Hodgdon v. Lehigh & Wilkes-Barre Coal Co.
Hodgdon v. Lehigh & Wilkes-Barre Coal Co.
Opinion of the Court
Opinion by
In this case the plaintiffs filed a bill in equity, to secure an accounting for royalties, surface rentals, and interest upon each, which they claimed to be due, under the terms of a coal lease. The questions involved, turn upon the construction of certain provisions of the lease. On August 13, 1870, the lease was entered into, for the coal under 330 acres of land in Wilkes-Barre Township, Luzerne County, belonging to the lessors, and provision was made that the lessee should pay an annual rental of $20,000, in quarterly installments of $5,000 each, in consideration of which, the lessee should have the right to mine and remove from the leased premises 80,000 tons of coal. It was then further provided: “And if the said party of the second part (lessee) shall pay said twenty thousand dollars rent in any one year, as is hereinbefore provided, and during that year less than eighty thousand tons of coal, of the pounds aforesaid, be mined and removed, the said party of the second part may, in any subsequent year within six (6) years thereafter, during the continuance of this lease, mine and remove sufficient coal to make up the deficiency. And the said Wilkes-Barre Coal and Iron Company, for herself, her successors and assigns, further agrees to pay at time of
The first question to be determined under the above clauses of the lease is stated by appellant as follows: “Under the lease can lessee apply all coal mined in any year to making up deficiencies in any prior year within six (6) years, or can lessee only so apply excess above 80,000 tons mined in any year?”
After the bill and answer were filed, the case was by agreement, sent to a referee. In his report, the referee held that all coal mined in any year might be first applied to making up previous deficiencies; but the court below took the opposite view, and held that only the excess over 80,000 tons mined could be so applied.
The second question to be determined is thus stated by appellant. “Is the interest on royalties due for coal mined in excess of the 80,000 tons (and not applied to making up past deficiencies) to be computed from the end of each quarter, or from the end of the year?” The court below again reversing the referee, computed the interest from the end of each quarter.
The third question to be determined arises under the following clause of the lease. “It is further agreed and covenanted that the said party of the second part, her successors and assigns, shall pay an annual rental of Ten (10) Dollars per acre for all surface occupied and used in the mining operations on said premises, payable on the first day of January in each year during the continuance of this lease.” The lease also contained, immediately after the description of the premises leased, the following clause: “Together with so much of the surface of the said lands around and adjacent to the present shaft and breaker upon the premises as may be necessary for the deposit of dirt and the conduct of their mining operations by the party of the second part, not how
The principal question is the one first above stated. Can the lessee, in case of a deficiency in the amount of coal mined during any one year, make up that deficiency immediately upon the close of the year, or must it first proceed to mine and remove 80,000 tons of coal to which the payment of the second year’s rental will entitle it, before it can apply any coal mined in that year to a prior deficiency. We know of no case in which a similar provision in a mining lease has been construed. In Lehigh & Wilkes-Barre Coal Co. v. Wright, 177 Pa. 387; Lehigh Valley Coal Co. v. Everhart, 206 Pa. 118; Penna. Coal & Coke Co. v. Whiterow, 215 Pa. 327, and Woodruff v. Gunton, 222 Pa. 376, cited by appellees, there was no limitation of the right to make up deficiencies to six years, or any other period. The leases in the first three cases allowed deficiencies to be made up at any time before the expiration of the terms of the leases, and therefore created an entirely different situation. In the
In the case now before us, the court below held that the 80,000 tons must first be mined in any year, and that only the excess of coal mined over that amount, could be applied towards making up the deficiency. With this construction we agree. The lease clearly recognizes an output of 80,000 tons as the offset of the amount of the rental to be paid in each current year. If that precise amount had been mined during each year, the account would have been evenly balanced. If more than that amount was mined, in the year, the excess was 'to be paid for, at twenty-five cents per ton. If less than that amount was mined, a deficiency was created, which could be made up within six years. Under the view adopted by the court below, the whole tonnage mined, would cost the lessee twenty-five cents per ton, provided the lessee exercised in a reasonable way, the privilege it had, of making up any deficiency, within six years after the end of the year in which it occurred. If it neglected to do so, the fault was entirely its own, and it cannot reasonably be heard to complain. If the construction of the lease, for which counsel for appellant contend, should be adopted, it would have the effect of practically nullifying the six years limitation for which the parties contracted. For instance if the lessees should mine only 60,000 tons of coal in one year, and 80,000 tons in each of the next ten years, then under appellant’s construe
We agree also with the view of the court below, that interest should be computed on the royalties for excess coal mined, from the end of each quarter, rather than from the end of the year. The lease provided that such royalties should be paid “at the time of payment of the quarterly installments above named,” which were “payable on the first day of January, April, July and October in each year.” Indebtedness for the royalties therefore became due and payable at the end of the quarter, and as a matter of course the interest on the debt began to run from that time.
