Genet v. Delaware & Hudson Canal Co.

Headnote

1. Evidence—Parol to Vary Writing.

The declaration of the parties made at the time of the delivery of a written contract is not admissible to vary its terms, where the language of the contract itself is unambiguous.

2. Same—Collateral Contract.

Where a written contract requires defendant to take out only a certain quantity of coal from defendant’s mine, but authorizes the taking of an unlimited additional quantity, paroi evidence is not admissible to show that the contract was delivered in reliance on a promise by defendant to “ work out the greatest quantity of coal, ” as such paroi agreement is inconsistent with the written contract.

8. Same—Admissibility—Conflict of Laws—Lex Pori.

In an action on a contract to he performed in another state the lex fori governs as to the admissibility of evidence.

4. Mines and Mining—Leases—Adjoining Mines.

Defendant was required by its contract to take 20,000 tons of coal yearly from plaintiff's land, with the privilege of an unlimited additional quantity, until all plaintiff’s coal should he mined. The contract authorized defendant to erect all buildings, fixtures, etc., and dig shafts on the land; to use all the land which it “may deem necessary for the prosecution of its business, together with land for piling coal or culm, and all other appurtenances it may require for mining * * * under this agreement; ” and to exercise such rights for the purpose of taking coal

from adjoining lands. Held, that defendant was not authorized to mine coal on the adjoining lands through a shaft on plaintiff's land until all plaintiff's coal was exhausted. Ingbaham, J., dissenting.

5. Same—Injunction.

Piling oulm and discharging water from the mines on the adjoining lands upon plaintiff’s land, through the shaft thereon, is a burden not contemplated by the contract, and will he enjoined. Ingraham, J., dissenting.

6. Estoppel—By Acts—Acquiescence.

Plaintiff’s acquiescence in the erection by defendant of fixtures with a capacity sufficient to take out more than the amount required by the contract will not estop her from objecting to defendant’s taking coal from adjoining lands, by means of such fixtures, before the coal in her land is exhausted, as the contract authorized defendant to take out an unlimited quantity. Ingraham, J., dissenting.

Appeal from judgment on report of referee.

Action by Augusta G. Genet against the Delaware & Hudson Canal Company for damages, and for an injunction. The referee dismissed the complaint as to the first cause of action, awarded damages to plaintiff as to the second cause of action, and found that plaintiff was entitled to an injunction. Judgment was entered on the report of the referee, and both parties appeal. The following are the opinions of Henry E. Sickles, Esq., to whom the case was referred, on the first and second causes of action, respectively:

“ 1. The language of the lease or contract upon which this action is based, as to the duties imposed upon the defendant in the matter of mining coal, is so clear and unmistakable that there can be no reasonable doubt as to its meaning. The defendant, the party of the second part, agrees ‘ to mine from said land, in the year one thousand eight hundred and sixty-four, not less than ten thousand tons of coal; in the year one thousand eight hundred and sixty-five, not less than ten thousand tons; and twenty thousand in each and every year thereafter; it being understood that the said party of the second part is to pay for ten thousand tons in each and every year, whether the same shall be actually taken out in such year or not, and that in case the maximum quantity of twenty thousand tons is not taken out in one thousand eight hundred and sixty-six, or any subsequent year, interest at the rate of seven per centum per annum shall be paid by the said party of the second part to the said parties of the first part, their heirs or assigns, upon such sums as the deficiency shall amount to, said interest to be continued until the full quantity agreed to be taken out as aforesaid shall be reached:’ provided, ‘that the said party of the second part shall have the privilege of taking out, without charge, at any time thereafter, a quantity of coal equal in amount to the deficiency they may have paid for in any previous year or years.’ Then, after providing for certain contingencies, which, if they arise, may terminate or modify the liability of defendant, the contract continues: ‘ And the said party of the second part agrees to pay for the coal mined and taken out in pursuance of this agreement at the rate of twelve and a half (12J) cents for every ton of (2,240) twenty-two hundred and forty pounds of clear merchantable coal, exclusive of culm or mine waste, that will pass through a mesh of one-half inch square. * * * And it is further understood and agreed that, if the said party of the second part elect to do so, they may increase the quantity beyond that stipulated to be mined in any one year, and at their option may diminish the quantity for any succeeding year or years by an amount corresponding with such increase: provided, that the quantity mined shall not be less in the aggregate than as hereinbefore stipulated.’ Ho ingenuity of argument will change the meaning of this language. The defendant obligates himself to mine not less than ten thousand tons of coal for the first two years, and not less than twenty thousand tons thereafter. If it fails so to do, provision is made for indemnity to the plaintiff for the breach. The defendant does not obligate itself to mine more under any circumstances, but, in precise and emphatic phrase, limits its liability to that amount. It has the privilege to mine more, but if it avails itself of that privilege, the excess is first to be applied

