Girard Trust Co. v. Delaware & Hudson Co. , 246 Pa. 161 ( 1914 )

Opinion by

Mr. Justice Elkin,

This bill was filed for an accounting for coal mined and removed by defendant and not paid for. There is no substantial dispute about the facts and the case turns upon the interpretation of the contract between the parties. The agreement is in writing and was executed July 16,1878. The elause which forms the basis of this litigation provides as follows: “And further it is hereby agreed, that the said party of the second part may continue to mine the coal from the lands so held by the Northern Coal & Iron Company and the said Lazarus D. Shoemaker as tenants in common, paying to the said L. D. Shoemaker, his heirs or assigns, at the rate of twenty-five (25) cents per ton for his proportion of the coal so mined as heretofore and according to their established usage and practice and without any liability for any damage that may occur from mining and removing the coal, or any part thereof in or from said land so as aforesaid held in common or for the occupation and use of the surface thereof.” The primary purpose for executing the agreement of 1878 seems to have been to grant or lease all the merchantable coal underlying a certain five-acre tract of land belonging to L. D. Shoemaker, but which was independent of and had no connection with the interest held by him as tenant in common in the coal which forms the subject matter of the present controversy. In 1871 the Northern Coal & Iron Company granted appellant the right to mine coal from the lands held by it as tenant in common with Shoemaker, and this was done with the consent of the latter. Under that lease appellant accounted to Shoemaker every three months for the coal mined from the premises at the rate of twenty-five cents per ton for his proportion thereof. It is true that under the lease of 1871, the lessee only paid for the coal which passed over a five-eighth-inch mesh, but in the quarterly statements rendered from time to time to Shoemaker during the entire period no mention was made of the sizes of coal mined and removed, nor was there any suggestion or notice that the smaller sizes were not included in the total amount accounted for. These statements simply showed the total number of tons accounted for during the quarter without specifying sizes. This was the situation when the agreement of 1878 was entered into. Appellant insists upon its right to take all the coal that passes over or through the mesh by paying at the rate of twenty-five cents per ton for the larger sizes of coal passing over the mesh. If this interpretation be sustained it means that the lessee can appropriate the pea and smaller sizes of coal without paying anything for the same. The real question for decision is whether the contracting parties so covenanted, or perhaps whether by their acts they placed such a construction upon their agreement. We find nothing in the clause above recited, or in any other part of the agreement relating to the coal underlying the land held by the parties as tenants in common, to indicate an intention to give the lessee the pea and smaller sizes of coal for nothing. The agreement did not constitute a sale of the coal in place. A contract regarding coal in place may be a sale absolute, a conditional sale, a lease in the; ordinary acceptation of that term, or a mere license to mine and remove the minerals: Neumoyer v. Andreas, 57 Pa. 446; Denniston v. Haddock, 200 Pa. 426; Gallagher v. Hicks, 216 Pa. 243; Hollenback Coal Co. v. Coal Company, 219 Pa. 124; Barnsdall v. Gas Company, 225 Pa. 338. We do not deem it important to define in precise terms what kind of an interest the lessee took under the agreement in question. It certainly did not constitute a sale of the coal in place, nor was it a conditional sale, and as we view it, there is no warrant for the contention that the lessee took title to all the coal mined from the premises by simply paying for the larger sizes which passed over the five-eighth-inch mesh. To adopt such an interpretation it is necessary to read into the contract what the parties themselves did not insert. We cannot agree that the provisions relating to the five-acre tract should be read into the clause under consideration. The parties were dealing with two different tracts of land and made different provisions respecting each. The smaller tract was held by Shoemaker in fee, while his interest in the larger tract was that of a tenant in common. The fact that the contracting parties made different provisions respecting the tracts is a sufficient answer to the suggestion that they intended both tracts to be operated upon the same terms and conditions. As to the five-acre tract the agreement stipulated that all coal passing over a five-eighth-inch mesh should be paid for, and all coal passing through the mesh should not be paid for, but as to the property held in common, being the one in controversy, there is no stipulation as to sizes of coal, nor any suggestion that the lessee should have any coal without paying for the same.

It is argued that the phrase “in accordance with their usual conditions and practice” which appears in another clause of the lease relating to the coal held by Shoemaker as tenant in Common, was intended to include in the agreement of 1878 the “conditions and practice” which the lessee company adopted as to sizes of coal to be paid for under the lease of 1871. "The same argument is made as to the phrase “according to their established usage and practice” which appears in the clause herein-before set out. As to this contention the learned court below said: “Neither of these phrases, however, on casual reading, or after careful analysis of the evidence, or of the instrument itself, shows an intention to reduce the measure of payment to the basis of coal in larger sizes only.” The evidence is not sufficient to charge Shoemaker with notice that the lessee was appropriating the smaller sizes of coal without paying for the same. The quarterly statements contained no such notice and there is no other evidence that he knew or was informed of any such practice. Under these circumstances it cannot be said that he was bound by a practice which the lessee company adopted, but about which he was not informed. The same may be said as to the suggestion that he waived his right to claim royalties in addition to what he had received, and was estopped by his acts from now claiming payment for the smaller sizes of coal. He could not be estopped by the acts of the other party to the contract of which he had no knowledge. On the question of estoppel the following cases are in point: Dunham v. Haggerty, 110 Pa. 566; Hoyt v. Kingston Coal Co., 212 Pa. 205. Even where a lessor by receipting in full for a lesser amount of coal than he claimed he was entitled to receive waives the right of himself and his descendants to recover the correct amount, yet his conduct cannot be considered such an interpretation of the lease as to prevent his descendants, who are his legal representatives, from asserting a different interpretation of it: Wright v. Coal Co., 182 Pa. 514. In the case at bar Shoemaker did not receipt in full for all sizes of coal mined and removed. He only receipted for the number of tons of coal which the lessee accounted for without specifying sizes.

After a careful consideration of this entire record we have concluded that the learned court below properly decided the case under the facts as well as the law.. The learned chancellor gave the case intelligent and exhaustive consideration and reached a conclusion that accords with right and reason, and does no violence to establislied rules of law. We And nothing in the record to warrant a reversal of the decree.

Decree affirmed at cost of appellant.