Philadelphia & Reading Coal & Iron Co. v. Commissioners

Argued November 27, 1935. The Philadelphia and Reading Coal and Iron Company owns in fee or holds under lease approximately seventy tracts of anthracite coal land in Northumberland County. Some of these holdings are in the names of subsidiary companies. These tracts, covering a contiguous area of over twenty thousand acres, lie in five townships and two boroughs, and comprise over one-half the entire coal field of the county. They are located in Coal, Mount Carmel, Zerbe, East and West Cameron Townships, and in Shamokin and Mount Carmel Boroughs.

From the triennial assessment of 1931, as reviewed by the county commissioners, acting as a board of revision, the owners of these lands appealed to the court below, complaining that the valuations were excessive and confiscatory. Voluminous testimony was taken at hearings held over a period of thirteen months, and, after argument, the court modified certain of the assessments, reducing the total valuation of all the tracts for tax purposes from approximately twenty-one million dollars to less than twenty million dollars. Deeming these reductions insufficient, the owners appealed to this court. As the same general questions are involved in all eleven appeals they will be dealt with in one opinion.

The appeals come to this court by virtue of the provisions of section 519 of the General County Assessment Law of May 22, 1933, P. L. 853.¹ Under this section it is our duty to pass upon the findings of fact of the court below as well as upon its conclusions of law: Rockhill Iron Coal Co. v. Fulton County,204 Pa. 44, 48. The weight of the evidence is thus before this court: Lehigh Wilkes-Barre Coal Co.'s Assessment, 298 Pa. 294,308; Westbury's Apartments' Appeal, 314 Pa. 130. But in cases of this character the findings of the court below, except for clear error in the ultimate determinations, will not be disturbed: York Haven Water Power Company's Appeal,212 Pa. 622; Lehigh Valley Coal Co. v. Luzerne County, 255 Pa. 17;Thompson's Appeal, 271 Pa. 225.

The standard which the legislature has prescribed for the making of assessments is well known. The General County Assessment Law of 1933, which repealed the old statutes and codified their provisions, sets forth in section 402² that all objects of taxation shall be assessed "according to the actual value thereof, and at such rates and prices for which the same would separately bona fide sell, " and further, in section 505³ it makes it the duty of the board of revision to inquire whether property "has been valued at a sum or price not less than the same would bring after full public notice at a public sale." Here, in language which every citizen can understand, the legislature has fixed market value as the basis for the assessment of property, and market value has been defined as "the price which a purchaser, willing but not obliged to buy, would pay an owner, willing but not obliged to sell, taking into consideration all uses to which the property is adapted and might in reason be applied": Lehigh Wilkes-Barre CoalCo.'s Assessment, supra, at page 300; see also Appeal ofPennsylvania Co., 282 Pa. 69, 74.

When we speak of "assessments" in this opinion, we refer to the market value of the tracts involved in these appeals as affected by the particular conditions of the lands described herein, and applying in their valuation the ratio extant in the county for the appraisement of all real estate.⁴

The factors to be considered in determining the market value of coal lands have frequently been stated by this court. Besides the prices paid in sales of similar lands due regard must be given to the physical features of the property to be valued. There should be taken into account the location, the formation of the coal strata, the number of veins, their depth, thickness, pitch, basins, their proximity to outcrop, and the character of the separating rock formation; the quality of the coal, and whether of a gaseous or nongaseous nature; the kind of overlying surface; the availability of the coal and difficulty in mining it; the probable quantity of the merchantable coal in the ground with allowance for loss in mining; the state of development of the property, the demand for the product, and all the elements which a prudent purchaser would take into consideration: Phila. Reading Coal Iron Co.v. Northumberland County Commissioners, 229 Pa. 460; State Line Sullivan R. R. Co.'s Taxation, 264 Pa. 489; Thompson'sAppeal, supra; Lehigh Wilkes-Barre Coal Co.'s Assessment, supra.

