Pawnee Construction Co. v. Pavelec

383 So. 2d 835, 66 Oil & Gas Rep. 159, 1980 Ala. LEXIS 2705
CourtSupreme Court of Alabama
DecidedFebruary 29, 1980
Docket78-590
StatusPublished
Cited by1 cases

This text of 383 So. 2d 835 (Pawnee Construction Co. v. Pavelec) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pawnee Construction Co. v. Pavelec, 383 So. 2d 835, 66 Oil & Gas Rep. 159, 1980 Ala. LEXIS 2705 (Ala. 1980).

Opinion

SHORES, Justice.

Plaintiff (Pavelec) sued defendant (Pawnee) alleging a breach of a written agreement by the defendant. From a judgment in favor of the plaintiff entered by the trial judge, who heard the case non-jury, the defendant appealed.

The written instrument sued on purported to be a lease and referred to the plaintiff as “Lessor” and the defendant as “Lessee.” By the agreement, Pawnee agreed to pay Pavelec a royalty of $1.30 per ton for coal mined from the property and also provided:

LESSEE represents to the LESSOR that he intends to mine from 10,000 to 12,000 tons of coal each month from the LESSOR’S Premises and does hereby guarantee to the LESSOR that he will mine from the LESSOR’S Premises a minimum of 30,000 tons of coal during each six-month term of this Lease.1

It is undisputed that Pawnee never mined any coal from the lessor’s property and never paid any royalties to the lessor. It is also undisputed that there was coal on the property that was mined by someone else after the lessee refused to mine it.

On appeal, Pawnee argues that it is not liable to Pavelec under the agreement because it was a mere license to mine coal and not a lease. By this argument, Pawnee asserts that, inasmuch as it mined no coal, it owes Pavelec nothing. This construction of the agreement would leave the paragraph set out above and many other provisions of the instrument without any efficacy whatever. Although it is sometimes difficult to distinguish between licenses and leases in cases such as this, the general rules applicable to construction of written contracts apply and compel a construction which will effect the intention of the parties, and one aid in this regard is supplied by what they called it. Holt v. City of Montgomery, 212 Ala. 235, 102 So. 49 (1924). See generally 54 Am.Jur.2d, Mines and Minerals § 120. Mineral rights and interests may be transferred by contracts of sale, deeds, leases or licenses, but the intention of the parties is to be sought, and each instrument is to be considered in light of its own provisions. Adams v. Riddle, 233 Ala. 96, 170 So. 343 (1936).

[836]*836Applying these rules to the instrument before us, we are compelled to the conclusion that the parties intended to provide that Pawnee would guarantee a minimum payment of $1.30 per ton for coal recovered from Pavelec’s property and would guarantee that it would mine 30,000 tons during each six-month term of the lease. Pawnee breached its agreement in this regard, and the trial court correctly held that Pavelec was thus entitled to damages in that amount: “The compensation to which a lessor of a mining lease is entitled, whether it is termed rent or a royalty, is primarily that stipulated for in the lease.” 54 Am.Jur.2d, Mines and Minerals § 136.

Having agreed to pay a certain amount, Pawnee is liable to Pavelec whether or not the instrument is a lease. Am.Jur., supra, § 143.

The judgment appealed from is affirmed.

AFFIRMED.

MADDOX, JONES, ALMON and BEAT-TY, JJ., concur.

APPENDIX

STATE OF ALABAMA )

) LEASE

COUNTY OF WINSTON )

THIS LEASE made and entered into this 25 day of July, 1974, by and between DOROTHY GREENE PAVELEC, hereinafter referred to as LESSOR, and PAWNEE CONSTRUCTION COMPANY, INC., an Alabama Corporation, Birmingham, Alabama, hereinafter referred to as LESSEE:

WITNESSETH:

LESSOR, in consideration of the payment to her of the sums of money hereinafter stipulated, and for the further consideration of the covenants of LESSEE as hereinafter expressed to be kept and performed, hereby grant to LESSEE the right, to the extent of the interests of LESSOR, to mine by the strip-mining method only, the coal from all seams from the following described mineral rights located in Winston County, Alabama, to-wit:

WVs of WV2 of FJ/2 and EVi of EVfe of WV2 of Section 21, Township 10 South, Range 10 West, Winston County, Alabama,

which lands are hereinafter sometimes referred to as the Premises, the mining of the land located North of the paved road which divides the property and runs generally East and West to be completed before mining operations are commenced 6n the land located South of said Road. LESSEE may open an operation on the land North of the said Road to have two operations on each side of the Road provided both operations strip simultaneously to remove the overburden to a depth of at least fifty (50) feet provided the coal underneath is of equal consistency.

The rights herein granted are expressly made subject to the following terms, conditions, covenants and limitations:

1. EXTENT OF RIGHTS GRANTED. LESSOR grants to LESSEE, in addition to the foregoing mining rights, such rights to use, damage or excavate the surface of the Premises as may be reasonably necessary or proper in mining coal by the strip-mining method without being held liable for such damage, including the use of water and office space on said lands, but for no other purpose whatsoever, and subject in any event to all of the following terms and conditions of this Lease.

2. ROYALTY. LESSEE shall, as rental for the rights herein granted, pay to the LESSOR or assigns not later than the 20 day of each month for all coal mined from the Premises during the preceding month a royalty equal to the following:

(a) $1.30 per ton of 2,000 pounds avoirdupois of all coal removed from the Premises during said preceding calendar month.

LESSEE represents to the LESSOR that he intends to mine from 10,000 to 12,000 tons of coal each month from the LESSOR’S Premises and does hereby guarantee to the LESSOR that he will mine from the LESSOR’S Premises a minimum of 30,000 tons of coal during each six-month term of this Lease.

[837]*837If the mining of coal under this agreement is prevented for any full calendar month during the primary or extended term of this Lease by any strike or work stoppage of miners or work stoppage due to shortage of vital materials unobtainable by LESSEE after reasonable diligent efforts by LESSEE, which is general in the district in which the Premises are located, then the guarantee set out above shall be reduced in direct ratio to the time of said work stoppage.

If either State or Federal Law is enacted which materially affects this agreement, either party, upon written notice to the other party, may, thirty (30) days thereafter, terminate this agreement.

Remittance of royalties provided for herein shall be accompanied by certificates signed by the LESSEE showing the total amount of coal mined during the preceding month for which the royalty is being paid.

3. RECORDS. LESSEE will keep proper books of account of the weights and sale prices of all coal mined from the Premises and, for the purpose of information and checking the certificates of weights and prices furnished by LESSEE, LESSOR, by its officers, agents or employees, at all reasonable times, shall have access to said books of account and other records insofar as it is necessary to ascertain such weights and prices, but said books and records shall not be conclusive of LESSOR’S rights.

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Bluebook (online)
383 So. 2d 835, 66 Oil & Gas Rep. 159, 1980 Ala. LEXIS 2705, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pawnee-construction-co-v-pavelec-ala-1980.