Thomas v. Harbison-Walker Refractories Co.

75 A. 199, 226 Pa. 136, 1910 Pa. LEXIS 727

• Court: Supreme Court of Pennsylvania
• Decided: January 3, 1910
• Docket: Appeal, No. 140
• Status: Published

Opinion

Opinion by

Mr. Justice Elkin,

This is a controversy between the assignee of the lessor and the assignee of the lessee involving the amount of royalty to be paid for fire clay mined and removed from certain tracts of land included in the indenture of lease.

In 1891 Bliss, the then owner of certain tracts of land involved in this suit, entered into an agreement of lease with a predecessor in title of appellant here granting the privilege of mining and removing the fire clay under the same for and in consideration of fifteen cents per gross ton to be paid the lessor. In 1897 the terms of the lease were modified by an instrument in writing so that the royalty was reduced from fifteen to seven and one-half cents per gross ton. In 1899, Bliss still being the owner of the land, executed a new lease to another predecessor in title of appellant, which lease included all of the tracts described in the original lease of 1891 as well as several other tracts not included in the former lease. This suit was brought to recover the amount of unpaid royalties upon the basis of ten cents per gross ton as stipulated in the lease of 1899. The appellee has succeeded to all the rights of the original lessor-and the appellant has succeeded to all the rights of the original lessee. If the lease of 1899 covers all the lands described therein and supersedes the former leases the right of the appellee to recover on the basis of ten cents per ton cannot be doubted. The fire clay was mined from these properties, and there is no dispute as to the number of tons removed. The lease in terms provides that the lessee shall have “the right and privilege to explore, convey, mine, dig and carry away all the fire clay in and upon those certain tracts of land” described therein. Ten different tracts, aggregating several thousand acres with the names of the respective warrantees, dates of the original surveys and the number of acres contained in each tract, are separately described in the lease. It is further provided therein that “the said parties of the second part covenant, promise and agree for themselves, their heirs and assigns, to pay said party of the first part the price or royalty of ten (10) cents per ton of twenty-two hundred and forty pounds for each and every ton of fire clay mined and used, or shipped from said land.” The right to mine the fire clay was to continue and be in force for a term of twenty-one years from the date of the agreement unless canceled in the manner therein provided. Here, then, is an agreement between the parties covering all the lands from which fire clay was taken and removed by appellant which in the most positive terms provides that the lessor shall receive in payment for the clay so mined and removed the sum of ten cents per ton. This certainly makes out a strong prima facie case for appellee and places upon appellant a heavy burden to overcome the express provisions of the covenants thus formally entered into. The attempt is made to meet this burden by setting up a course of dealing between the prior owner and the former lessee under which only seven and one-half cents per ton was paid for the fire clay, taken from the lands included in the lease of 1891, and ten cents per ton for all the clay taken from the lands described in the lease of 1899 but not included in the former lease. In other words, the contention of appellant is that the two leases ran together and are in force, so that royalties should be paid according to their respective terms. By agreement of the parties the case was tried in the court below without a jury under the act of 1874: In such cases the findings of the court have the force and effect of the verdict of a jury. The learned court below in passing upon the course of dealing between the former parties to the contract of lease found that, “There was nothing in the character of the possession manifested by the operations of the defendant company, and nothing in the evidence which would indicate to the plaintiff that defendant was not operating under the lease dated October 31, 1899; and there is nothing in the testimony tending to show any course of dealing between the defendant company, its predecessor in title and the grantors of the plaintiff, which would bring home to the plaintiff knowledge of any course of dealing other than that outlined and provided for in the said agreement of 1899. There is no evidence before the court which is calculated to even raise a suspicion in the mind of the plaintiff at the time he took title to this property and succeeded to all the rights of his grantor and assignor of the course of dealing relied upon by the defendant to relieve it from a portion of the plaintiff’s claim, and plaintiff has always refused to accept royalty at a less rate than that provided by the agreement of October 31, 1899.” Unless there is manifest error in these findings, the judgment must be affirmed. We have carefully examined the entire record here presented, but have not been convinced of any such manifest error as would justify a reversal. The twenty-seven assignments of error relate to the rulings of the court, the affirmance of certain points submitted, the admission of certain testimony, the manner of stating findings and the judgment entered. As we view the case, no useful purpose can be served by discussing the numerous questions raised by the assignments. If in point of fact the appellee had no knowledge or notice of a course of dealing between the prior lessor and lessee affecting the payment of royalties, he had the right to rely on the lease of 1899 and to insist upon payment according to its terms. Independently, however, of the question of fact as to the knowledge of appellee, the court was clearly right in holding that the lease of 1891 and its modification of 1897 were merged in the new lease of 1899. The language and covenants of this lease are not susceptible of any other reasonable interpretation. The new lease includes all of the lands covered by the former leases and adds several other tracts. The language is plain and unambiguous, and expresses the final understanding of the parties. There is no exception or reservation and no mention of former leases or different royalties. The presumption is that the parties meant what they said and intended to do what their written language imports, which was to pay for all the fire clay mined and removed at the rate of ten cents per ton. There is no ambiguity in the language used, and therefore nothing to explain by parol testimony. It may be conceded that notwithstanding the express covenants contained in the lease of 1899, the contracting parties might agree among themselves, or by a course- of dealing amounting to a common understanding and agreement, that the royalties under the lease of 1897, should continue to be paid as therein provided and all other royalties to be paid as required by the lease of 1899. But such an understanding or course of dealing when set up in face of' a written agreement otherwise providing must be established by full, clear and satisfactory evidence even as between the parties alleged to have assented to such a course of dealing. As against a subsequent grantee, or assignee, without knowledge, a course of dealing between prior owners cannot be set up at all to affect the rights of the parties under the written instrument. In the case at bar the learned court below has found that appellee had no knowledge of such a course of dealing and that he relied on the terms of the written agreement and always insisted upon payment according to those terms. The evidence was sufficient to warrant the finding, and we see no reason to disturb it. Nor was there any error in allowing interest on the installments due from time to time under the terms of the lease and not paid as therein provided. The voucher checks were not unqualified tenders of the amounts due under the terms of the lease, and the appellee was not precluded thereby from claiming interest.

Assignments of error overruled and judgment affirmed.