Case ID: ohio-st_39/html/0041-01.html
Source: Caselaw Access Project
Author: {"author": "McIlyaine, J. Okey, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Edwards v. McClurg.
    1. A deed containing apt words to convey an estate in fee, must be held to have that effect, in the absence of other words showing clearly and unequivocally a different intention.
    2. The granting clause in a deed was as follows: “The first party has agreed to sell and does hereby give, grant, bargain, sell and convey ” unto the second party, their heirs and assigns, “all the stone coal lying and being in, under and upon certain premises,” in consideration of thirty cents per ton on all coal when mined, and the second parly bound themselves to mine at least 3,000 tons annually. It was also stipulated that the second party “ shall have the right to abandon the contract at any time when they shall determine, in their judgment, that said coal, in quantity, quality and condition, is no longer minable with economy and profit.” Held: 1. All minable coal in place passed absolutely to the grantees. 2. After such conveyance no interest in the minable coal remained in the grantor subject to be mortgaged as land. 3. A mortgage upon the remaining interest of the grantor in the land, did not cover the purchase money due or to become due from the purchasers of the coal.
    Error to the District Court of Trumbull county.
    Ou September 28, 1867, one Adam McClurg, being then the owner in fee simple of the lands hereinafter described, entered into a written contract with Jacob Stambaugh and associates, as follows:
    “ This agreement made and concluded this 28th day of September, a. d. 1867, by and between A. McClurg, of Yienna township, Trumbull county, State of Ohio, the party of the first part, and Jacob Stambaugh and Evan Morris, of Liberty, J. II. Hnmason and Homy Eowler, of Yienna township, Trumbull county, state of Ohio, and John Tod, of Cleveland, and John Stambaugh, of Youngstown township, Mahoning county, State of Ohio, the second party.
    “ Witnesscth. That in consideration of one dollar paid by said second to said first party, and also of the covenants and agreements of'the second party, to he performed as hereinafter stipulated, the said first party has agreed to sell, and does hereby give, grant, bargain, sell and convey unto the said second party their heirs and assigns the following described stone coal, mining rights and privileges, to wit: All the stone coal lying and being in, under and upon the following lands, to wit: situate in the township of Yienna, comity of Trumbull, and state of Ohio, hounded and described as follows: on the north by land of William Squire ; on the east by land of Daniel Reeser; on the south by lands of R. L. Doming and Amos Woodford’s heirs ; on the west by lands of Lewis and Lucretia Clark; containing in the whole one hundred and four acres, more or less, together with the right and privilege to said ■ second party, their heirs and assigns freely to enter upon said lands, to search for said stone coal, and when found to mine and remove the same, and dispose thereof for their own use and benefit, and for this purpose the right to drill on said land at all suitable points in the judgment of said party of the second part, their heirs and assigns, to ascertain the location, quantity, thickness and inclination or dip of said coal, and the right to make all such shafts, slopes or entries, air holes, ditches, roads and roadways, and erect such machinery, shops, houses and structures, and use all such appliances and means as may be necessary and convenient in the judgment of said second party, their heirs and assigns, for the most economical and profitable mining, removing and marketing said coal, and also’ the right to use on or about the mouth of entries or mines for all said purposes so much of the surface of said land as may be necessary or convenient, in the judgment of said second party, to be selected by them from time to time as needed, but not to exceed in all two acres; and when selected and entered upon for use, said second party, their heirs or assigns shall so enclose the same or otherwise provide as that trespassing animals therefrom shall not damage the residue of said lands for farming purposes, and the first party also grants and conveys to the said second party, their heirs and assigns the right of way through, over or under said lands to transport coal from adjacent lands.
    “ It is mutually understood and agreed that all said rights, privileges and facilities hereby granted are to be used and con ducted in a good, careful, workmanlike manner, and so as to do no unnecessary damage or injury to said coal mine, and to said land and the surface farming privileges thereof. Audit is also understood and agreed that no mining shall be done under the substantial buildings of said first party norv on said land, nor so near thereto as to undermine or endanger the same.
    “ The said second party, in consideration of the premises, for themselves, tlieir heirs and assigns, covenants and. agrees to make reasonable search, within one year from this date, for said stone coal, and if found in location, quality, quantity and thickness sufficient to warrant economical and profitable mining and marketing thereof, then to open said mine of coal, and make full preparations for mining and removing the same within two years from this date, and thereafter to mine and remove from said land yearly, while said coal shall continue profitably min-able, not less than 3,000 tons, of (2,240) two thousand two hundred and forty pounds to the ton as mined, or pay for that quantity as though mined ; but payments made in any year in excess of coal actually mined in such year shall be applied on the excess of coal mined in after years over said stipulated quantity.
    