These principles are not questioned by any of the parties. All the witnesses seemed to be guided by such considerations in fixing their estimates of value of each of the many tracts involved. This resulted in constant repetition of testimony and served to make more unwieldy a record necessarily extensive. Had the parties followed the suggestion of this court inLehigh Wilkes-Barre Coal Co.'s Assessment, supra, that contiguous land in the same ownership and devoted to the same use be assessed as one tract, needless expenditure of time and money might have been saved. And such a course is not in contravention of section 505 of the General County Assessment Law. As we pointed out in the last case cited, at page 313: "This does not mean that, where the ownership of contiguous locations come into one person or company, it is necessary that each separate purchase be carried through for assessment purposes. Such tracts, where used for a common purpose, may be joined as one large tract under the act."

At the hearings appellants produced as witnesses ten officers and employees of the appellant company⁵ who were familiar with the property; not all of them, however, testified as to every tract involved. For the county three witnesses, each of whom were engineers with practical mining experience, were called on its behalf in all the cases.

Appellants' witnesses valued the tracts at prices which varied from about one-fifth to one-half of the valuations fixed by the court below; the county witnesses, on the other hand, fixed values ranging from those set by the court to eighty per centum greater, yet there is little conflict in the testimony of the witnesses as to the acreage of each tract, the number, thickness and pitches of the veins, the area which they occupy, the depth of the basins, or the proportion of exhaustion. The record presents a situation where two groups of witnesses are at wide variance with each other and with the court concerning the value of property as to the principal physical features of which they are in substantial accord. It is apparent that varying importance was given to the identical factors which they considered.

Appellants' witnesses testified to certain sales of coal lands in Northumberland and Schuylkill Counties. These sales, they said, were used in giving their present estimates as to the value of the tracts in question. It must be borne in mind that the desirable coal tracts in this particular field were purchased by the large mining companies many years ago.⁶ Therefore the sales available for comparison were necessarily few in number, and extended over a period of many years. Most of these sales related to properties in Schuylkill County. Two of the sales referred to⁷ were properties now owned by appellant company and involved in these appeals. These two sales, however, occurred over ten years prior to the assessment now before us for review. One was a private sale, and the other a public sale of a small undivided interest. For these reasons they are not of much assistance in estimating present market values in the entire field. Similar objections appear to all the other sales testified to by appellants' witnesses. They were of lands in another field, or the property was exhausted, or its value had been impaired by improper mining. It is clear that there have been no recent sales of coal lands which might be used as a standard for comparison. In fact there is no active market for anthracite coal properties.

It is necessary, therefore, to consider the other elements which enter into the valuation of coal lands. This thought was expressed by Mr. Justice ELKIN, in Philadelphia Reading Coaland Iron Co. v. Northumberland County Commissioners, supra, at page 467, when he said: "If, however, there were no sales from which the general selling price might be ascertained, the market value may be established by the testimony of persons acquainted with the property, and whose knowledge and experience qualify them to form an intelligent judgment as to its proper valuation. In such cases it is proper to adduce evidence upon all matters affecting probable selling price, such as location, condition, improvements, quality of land or coal, and any other element of value that would influence the mind of a purchaser: Pittsburgh, etc., R. R. Co.v. Patterson, 107 Pa. 461; Pittsburgh, etc., Ry. Co. v. Vance,115 Pa. 325."

An important consideration in valuing real property used for business or industrial purposes is the return which it yields to the owner. Applied to coal lands, this means that the value of a particular tract depends upon whether it can be mined at a cost low enough to return a profit to the operator. In order to determine this question the physical features of the property must be carefully considered.

The witnesses for the county based their valuations largely upon calculations of the total amount of coal originally underlying the tracts, the amount of coal which had been removed, and the tonnage remaining available for mining. Appellants' witnesses testified that the coal veins in this field so vary in thickness that any computation as to total quantity would be a mere guess. They said that unless the veins are regular, which is not here the case, total tonnage is not susceptible of accurate calculation. The court below gave great weight to the tonnage calculations of the county's witnesses and commented upon the fact that appellants' engineers "failed to give the court the benefit of their estimate of tonnage." However this may be, coal under the surface of the land is of little value if it cannot be mined profitably. As Chief Justice LOWRIE said in Searle v. Lackawanna R. R. Co., 33 Pa. 57, 63: "Land may have $4,000 worth of coal per acre in it, and yet sell at $40 per acre. . . . Though we might have the most accurate calculation of the quantity of coal in the land, yet, without knowing exactly the expense of bringing it to the surface and carrying it to market, and the amount likely to be lost in mining and conveying, and the times in which it would be brought out, and the market prices at those times, the quantity would not help us to value the land." See alsoKemble's Est., 280 Pa. 441; Reading Pottsville R. Co. v. Balthaser,119 Pa. 472; Becker v. Reading R. R. Co., 177 Pa. 252.

