60 Ind. App. 675 | Ind. Ct. App. | 1916
Appellees recovered a judgment against appellants in the sum of $433.97, as an an-
The correctness of the conclusions of law involves the construction of the lease, which is the foundation of the action and which is a part of the special findings of fact. The lease was entered into on October 1, 1904, and provides among other things that it was to continue for fifteen years unless the minable coal in the land and adjoining lands should be sooner exhausted, but the annuity was not to be paid after the exhaustion of the coal. The lessee to enter upon the lands and make search for coal within ninety days from the date of the execution of the lease, and if the coal was found in sufficient quantity and quality and the roof of sufficient strength to justify mining, to sink a shaft and have the same completed for operation within six months and from thence to mine coal and pay the lessors for all coal caught on a screen of a certain size, ten cents per ton, to be payable between the fifteenth and twentieth of each month for coal mined during the preceding month. The nut and slack coal to be free of royalty except when worked on mine run basis. The lessee to pay from date to make the royalty amount to $600 annually, or in default, to pay the sum each year after the completion of a shaft or the commencing of mining operations and any sum paid
The controlling question for the decision of the court is the amount of royalty or annuity, if any, that is due the lessors by the terms of the lease and the facts found by the court. On January 16, 1905, a shaft was completed on the land lying immediately east of appellees’ land and which was in the same quarter section as that of appellees; all of which quarter section was leased at the same time, for’ the purpose of operating for and mining coal. This was the only mine opened under the lease, and from this shaft operations were commenced and 751.55 tons of coal mined on appellees’ land, for which they received a royalty of $75.15. On November 21, 1905, appellant paid appellees $600 and in October, 1906, an additional $600 as advanced royalty. The court found that on account of the thinness of the vein and the poor quality of the coal in the lands of appellees, coal could not have been mined with ordinary mining facilities during the year of 1906, and in none of the succeeding years up to and including the year 1911, and during these years there was no minable coal in appellees’ land, and the term, “minable coal”, as used in the lease had reference to coal that could be mined and
• Recurring again to the lease, it will be remembered that it provides that the annuity should not be payable after the exhaustion of coal and that sufficient coal should be mined to make the royalty amount to $600 annually, or in default to pay said sum each year after the completion of a shaft or the commencing of mining operations, and any sum paid in excess of the royalty on coal mined should be treated as advanced royalty to be deducted out of any excess over $600 in any year or years thereafter, with the proviso that the annuity was not to be payable until after the expiration of one year from the completion of the shaft or the commencement of operas tions on appellees’ land. Appellant plants itself on two legal propositions, (1) that when parties enter into an agreement in regard to a thing, which, unknown to both parties, is nonexistent at the time, .the mistake avoids the contract, as the thing agreed upon ceased to be possible before the agreement was made; there being no subject-matter, there could be no contract in reference thereto; (2) the lessee in a lease of the character under consideration determines whether the minable coal is exhausted, or the condition of the same renders operation unprof
The quantity of coal mined, it will be noticed, did not at the fixed royalty produce the minimum rental per annum, as provided by the lease, hence it need not receive further attention; as it was held by this court in Vandalia Coal Co. v. Underwood (1913), 55 Ind. App. 91, 101 N. E. 1047, that in a lease identical with the one under consideration and on real estate adjoining appellees’ that where the royalty per ton on coal actually mined did not produce the minimum royalty in any one year, the payment of the minimum royalty of $600 was required, together with the royalty per ton on the coal actually mined during that year, and the lessee could obtain credit under such circumstances for the excess paid only in a subsequent year, where the royalty per ton produced an excess over $600, and when it did, the excess over $600 paid in the previous year should be credited to the lessee.
“agrees to pay from date to make the royalty thereon amount to $600 annually, or in default thereof, to pay such sum each year after the completion of shaft or the commencing of mining operations, and any sum paid in excess of royalty on coal mined shall be deducted out of any excess over $600 in any year or years thereafter. * * * Said annuity shall not be payable until aftér the expiration of one year from the completion of a shaft or the commencement of mining operations in said land * * * upon failure of said second party to sink said shaft or begin mining operations within the time heretofore stipulated, said second party agrees to pay at the expiration of said time the sum of $600 to first parties*682 as advanced royalty to be deducted as herein-before provided.”
The foregoing provisions of the lease are so ambiguous as to make it impossible from the language of the lease to determine from what date the royalty of $600 was. to commence. Within a short time' after the first year had elapsed from the execution of the lease, and much less than a year from the completion of the shaft appellant paid appellees $600, hence the interpretation placed on the lease by the parties early in the life of the same and before any litigation arose is entitled under the circumstances to great weight, and will be treated by the court as a construction placed thereon that the lease was to yield $600 to the lessors from the date of the execution. Scott v. Lafayette Gas Co. (1908), 42 Ind. App. 614, 86 N. E. 495.
After coal had been exhausted on appellees’ land, the lessee was not bound to surrender the lease formally, f<?r the lease gave appellant the right to remove through appellees’ land, free of charge, mineral found on adjoining land, and from January 1, 1906, the time that the coal was found to have been exhausted in appellees’ land, up until it was found that coal was exhausted in the whole quarter section, and an abandonment of the entire tract, we do not think that appellant could be held liable for royalty on coal that did not exist in appellees’ iand, by reason of the provisions of the lease. It, therefore, follows that appellant was liable only for the royalty of $600 per annum from October 1, 1904,. the date of the lease, to January 1, 1906, the date when coal was found by the court to have been exhausted on appellees’ land, and the court erred against appellant in stating its conclusions of law. The state of the issues is such that the ends of justice will best be subserved by the granting of a new trial. Judgment reversed with instructions to
Note. — Reported in 111 N. E. 329. As to leases and licenses under law of mines, see 91 Am. St. 881. See, also, under (1) 27 Cyc 710, 712; (2) 9 Cyc 588; 27 Cyc 715; (3) 27 Cyc 719; (4) 27 Cyc 718-720.