“(2) It is claimed that as the contract was delivered only in reliance upon the promise of defendant’s agent that they would work the mine industriously, < work out the greatest quantity of coal,’ that this was enforceable as a separate and independent agreement. Such a paroi agreement, to be enforceable, must be consistent with the terms of the written contract, not directly antagonistic to and subversive of it. The cases cited by the learned counsel for the plaintiff go no further than this. I listened with interest to his ingenious and able argument, and perused with care his exhaustive brief, and would not have been displeased could I have had pointed out to me some practicable way -to avoid the rule, as there is an apparent equity in her case. But I find none in the argument or brief, and the oral evidence must be rejected unless another position counsel takes is maintainable, and that is

“ (3) This is a Pennsylvania contract, and its constructions must be governed by the laws of that state, and in that state written contracts may be •changed or modified by paroi evidence. It is not claimed that there is any statute in Pennsylvania which controls the subject, but that it is a modification made by the courts of that state of the common-law rule. There are •cases in that state as in this, where, to prevent the doing of an injustice, the •courts have been ingenious in avoiding the rule, and in discriminating between it and the case under consideration. But there were none called to my attention which go to the length necessary to aid the plaintiff here. But, again, •the question depends upon a rule of procedure, i. e., as to the reception or rejection of evidence, and this is a field into which the laws of another state cannot intrude; it is to be determined exclusively by the laws of this state. I :am constrained, therefore, to grant the motion to strike out the testimony objected to as to the negotiations and conversations preceding, and those accompanying, the delivery of the lease, and as to the first count to dismiss the complaint.

“ The motion" to dismiss as to the second count is denied. There is some ■evidence tending to show that defendant has exceeded the rights given to it by the lease, extensive as they are. It would not be profitable to discuss rthis evidence for the purpose of determining the particulars in which plaintiff’s rights have been violated, the extent of such violation, or, perhaps, to •determine definitely that a cause of action had been absolutely established. .Suffice it to say there is evidence tending to establish a cause of action, and which will not justify a nonsuit.

“2. The causes for complaint for alleged illegal action on the part of defendant, for which plaintiff seeks redress under the second count of her complaint, are threefold: (1) That defendant, instead of using the privileges which were granted to it solely for the purpose of enabling it to carry out the provisions of the contract (Exhibit A) in regard to the mining of the coal on plaintiff’s land, exclusively, or principally for that purpose, has unlawfully used them for the mining of its own coal, and this to such an extent that it has seriously interfered with the work to aid in which they were granted; (2) that defendant has excavated and is using a gangway connecting the Marvin .shaft with defendant’s other collieries, not for any object or purpose connected with the mining of the coal in plaintiff’s land,- but mainly for the purpose of •draining the water from the other collieries down upon plaintiff’s land, and thus is imposing a burden upon the said land not authorized or contemplated by the •contract; (3) that defendant is piling the culm or refuse coal arising from the coal mined from its land upon the surface of plaintiff’s land, thus appropriating and using so much of the surface for its own purposes, which is not needed ■or used for the purpose for which alone defendant is entitled to use any portion of the surface. The facts alleged are established by the evidence, and I am satisfied that by no reasonable construction of the instrument (Exhibit A) is the use thus made of plaintiff’s property, and the burdens so imposed upon .it warranted or authorized thereby, and neither the able arguments of defend

ant’s counsel, nor a careful perusal of the learned and exhaustive brief furnished by them, and examination of the authorities cited, have convinced me to the contrary.