It seems to us that of equal importance in the assessment of coal lands are the factors of value found in answer to the questions, how available is the coal, and how profitably may it be mined? Upon the question of availability, a number of the tracts included in these appeals are virgin undeveloped territory to be mined at some future date when the present workings approach exhaustion. To develop these lands tunnels must be driven, equipment installed and much nonproductive labor and money be expended before the coal deposits can be made available and marketed. The court below regularly assessed the undeveloped properties at rates higher than those applied to lands now in production. In this the court clearly erred. And the same is true with respect to those tracts where the workings have been abandoned for reasons of economy or otherwise, and the operations of mining concentrated at other places. Moreover, under the present existing conditions of the anthracite coal market, where the existing productive mines can readily supply more than the demand, undeveloped coal lands have problematic value, largely dependent upon the future of the industry.

Another factor which must be considered in determining the market value of land for productive purposes is the demand for the commodity which is produced. This element vitally affects the value of the land both as a presently operating enterprise and for future use. The market value of coal land is directly dependent upon the demand for coal. If anthracite coal cannot be sold, the land containing it is useless as a mining proposition. The record clearly shows that almost all of the land involved in these appeals has little worth save as the coal underlying the surface gives it value. It is rough and mountainous, the timber upon it is of poor quality, and coal mining is the industry which attracts its population. As the market for coal decreases, the market value of the land from which it is mined falls accordingly.

The decline in the demand for anthracite coal is unquestioned. According to the figures of the Anthracite Institute, which were placed in evidence, shipments of coal declined from over seventy-three million tons in 1923 to fifty-one million tons in 1931. Much of this decrease may be traced directly to the great strike of the winter of 1925-26. While anthracite has been for many years the principal domestic fuel in the northeastern part of the United States and Canada, the effect of the curtailment of production caused by the strike was to force consumers to use other fuels, which have continued as competitors to make inroads upon the anthracite market. It is to be noted that anthracite does not enter the industrial field except to the extent of about five per centum of total production. Shipments of coal have declined each year since the strike, the shipments in 1931 being almost twenty-five per centum lower than in 1926. While cheaper fuels, notably soft coal, oil and coke have grown as competitors, anthracite has steadily lost ground. The worth of the coal lands has been materially influenced by market conditions affecting the product, which, in turn, have reacted upon the taxable value of the lands. The appeals are the direct result of that situation.

This condition in the industry was graphically reviewed by the present Chief Justice in Lehigh and Wilkes-Barre Coal Co.'sAssessment, supra; his discussion dealt with the decline in the anthracite market in the period prior to 1929. It may be now asserted that there has been no amelioration in the conditions which worked to the detriment of anthracite coal since that opinion was written; in fact, increases in productive cost and taxes, greater competition and less demand for the product have aggravated the unfavorable character of the situation.

While coal lands must bear their fair share of taxation, excessive or confiscatory assessments and taxes are to be avoided. As Chief Justice KEPHART said in Lehigh andWilkes-Barre Coal Co.'s Assessment, supra, (page 305): "While not deprived of their right to a fair assessment simply because they did not object, it should be understood that their lands, based on present values, should bear a fair and full share of the burden of government; however, they cannot be singled out to bear the chief revenue burden. . . ." In recent years there has been little reduction in the taxation of coal properties. We were informed at bar, without contradiction, that the assessments here involved are, even as reduced by the court below, only $800,000 less than in 1922. This is a reduction of less than five per centum. The failure to reflect to an appreciable degree the loss of the coal market in the assessments of coal lands has resulted in a heavier tax burden per ton of coal produced. The effect upon the industry is apparent.

