157 S.W.2d 756 | Ark. | 1941
May 4, 1938, M. H. Guthrie and Donald McKenzie, who, prima facie, owned surface and mineral rights incident to Guthrie's island,1 executed a written lease2 whereby they ". . . gave, granted, demised and leased" for eight years the lands described. *435
Appellant company agreed to pay ten cents per ton for all coal mined and removed from the premises. If such transactions amounted to less than $500 per year, the difference ". . . between the royalty so paid and the said sum of $500," was due the lessors.
In September, 1939, appellees3 alleged that the company, as an incident to mining and transporting, had constructed, beneath the stratum of soil underlying the coal, certain tracks; and, in disregard of protests by appellees, had used the tunnel and rail facilities in removing coal mined from lands other than those in which appellees had an interest, and not adjacent to the leased property. It was also charged, in effect, that rock and debris were taken from lands alien to the contract, and that facilities intended for use in mining appellees' lands, and available for no other purpose, were being wrongfully used. A fair charge for the use, it was said, would be five cents for each ton transported. An accounting was prayed, with judgment and injunction. An amendment to the complaint4 charged that the company had violated its contract through failure to pay the tonnage charge on or before the fifteenth of each month; that it had not made complete reports of royalties; and there had been failure to develop and operate the mines in a workmanlike manner. There were other similar averments, coupled with a prayer that the contract be canceled.5
The answer was that prior to execution of the written contract appellant had mined coal from beneath the premises in question for which ten cents per ton was paid. It continued operations under the written lease. Underground workings and passageways had been constructed, and [appellant] ". . . owns all mine tracks . . . required for and used in removing . . . coal to the shaft located on other land." *436
It was asserted that the operations complained of were consented to by appellees when the contract was made. Another contention was that appellees, in "granting and demising" the lands, with the right to mine and market coal, authorized use of the tunnels, etc., ". . . and defendant avers that in granting said premises, . . . [there was a grant of] minerals under such surface to the extend of the space occupied by such minerals while in place, and that [appellant] is entitled to use any such . . . tunnels for any . . . lawful purpose, including the right to transport, through the same, minerals or other substances taken from adjoining lands."
Finally, it was declared that M. H. Guthrie had orally agreed that the mining facilities might be used for transporting tonnage from other lands; that the lease was prepared by Guthrie, mutual intentions being to have the privilege expressed; that if the right were not inferable from the writing the omission was a mutual mistake, and there should be reformation.
In an amended answer appellant denied having violated the contract. It also pleaded that appellees had received, with monthly regularity, royalty payments with knowledge of use to which the property was being put; therefore they had waived damages, if in fact any accrued.6
Testimony was taken on three occasions when the court granted hearings, with final decree and judgment December 20, 1940. With permission appellees amended their complaint (Dec. 20) and asked judgment for $500 as the amount due for 1940 under the minimum royalties clause.
The court found that the transportation facilities constructed by appellant were installed for the purpose of removing coal appurtenant to appellees' land; that operations were continued until August, 1939; that with discontinuance of work benefiting appellees, appellant *437 began mining and moving coal from under the channel of the Arkansas River without consent of appellees, and transported it as alleged. There was the further finding that a quantity of coal remained on the leased property, and that appellant had refused to mine it. The lease was terminated and judgment given on the basis of two cents for 58,090.72 tons hauled from the river bed, for which appellant had paid the state at six cents. Judgment was for $1,161.80.
Appellees cross-appealed from the court's order denying recovery of $500; also from the finding that two cents per ton was reasonable for use of the facilities.
Appellant thinks express terms of the lease "granted and demised" to it an interest in the land; therefore it is immaterial whether the instrument be termed a "conveyance," a "deed," a "contract or lease." In any view that may be taken, it is argued, legal effect of the words employed in creating the estate vests in the defendant, by operation of law, title to the coal for the term specified. From this premise appellant insists that since an actual interest in the land was conveyed, as distinguished from a naked license to mine coal, the lessee was entitled to use of underground passages it constructed, whether the purpose being served was removal of coal or debris from appellees' lands, or from lands in which appellees had no title or equity.
Words following the grant and the land description qualified appellant's interest. By express limitation, the lease was "for the purpose of mining, removing, and selling coal, . . . with the right to enter . . . upon said premises for the purpose of prospecting."
Two rights were created: (a) The right to mine and remove coal. (b) The right to prospect.
In Standard Oil Company v. Oil Well Salvage Co.,
On rehearing (opinion by Chief Justice McCULLOCH) the decision of June 18, 1926, was modified. It was held that the appellee, (salvage company) in erecting its station under the subsequent lease, had not impinged Standard's rights because there was no showing that Standard required, for conversation of its products, the location utilized by appellee. It was stated that the question of superiority of rights in the erection of a station "at that particular place" was not involved in the controversy.
The holding in Osborn v. Arkansas Territorial Oil
Gas Co.,
A headnote to Goodson v. Comet Coal Company,
In an appeal styled B. H. M. Oil Company v. Graves,
Arrington v. United Realty Co.,
While in Arkansas the two interests may be severed, we do not understand that the mere fact of leasing lands for exploration purposes ipso facto creates such severance.
Holdings of this court that a mineral lease with easement rights creates an interest in the land do not go to the extent of saying that the interest so created is synonymous with present ownership of the minerals; nor is an easement and the interest in land which attaches by virtue of a mineral lease such an estate as will give to the lessee dominion over the land for purposes other than those expressed in the writing, or necessarily implied from the nature of the undertaking.
The Graves case appears to have been an equitable determination that sale by the husband of all his interest in valuable oil deposits pertaining to "worthless" lands should not have the effect of denuding Bettie Graves of her rights. The husband, in executing a warranty deed reciting that he was a single person, acted fraudulently. The property affected was acquired by Graves, Jr., from his parents, who also conveyed by warranty deed, as *440 distinguished from a lease; hence, the case is not authority for appellant's contentions in the instant appeal.
In the Tatum case Chief Justice HART referred to the wife's interest as a right, "whatever it may be." Again, he said: "Here . . . the grantees have drilled oil and gas wells and have thereby opened up the mine. The wife has a contingent interest in it which should be protected just as the remainderman had a right to protect his interest [in Cherokee Construction Co. v. Harris,
Estimates of what a fair charge would be for use of appellees' land through which the tunnel was driven varied from half a cent to five cents per ton. From all the testimony the chancellor concluded that two cents per ton was reasonable. We cannot say this finding was contrary to a preponderance of the evidence.
We are also of the opinion that appellees, in asking that the lease be cancelled, waived their rights to payment of such part of the $500 guarantee as may not have been accounted for in royalty remittances.
There is evidence that marketable coal remains on the leased property. The chancellor apparently found that appellant considered it more profitable to conduct mining operations on the state's land where the royalty charge was six cents per ton, as contrasted with ten cents appellees were entitled to.
Affirmed, both on appeal and cross-appeal.