      “ Said second party, for themselves, their executors, administrators, heirs and assigns, further covenants and agrees to pay to the said first party, his executors, administrators, heirs or assigns, for all coal mined and removed from said land at the rate of (30) thirty cents per ton, of said 2,240 pounds.
    “ Settlements and payments for coal to be made yearly, on the first day of October, and in each year during the continuance of this agreement.
    “ Said second party, their heirs or assigns agree to keep accurate scales for weighing, and accurate weights and accounts of coal mined, and at all reasonable hours have the same, and said mine and works open to the free and full inspection of said first party, Iris heirs and assigns, and also to pay all taxes or public charges of every kind, national, state or municipal, that may be assessed upon said coal, or upon any of the machinery or structure of said second party.
    “It is mutually understood and agreed that said second party, their heirs and assigns, shall have the right to abandon this contract and yield up said coal mine and privileges at any time they shall determine, in their judgment, that said coal is in quantity, quality or condition no longer minable with economy and profit, and when this contract shall be ended, for any reason, said second party, their heirs or assigns, shall have the right to remove their machinery and other structures and property from said land.”
    This instrument was signed and sealed by the parties, attested, acknowledged and recorded in conformity with the statute in relation to deeds and other instruments for the conveyance of land.
    Stambaugh and associates afterwards transferred all their rights and interests under the contract to the Yienna Coal and Iron Company, a corporation, which was in possession, operating the mine, at the commencement of this suit.
    Subsequently, Adam McClurg died testate, having by his will given to his son, James L. McClurg, two undivided ninth parts of said land, and also two ninth parts of the interest of the testator under said contract of September 28, 1867.
    Afterwards, but prior to August 30, 1876, James L. McClurg parted with his interest in said land, by deed duly executed, reserving, however, his interest in the coal and his interest in the contract of September 28, 1867.
    On August 30, 1876, James L. McClurg executed two mortgage deeds, one to Darius M. McClurg, and the other to John McClurg, to secure the payment of certain notes, on his interest in said land, stating his interest to be two ninth parts, and covenanted that “ until the ensealing of these presents, I am well seized of the above-described premises as a good and indefeasible estate in fee simple and have good right to bargain and sell the same.” These mortgages were duly recorded as real estate mortgages, first the mortgage of Darius M. and subsequently that of John McClurg.
    Afterwards, on the 6th of December, 1876, James L. McClurg and his wife executed a mortgage deed to William J. Edwards and others, trustees of the Rayen school, plaintiff in error, upon two undivided ninth parts of the stone coal underlying said land in which it was stipulated as follows:
    
      “ Said coal is, however, conveyed subject to a certain lease made by A. McClurg to J. H. Iiumason and others (to wit, Jacob Stambaugli and associates), on the 28th day of September, 1867, which lease is now held and owned by the Yienna Coal and Iron Company, as assignee of said Iiumason and others. And the said A. McClurg’s interest in said lease to the extent of an undivided two-ninths part therein, is now owned by the grantors, and the said grantors assign to the grantees hereunder, said two-ninths part of said lease and of the right to collect and enjoy rents thereunder for the purpose of securing the payment of the promissory note hereinafter described, be the same more or less.
    Upon this state of facts, a controversy arose between Darius M. McClurg and the trustees of Rayen school as to their respective rights to receive from the Yienna Coal and Iron Company the two ninths of the money in its hands payable to James L. McClurg or his assignee. To settle this controversy the original action was brought by Darius M. McClurg. In the court of common pleas a decree was rendered for plaintiff. This decree was affirmed by the district court. This proceeding is prosecuted by the trustees of Rayen school, to reverse the judgments below.
    