We have examined with exhaustive care the voluminous record, maps, and data submitted. From our study of them we have reached the conclusion that the court below failed to make sufficient reductions in the assessments of appellants' properties. In view of the fact that it has now been over five years since the assessments appealed from were made, and in order to avoid the delay which might result were we to remand the cause for further hearing (see Lehigh Wilkes-Barre Co.'sCase, 300 Pa. 564), we shall ourselves revise the assessments in line with the principles which we have stated. Our action in this regard is not to be taken as a precedent. We have prepared as a part of this opinion an appendix setting forth our revision of the assessments upon the various tracts in each township. Inasmuch as the assessment figures are of interest only to the parties, this appendix will not be printed in the STATE REPORTS. The details of the different appeals, and our disposition thereof, follow.

COAL TOWNSHIP APPEALS. PHILADELPHIA AND READING COAL AND IRON COMPANY, Appellant.^* No. 120, January Term, 1935. EBENEZER GREENOUGH ESTATE, Appellant.^* No. 122, January Term, 1935. The Philadelphia and Reading Coal and Iron Company owns in fee over forty-three hundred contiguous acres of coal land in Coal Township. It also owns the mineral rights, or "coal reserve" on over two hundred additional acres, and an undivided three-fourths interest in the so-called Hubley tract of one hundred and fifty-eight acres. The Ebenezer Greenough Estate owns thirty-nine-fortieths of another tract known as the Hepburn tract, and an equal share of the remaining quarter interest in the Hubley property. These last two tracts are mined by the company under a royalty agreement. Both owners have appealed to this court from the valuations placed on their properties in Coal Township at the 1931 triennial assessment, as revised by the court below.

Included in these assessments are those placed upon the Hubley and the Green properties which we have referred to in our general discussion. In our opinion the court below erred in valuing these tracts at a figure greatly in excess of the price for which they were sold at a time when the market for coal lands was better than in the year of the assessment (1931), and when there was more coal underlying the properties.

Four adjacent tracts in the central part of the township are almost virgin, and very little coal has been removed from them. We think the court below erred in placing extremely high values upon these tracts, which are not in production and which must be developed at considerable cost before the value of the coal deposits can be realized.

Certain other tracts lying to the south and east of the Borough of Shamokin, are partly developed, but it appears from the record that they are not now in operation. The Green tract is one of these. This land in its present state is held in reserve as are the virgin tracts. While this property has some added value because of the developments already made which will enable coal to be mined in the future at less expense, we feel that the court below erred in that it failed to give due weight to the fact that this property is not now in active operation because of the lack of demand for anthracite coal. Under the circumstances we think the assessments on these tracts should be reduced. Similar considerations apply to the assessments of the lands of which the company owns only the mineral rights, commonly called "coal reserve," which are in the neighborhood of Shamokin. While the court below made sufficient allowance, we think, for the fact that this coal reserve may not be freely mined because of the danger of causing subsidence or sinking at the surface, these assessments must be reduced in line with those on the adjoining properties owned in fee, as they are of the same character and stage of development.

On another tract, designated as the "John Brady," the colliery has been closed, the mine abandoned and permitted to fill with water. Furthermore, the coal here is largely exhausted. The witnesses for both sides agree that this property is of less value than the North Franklin Colliery property in Zerbe Township, which is also abandoned and which we shall hereafter mention. We think that in revising the assessment upon this tract the court below erred in failing to give sufficient weight to the factors of abandonment, high percentage of exhaustion, and loss of market for coal.

On the remainder of appellants' properties in this township, three collieries are operating. On one of these tracts (the Hubley) there is a fire which has been burning for over twenty years. This is a factor to which insufficient consideration was given in the revision of the assessments.

In general, as to all of the actively operated land in this township, the court below did not give due weight to the falling off of the market for anthracite coal. While property which is in active production is worth more than similar land which is idle, these lands do not have the value they possessed when the demand for coal was greater and the anthracite industry more prosperous.

