Court Opinion

ID: 6243890
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:52:32.119777+00
Date Added: 2024-06-11T08:59:14.371846
License: Public Domain

Opinion by
Mr. Justice Green,
The parties litigant in tins case are in controversy over a single question of very narrow limits arising upon the construction of a coal mining lease. The question is whether a commission of 8 cents per ton is to be allowed as part of the expenses to be charged in determining the selling price of coal at the breaker. It is perfectly manifest that the literal meaning of the words employed in the lease is not the meaning of the parties. The subject of contention is the amount of royalty to *410be paid to the lessor for coal mined under the lease. The words of the lease on this subject are, “For all coal mined taken out and disposed of, above the size of pea coal, twenty five cents per ton shall be paid when such coal sells at an average of two dollars per ton or less at the breaker.”
The coal in large quantities is no.t sold literally “at -the breaker,” but at distant points of delivery, and the custom of the trade is, in determining what is the selling price “ at the breaker,” to deduct from the price received by the shipper the cost of selling and transporting of the coal to the point of delivery. The cost of selling is represented by the commissions paid to selling agents, who conduct a business of selling coal at tide water, and other points, for the producers, otherwise called operators. The selling agents are paid by a commission, varying from 25 to 10 cents per ton, according to the size and quality of the coal sold. In the present case the defendant was in the habit of selling the coal produced from their leased mines through a firm named Williams & Peters, under a contract in writing made with them dated January 15, 1889, at a commission of 15 cents for all sizes above pea, and 10 cents for pea and smaller sizes. In the settlements for royalty between the plaintiff and defendant these commissions were always deducted from the selling price of the coal together with the cost of transportation, in order to determine the selling price at the breaker, and that was the uniform habit of doing the business up until March, 1892. At that time a new arrangement in the coal trade was made by which many producers agreed with the Philadelphia & Reading Coal and Iron Co. to sell them all their coal upon certain terms agreed upon. For the year now in question, from March, 1892, to March, 1898, the defendant company sold its coal to the Reading Coal and Iron Company under a written contract for that purpose. The purchase price was to be paid directly to the defendant company and the agency of Williams & Peters was suspended during that time. But Williams & Peters held a written contract for the sale of all the output of coal from these mines, which covered the year in question, and they declined to surrender their contract. Finally they were induced to agree with the defendant company that they would suspend their rights under the- original contract upon receiving from the *411defendant a commission of 8 cents per ton on all coal sold to the Philadelphia & Reading Coal and Iron Company. This agreement was to continue for seven years from March 1,1892, unless the defendant made default in the payments, and at the expiration of the term, or in the event of a default in the payments, • the original contract was to be restored and remain in full force and effect.
It was in this state of the facts that the present question arose. Prior to the making of this new contract the original commissions of 15 and 10 cents per ton were always deducted from the selling price of the coal without objection on the part of the plaintiff. The freights were also deducted, and the resulting price was treated as the selling price at the breaker. Considerable testimony was taken to show that this was tbe uniform custom in all such contracts throughout the anthracite coal region and not a word of opposing testimony was taken. The plaintiff fared much better under the new arrangement than under the old, because the royalty which he received was increased by the difference between the new and the old rates. A better price also was obtained for the coal sold than under the old system and in that way also the royalty was increased. But the plaintiff desires also the 8 cents commission which the defendant was obliged to pay, and did pay, in order to obtain the privilege of selling. We know of no reason why this ungracious and unreasonable demand should be allowed. In strict construction of the words of the contract, if the deduction of commissions was allowed as part of the cost of selling the coal beyond the breaker, before the change was made, it was just as certainly a proper charge after that event. It still remained as a commission which had to be paid, and actually was paid, in order that the coal should be sold to the new purchaser. Williams & Peters were under no obligation to give up their contract, and if they choose not to do so except upon condition that a part of what they had originally received they should still receive, the part which they continued to receive was as much a lawful burden upon the selling price of the coal after, as before, the contract with them was made. Independently of that consideration the undisputed testimony showed that the meaning of the phrase “selling price at the breaker” was by universal usage, in winch this plaintiff participated, the actual *412selling price at tbe place of delivery less the cost of selling, and the freight. We are of opinion that the referee and the conrb below were entirely correct in their disposition of the case.
Judgment affirmed.