Mount Lookout Coal Co. v. Schooley

115 A. 822, 271 Pa. 539, 1922 Pa. LEXIS 754
CourtSupreme Court of Pennsylvania
DecidedJanuary 3, 1922
DocketAppeal, No. 450
StatusPublished
Cited by3 cases

This text of 115 A. 822 (Mount Lookout Coal Co. v. Schooley) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mount Lookout Coal Co. v. Schooley, 115 A. 822, 271 Pa. 539, 1922 Pa. LEXIS 754 (Pa. 1922).

Opinion

Opinion by

Mr. Justice Simpson,

Plaintiff, as assignee of a coal lease, filed a bill in equity against the lessors, defendants herein, averring the latter wrongfully threatened to forfeit the lease, be[541]*541cause of alleged neglect to make the payments of minimum royalties provided thereby. A preliminary injunction was granted, which remained in force throughout the proceedings. Subsequently defendant filed a cross-bill, reiterating its contention made in its answer that plaintiff had wrongfully ceased paying the minimum royalties, and prayed a decree for payment thereof. The court below filed an adjudication, plaintiff’s exceptions thereto were dismissed and, from the final decree which followed, plaintiff prosecutes this appeal.

Many points were raised and much evidence taken in the court below, but a proper interpretation of paragraph 8 of the lease will answer all the questions we are called upon to decide, and these arise only because defendants revoked the arbitration clause provided for therein, thus admittedly casting upon the courts the duty of determining when the minimum royalty payments should cease.

The paragraph referred to is as follows: “At any time that the said lessees may have paid for as much coal ......as in their opinion still remains in said premises unmined and capable of being mined, the said lessee may notify the lessors to choose a mining engineer, who, with the mining engineer of the lessees, shall select a third mining engineer disinterested in the result; and said three engineers shall thereupon make the necessary examinations for determining the amount of coal still on the property, by actual examination and testing of all the veins, including the Ned Ash’ or bottom vein, and if they, the said engineers, or a majority of them, shall be of the opinion that all of the said coal on said land and property hereby leased, capable of being mined under the terms of this lease, has been paid for, the said lessees shall not, thereafter, be required to make further payments on account of coal mined, or to be mined, until they shall have mined out the quantity for which they have paid, and thereafter the lessees shall only be liable to pay for the coal mined in excess of the amount already [542]*542paid for, using due and reasonable diligence to mine the excess of coal which may still remain in said lands, and which is capable of being mined therefrom.”

The first question to be determined is: Until what date should plaintiff have continued paying the minimum royalties? It contends that, since the court below decided it acted “in good faith, with honest intention and intelligent knowledge,” when it gave notice the time had come to cease paying those royalties, defendants were bound by its decision, under the authority of Shiffer v. Hudson Coal Co., 245 Pa. 479. We cannot agree with this contention, because the clause providing for plaintiff’s preliminary determination of the question is but a means of setting in motion the machinery provided for ascertaining the actual facts, and itself plays no part in the final determination thereof.

Defendants, on the other hand, claim that, with the elimination of the clause referred to, the minimum royalty payments must continue until the court has actually determined whether or not they should cease, just as they would have continued until the arbitrators had decided that question. This view, which was adopted by the court below, is also erroneous, since it necessarily results in the making of a new contract, so far as this matter is concerned. The chancellor found that, if the arbitration clause had not been revoked, the engineers to be appointed thereunder would probably have decided the dispute “perhaps in the course of a month, certainly in the course of two or three months”; this litigation, resulting from its revocation, has already occupied nearly eight years. We cannot say that plaintiff would have consented to continuing the payments while a proceeding in equity “drags its slow length along,” especially as, by the contract actually made, they sought to avoid this very thing.

There are some who still contend, — the law of criminal conspiracy to the contrary notwithstanding,=-that “the end justifies the means,” but it has never been [543]*543thought the means provided to attain an end should, in equity, be permitted to destroy the end itself, unless this ease is to furnish the exception. The two paramount purposes underlying the lease are (1) that the lessors shall be paid for “all the merchantable anthracite coal” under their land, but nothing beyond this, and (2) the payments shall continue^o be made, at not less than the ■minimum royalty provided, until all the unmined coal under the tract has been paid for. The method provided for determining whether or not it has been thus paid for, and the requirement of continuous payments until the decision, are incidental and relatively unimportant provisions, yet by the decree they have been made the most important part of the lease, a means for defeating its paramount purpose; and, if the court’s conclusion as to the tonnage unmined is even approximately correct, would result in appellant paying to appellees nearly $200,000 more than the latter are entitled to receive. This, of course, is an impossible conclusion, so inequitable that no court of equity can entertain it.

In, our opinion, when the arbitration provision was revoked, every clause relating thereto and depending thereon fell with it, the one now under consideration as well as every other, and thereafter the issue on this point was to be determined by the-courts, exactly as if the lease had said: “The lessee shall continue payment of the minimum royalties until such time as it shall have paid for all the merchantable and minable coal still underlying the land.” Under such a clause, the lessee would have been compelled to determine, in the first instance, whether it had fully complied with the requirements of the lease in this respect; if the lessors disagreed,with its conclusion on this point, the courts would have been invoked to settle the dispute, just as they have.been in this case; and the chancellor could fully proteet both parties, the lessees by a preliminary injunction, if the evidence justified it, and the lessors by requiring adequate security, the payment of stated sums [544]*544into court, or, if necessary, by appointing a receiver, pendente lite. This would have been the court’s duty, if the parties, by tbeir contract, had not provided a method for settling the dispute; it was no less its duty, in the present instance, where, by the action of one of the parties, the provision actually made has become nugatory.

Moreover, even if we agreed with the chancellor in his conclusion regarding the effect of the revocation of the arbitration clause, or even if the contract had expressly provided the minimum royalties should be paid until the court had decided the excess payments equalled the royalty value of the coal still unmined, we would nevertheless reverse this decree; for a court of equity is not so impotent as to be compelled to take nearly $200,000 from one litigant and give it to the other, who it finds is not entitled to receive it, when the accumulation of the greater part or all of that sum was due to the delays of the court itself, which neither party could have anticipated ; and this is so even though, as all the counsel agree, the delays were excusable in the present instance.

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Bluebook (online)
115 A. 822, 271 Pa. 539, 1922 Pa. LEXIS 754, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mount-lookout-coal-co-v-schooley-pa-1922.