For the reasons stated we feel that there should be a reduction in the assessments on most of these tracts. The modifications upon which we have decided, reduce the total assessments in these two appeals from $5,678,193.50 to $4,936,427.51.

The decrees in No. 120, January Term, 1935, and No. 122, January Term, 1935, are modified, and the record remitted to the court below that an order may be made carrying into effect the modifications set forth in the appendix attached hereto. Costs to be paid by appellees.

FULTON COAL COMPANY, Appellant. No. 121, January Term, 1935. The Fulton Coal Company, a subsidiary of the Philadelphia and Reading Coal and Iron Company, appeals from the assessment of its lands in Coal Township, Northumberland County. This property occupies the southeastern corner of the township, and comprises a block of 1,668 acres. The appellant does no mining itself, but has leased to two operators parts of the land,⁸ while other parts are mined from workings of the Philadelphia and Reading Coal and Iron Company in Coal and Mount Carmel Townships, making in all four different mining operations in progress on this tract.

This territory has been mined for many years, and the more important veins of coal are largely exhausted. The court below, however, apparently gave full consideration to this fact for it reduced the original assessment and placed a value on the tract considerably below that which it placed on other tracts in operation. We see no reason to disturb the assessment as reduced by the court below.

The decree of the court below in No. 121, January Term, 1935, is affirmed, costs to be paid by appellant.

MOUNT CARMEL TOWNSHIP APPEALS. PHILADELPHIA AND READING COAL AND IRON COMPANY, Appellant. No. 123, January Term, 1935. LOCUST GAP IMPROVEMENT COMPANY, Appellant. No. 124, January Term, 1935. The Philadelphia and Reading Coal and Iron Company operates over five thousand acres of coal land in Mount Carmel Township, Northumberland County. A portion of these lands it owns in fee while the remainder is held under lease from the Locust Gap Improvement Company.⁹ A small part of this acreage, lying in the valley below the Borough of Mount Carmel, is "coal reserve" of which the company owns only the mineral rights. From the assessment placed on all this property, and revised by the court below, the owners have appealed.

It is in this territory that the Philadelphia and Reading Coal and Iron Company in recent years has concentrated its operations in Northuberland County. The veins of coal are thicker, and contain coal of more marketable quality than elsewhere in the county. A new central breaker has been erected with a large capacity, and two older and smaller breakers have been abandoned. It was for these reasons, no doubt, that the court below placed valuations on these properties well in excess of the highest prices, according to the testimony, paid for coal lands in Northumberland or Schuylkill Counties at any time. In our opinion, however, the court below went too far in this direction, and failed to give sufficient weight to the factor of loss of market demand for anthracite coal. While the coal land in this territory is undoubtedly more valuable than that in Coal and Zerbe Townships, we believe that the valuations fixed by the court below are excessive, and we have reduced them in order better to reflect the loss in value which they have suffered.

The modifications which we have made reduce the assessments in these appeals from $7,770,750 to $7,233,525.

The decrees in No. 123, January Term, 1935, and No. 124, January Term, 1935, are modified, and the record remitted to the court below that an order may be made carrying into effect the modifications set forth in the appendix attached hereto. Costs to be paid by appellees.

ZERBE TOWNSHIP APPEALS. PHILADELPHIA AND READING COAL AND IRON COMPANY, Appellant. No. 125, January Term, 1935. EBENEZER GREENOUGH ESTATE, Appellant. No. 126, January Term, 1935. These appeals involve lands lying in Zerbe Township, Northumberland County. The Philadelphia and Reading Coal and Iron Company owns almost all of the coal lands in this township, and except for the Hubley tract in this township, all of this property is owned in fee. As in Coal Township, the Hubley tract is mined under a royalty agreement. The company owns an undivided three-fourths interest in this tract, and the Ebenezer Greenough Estate is the owner of thirty-nine fortieths of the remaining quarter interest. Both owners have appealed from the assessments made upon their lands. The holdings of appellants include over forty-seven hundred acres, and constitute the greater part of the entire area of the township.

