59 Fla. 285 | Fla. | 1910
On September 27, 1901, Walter Ray and Daniel A. Clark, partners as Walter Eay & Company, referred to as lessors, entered into a contract with Herbert A. Ford and Edward Hiller, partners as Ford & Hiller, referred to as lessees, wherein it was agreed “that for and in consideration of the covenants and agreements herein contained, and the agreement to pay rent or royalties hereinafter referred to, the said lessors do hereby grant and lease unto the lessees all those certain” described lands containing 11,900 acres more or less “for the purposes only of digging, mining and preparing for shipment and shipping phosphate rock, hereinafter described, as to quantity and quality contained in said lands, and the carrying on of the business of mining said phosphate rock, reserving the timber and turpentine privileges and the full right to use the said lands for said purposes, except as hereinafter stated. The term of this lease is for a period of ten years from date hereof,” with stated provisions for a renewal. * * The lessees hereby agree to pay to the lessors as royalty or rent for the exclusive privilege of mining said lands, which exclusive privilege is hereby granted, the sum of 75 cents per ton * * :f for each ton of phosphate rock they may mine on said lands during the term of this lease, of the quality hereinafter designated;, and they agree specially that the minimum amount of said rock to be mined each year shall not be less than six thousand six hundred and sixty-six (6666) tons for each year of the lease period, or to pay the lessors or their assigns the sum of five thousand dollars per year in installments as hereinafter set forth, whether the mining is carried on or not. And it is agreed in the event the lessees shall mine a less quantity than the minimum of 6666 tons during any year they may within the next succeeding year make up the deficit of the preceding year. The lessees having paid on the de
The lessees, Ford & Hiller, witli the consent of the lessors, assigned the contract to the Dutton Phosphate Company, a copartnership composed of H. F. Dutton, C. W. Chase, W. G. Robinson and J. G. Nichols, and this partnership with the consent of the lessors assigned the contract to the Dutton Phosphate Company, a coi’poration. On August 3rd, 1907, Walter Ray & Company filed a declaration against the Dutton Phosphate Company, a corporation, and afterwards joined as a defendant Edward Hiller as surviving partner of the firm of Ford & Hiller, Ford having died, for the recovery of $5,000.00 for each of two years from September 27th, 1904, as
The declaration sets out the contract and alleges that the Dutton Phosphate Company, a corporation, entered upon said lands under the contract assigned to it about May 1st, 1903, “and accepted said lease, and thereby bound itself to perform the covenants thereof, in the manner and to the same extent as the said Ford & Hiller were bound to perform the same, and became liable to the plaintiffs for the payment of all sums of money due or to become due under said contract.”
Where there is an express contract to pay rent or royalties in return for the use of lands leased, and the lease is assigned so as to create a privity of estate between the lessor and the assignee, the latter is liable because of the privity of estate for rents or royalties accruing after the assignment. The lessee is liable on his express contract, and may be joined with the assignee as defendants in an appropriate action to recover rents or royalties for which both are liable. See 24 Cyc., 1177, et seq.
Assuming for the purposes of this case that the litigation is between the proper parties the meaning and effect of the contract will be considered so as to determine the propriety of rulings upon the pleas. See Tiffany on Landlord and Tenant, 881; Sutliff v. Atwood, 15 Ohio St. 186, text 194.
Upon a consideration of all the terms of the contract and its subject matter and object, the manifest purpose of the contract was as stated therein to give “the exclusive privilege” “for the purposes only of digging, mining and preparing for shipment and shipping phosphate rock,” of the specified “quantity and quality contained in said lands,” in return for which a royalty of seventy-five
The subject matter of the contract as expressed therein was phosphate rock of the specified “quantity and quality contained in said lands,” the existence of the rock being thereby assumed. Upon this assumption $15,000.00, of the amount to become due in return for the stated rights granted in the lands, was paid in advance to be reimbursed “before any other royalty or rent shall become due and payable.”
