207 Ky. 317 | Ky. Ct. App. | 1925
Reversing.
The appellees herein in April, 1922, leased to the appellants a gas well in Metcalfe county under a lease, the provisions of which pertinent to this appeal are as follows:
“That said first parties (appellees) have this day agreed to sell and do sell to the second party (appellants), his heirs and assigns, gas that may flow from said well at the following amount, to-wit: for the sum of $150.00 per month, the minimum amount, but if there should be used during any month more than the sum of 7,500,000 cubic feet of gas, then in that event the said second party, his heirs or assigns, agree to pay the first parties the sum of two cents per 1,000 cubic feet, to be measured by the meter at ten ounces above atmosphere pressure. In no event is the second party to pay the first parties less than $150.00 for any one month.
“It is further agreed that the payment for said gas is to begin within four months from the executing of this contract, and is to continue for six months after the completion of a carbon plant, that the second party or his assigns will erect on a tract of land that the first parties have this day leased to the second party for the said purpose, and the said second party further agrees to purchase and pay the first party for gas from said well thereafter at the same amount per month, provided said well should produce as much as the 7,500,000 cubic feet per month, and if said well does not produce said amount' to pay at the rate of two cents per 1,000 cubic feet for same so long as the said second party, or his heirs and assigns should operate ©aid carbon plant as contemplated in the contract of lease this day made between the parties hereto.”
In accordance with this lease, the appellants erected a carbon plant on appellees’ land and began the operation of their carbon plant. It is agreed that the effective date of the beginning of the rent was August 13, 1922. At the time the parties were negotiating for the above lease, the evidence shows that the gas coming from the well in question was under a very high pressure, but at the time the carbon plant began its operations the pres
Appellants next insist that their obligation to pay the minimum sum of $150.00 a month ceased upon the exhaustion of the gas, and this is the real storm center of this case. In Auxier Coal Co. v. Big Sandy & Millers Creek Coal Co., 194 Ky. 14, 238 S. W. 189, the question was presented of the obligation of a lessee to pay minimum royalties under a coal lease. In that case the court said:
“It was agreed in the lease of June 15, 1911, that the lessee should have the exclusive right and privilege of mining all seams of coal in or under the leased premises, and, further, that the lease was made for the sole and 'only purpose of mining and shipping coal and manufacturing and conducting a general merchandise business in connection therewith. ’ While the term was for 25- years and the lessee agreed to pay stipulated minimum royalties during the term, the intent and purpose of the lease must be read into its provisions, and it having become impossible through no fault of appellees to effectuate ■that purpose, it necessarily results that the lease is terminated.” The- exhaustion of the minable coal in the land must, in our view of the law, be held to have the effect of terminating the contract.
In Boyer v. Fulmer, 176 Pa. St. 282, land was leased for a term of 15 years for the purpose of mining for iron ore. The lease said: “In no year shall the amount to be paid by the first party be less than $400.00.” The court, in denying the right of the lessor to collect the $400.00 each year from the time the ore became exhausted and until the lease expired, said: “This 'obligation proceeded upon the assumption that the ore was there, and continued to be there, in sufficient quantity to enable the lessee to perform his contract in this respect. If the ore was not there at all, or became exhausted, . . . the lessee was not bound to pay for it.” In a Similar case concerning a clay pit, the court, in Adams v. Washington Brick Company, 38 Wash. 243, said: “The possibilities based upon the assumed extensive existence of clay prompted these parties to enter into this agreement. The contract was drawn upon the assumption the clay would last five years. It did not. When it became exhausted, the essence of the entire transaction was gone.” In Hiller v. Ray & Co., 59 Fla. 285, where the lease provided for a minimum rental “whether mining is carried on or not” the court held that the rental need not be paid if the mineral became exhausted, paying: “The contingency sought to be provided against was the failure to mine, not the failure to find rock to mine, for the contract assumed and contemplated the existence of the rock as its subject matter. ’ ’ See also Virginia Iron, Coal & Coke Co. v. Graham, 124 Va. 692. The case of Bunyan v. Culver, 168 Ky. 45, 181 S. W. 640, does not announce a contrary doctrine. There the performance of a log contract was interfered with by a flood, an act of God, and as the parties had not
The judgment is therefore reversed with instructions to grant appellants a new trial in accordance with this opinion.
Judgment reversed.