Roughly, the tracts involved in these appeals fall into four classes. The Hubley tract has been mined for many years and is now in active operation. In the workings on this tract, however, there is a large and serious fire which the company has been unable to extinguish. The fire has been confined by barrier pillars, but its continued existence has prevented mining at the lower levels. From a comparison of the values placed on this tract with those given to other tracts being actively operated and not affected by fire, we have concluded that the court below gave insufficient weight to this factor.

Adjacent to the Hubley tract is a tier of four nearly virgin tracts. They have been developed to a considerable extent and are now the scene of active operations. In addition to the tracts now being mined, there are a number of tracts which the company is holding in reserve. These have never been developed or mined, but because of their location adjacent to the workings of the company, they are favorably situated for development. The court below, however, valued these tracts as highly as similar tracts now in operation. For the reasons which we have stated we think the court erred in so doing.

Then there are a number of contiguous tracts comprising approximately half of the company's holdings in this township, which were formerly operated from the North Franklin Colliery. The mine last named was closed in 1929, and the workings permitted to fill with water. In 1931 the breaker was destroyed by fire. The mine was abandoned, appellants' witnesses said, for the reason that the coal from this territory was of inferior quality, and could no longer be sold. Zerbe Township is at the western extremity of the anthracite coal fields, and as the limit of the coal deposits is approached, the coal becomes softer and less marketable. It was testified that the appellant company still has in storage sixty-five thousand tons of coal from this mine which it has been unable to sell. Moreover, there is a fire along the western outcrop in the lower veins on one of these tracts. It would require considerable expenditure to build a new breaker, pump out the mine, and put it into operation again. These are most important factors, and in our opinion the court below erred in not giving full effect to them in revising the assessments upon these tracts.

The remainder of the company's lands in this township are barren, and not underlaid with coal. One small barren tract was purchased for use as a refuse bank by the appellant company in 1926 at a price of twenty dollars an acre, and was so used until the abandonment of the North Franklin mine in 1929. The court below valued this tract at fifty dollars an acre, and using the fifty per centum ratio applied in Northumberland County,¹⁰ fixed the assessment for the nine acres at two hundred and twenty-five dollars, at the figure of twenty-five dollars an acre. It would seem apparent that land used for the dumping of mine refuse is not thereby enhanced in market value, yet the value given this property by the court below is higher than that which it gave to barren land in other parts of the county. This assessment should be reduced.

The modifications which we have made reduce the total assessments before us for review in these two appeals from $3,616,490 to $3,198,247.50.

The decrees in No. 125, January Term, 1935, and No. 126, January Term, 1935, are modified, and the record remitted to the court below that an order may be made carrying into effect the modifications set forth in the appendix attached hereto. Costs to be paid by appellees.

EAST CAMERON TOWNSHIP APPEAL. PHILADELPHIA AND READING COAL AND IRON COMPANY, Appellant. No. 127, January Term, 1935. In this appeal the Philadelphia and Reading Coal and Iron Company complains of the assessments placed on two tracts of land which it owns in East Cameron Township, Northumberland County. The one is a small tract, entirely outside of the coal field, while the other is a large one of almost two thousand acres occupying the eastern end of the township. Approximately two-thirds of the larger tract is underlaid with coal, while the more important veins cover somewhat more than a quarter of the tract.

As to the barren tract, the court below valued it at ten dollars an acre, and at the fifty per centum ratio,¹¹ assessed it at a rate of five dollars an acre. In view of the fact that the tract, while barren and mountainous, may be used for access to the workings of the appellant company on tracts immediately adjacent, we think this valuation not excessive.

The larger, coal-bearing tract, is mined from the workings of the appellant company in Mount Carmel Township, where it has concentrated its operations. Indeed, some of the buildings of this colliery are on the surface of this tract, which adjoins the land owned by the Fulton Coal Company. The coal on this property is not near to exhaustion. A number of veins are not workable, and contain coal of inferior quality. The court below reduced the assessment slightly, but we feel that it erred in failing to give sufficient consideration to the unfavorable factors affecting this property.

The modifications which we have made reduce the assessments in this appeal from $735,175 to $686,175.

