Koch's & Balliet's Appeal

Mr. Justice Sterrett

delivered the opinion of the court May 3d 1880.

The agreement which forms the basis of claim in this case was made in August 1842, by and between Daniel A. Guth, of the one part, whose interest therein is now represented by the appellees, plaintiffs below, and Christian Pretz and others, parties of the second part, to whose rights, duties and obligations the appellants succeeded by virtue of sundry assignments of the agreement. Guth, being then the owner of the land, covenanted and agreed with the “ parties of the second part, their heirs, executors, administrators and assigns, to furnish and allow them * * * the exclusive right and privilege to dig, mine and take away all iron ore and all other minerals which are or may be found in or upon the land” described in the agreement; “and for that purpose to open pits, sink shafts, and to make and erect all necessary works for the purpose of digging and mining said ore and minerals and taking the same from said land,” &c. In consideration whereof the parties of the second- part covenanted and agreed “ to deliver to the said party of the first part, or to his heirs or assigns, the one-sixth part of all the iron ore and of all other ores and minerals which they * * * may mine or dig, or cause to be mined or dug, in or upon said land. The said one-sixth part to be delivered at the mouth or mouths of the pit or pits free and clear of all charges and expenses to the said party of the first part,” &c. “It being agreed and understood by all the parties that the remaining five-sixths part of all said ores and minerals shall belong to and be the property of the said parties of the seeond part, their heirs, executors, administrators and assigns.” This was followed by a supplemental agreement, made in March 1848, by which it was provided that each party should pay one-half of the taxes ; that the grantees should pay a certain rent for land occupied by their houses, stables, &c.; and, in case the mines should become exhausted, or the grantees should “ for any other cause see fit to surrender and give up their lease of said mines,” provision is also made for valuing and disposing of the houses, stables, &c.

The bill charges that, in pursuance of the agreement, the mines had been successfully worked for many years, and yielded a large income to the plaintiffs; that, on or about April 1st 1872, the defendants, “ without any cause whatever, and in violation of the terms and spirit of the aforesaid contract and agreement, entirely ceased, suspended and abandoned, or caused to be suspended and abandoned, the digging, mining and raising of iron ore and other ores and minerals upon the said premises, * * * and have persistently, and without cause, ever since continued their abandonment and suspension of the mining, digging and raising of said iron ore and other minerals;” and then concludes with a prayer for a decree that the defendants shall, within a reasonable time, proceed to work the mines and deliver one-sixth of the ores and other minerals mined to the plaintiffs, according to the spirit and intent of the agreement; or, in default thereof, cancel, rescind and deliver up the contract, and for “ such further relief in the premises as may seem agreeable to equity and good conscience.”

The master very .properly found that the mines had not been actually abandoned by the defendants, nor had anything been done that amounted to an abandonment. While it was shown that they had declined to extend the lease of the Crane Iron Company before it expired, and did not afterwards work tlio mines themselves, the master finds that immediately after the expiration of that lease they made diligent but unsuccessful efforts to lease the mines for the purpose of mining. They may perhaps have failed to comply with the terms of the agreement according to its true intent and meaning, hut there was nothing done or omitted to be done that would justify the cancellation of the agreement. At most, they rendered themselves liable to damages for neglect to work or cause the mines to bo worked. While the rights granted are without limit as to time, and the agreement contains no express covenant as to how the mines shall be worked, or that any specified amount of ore shall be taken out, it does not follow that the appellants were at liberty to operate the mines or not as they saw fit. It was evidently the intention of the parties that they should bo worked with reasonable diligence, and that would depend largely on the circumstances. The quantity and quality of the ore, and the demand that existed from time to time, would necessarily enter more or less into the question of due diligence. If the ore proved to be abundant and of good quality, and the demand was such as to justify a vigorous prosecution of the work, the spirit of the agreement manifestly required that it should be so worked. Where a right to mine iron ore or other minerals is granted, in consideration of the reservation of a certain proportion of the product to the grantor, the law implies a covenant on the part of the grantee to work the mine in a proper manner and with reasonable diligence, so that the grantor may receive the compensation or income which both parties must have had in contemplation when the agreement was entered into. This principle appears to be recognised in Watson v. O’Hern, 6 Watts 362, and Lyon v. Miller, 12 Harris 392. In the former, a lease of a stone quarry in consideration that the lessee should pay a certain price per perch for all the stone taken out,, was held to be a contract on his part that he would work the quarry, and, upon his failure to do so, the lessor might maintain covenant, and recover damages. It is there said, “ If the defendants had any excuse, legal or equitable, from the responsibility thus assumed by their agreement, it lay upon them to show it. The plaintilf was not bound to prove the extent of their capacity to fulfil the contract. The lease pre-supposes they would work the quarry, and gives them the entire control over the premises; and, being themselves acquainted with their own business and concerns, they were better prepared to show the extent to which they were able to work it, or, if not worked at all, the reasons for their inability. Not having done so, it was for the jury to give such damages as they might deem a compensation for the loss of rent.”

Assuming then that appellants neglected and refused to work the mines with reasonable diligence, it is very clear that the appellees had a complete and adequate remedy at law for the recovery of such damages as they may have sustained.

There was no allegation of fraud, accident or mistake in the procurement or execution of the agreement, nor was there anything alleged or shown that would justify a mandatory order on the appellants, requiring them to proceed and prosecute the work of mining within a specified time, on pain of forfeiting their rights under the agreement. Nor could it be justly claimed that by proceeding in equity a multiplicity of suits would be avoided. While the agreement remains in force, the right of action must necessarily depend on breaches of its provisions, and non constat that any will occur hereafter. The only claim that has been made and sustained with any degree of success is the demand for damages resulting from a breach of the agreement, and for that there was no doubt an adequate remedy at law. Where proper ground for equitable relief is laid and sustained, and jurisdiction has thus attached, courts of equity will proceed to award compensation or damages where they are incidental to such relief, but not otherwise. Wo think the conclusion reached by the master in both of his reports, that the bill should be dismissed, was correct.

Decree reversed and set aside; and it is now' ordered and decreed that the bill he dismissed, and that the appellees pay the costs, including the costs of this appeal.