      Sidney Strong, for plaintiffs in error:
    Coal in the land may be granted to and owned by one person, while the soil overlying it belongs to another, the ownership of each being as distinct and exclusive as if the property owned were separated by vertical planes. Bainbridge on Mines, 7, top paging; Cáldwell v. Fulton, 31 Pa. St. 475; 
      Cincinnati College v. Yeatman, 30 Ohio St. 276. The instrument in question conveyed all the minable coal in place to the grantees and thereafter neither such coal nor the money to be paid for it, was subject to be mortgaged by the grantor. Manning v. Frazier, 96 Ill. 279 ; Caldwell v. Fulton, 31 Pa. St. 475; Johnstown Iron Co. v. Cambria Iron Co., 32 Pa. St. 241; Funk v. Haldeman, 53 Pa. St. 229; Grove v. Hodges, 55 Pa. St. 504; Massot v. Moses, 3 S. C. 168; Cady v. Sanford, 53 Vt. 633.
    
      F. F. Hutchins, also for plaintiff in error.
    
      C. A. Harrington and Hutchins & Campbell, for defendant in error,
    claimed that in legal effect, the instrument of September 28, 18G7, is like the instrument in Funk v. Haldeman, 53 Pa. St. 229 ; or it may be like that in Knight v. Indiana Coal Co., 47 Ind. 105. If held to be a lease, still the reversion was in J. L. McClurg when he made his mortgages, and that reversion passed by them to his brothers, and with the reversion passed the rents as incident to it. 1 Hill on Mortgages, 209, and cases cited. And in Ohio, after condition broken, the mortgagee has the legal title upon which he may recover possession and hold the land subject only to the equity of the mortgagor to redeem, the legal estate being absolute in the mortgagee. Childs v. Childs, 10 Ohio St. 344. For other cases bearing on this question, see Glonninger v. Franklin Coal Co., 55 Pa. 7; Dark v. Johnston, 55 Pa. 164; Doe v. Wood, 2 Barn. & Ald. 724; Chetham v. Williamson, 4 East, 469; Neel v. Neel, 19 Pa. St. 323 ; Mountjoy,s case; Massot v. Moses, 16 Am. Rep. 697; Grubb v. Bayard, 2 Wallace Jr. 81.
   McIlyaine, J.

That the stipulations contained in the mortgage of December 6, 1876, executed by James L. McClurg to the trustees of Rayen school were sufficient to transfer the interest now in controversy, is not disputed. The sole contention between the parties is as to the sufficiency of the mortgage executed by James L. McClurg to Darius M. McClurg on the 30th of August, 1876, to transfer such interest to the mortgagee. This mortgage, in form and by its terms was a real estate mortgage — nothing more.

The principal question involved in this contention is, whether or not James L. McClurg, at the date of this mortgage, was seized of an estate or interest in the land therein described. The solution of this question depends on the proper construction of the instrument of September 28,1867, between Adam McClurg and Jacob Stambaugh and his associates.

Confessedly, James L. McClurg, at the date of the mortgage to Darius, had no interest in the land therein described, unless it was an interest in the coal in place. If he had such interest, it was under the will of his father, Adam McClurg; and whether his father had any interest in -the coal as land, which could pass to his devisee, depends upon the legal effect to be given to the instrument of September 28, 1867.

That coal in place may be granted and conveyed as land, separate and apart from that which overlies or underlies it, is not disputed. This brings us to the exact question in the case — what was the intention of the parties as gathered from the whole instrument of September 28, 1867 ?

