206 Ky. 638 | Ky. Ct. App. | 1925
Affirming in part and reversing in part.
So far as this appeal is concerned, the controversy between the parties hereto turns on the interpretation to be given certain clauses of a coal lease made by the appellee to one Stone, and which by successive assignments has come into the ownership of the appellant.
The first cause of controversy involves the tenth clause of that lease, which reads:
“The lessee agrees to enter upon the premises hereby leased, immediately, and begin in good faith the work of development and prosecute same with reasonable diligence, and it is agreed that no minimum or fixed royalty will be required until after one year from this date, except for the actual tonnage mined and shipped; but said lessee agrees that he will mine from the leased premises such an amount of coal during each and every year of this lease, beginning with January 1st, 1919, as will amount to and make the royalty due • at least twelve hundred dollars ($1,200.00) or one hundred dollars ($100.00) per month for each and every month during the continuance of this lease, that is to say, that in event said lessee shall not have mined from the leased premises such amount of coal as will make the rent or royalty due each and every year during the continuance of this lease, that is, after said January 1, 1919, to the sum of twelve hundred dollars ($1,200.00), then the said lessee shall pay to the said lessors within the thirty days after the first of the succeeding year as liquidated rent or royalty for the said leased premises during the preceding year, an amount as in addition to the rent or royalty paid will make same for the said years amount to the said sum of twelve hundred dollars, as hereinbefore provided, said liquidated rent or royalty to be and become due and payable at the expiration of the thirty days aforesaid. Provided, however, that if at any time said lessee be prevented from carrying on his said mining operations on said premises by reason of any epidemic, labor trouble, riot, strike, insurrection, or war, car shortages, the act of God, or the failure of workable coal, 36 inches to be the minimum, or the occurrence of faults or other obstruc*641 tions in the mine, without fault or negligence of said lessee, then the minimum rent or royalty with which said lessee is chargeable for the year including such period shall be reduced in proportion to the amount of time lost by reason of such interruptions, provided further, that the failure of the lessors at any time to demand and collect the minimum royalty due at any time on account of coal actually mined and shipped, and giving receipt therefor shall not operate or be construed as a waiver of their right to subsequently insist upon the payment of any minimum royalty then due or subsequently accruing under the provisions of this lease.”
The question is whether so long as appellant remains on the lease it is absolutely obligated to pay the minimum royalty of $1,200.00 a year beginning January 1, 1919, or may it be excused from such payment on account of “the failure of workáble coal, 36 inches to be the minimum, or the occurrence of faults or other obstructions in the mine, without fault or negligence of said lessee,” to the extent of time lost by it by reason of such failure or. occurrence of such faults or obstructions. The cardinal rule governing courts in the interpretation of contracts is to ascertain the intention of the parties thereto, which intention is to be gathered from the words employed in the contract and not from any unexpressed mental intention which the parties may have entertained but which they did not express. Of course, in arriving at this-intention, the entire contract must be looked into. Nelson Creek Coal Co. v. West Point Brick & Lumber Co., 151 Ky. 835, 152 S. W. 929; Gabbard v. Sheffield, 179 Ky. 442, 200 S. W. 940. Applying this rule to the lease in question, we find that the only clauses of that lease which help us in arriving at the intention of the parties as to the matter in dispute is the tenth clause itself, and probably the eleventh. The lower court in construing this tenth clause held, first, that the obligation to pay the minimum royalty of $100.00 a month, beginning January 1, 1919, was absolute, and that, so long as the lessee retained possession of the lease, it was obligated to pay that minimum royalty, even though there was a failure of workable coal of the minimum thickness provided for or the occurrence of faults or other obstructions in the mine without fault or negligence' of the lessee. We do not so read the contract. It seems to us that the lease
“It is further hereby agreed between the parties hereto that, if at any time the White Star Coal Company shall be prevented from carrying out any and all of the covenants of the leases under which it is operating, by reason of epidemics, riots, insurrections, strikes, wars, car shortages or by failure of workable supply of coal on premises of first parties and second party, or occurrences of faults or other obstructions in mines, or by reason of any other outside conditions over which the White Star Coal Company has no control, and which is without fault or negligence on the part of said'White Star Coal Company, then the minimum royalty of $750.00, as above stated, shall be reduced in proportion to the time lost by said interruptions by said above named causes.”
