Court Opinion

ID: 8751664
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:30:15.652609+00
Date Added: 2024-06-11T17:00:59.867171
License: Public Domain

ACHESON, Circuit Judge
(dissenting). I am not able to concur in the affirmance of the judgment of the court below. The result reached, it seems to me, is unjust, and not warranted by the authorities. The case in its facts differs essentially from every case relied on to sustain the judgment. The coal vein which the plaintiff below leased to the defendant was undeveloped, and the defendant was to open a mine therein. The lease contained the following clause:
“And the said lessee covenants and agree to mine and ship from the premises aforesaid not less than 75,000 gross tons of coal per year (after the first year of this lease), and to pay royalty on 75,000 gross tons per year, whether mined or not, and as much more as is practicable, unless prevented Wy'strififes, riots, or’ other unforeseen calamity, or by fire or water, or by *318troubles or faults in the coal seams. And the said lessee agrees to pay to the said lessor ten cents per gross ton on all said coal mined and shipped.”
The lease provided for monthly settlements for royalties. Soon after its date (January 5, 1891) the defendant took possession, and at large expense opened a mine, which produced in the year 1891 about 7,000 tons of coal. Near the end of that year marketable coal ran out. For several months thereafter the defendant continued to drive the entry through the bad material which the seam had developed, but, not being able to obtain marketable coal by reason of “troubles or faults in the coal seams,” the defendant early in 1892 abandoned the mine. The defendant paid to the plaintiff the stipulated royalty on all the coal it had taken out. After the defendant had abandoned mining operations, the plaintiff, with the defendant’s acquiescence, took possession of the mine, and during the remainder of the year 1892 carried on operations in the mine, endeavoring to find marketable coal. He claimed to have reached good coal eventually, and about the end of the year 1892 or beginning of 1893 requested the defendant to resume mining operations. The plaintiff did not demand this as a matter of right, nor did he by word or act signify that he regarded the abandonment of mining operations by the defendant as wrongful or without good cause. He made no demand for royalties, nor any demand whatever upon the footing of the lease. Apparently he acquiesced in the defendant’s abandonment of mining operations as justifiable in the circumstances and under the terms of the lease. The first intimation he gave of his intention to hold the defendant to performance was after the expiration of the 10 years term of the lease. Then, on March 23, 1901, he brought this action. He sued to recover (and the claim was allowed) the sum of $7,500 for each of the last nine years of the lease, with interest. The judgment in his favor was' for the sum of $86,586.34, which actually included $7,500 and its interest for the year 1892, when, indisputably, marketable coal was not obtainable from the premises, and during most of which year the plaintiff was in possession of the premises, endeavoring to reach such coal.
The defendant below insisted there and contends here that the plaintiff, by his conduct and silence, had estopped himself from setting up such a claim as he sued for; that his course of conduct, both active and passive, had been such as to induce the belief that he had acquiesced in the defendant’s abandonment of mining operations as justifiable, and that he did not intend to claim minimum royalties; that he had so misled the defendant that the latter had not taken steps to get out the 67,500 tons of coal involved in this suit while it had the right to do so, and that the plaintiff had thus secured to himself the whole of this coal. The defendant’s position, in my judgment, was well taken upon the indisputable facts. By his course of conduct and intentional concealment of his purpose during a period of nearly eight years, the plaintiff lulled the defendant into a sense of security. In view of the circumstances, good faith required the plaintiff to move in assertion of this claim, or to make some sign of his purpose to assert the claim, before it was too late for the defendant to do anything to avert loss. There is no rule more necessary to enforce good faith than that which compels a person to abstain from asserting claims which he has induced others to suppose he would not rely on. Dick*319erson v. Colgrove, 100 U. S. 578, 581, 25 L. Ed. 618. It is a well-recognized general principle that where, by the course of conduct of one party entitled to the performance of certain terms, the other party has been led to believe, as a man of average intelligence, that such performance will not be required until it has become too late to perform, or until to insist on performance would work material injustice, the person who has so conducted himself is barred from asserting the right he had. Bigelow on Estoppel (5th Ed.) 660. Equitable estoppel is available as a defense in an action at law. Kirk v. Hamilton, 102 U. S. 68, 78, 26 L. Ed. 79. Here the defense of estoppel arose upon the undisputed facts. It inhered in the case as a question of law, independently of the defendant’s third point, which particularly brought this defense to the attention of the court. I think the defense of estoppel should have been sustained by the court below, and that the failure to do so is reviewable here.
Upon the question of the measure of damages the court below, it seems to me, erred. The plaintiff has recovered the full price of 67,500 tons of coal still in place, and which he now owns absolutely. This, I submit, is not right, under the peculiar facts of this case. The just measure of damages applicable here is the one laid down by the Supreme Court of Pennsylvania in the analogous cases of Cherry v. Miller, 1 Pittsb. Leg. J. 98, and Lyon v. Miller, 24 Pa. 392, and recognized in Kille v. Reading Iron Works, 141 Pa. 440, 21 Atl. 666. That measure of damages is compensation for the injury the plaintiff has sustained by the defendant’s alleged breach of its covenant. In Cherry v. Miller the trial court instructed the jury that the stipulated royalty was the measure of damages for all the limestone the defendant shquld have quarried under his lease. In reversing the judgment the Supreme* Court of Pennsylvania said: “This is certainly wrong, for it gives to the plaintiff more than a compensation for the injury, by giving him full payment for limestone that is still his own.” In Lyon v. Miller, that court said: “The coal in the mine was certainly worth something. As matter of law the court was bound to consider it as possessing some value. It was, therefore, proper to direct the jury to ascertain the value, and to deduct it from the stipulated rate.” These cases have never been overruled. They furnish, I think, the fair rule for the assessment of damages here, whether we regard the terms of the lease or the plaintiff’s course of conduct.
The learned judge below thought that upon the question of the measure of damages this case was ruled by Powell v. Burroughs, 54 Pa. 329. But there the lessee had the right to terminate the lease on the 31st of December in any year by giving three months’ notice, and he did not exercise that option, but held on to the premises. This was a controlling circumstance. A like distinguishing feature is found in Gilmore v. Ontario Iron Co., 86 N. Y. 455. In Timlin v. Brown, 158 Pa. 606, 28 Atl. 236, the court held that the contract was a sale and absolute grant of the coal in place, and not a license to mine. This, too, was the ground of the decision in Lehigh & Wilkes-Barre Coal Co. v. Wright, 177 Pa. 387, 35 Atl. 919. But the contract involved in this case is a coal-mining lease. The defendant’s right to mine expired at the end of the term, and the unmined coal now belongs to the plaintiff.