"First. That the object that the parties had in view in entering into the contract, (Exhibit A,) at least so far as appears from the terms and provisions-thereof, was the mining of coal that might be found in plaintiff’s land; that the rights and privileges granted by plaintiff to defendant were merely as incidents, and were designed to be limited to the actual requirements for a successful accomplishment of that purpose, can scarcely be successfully disputed. The-plaintiff grants to defendant the right, and defendant assumed the obligation to-mine all the coal in said land which can be economically mined, and,to enable the-defendant to exercise this right, and to perform its covenants, plaintiff grants to it the right of way for all ‘railroads, * * * slopes, tunnels,’etc., it ‘ may find necessary to construct across or upon said tract with the right to-erect dams upon the surface for the proper mining of said coal; also the use of land for digging all air shafts that they (i. e., defendants) may consider necessary, with the right to dig the same; also the use of all the land they may require for the purpose of erecting * * * buildings they may deem necessary for the prosecution of their business, together with land for piling-coal or culm, and all other appurtenances they may require for mining, * * * preparing, and forwarding the coal to be mined under this agreement.’ By the very language of the agreements, the rights and privileges are limited to the necessities of the work contemplated. It maybe conceded, as defendant’s counsel claim, that defendant is the sole and exclusive judge as to what is necessary, but in determining that question it may look only to this work. It is not authorized to take into consideration any other object or purpose. If it did consider or was influenced in its determination by other purposes connected with its adjoining property, it was not authorized by the contract, and was a breach of good faith. When, therefore, defendant sunk the Marvin shaft, and erected the breaker and other buildings, its officers, through whom it acts, virtually announced to plaintiff, ‘We consider works of this size and capacity necessary for the successful and profitable mining of the coal in your land as rapidly as we propose to mine it,’ and inasmuch as the shaft and breaker, etc., were clearly and admittedly of much greater capacity than would be required for the mining of the twenty thousand tons per annum, which defendant bound itself to mine, and to which it limited its obligation, their construction was an announcement to plaintiff that defendant had elected to avail itself of the option given to it to mine a greater quantity. Plaintiff, therefore, had a right to assume that defendant intended and in good faith required that it should use the shaft and structures, primarily, at least, for the mining of the coal in her land. Plaintiff was interested in having this coal mined as rapidly as possible, and the greater the capacity of the structures, so long as they were no greater than was necessary for this purpose, the better it suited her interest. The fact, therefore, that plaintiff did not-object to the sinking of a shaft, and the erection of a breaker of the size and capacity of the one in question, was not a concession of a right to exceed the necessities of the case. It seems to me justice and equity entitle her to insist that inasmuch as defendant has.iin the exercise of its right to determine what those necessities require, determined that these structures were necessary for the mining of the coal in her land, it is estopped by that determination, and may not now claim that they were in fact much larger than were necessary, and so that it could use them for purposes of its own without interference-with the proper and expeditious mining of plaintiff’s coal. It remains then to be seen whether the contract gives to defendant a right to use these structures for mining of coal on its own land, where it does interfere with the mining of plaintiff’s coal; in fine, whether defendant has the right to elect so to do, provided it pay the royalty on twenty thousand tons per annum, to-