The decree in No. 127, January Term, 1935, is modified, and the record remitted to the court below that an order may be made carrying into effect the modifications set forth in the appendix attached hereto. Costs to be paid by appellees.

WEST CAMERON TOWNSHIP APPEAL. PHILADELPHIA AND READING COAL AND IRON COMPANY, Appellant. No. 128, January Term, 1935. This appeal relates to seven tracts of land lying along the border of West Cameron Township, adjacent to Zerbe and Coal Townships. All of the tracts are owned in fee by the Philadelphia and Reading Coal and Iron Company. These properties are on the southern edge of this coal field, and the outcrop of the lowest veins runs through them. As the coal approaches the outcrop it is of poorer quality, and the larger part of these tracts is barren. The upper veins on most of these properties have been mined to a considerable extent, and the remaining coal is largely in the lower or "Lykens Valley" veins, which in this territory are not as regular or persistent as the overlying ones. Some of appellees' witnesses testified, however, that the Lykens Valley veins in this township are workable and contain good coal. The western tracts in this township were formerly operated from the North Franklin Colliery in Zerbe Township which has been abandoned; the other tracts are tributary to the Bear Valley Colliery in Coal Township, which is still in operation.

As to the value of the barren land, the only sale testified to as a basis of comparison was a very recent sale of a tract on the other side of the valley from these tracts, it was sold to the State of Pennsylvania at a price of $3.75 an acre. This land lay wholly outside the coal fields. The tracts here involved, however, possess some added value by reason of their contiguity to the coal-bearing lands, which permits them to be used as access to the coal. None of the witnesses gave much value to the surface, which is rough and mountainous, lying as it does along the top of Mahanoy Mountain. It was testified that the timber on the tracts is of little worth and is mostly scrub oak.

While the court below gave lower values to the tracts in this township than to those in other locations, we feel that it erred in failing to give due consideration to the fact that the mine from which some of these lands were operated, has been abandoned, and to the fact that most of the coal remaining in the tracts lies in veins of doubtful value. For these reasons the assessments must be reduced.

The modifications which we have made reduce the total assessments before us in this appeal from $266,770 to $231,000.

The decree in No. 128, January Term, 1935, is modified, and the record remitted to the court below that an order may be made carrying into effect the modifications set forth in the appendix attached hereto. Costs to be paid by appellees.

SHAMOKIN BOROUGH APPEAL. PHILADELPHIA AND READING COAL AND IRON COMPANY, Appellant. No. 129, January Term, 1935. This appeal concerns the assessment of ninety-six acres of coal-bearing land owned by the Philadelphia and Reading Coal and Iron Company in the Borough of Shamokin. The company owns eighteen acres in fee and the balance of the property is "coal reserve" in which the company owns only the mineral rights.

The lands involved in this appeal are part of two tracts, the William Green and the Samuel Wetherill, the greater part of which are in Coal Township. The witnesses on both sides gave almost exactly the same values to the portions of the tracts in the borough as to those beyond the borough limits. The same considerations apply, and we think the same valuations should prevail. As the court below did not give effect in revising the assessments to the same factors which we deemed important in reducing the assessments on the same tracts in Coal Township, the assessments here appealed from must be reduced.

The modifications which we have made reduce the assessments before us in this appeal from $74,100 to $69,600.

The decree in No. 129, January Term, 1935, is modified, and the record remitted to the court below that an order may be made carrying into effect the modifications set forth in the appendix attached hereto. Costs to be paid by the appellees.

MOUNT CARMEL BOROUGH APPEAL. PHILADELPHIA AND READING COAL AND IRON COMPANY, Appellant. No. 130, January Term, 1935. This appeal is from the assessments placed on most of the property which the Philadelphia and Reading Coal and Iron Company owns in the Borough of Mount Carmel, Northumberland County. The appellant company owns the greater part of the coal under the borough, and over forty acres of surface land, title to which is held in fee. No appeal has been taken from the assessments of the lands owned in fee.

