Delaware, Lackawanna & Western Railroad v. Sanderson

Mr. Justice Trunkey delivered the opinion of the court, These plaintiffs were not parties in the case of Sanderson v. City of Scranton, 9 Out., 469, and therefore are not bound by the adjudication. The sole question in that case is the controlling one in this, namely, whether the deed dated May 10th, 1875, by Sanderson and others to Jermyn, “is a lease, properly so called, or virtually a sale of the minerals in place.” Notwithstanding the very able and ingenious argument of the plaintiffs’ counsel we are not convinced that there was error in the interpretation of the deed. Nothing can be added to the opinion of Justice Clark in support of the con■elusion “ that there was such a severance of the surface from the underlying strata as created a divided ownership in these distinct portions of the land.” [589] It may not be amiss to remark some of tlie points of tbe plaintiffs’ argument. At present no question arises respecting the grantors’ security for the purchase money, nor of their power to subject their right under the deed to the lien of a mortgage. Nor is it a part of the case that the great body of coal lands in the Commonwealth are held under similar instruments. And if they are so held the real question remains as to the nature of the estate vested in the grantees. In this instrument the operative word of the grant is “lease,” which signifies to grant the temporary possession of the subject, but in another part, it is provided how long that possession shall continue. “ In consideration of the grant or lease aforesaid” the grantee or lessee agrees to pay a certain sum por ton; the mode of ascertaining the number of Ions, the times of making payment, and the minimum quantity to be paid for annually, are well defined. The moiiéy to be paid is called “payment,” “ price or royalty.” and “royalty,” but the meaning would be the same were the price to be paid for the coal called “ rent.” The stipulated remedies in case of default in payment, are consistent with either a sale or lease, but were the instrument a lease some of them would exist if not therein expressed. When the parties omit to name a term, do not create a lease at will, nor a lease for life, though much of their contract is expressed in words peculiar to a lease, the whole instrument must be taken into view to ascertain the intent. Where it is clear that the owner of a tract of land grants the right to take all the coal beneath the surface, and the grantee obligates himself to mine and remove all said coal and to pay a certain price per ton each month for all coal mined, not loss than a named quantity to be mined and paid for every year, the contract to be binding until, all the coal under the tract is mined, and the rights, covenants and obligations are made binding on the parties, their heirs and assigns, and executors or administrators, there is an actual sale of the coal. It is none the less a sale, if the parties called the deed a loase, and styled themselves lessor and lessee, and contracted that in case of non-payment of the “royalty” the grantor should have the right of distress, or at his option the right to forfeit the grant. A deed on such terms is not a lease at will, nor for a term of years, nor for life. It cannot be limited to the life of the grantee, for should all the coal not be mined at the time of his death, his rights and obligations do not die with him. Leases are generally for a term of years. If for a long term, as a hundred years, though of greater value than if for the life of the grantee, the estate is inferior. The entire body of coal under a tract of land maybe embraced in a lease, and [590] the term be so long that in all probability the lessee will mine the whole of- the coal. Yet a term of years is a chattel, a transient interest in the land. A lease for the life of the lessee vests in him a freehold. A lease of a mine, whether for a term of years or for life, implies the possibility, if not the probability, of its reversion. That the mineral may be partly or wholly exhausted before the end of the term is a result involved in the contract. It is not pretended that the instrument in question is a lease for life. No particular period is named for the duration of a tenancy. Then if it is a lease the tenancy is from year to year. Such tenancy is contrary to the plain intent. The subject of the grant is coal, nothing else save some necessary incidents for mining, and when the grantee shall have, performed his covenants there can be no reversion. It may have been believed, as the plaintiffs allege, that instruments of this character, by settled construction, are mere leases, but we have not been advised of the authority settling such construction. In support of this allegation it is said that these instruments have been recognized as leases in the body of our statutes, and reference is made to the Act of April 27th, 1855, P. L., 369, and its supplement of April 3d, 1868, P. L., 57, relative to the mortgaging of leaseholds; but that statute expressly applies to “every lessee for a term of years.” It embraces no lease that vests a freehold. Nor an absolute grant of the whole body of mineral. Again, it is averred that judicial recognition of such instruments as leases, has been distinct and emphatic, and reference is made to Miners’ Bank v. Heilner, 47 Pa. St., 452; Effinger v. Lewis, 32 Id., 367; Offermau v. Starr, 2 Id., 394; Griffin v. Fellows, 32 Sm., 114; Greenóugh’s App., 9 .Pa. St., 18; Trout v. McDonald, 83 Id., 144; and Winton’s App., 97 Id., 385. Each of the first four of these cases related to a lease expressly for a term of years, Greenough’s Appeal to a lease determinable on one m.ontli’s notice by either party, and in each of the last two cases no question was made respecting the nature of the instrument, and the report does not show that it was not a lease for years. These cases seem to have no bearing upon the proper construction of the instrument in hand. They recognize the fact that a valid lease may be made of a mine; here the defendants deny that the mine was leased. In Sanderson v. City of Scranton, the right of the owner of a tract of land to lease all the coal under the surface is not gainsaid. Nor is it alleged that in Scranton v. Phillips it was decided that the instrument was not a lease, but the remark of the Chief Justice was referred to as evidencing that it was deemed more than a lease. In the late case of Stoughton’s [591] Appeal, 88 Pa. St., 198, tbe instruments were leases, each was for a term of years, of land for tbe purpose of producing or mining oil. It was held that the guardian of a minor, without the approval of the Orphans’ Court, had no power to lease the lands of his ward for mining purposes, as in effect it would be a, grant of a part of the corpus of the ward’s estate. One of the leases having been properly approved, was held valid. The validity of leases of mines has been uniformly recognized by the courts in this Commonwealth. There is a marked difference between a chattel and a freehold — estates created by leases are not all of the same nature. Where by the terms of the deed the ownership of the mineral therein described is vested in the grantee, he is entitled to the benefits and is subject to the burdens incident to its ownership. It is contended that even if there was a sale of the coal, that the provision in the deed relative to taxes on the mined coal implies that the grantors shall pay the taxes on the unmined. The plaintiffs say that at the time of the execution of the deed there had been a tax upon the coal itself when mined, and doubts existed whether the tenant was not authorized to deduct such tax from the royalty or rent. This explains why tbe provision was inserted. At that day, probably, the parties had no thought that unmined coal was taxable as real estate separate from the surface. Their intent must be ascertained from the language in the deed. They meant to insert many covenants similar to covenants usually inserted in leases. In a matter of so much importance had they intended to create a leasehold — a chattel — they would have limited the estate to a “determinate period.” “ The estate of a lessee for years is called a term, terminus, because its duration is limited and determined; for every such estate must have a certain beginning and a certain end.” Where the subject and purpose of the grant involve the mining and removing of the entire thing granted, to be held by the grantee and his heirs until it shall be so mined and removed in accord with his covenants, how can it be said that lie takes a term? What can be more uncertain than the date when the subject shall be exhausted ? What greater estate in the mineral underlying the surface of a tract of land, can a man have than the right in himself, his heirs and assigns, to mine and remove the whole of it? If his title is burdened with covenants and conditions insuring his payment of the purchase money, the burden does not affect the nature of the estate. We are of opinion that there is no express or implied covenant obligating the grantors to pay the taxes assessed on the coal as land, the property of the plaintiffs. Judgment affirmed.