This clause is strikingly similar, if not exactly so, to the tenth clause of the lease before us. This court in the Siler case held that the lessee under the quoted clause of his lease was not obliged to pay the specified minimum
This brings us to the question whether or not the evidence showed the existence of any of such contingencies. In the fall of 1917, W. S. H. Armistead, who had been in the real estate business in Nashville, Tennessee, was seeking an opening in some other line. He knew nothing of the coal business. He bought the lease here in question from Stone, its owner, and soon thereafter transferred it to,the appellant, a corporation which he organized and of which he was the principal stockholder. He came in person to the location of the lease and went to live with or on the property of the appellee, in whom he seems to have had absolute trust and confidence. On appellee’s representations that it was not necessary to procure an engineer, and on appellee’s advice and suggestion that he open the coal mine at a place where appellee or some prior lessee of his had done some little work previous thereto, Armistead began work on this lease in accordance with such advice and opened a seam known as No. 4 coal. From that time until the latter part of March, 1921, the evidence shows without any doubt that appellant was earnestly striving to find a workable vein of coal that could be mined at a profit. During that period appellant invested between $10,000.00 and $15,-000.00 in the opening of various seams, in driving entries and in development work, a great deal of which was done on the advice and under the supervision of appellee. However, during all of this time, although some little coal was gotten out at great expense, no real workable vein or seam was discovered. The maximum thickness of any seam found was between 29 and 30 inches and the coal was dirty. Several entries had to be abandoned and other entries were opened. Finally about the last of March, 1921, the appellant discovered a seam of coal known as No. 6, which it mined up to and including December, 1921, which is as far in point of time as this lawsuit goes. This seam which was discovered is thus described in the evi
The next cause of controversy arises over the cutting of timber on the leased premises both by appellant and appellee. The lower court gave judgment against appellant on this branch of the case in the sum of $84.00. To the extent of $80.00 appellant admits this to be correct, but states that it is unable to find why the court gave judgment for $84.00. No doubt the court did this on the testimony of appellant’s witness, C. E. Howard, who first testified that appellant had cut without right eleven trees measuring 4,038 feet, but later admitted that there might also be two other trees which were cut measuring 350 feet. If one of these two be added to the amount admittedly cut without right and the agreed price of $2.00 per hundred applied, the figure of $84.00 as found by the court is practically arrived at. Appellant insists, however, that this sum should be credited by $30.00 for trees appellee cut without right. Appellee, however, had a right to clear and cultivate certain parts of the leased premises. In the absence of the many maps referred to in the evidence and which were not sent up to this court, we are unable to locate exactly where these trees appellee
The last cause of controversy is concerning the extent of the lien which the lower court gave appellee to secure him in the payment of the moneys due him from appellant. This question is important, as appellant has gone into 'the hands of a receiver since the institution of this action. The 12th-clause of the lease reads as follows :
“And it is distinctly understood and provided by and between the parties hereto that the lien of the lessors upon the property of the lessee on the premises hereby leased shall extend to all property and effects that come on said premises, or that are used by or belong to the lessee in running the business under this lease, to secure said lessors in the payment of the rents and royalties aforesaid, and to save harmless said lessors from any and all damage and loss that may accrue to them, or which they may suffer by reason of the failure of the lessee to keep any one of the above agreements and conditions of this lease, and no property shall be removed from the premises by him after such claim has accrued until same is settled; and at the conclusion of this lease the miners’ houses and structures so erected on said leased premises by lessee shall attach to and become a part of the freehold, and title thereto shall pass to the lessors.”
It appears that after appellant had started developing the leased premises it bought some adjacent real estate on which it has erected certain houses and placed certain property used in connection with the development of the leased premises: The lower court gave appellee a lien, not only on all of the property of appellant located on the leased premises, which was undoubtedly correct, but also gave him a lien on all the adjacent real estate so bought by appellant and on all of appellant’s property located thereon and used in connection with the development of the leased premises. The 12th clause of the lease plainly stated, first, that the lien provided for shall extend to all property and effects that come on the premises covered by the lease. This necessarily means
It is therefore the order of this court that the judgment of the lower court be reversed with instructions to render a. judgment in accordance with this opinion.
The record in this case is very badly gotten up. Subdivision 3 of rule 5 of this court requires depositions to be copied in the order in which they were taken. The depositions in this case are copied in flagrant violation of this rule, rebuttal proof often appearing before proof which it rebuts, making it very confusing for this court to read. This court said in the case of Taylor Coal Co. v. Miller, 168 Ky. 719, at page 724, 182 S. W. 920, that all records for this court should be typewritten with a black record ribbon not worn or faded and on good weight paper, so that the matter will be easy to read. This record is largely typewritten on very thin paper, such as is used in making carbon copies, and it is very trying on the eyes to read it. Therefore, the record in this case is condemned, and to the extent of $50.00 the clerk will not recover his costs for making it.