The granting clause is as follows : “That in consideration of one dollar paid by said second to said first party, and also of the covenants and agreements of the second party, to be performed as hereinafter stipulated, the said first party has agreed to sell, and does hereby give, grant, bargain, sell and convey unto the said second party their heirs and assigns the following described stone coal, mining rights and privileges, to wit: All the stone coal lying and being in, under and upon the following lands, to-wit.” That this language was sufficient to transfer a fee simple estate in the coal, is too plain to admit of discussion. The intention of the parties to transfer a fee simple estate in the coal, must be found from this language, unless we find in other parts of the instrument, a contrary intention expressed in words equally plain and unequivocal.

We do not find in the instrument any other language which, by fair and reasonable interpretation is not entirely consistent with the intention so clearly expressed by the terms above quoted, except in the last' paragraph, which reads as follows : “ It is mutually understood and agreed that said second party their heirs and assigns shall have the right to abandon this contract and yield up said coal mine and privileges at any time they shall determine in their judgment that said coal is, in quantity, quality or condition, no longer minable with economy and profit; and when this contract shall be ended, for any reason, said second party their heirs or assigns, shall have the right to remove their machinery and other structures and property from said land. ”

The exact import or legal effect of this language is not clear. The defendant in error claims that, when construed in connection with other parts of the instrument it shows the intention of the parties to have been to make a lease of the coal, or to grant a license to enter and mine. Either of which would be inconsistent with the intent to convey a fee. To this it may be answered, that the subject matter of the contract was land —coal in place. It is very clear that the parties intended that the coal should be mined by the grantees and thus converted into personalty and disposed of by them. The coal was not to revert to the grantor. Nothing was to be returned to him except the consideration to be paid for the thing granted. Such is not the nature of a contract of lease. It was a sale of the coal for a consideration. True, a license was granted to enter on the lands of the grantor to mine and remove the coal conveyed — the coal of the grantees, not of the grantor.

On the other hand, we think, effect can be given to the terms of the grant, and also to the stipulations of the contract last quoted.

With regard to these stipulations, it may be said, with much show of reason, that the parties thereby intended to save and' except from the grant, such coal as could not, with economy, be mined with profit. If this be not the true interpretation, then, we think, the right reserved to the grantees to abandon the contract, when they may determine, in their judgment, no more coal remains in the premises, which, with economy, may be mined with profit, must be construed as a condition upon the happening of which, the estate granted is determined, and tlie unminable coal reverts to the grantor, liis heirs, assigns or devisees. This right to abandon the contract, does not rest in the mere will and pleasure of the grantees, their heirs or assigns, but upon their judgment exercised in good faith. Cook v. Andrews, 36 Ohio St. 174. So that, upon either interpretation, all minable coal, or, at least, all that was min-able in the judgment of Stambaugh and his associates and their heirs and assigns, passed absolutely, as lands, from Adam McClurg to the grantees named in the deed of September 28, 1867.

This being so, it follows that no estate or interest passed by the will of Adam McClurg to James L. McClurg in the coal as land, which had been previously conveyed by the deed from Adam McClurg to Stambaugh and his associates; and, of course, the mortgage from James to Darius did not create a lien on property not owned by the mortgagor. True, at the date, of this mortgage, James had an interest in all the moneys due and to become due from the Yienna Coal and Iron Company ; but as the mortgage was upon real estate alone, it did not cover the interest of James in such moneys; and, were it true, that J ames intended to pledge'his interest in these moneys to Darius, the trustees of Rayen school are not affected thereby, for the reason that they loaned money upon the faith of this security without actual knowledge of such intention, and the mortgage was not constructive notice thereof.

This is not a case for the application of the doctrine, that a mortgagee, after condition broken, may demand the rents from a lessee of the mortgaged premises. The Yienna Coal and Iron Company is not lessee of any part of the premises mortgaged by James L. to Darius M. McClurg. The moneys due and to become due from the company under the deed, September 28,1867, are not rents, but purchase money.

The conclusion to which we have arrived is fully sustained by the case of Manning v. Frazier, 96 Ill. 279.