There is no covenant by the lessors that the required rock actually existed in the lands, but the contract clearly contemplated its existence and a search by the lessees to ascertain the location and extent of the specified deposits assumed to be in the lands. There is no covenant by the lessees to actually find the designated rock in the lands, but by necessary implication and intendment the obligation devolved upon the lessees to make due and reasonable effort to find upon or in the land, rock of the quantity and quality specified. If found, the lessees specially agreed that “the minimum amount of said rock to be mined each year shall not be less than six thousand six hundred and sixtv-six (6666) tons for each year of the lease period, or to pay the lessors or their assigns the sum of five thousand dollars per year * * * , whether the mining is carried on or not.” If upon due and reasonable effort being made the rock is not found, the purpose of the contract fails in whole or in part according as rock of the specified quantity and quality is not found. See Brick Co. v. Pond, 38 Ohio St. 65; Venedocia Oil & Gas Co. v. Robinson, 71 Ohio St. 302, 73 N. E. Rep. 222, 2 Ann. Cas. 444 and notes.
What is due and reasonable effort depends upon the
The purpose of the contract being the mining of phosphate rock of a specified character, a failure upon proper endeavor to find the rock as required would be a good defense to an action for royalties.
The alternative obligation to pay “five thousand dollars per year * * * * whether the mining is carried on or not,” is based upon the assumption that rock of the specified “quantity and quality (was) contained in said lands.” The contingency sought to be provided against was the failure to mine, not the failure to find the rock to mine, for the contract assumed and contemplated the existence of the rock as its subject matter.
There was no maximum limit to the right as to the amount of rock that could be mined if found, and the minimum of 6666 tons per year was fixed to stimulate the mining operations so as to yield the stated average minimum in royalties. The only possession of the lands accorded to the lessees under the contract was the right to mine phosphate rock of a specified character, and of ingress and egress and other rights incidental to the mining and marketing enterprise. The contract does not require the lessors to point out or to discover to the lessees the rock to be mined, nor does it require the lessees to notify the lessors of the failure to find rock.
While the necessarily implied duty of the lessees to duly search for rock on the land continued till all the lands were properly examined, the purpose of the contract being the mining of rock, not merely the search for rock, royalties are to be paid only upon rock mined or that should have been mined because it was found or could have been found by due search. The minimum annual payments provided for depended upon the exist
If some rock was mined, but after due and reasonable search no more rock is found than is required to reimburse in royalties the $15,000.00, advanced by the lessees, the lessors cannot recover, for the contract clearly contemplated the existence of sufficient rock the royalties upon which would reimburse the lessees for the $15,000.00 advanced. The contract also assumed and contemplated the existence of rock to be mined after the prepaid royalties had been reimbursed, and that at least 6666 tons would be found and mined each year during the contract period.
The contract provided for the re-entry of the lessors upon failure to make the agreed payment, and this was the express remedy of the lessors against laches of the lessees in making payment whether caused by failure to properly search for the required rock or otherwise.
This court sustained as a good defense a plea that there was not upon the land phosphate rock of the quality and in the quantities and locations mentioned in the contract and also two pleas that there was not upon the lands rock of the quality and in the quantities and locations mentioned in the contract and that defendants notified the plaintiffs thereof and of the surrender of the contract, and also a plea of payment. But the court sustained a demurrer to a plea that the defendants “diligently looked and prospected and examined for the phosphate rock of the quality and in the quantities and locations in said lease or contract and in said counts mentioned, and did
The court also sustained a demurrer to a plea that the lessees having paid $15,000.00 in advance to be reimbursed from royalties upon rock mined there was not sufficient rock of the quality and in the quantities and locations mentioned in the contract to reimburse defendants for the advance payment. If there was not on the lands sufficient rock.of the specified character to reimburse in royalties the advance payment, the defendants are not liable for the claim here asserted and the demurrer to the plea should have been overruled.
This discussion indicates the proper issues for another trial.
Under Section 1505 of the General Statutes the plaintiff Ray was incompetent to testify “in regard to any transaction or communication between such witness” and a member of the partnership of which the defendant is the “assignee” in this action against such assignee.
The judgment is reversed and the cause remanded.
Petition for rehearing in this case denied.