The assessments appealed from are upon "coal reserve," or land of which appellant owns only the mineral rights. This land underlies the built-up section of the borough. Mining, therefore, must be done in such a manner as not to cause subsidence or sinking of the surface, with consequent injury to buildings thereon erected. Appellant leases a substantial part of its holdings here to the Lehigh Valley Coal Company. It has, however, done no mining in this territory itself for a number of years, and the colliery from which it would be mined is not now in operation.

The important veins of coal lie close to the surface in this area, and the outcrop of two veins (No. 10 and No. 11) runs through the borough. The two large veins in this field (No. 8 and No. 9) were mined here many years ago, and the only coal remaining in them is in pillars left for the support of the top. As added support these veins, and such part of the veins above them as have already been mined, have been "slushed" throughout a large part of appellant's workings.¹² The witnesses for the county stated that perhaps some coal could still be recovered from the No. 10 and No. 11 veins, and that some of the pillars could be removed from the No. 8 and No. 9 veins, but that any further mining in these veins would have to be accompanied by slushing in order not to cause sinking at the surface. From the record it appears that the cost of slushing varies greatly, depending upon the remoteness of the workings to be slushed. Although the coal is worth more than the waste material used to replace it, this adds materially to the expense of mining, and decreases the value of coal land which must be mined in this way.

With the upper veins thus largely removed from consideration, the only readily available coal in this property lies in three lower veins. According to the county witnesses, one of these is largely exhausted, another is not a persistent vein in this territory, although it can be worked to some extent, while the third has not been mined but in their judgment contains good coal.

The court below reduced the assessments on this coal reserve property and valued it at only five-eights of the value placed on the lands in the borough which appellant owns in fee. There is no appeal from the assessment of the fee lands. Considering the relative values given elsewhere in the county to fee land and coal reserve, we think the court below made ample allowance for the fact that mining in this territory must be restricted. In this appeal, therefore, the decree of the court below is affirmed.

In No. 130, January Term, 1935, the decree of the court below is affirmed, costs to be paid by appellant.

¹ Section 519, is a reënactment of the Act of June 26, 1901, P. L. 601, as amended by the Act of June 12, 1931, P. L. 547.

² It may be noted that section 402 is derived from section 4 of the Act of May 15, 1841, P. L. 393, section 4; section 505 is derived from the Act of July 27, 1842, P. L. 441, section 13. See Appeal of Pennsylvania Company, 282 Pa. 69; Lehigh, andWilkes-Barre Coal Co.'s Assessment, 298 Pa. 294, 300.

³ See preceding footnote.

⁴ It appears that in Northumberland County the assessments are based upon fifty per centum of the market value of real estate.

⁵ Whenever the term "appellant company" is used herein it will refer to the principal appellant, the Philadelphia and Reading Coal and Iron Company.

⁶ Most of the land involved in these appeals was purchased by appellant company between 1870-1875.

⁷ The William Green tract of 384 acres, situated partly in Shamokin Borough and partly in Coal Township, was sold at private sale in 1917 at a price of less than $450 per acre. The other sale occurred in 1919, when an undivided fractional interest in the Bernard Hubley and James Hepburn tracts, in Coal and Zerbe Townships, was sold at public sale at a price of $1,053 per acre.

^* The lands involved in these appeals are situate in Coal Township, Northumberland County.

⁸ We are informed from the record in Nos. 123 and 124, January Term, 1935, that the one operator to which part of this tract was leased has gone out of business, while the other operator has abandoned its lease. These events, however, happened subsequently to the assessment from which this appeal was taken.

⁹ The record is not exactly clear as to which tracts are owned by the Philadelphia and Reading Coal and Iron Company, or are owned by the Locust Gap Improvement Company. In making our modifications, we have given separate figures for each tract, and the assessment to the proper owners can be adjusted by the court below in the order to be made in accordance with this opinion.

¹⁰ Assessments in Northumberland County are at fifty per centum of the real value, so that for the purpose of comparison the assessment figures must be doubled.

¹¹ See preceding footnote.

¹² "Slushing" is a method of filling old mine workings hydraulically with fine waste material. Mine refuse is mixed with water and pumped into the workings, where it solidifies, and adds support to the overlying strata.