stop entirely the mining of coal on plaintiff’s land, and to use the structure it has erected, and the excavation it has made, exclusively for mining its own land, as, if the' argument of defendant’s counsel is tenable at all, it must go to this extent. A right so inconsistent with the spirit and intent of the contract, so subversive of its purposes, should be based on clear and unmistakable language in the contract. It is claimed to exist under this clause therein: * And it is further agreed and understood that the party of the second part * * * may use and occupy the rights and privileges hereby granted, and the openings, buildings, fixtures, and appurtenances made and constructed by them for the mining, preparing, and forwarding coal from any adjoining or contiguous lands until all the land they desire to take coal from and that can be mined and taken out through said openings, shafts, and slopes shall be exhausted.’ Following this is this provision1 that the party of the second part * * * shall have the right to rebuild, reconstruct, or remove any and all the buildings, fixtur.es, * * * and improvements during the continuance of this agreement, and until the coal in the adjoining and contiguous lands that can be worked from those openings, shafts, slopes, and tunnels shall have been worked out.’ These two provisions are at the end of the contract, after full provision has been made for the mining of all of the coal on plaintiff’s land that defendant obligates itself to mine, and after full provision is made for the termination of its obligation in this respect. The language of the two clauses, as well as their position in the contract, instead of conveying by any reasonable construction the idea that the rights thus granted were to be exercised while the obligations imposed upon defendant as to the mining of the coal in the land in question remained unfulfilled and in force, and while they would interfere with or retard that work, indicate that they were to be exercised only after the main purpose of the contract was substantially carried out and accomplished; and, inasmuch as only rights and privileges necessary for this work are granted, they cannot well be used during the prosecution of the work for other purposes without interfering with and retarding the work. That the purpose in view in making the contract had been subordinated to defendant’s other purposes, and that the rights and privileges granted solely as aids to the accomplishment of that purpose have been used principally for the mining of coal on defendant’s other land, and for the benefit of its other collieries, cannot be disputed. Defendant has mined up to May 1, 1886, through the Marvin shaft, 497,614 tons of coal from plaintiff’s land, and 608,771 from its own. In November, 1886, the last month for the working of which an account was presented, it mined 3,027 tons from plaintiff’s land, and 9,609 tons from its own. It did mine in one year from plaintiff’s land over 89,000 tons, thus showing its capacity in that respect, and yet the average output is only about half that amount, and is gradually growing less, while that from defendant’s land is increasing. But, it is urged by defendant’s counsel, the company mined and has paid to plaintiff the royalty on more than the quantity of coal it obligated itself to mine from her land, and therefore she has sustained no damages, and is entitled to no relief. Plaintiff has submitted to the imposition of heavy burdens upon her land, under the supposition, as I have attempted to show, that they were to be used for her benefit. That they would have been so used to a much greater extent, at least, than they have if defendant had not assumed to use them to such an extent, for his own purposes, is very clear, and if it is permitted to continue such use, the inducement will always be to subordinate the interests of plaintiff to its own, to mine the coal upon which it pays nothing in preference to that upon which plaintiff is entitled to royalties, and it is in precisely such a case where plaintiff cannot be compensated in damages for the injury inflicted upon her that the aid of a court of equity may be invoked. If defendant be prohibited from exceeding the privileges granted to it by the contract, the temptation to make the plaintiff’s interest subordinate to its own will be

removed. If it had worked the colliery to its full capacity in mining the coal in which plaintiff is interested, it might, perhaps, have urged with plausibility that it should not be restrained from mining what coal could be mined from its own land through the shaft and breaker without interference with such working. But, as it has not shown a disposition to thus work the colliery, it cannot complain if it be confined to the exercise of the privileges granted by the contract. It seems to me, therefore, that plaintiff is equitably entitled to a judgment restraining defendant from using the shaft, breaker, etc., for mining its own coal until the coal in plaintiff’s land, so far as defendant is bound to mine it, is removed.