In Caldwell v. Fulton, 31 Pa. St. 475, the court went much further and held that by a deed in which there were no words importing a grant of the fee, but which gave absolute dominion over the stone coal in certain lands to the grantees, who agreed to pay a certain and fixed sum in sólido, a conveyance of the coal in place, passed absolutely.

Without referring to other cases, I will merely add, that I know of no case, where, upon similar facts, a different conclusion was reached.

Judgment reversed.

Okey, J.

In my opinion the district court did not err. Much depends, in the proper determination of this case, upon the instrument executed by Adam McClurg, hereinbefore set forth, in the construction of which instrument regard must be had to the words in which it is expressed, applied to the facts then known to the parties. The granting clause is quoted in the opinion of the majority, and it is said that it is sufficient “ to transfer a fee simple estate in the coal,” and that the estate so granted cannot be cut down except by words equally clear. But it is not denied that the words which follow the granting clause show that a fee simple was not intended. “It cannot properly be a fee simple, if it is either base, conditional or qualified.” 1 Wash. R. P. (4th ed.) 78, n. 1. Finding that no indefeasible estate was conveyed, the rule invoked has no application, and we must seek the meaning of the instrument by exploring all its terms. Jackson v. Myers, 3 John. L. 388.

It is not denied that if the instrument is a lease of the <3oal, the mortgagees, Darius M. McClurg and John McClurg, became entitled, on condition broken, to the rents that subsequently became due. Burden v. Thayer. 3 Met. (Mass.) 76. But they are entitled to the sums becoming due annually, even if the instrument were not a lease ; for something more than a naked possibility of reverter — something more than a mere possibility of expectancy, not coupled with an interest in, or growing out of the property — remained in Adam McClurg, and consequently in the mortgagor, who succeeded to his interests, and hence there was an interest which could be effectually mortgaged to Darius M. and John. 1 Jones on Mortg. § 136. It will be observed that by each of those mortgages, the mortgagor grants, bargains, sells and conveys to the mortgagee all his right, title and interest in the premises.

No doubt one owning land in which there is unmined coal, may convey to another a fee in the coal, if he have a fee, or he may convey a less estate; or such owner may give to another license or permission to mine such coal, and such license or permission may be made to assume the form of a lease. Leases may be at will, for years, for life, or of perpetual duration; and, whatever the term, it may be subject to conditions, whereby it may be defeated or terminated. Warner v. Tanner, 38 Ohio St. 118.

In my opinion the instrument executed by Adam McClurg is a lease; and I am led to the conclusion, by the following among other considerations — taken together and not singly— that violence is done to the intention of the parties by any other construction:

