Reed v. Beck

Reed, J. By the terms of the lease, defendant acquired the exclusive right and privilege, for the term of twenty-five years from the date of its execution, “to dig, mine and remove and take away, all the coal in or under 'the surface ” of the premises described therein. He is also granted the right to sink a shaft in the most suitable place on the premises, and to dig and construct the necessary air shafts; also the use of three acres of ground on which to erect the buildings and fixtures necessary for carrying on the mine. He is also granted the use of a strip of land across the premises for a road over which he may remove the coal mined by him. He acquires no other rights or privileges as to the surface of the land. His agreements as to the consideration which he will pay for these rights and privileges are expressed in the following language: “ For and in consideration of which the party of the second part covenants and agrees to .tender [23] and pay to the party of the first part twelve cents per ton for all the nnt and .larger than nut coal * * » * mined and taken by the party of the second part therefrom, and to work said mine to an extent necessary to make the rent at five hundred dollars per annum, and for the first year the rent to be paid one hundred dollars per month, the last five months of the year, and the years following the first five months of each year. An^l in case the rent or royalty due for coal mined during any period of six months shall amount to less than $250, then the said party of the second part agrees to advance the difference, to apply, however, on future royalty; also agrees * * * on the first day of each month (after the shaft is open and mining commenced) to pay the party of the first part the amount due from the previous month.” Plaintiff’s position is that by this agreement defendant is bound to pay the sum of $500, in monthly installments, during the last five months of the first year of the term of the lease, whether he has then opened a shaft on -the premises, or mined and removed any coal therefrom, or not; and this is the. view taken by the circuit court of the effect of defendant’s undertaking. In our opinion this is not the correct interpretation of the contract. In the first clause of the portion of the lease quoted above, the consideration which defendant agrees to pay for the rights and privileges granted by plaintiff is clearly stated to be twelve cents per ton for all coal mined and removed by him from the premises during the term of the lease. The subsequent clauses relate merely to the time and manner in which that undertaking is to be performed. The $500 which he agrees to pay annually is not a sum in addition to the amount of the royalty which he is to pay, but is a part of that amount. His undertaking is that he will work the mine to an extent necessary to make the rent $500 per annum; not that he will pay that sum absolutely as a consideration for the rights and privileges which are granted him. The language of the provision clearly implies that the amount to [24] be j>aid is to accrue to plaintiff as royalty on coal actually mined on the premises. At the time the contract was entered into there was no mine opened on the place. Defendant contacted to open one, and he undertook, further, that after it was opened he would mine such number of tons of coal each year as would amount, at twelve cents per ton, to the sum of $500; and that he would pay this amount ,.in five monthly installments. Clearly this is not an undertaking to pay any amount before the mine should be opened. But it is claimed that the provision that “ for the first year, the rent is to be paid, one hundred dollars per month,” etc., fixes defendant’s liabil ity to pay rent for the first year of the term of the lease, whether he mined any coal during that year or not; but we think this provision was not intended to fix the time when the rent should begin to accrue. It simply, prescribes the manner in which the payments shall be made for the first year in which rent becomes due. If the provisions we have been considering were to be construed, then, solely with reference to the language in which they are expressed, they would not, we think, render defend* ant liable to pay the installments sued for before he had opened a mine on the leased premises. But, if we were not satisfied of the correctness of this position, there is a subsequent provision of the lease which we think definitely settles the question as to when the rent will begin to accrue. It is provided that defendant, on the first day of each month, “ after the shaft is opened and mining commenced,” will pay plaintiff the amount due from the previous month. This provision fixes the time when the rent or royalty which accrues in any one month is to be paid. That it applies to the installments in which the annual sums of $500 are to be paid, we think there can be no doubt. These installments will accrue in certain months of the year, and by this provision they are each to be paid on the first day of the month following the one in which it accrues. In this provision, [25] also, tlie parties have expressed their understanding as to the time when the rents will begin to accrue, which is when “ the shaft -is opened and mining is commenced.” If defendant has violated his contract by failing to open the mine within such time as may be provided for in the lease, plaintiff would doubtless have a remedy for such breach in an action to recover the damages which he has sustained in consequence thereof. But we are very clear that he is not entitled to any portion of the royalty provided for in the lease before a mine is opened on the premises. The judgment of the circuit will be Reversed.