“Second. The gangway driven' to connect the Marvin with the Leggett’s Greek and Van Storch shafts concededly was not excavated for the purpose of mining the coal in question. According to defendant’s testimony it was, in the first place, designed to serve as a second opening to comply with the-requirements of the Pennsylvania laws, enacted some ten years after the execution of the contract, and then, it having been discovered that it could be used advantageously for that purpose, it was arranged and finished so as to serve as a drain to bring the waters collecting in the othertwo collieries down to the Marvin shaft, thus saving to defendant the expense of running the pumps in the other collieries. Defendant claims the right to do this (1) Because it owns the vein of coal in plaintiff’s and the adjoining lands, and had the right to drive the gangway through it for any purpose it deemed it best so-to do. (2) Plaintiff has no remedy if, in the ordinary course of mining, the water is discharged upon her land. It is not necessary to dispute the proposition that defendant is by the contract in question made the owner of the coal. Conceding this for the purpose of the argument, plaintiff still remains the owner of the layers of earth and rock between the veins of coal. Defendant excavated down to the layer under the fourteen-foot vein, and so discharges the water upon plaintiff’s land. The gangway was not made in the ordinary course of mining, and so the authorities cited, which hold that in the ordinary course of mining coal or minerals may be taken up the line of the adjoining land; that a party is not bound to have a barrier to prevent the water from flowing into the mine of an adjoining owner does not apply. But this was-not done in the ordinary course of mining, and I have yet to learn of a decision holding that a person may lawfully dig a ditch upon the surface of his land so as to gather the surface-water thereon, and discharge it upon the land of his adjoining neighbor, or may drive a gangway from his mine to the line of an adjoining owner for the purpose of discharging the waters collecting in his mine into that of the adjoining owner. The authorities cited by defendant’s counsel sustain no such doctrine. In one of them, Iron Co. v. Taylorr 1 Leg. Chron. 36, is cited with approval a clause in the opinion in the case of Consolidated Coal Co.’s Appeal, 54Pa. St. 183, 189, as follows: ‘Had it been made manifest that the consequence of the defendants’ operations would have the effect of letting water in large quantities into the plaintiffs’ mine, it would assuredly have been proper to have enjoined them, even although they were operating exactly within the terms of their lease. ’ In that case a motion for a preliminary injunction was denied, but the court say that if it appears on the trial that the danger exists it can be guarded against by the judgment. Another case is also cited, (Iron Co. v. Qorrell, 29 Leg. Int. 101 ,) which holds as-follows: ‘ Where the miner, in his upper mine, in carrying forward his gangway strikes into a breast which has been wrongfully worked by a trespasser up to the dip of his coal vein, he is not justified in emptying the water flowing down the drain or gutter of his gangway into the opening thus struck, if, by reasonable means, he can carry the water into his own dump,’—that it was the duty of the upper owner to carry off the water, even though a trespass had been committed upon him. The court say: ‘ To adopt the principle that the upper owner is liable for no act done within his own mine, and no neglect be

'cause it falls within his own property right, would lead to results disastrous to mining, and cannot be tolerated.’ It is hardly necessary, however, to cite or discuss authorities. Suffice it to say none go to the extent necessary to sustain defendant’s contention. But it is urged the use of the gangway as a drain is a great convenience and benefit to defendant, and is no inj ury to plain- 0 tiff. This is hardly an excuse for an unlawful interference with another’s rights; but if no serious damage has thus far been occasioned, such damage may result at any time. If the pump in the Marvin shaft should become disabled,or the working thereof should cease because of a strike, (a contingency not altogether improbable in these days,) or from any other cause, the water that is being poured down from the defendant’s other collieries into the Marvin shaft would soon flood that colliery, and for a time utterly prevent the mining of coal therefrom. Defendant has no right to impose this burden and this risk upon plaintiff, and she has a right to ask that it be restrained from so doing.