1. The consideration named is one dollar, and “ the covenants and agreements of the second party, to be performed as hereinafter stipulated,” by force of which provision and others in the instrument, a forfeiture might be decreed for violation of the covenants. "
2. The things contracted about were mining privileges— “ stone-coal mining rights and privileges, to wit, all the stone-coal lying and being in, under and upon the lands” (described) with the right to enter on the lands, search for coal, and mine and remove such coal.
3. Why reserve the light to dispose of the coal if a fee was granted ?
4. The parties of the second part agree “ to pay all taxes or public charges of every kind, national, state or municipal, that may be assessed upon said coal, or upon any of the machinery or structures of said second party.” But by the act of 1859 (4 Ourwen, 3309, § 9), then and still in force (Rev. Stats. § 2192), where the fee of the soil is in one person or corporation and the right to the coal in the land in another, the soil and the coal must be “valued and listed agreeably to such ownership in separate entries, and traced to the parties owning the same respectively.”
5. The money consideration is not a sum in solido, nor even a uniform sum each year, but nine hundred dollars “ on the first day of October, and in each year during tho continuance of this agreement,” and thirty cents in addition for each ton above 3000 mined in any year, and “ payments made in any year in excess of coal actually mined in such year shall be applied in excess of coal mined in after years over said stipulated quantity.” These provisions seem very proper, if we consider them as prescribing a mode of fixing the amount of rent to be paid; but this is not a usual or natural way of stating the consideration for a conveyance of real property.
6. The parties of the second part have the right to abandon at any time. In the opinion of the majority two theories with respect to this provision are suggested, neither of which, if established, would prove this judgment to be erroneous. In support of the latter, i. e., that the right to abandon must be exercised in good faith, Cook v. Andrews, 36 Ohio St. 174, is relied on ; but the lease construed in that case was quite different from this instrument, and lam unable to see that the decision sheds any light on this case. Here the provision is too plain to be misunderstood: “It is mutually understood and agreed” — so the instrument provides — •“ that said second party, their heirs and assigns, shall have the right to abandon this contract and yield up said coal mine and privileges, at any time they shall determine, in their judgment, that said coal is in quantity, quality or condition no longer minable with economy and profit; and when this contract shall be ended for any reason, said second party, their heirs ’ or assigns, shall have the right to remove their machinery and other structures and property from said land.” That this conferred power to abandon which was practically unlimited, I cannot doubt.
7. The parties speak of the instrument as a contract ” and an “ agreement.”
8. The wife of Adam McClurg, then and still living, is not a party to the instrument, nor does it appear that she was requested to sign it.
9. The parties of the second part caused the instrument to be recorded in the record of leases and not elsewhere. The recorder was then and still is required to keep four sets of records, in one of which deeds, and in another, leases are to be recorded. S. & C. 1278 ; S. & S. 655 ; Rev. Stats. § 1113. And in the answer of the Vienna Coal and Iron Co. it is said that it is the owner and holder of the coal lease and contract, and the coal, coal mining right, privilege and easements therein and thereby granted and conveyed by Adam McClurg:. . That the stipulated annual coal rent, therein provided, whether coal has been mined or not to meet the quantity of 3,000 tons of 2210 pounds to the ton, at 30 cents per ton, being $900 per year, has been regularly paid in advance, and sufficient coal has not yet been mined from said land to equal said advance yearly rents paid ; that there is nothing now due on said coal lease for rent or royalty from this respondent, or from the lessees in said lease, and nothing will become due thereon until October 1, 1878, when $900 more will become due on the whole lease, provided,” etc. This shows very clearly how the instrument has been regarded. “ Tell me what you have done under such a deed, and I will tell you what that deed means.” Attorney General v. Drummond, 1 Drury & Warren, 353, 368 ; aff. 2 H. of L. 837; Whart. Con. § 653.

In support of the judgment of reversal in this case, two decisions are cited in the opinion of the court. One of these is Caldwell v. Fulton, 31 Pa. St. 175, which is said to hold that by a deed in which there were no words importing a grant of the fee, but which gave absolute dominion over the stone coal in certain lands to the grantee, who agreed to pay a certain and fixed sum in solido, a conveyance of the coal in place passed absolutely. But an examination of the case will show that whatever was granted was in terms granted to the grantee, his heirs and assigns, for a sum in solido. The objection was that a grant of the privilege of digging and carrying away coal, did not grant the coal; but the court overruled the objection, and properly. 3 Wash. R. P. (1th ed.) 382. The little application the decision has to this case is in favor of the view I have endeavored to maintain. See cases cited by counsel, in which that case is commented upon ; also, Union Pet. Co. v. Bliven Pet. Co., 72 Pa. St. 173 ; Scranton v. Phillips, 94 Pa. St. 15; Grubb v. Grubb, 71 Pa. St. 25.

The other case relied on in the opinion is Manning v. Fraz ier, 96 Ill. 279, in which the opinion vras delivered by Walker, J. Three judges concurred with him, and an equal number dissented. Aside from that, the case falls far short of supporting this judgment.of reversal. The instrument under consideration there, was a conveyance to one and his heirs, of all the coal-in a described lot of land. He was not obliged to mine or pay for any particular quantity in any year; he was only permitted to abandon the mine “ when the coal should be exhaustedthe instrument was recorded in the proper record of conveyances; and other grounds upon which my opinion as to the proper construction of this instrument is based, do not apply to the instrument under consideration in that case.

Additional reasons might be given in support of the judgment of the district court; but I should not devote further time or space to the subject.