The lessee had the right to occupy the surface of the ground adjacent to the shaft and breaker, not exceeding sixteen acres. As a matter of fact it occupied twenty-three and one-half acres. The lease sets forth: “It is further agreed and covenanted that the said party of the second part, her successors and assigns, shall pay an annual rental of Ten (10) Dollars per acre for all surface occupied and used in the mining operations on said
It is suggested in the argument of counsel for appellant that no demand was made for rental for surface land, during the operation of the lease, prior to the filing of the bill, and that this amounted to a construction of the contract in this respect, by the parties themselves, which should not be disturbed by the court. But as to this, the trial judge well says: “On this subject, there is rot the slightest ambiguity in the written, contract, which is susceptible of only one interpretation, and there
Of the seventeen assignments of error, some are to the interlocutory decree, and some to the final decree, and the remainder are to the action of the court in sustaining plaintiffs exceptions to the report of the referee. They raise however, only the three questions which we have considered.
The assignments are all overruled, the decree of court below is affirmed, and this appeal is dismissed at the cost of appellant.
Reference
- Full Case Name
- Hodgdon v. Lehigh & Wilkes-Barre Coal Company
- Status
- Published
- Syllabus
- Mines and mining — Goal lease — Construction—Deficiencies in yearly output — Royalties—Rental for surface occupied — Statute of limitations. 1. Where a coal lease provides for the payment of a flat rental-for a stipulated number of-tons of coal to be mined in any one year, and for making up deficiencies in the number of tons mined in any one year, within six years after such deficiencies occur a construction of the terms of the lease which would ignore the limitation of six years, during which such deficiencies may be made up, is not to be adopted if the language used can fairly be given another construction. 2. A coal lease which grants the right to mine 80,000 tons of coal annually at a rental of $20,000, payable quarterly and which provides that “If......lessee......shall pay said.....-.rent in any one year......and during that year less than 80,000 tons of coal be mined and removed, the said (lessee) may in any subsequent year within six years thereafter, during the continuance of this lease, mine and remove sufficient coal to make up the deficiency” discloses the intention of the parties that in each year subsequent to a year in which less than 80,000 tons have been mined, 80,000 tons must first be mined, before any excess of tons mined during such subsequent year can be applied to making up the deficiencies. 3. A provision in such lease that the lessee will “pay at the time of payment of the quarterly installments at the rate of twenty-five cents per ton for all coal mined during the three months preceding the time fixed for such payment over and above 20,000 tons” requires that the interest on royalties due for coal mined in excess of the 20,000 tons and not applied to making up past deficiencies be computed from the end of each quarter when such royalties fell due. 4. Where such lease provided that the lessee should “pay an annual rental of $10.00 per acre for all surface occupied and used in the mining operation on the said premises” and after describing the demised premises, granted “so much of the surface of the said lands around and adjacent to the present shaft and breaker upon the premises as may be necessary for the deposit of dirt and the conduct of their mining operations,......not, however, exceeding sixteen acres of such surface,” the fact that the lessor for many years acquiesced in the occupation of twenty-three and one-half acres of the surface by the lessee without demanding any rental therefor was not a construction of the lease by the parties which would prevent the lessor from successfully demanding rental for the sixteen acres referred to in the lease, and for use and occupation of the seven and one-half acres occupied in addition to the sixteen acres demised, a sum per acre equal to the per acre rental stipulated for the sixteen acres. 5. Where the successors in title of the lessor of such lease brought suit in equity for an accounting for royalties due on coal which had been mined in excess of 80,000 tons per annum and which was not needed to make up deficiencies in the tonnage mined in previous years, for interest on such royalties, and for the rentals of the surface occupied, the court properly allowed recovery for such royalties with interest thereon computed from the quarterly periods when such royalties fell due, and rentals for the sixteen acres occupied and made no error in allowing recovery for the use and occupation of seven and one-half acres on the surface during a period more than six years before the suit was brought, the statute of limitations not haying been pleaded as a defense.