“Third. The right claimed by defendant to deposit all of the culm or waste coal arising from the coal mined through the Marvin shaft from defendant’s adjoining land upon the surface of plaintiff’s land, as well as that coming from the coal mined from her own land, seems to me ah extraordinary one. If it be true, plaintiff, in executing the contract, virtually surrendered all right to the surface of her land, and cannot safely sell one foot of it. It appears that defendant has from 800 to 1,000 acres of land adjoining plaintiff’s land, the coal from which can be mined to advantage through the Marvin shaft. The coal from the farm,’ which contains 500 acres, can be mined in no other way, unless a new shaft is sunk, and it is the evident purpose of defendant to mine it all through the Marvin shaft. A very moderate estimate of the coal from defendant’s adjoining properties already and hereafter to be mined through "the Marvin shaft is 20,000,000 tons. Add to this say 3,000,000 tons for the coal from plaintiff’s land, the whole amounts to 23,000,000 tons. There has already been mined 1,100,000 tons. The culm from this covers seven acres and seventeen perches of land, to a depth of between forty and fifty feet. If the balance yet to be mined yields culm in anything like the same proportions, it would cover the whole surface of plaintiff’s land not used by defendant for other purposes to a depth of at least seventy feet. If, then, defendant has the right claimed, it has the right to appropriate the whole surface. The language of the contract must be strong and unequivocal, indeed, which will authorize a court to arrive at a result so disastrous, and yet the claim is based simply upon a grant of the right to use so much of the surface as shall be necessary for the deposit of the culm from the coal mined from plaintiff’s land. The provision of the contract, authorizing the use of the rights and privileges granted for purposes connected with the mining of the coal from its own land, does not purport to extend the right granted so as to make it cover land not necessary for the purposes specified. How, there is marked distinction between the use of the surface for the deposit of culm and the use for other purposes connected with mining. For the latter the use is but temporary, and the portion taken, when not being used for purposes connected with mining plaintiff’s coal, may be used for mining that of defendant’s, without imposing an additional burden, and the portion required to be taken must be a matter of judgment. Bnt the necessity to take land for the deposit of culm only arises as the culm is produced, and the use of the land taken for it is, in effect, a permanent appropriation, as the land is rendered valueless for building or other purposes. It can scarcely be claimed that defendant has the right at the outset to mark out and appropriate all the land it may deem necessary to use even for the deposit of culm from plaintiff’s coal. Until needed plaintiff has the right to use it. If any culm arising from any other coal is deposited on plaintiff’s land, then so much space which might have been used for the deposit contemplated by the contract is otherwise appropriated, and so

much additional land must be taken which would not have been required had the land so appropriated been used for the deposit of the culm from plaintiff’s coal. Certainly, if I am correct in my first proposition, if defendant is not authorized to mine its own coal through the Marvin shaft until it has per- # formed its contract as to mining plaintiff’s coal, when that is done, the quantity of land required for the deposit of the culm therefrom will be definitely determined, and no more can be taken. Nor is it necessary to enable defendant to use and enjoy the rights and privileges granted to impose this heavy burden upon plaintiff’s land. The Marvin shaft is located near the Lackawanna river, on the opposide side of which lies the defendant’s ‘farm.’ By building a bridge across the river access can be had to the farm, and a convenient dumping place for its own culm can be reached. It seems to me, then, as there is no express grant to defendant in the contract of a right to deposit culm • arising from the coal mined in its own land, upon the surface of plaintiff’s land, as no such deposit can be made without appropriating land not necessary for the deposit of culm from coal mined under the contract, and as, so far as this question is concerned, the right to use only so much of the surface as is necessary for that purpose is granted, defendant exceeded the rights granted, and was guilty of a trespass in depositing the culm from its own properties upon plaintiff’s land, and to the extent of the injury thus inflicted, it is liable, and plaintiff is entitled to judgment restraining any such further unlawful use of her land, it appearing that such use is contemplated and the right thereto asserted. It does not appear in the case what is the usual or reasonable height to which deposits of culm are or should be carried. It may, perhaps, be inferred from the testimony that more culm may yet be deposited on the land already appropriated for that purpose. It does appear that the surface so covered is rendered useless; that it was worth $1,500 per acre; that a little over seven acres have been covered with the deposit; that about six-elevenths of such deposit was made without right,—and perhaps it would not have been unreasonable to have allowed to plaintiff by way of damages the full value of six-elevenths of the land taken. I have concluded, however, to allow $8,000, the value of two acres, and, if I am right in my views as to the construction of the contract, this cannot be considered an excessive allowance.”