is especially significant that the lessees were not permitted to escape from the strict terms of their bargain.

If, then, according to these cases, the defendant company was bound (as it undoubtedly was) to pay for the stipulated minimum quantity, year by year, as it accrued during the life of the lease (subject only to the contingencies with regard to faults and strikes there provided for), it is difficult to see why it is not answérable to the same extent now that the term is closed. Had suit been brought at the end of each year, there can be no question that the plaintiff would have been entitled to recover the $7,500 which the company agreed to pay, and, repeating this year by year, he would have obtained in the aggregate every dollar that he now claims. How, then, can he be put off with less simply because he has waited and consolidated his demand so as to cover the whole period?

The suggestion that the plaintiff still has his coal is well disposed of in the case of Gilmore v. Ontario Iron Company, 86 N. Y. 455, which was a suit, the same as here, for unmined royalty. “It would be no answer to a demand for rent of agricultural land,” says Folger, C. J., “that the tenant had let the land lie idle, and that all the elements of productiveness still lay in the soil unused; that those were what thé tenant had bargained for, and they were yet there for the landlord. They are of value to the landlord only when used. He uses them, in effect, from year to year, through the tenant, and gets his profit from the use in the rent he receives. So here the ore gives no return until dug out and marketed. The plaintiff’s method of doing this was to let the privilege of mining to the defendant, and reserving a portion of the profit in the royalty stipulated for. It may have been — it probably was — the most profitable method for him to-adopt to make gain from his ore. Though the ore may remain, and not be lost to him, time has been lost to him in the process of having it turned into money. He has lost the enjoyment of the fruits of his property. * * * He has failed to realize the profitable results he looked for, and had a right to look for, from the bargain he made.” The same point was raised and discussed in Powell v. Burroughs, 54 Pa. 329, where the defense set up- was that the unmined coal was worth more per ton at that time than what the defendant had agreed to pay for it; but he was nevertheless held liable. “It can hardly be said,” says Thompson, J., “that this plea was a ground of defense at law for a breach of the covenant sued on. It does not aver performance in any shape, nor does it show that it was contrary to law that it should be performed. If it be a plea at all, it is an equitable plea or defense. * * * If sanctioned, it would be a panacea to heal every broken covenant where performance was stipulated for.”

These observations apply whether, as stated above, the case be regarded as counting in debt, or in covenant as treated in the court below. The only difference is that in the latter the minimum royalties agreed to be paid are to be taken as liquidated damages; and, notwithstanding what is said in Johnston v. Cowan, supra, there is abundant authority to sustain this view. Powell v. Burroughs, 54 Pa. 329; Wolf Creek Coal Company v. Schultz, 71 Pa. 180; Consolidated Coal Company v. Peers, 166 Ill. 361, 46 N. E. 1105, 38 L. R. A. 624; Coal Creek Mining Company v. Tennessee Coal Company, 106 Tennessee, 651, 62 S. W. 162. The defendant relies on Lyon v. Miller, 24 Pa. 392, and Kille v. Iron Works, 141 Pa. 440, 21 Atl. 666; but in neither of these was there any provision for the payment of a definite annual quantity whether mined or not, a most material distinction. Ridgely v. Conewago Iron Company (C. C.) 53 Fed. 988. In Kille v. Iron Works, moreover, judgment was given for the defendant on the merits, the court holding that the plaintiff was not entitled to recover, and the expression of opinion by Thayer, P. J., on the question of damages was, therefore, entirely obiter.

Our conclusion, therefore, is that the plaintiff is entitled to all that has been awarded him. It certainly would be most disturbing to the obligation of mine leases if we should hold, as we are urged to do, that the defendant company, after covenanting to pay a definite minimum royalty so unqualifiedly as it did, can only be required to settle for the difference after allowing for and deducting the uncertain value of the coal in place which it undertook to mine, and might have, but did not. Nor is this helped out by conceding interest on deferred payments, which, at the same time, in effect, it claims were not really due. If the fact that the plaintiff still has his coal suggests an equity — of which we are by no means convinced — it is sufficient to say that, this being an action at law, it cannot be worked out here. Finding, therefore, no error in the record, the judgment is affirmed.