Wharton v. Stoutenburgh

The opinion of the court was delivered by Beasley, Chief Justice.

This suit was for the breach of a covenant for the payment of rent. The case comes before this court on the record and on certain bills of exceptions sealed in the progress of the trial.

The first of these objections is pointed at the admission of the record of a chancery suit between these same parties. From an inspection of that record it appears that the bill was for the purpose of compelling the defendant to execute precisely such a lease as that which was declared upon, and a copy of which was appended to the declaration in the present action. The decree in this chancery proceeding commanded the defendant to execute such an instrument. This record was offered in evidence by the plaintiff at ifche trial of this cause, and it being admitted in the face of the defendant’s objection, a bill of exceptions was sealed.

It is not apparent why, in behalf of the plaintiff, this piece of evidence was offered. It did not prove the existence of *154 the lease upon which the declaration was founded. An order of the Chancellor that the plaintiff in error should make such an instrument did not prove that such an instrument had been executed. Nor could the decree of the Chancellor to that effect have supplied the want of the demise declared on, for the declaration alleged, in the ordinary form, the making of such a lease, so that at the trial, if it had been necessary to-show the truth of such allegation, the substitution in the testimony of this decree for the lease would not have been allowable. But such was not the attitude of the case at the trial,, for the due execution and existence of this lease were admitted by the pleadings. The first plea was non infregit eonventionem ,- the second and third that the performance of the covenant was-impossible, and thus the deed in question was conclusively admitted. The record from the Court of Chancery, therefore,, did not effect the purpose for which it was offered, but, as it could not be detrimental to the defendant, it can have no effect in the case in its present stage.

Nor can the other offer of a defence that was overruled at the trial avail the plaintiff in error. That offer, as stated in the bill of exceptions, was in these words, to wit: “ The defendant, to maintain the said issue on his part, offered to prove that at the time the plaintiff alleges in his declaration in said cause that the said supposed agreement or lease was made there was not, nor has there been at any time since the alleged execution of the said supposed agreement or lease, or during the time mentioned in the plaintiff’s declaration in this cause, existing or being in, upon or under the said lands and premises mentioned and described in the said supposed agreement or lease, iron ore to. the amount of two thousand tons, or to-any other amount, that could be mined or taken from the said lands and premises; that at the time the said plaintiff alleges that the said supposed agreement or lease was made, the fact of the non-existence of such iron ore in, upon or under the said lands and premises, and the impossibility of the performance of the covenants in the said supposed agreement or lease was wholly unknown to the said defendant, and that the said de *155 fendant had not any means of knowing or ascertaining the-fact of the non-existence and want of iron ore in, upon or under the said lands and premises; that at the time the said plaintiff alleges said supposed agreement or lease was made,, the said plaintiff represented to the defendant that the said mines contained, and that there was in, upon or under the said lands and premises large, rich and valuable deposits of iron ore, which were and could be easily and profitably mined and gotten thereon and therefrom, and that at the time the said plaintiff alleges that the said supposed agreement or lease was made, the said plaintiff well knew that there was not any iron, ore in, upon or under the said lands and premises, or any part, thereof.”

So far as this proffered defence rests on the alleged nonexistence of iron ore on the demised premises, it is, I think,, quite clear that it has no admissible foundation. It has its-origin in a misinterpretation of the lease itself. There is-nothing in that instrument that will give a reasonable semblance to the notion that the parties agreed on the basis that iron ore to a certainty was to be found upon these premises,, and much less is there any indication that the lessor intended to guarantee such a state of affairs. All the intimations of the contract are averse from such a construction. The covenant that the lessee will sink one of the shafts in the upper-vein fifty feet lower than any one of the existing shafts then were, “ the object being,” to use the language of the lease, “ to-more thoroughly prove the ground for iron ore,” and the provision that the lessee may terminate the letting on a six months’ notice, but not, however, before such shaft has been sunk to the specified depth, have plainly that aspect. So there is a similar implication in the absence of any right in the lessor to put,an end to the term. But the most decisive feature is apparent in the stipulation “ to mine or pay for two thousand tons per year.” This covenant is absolute, and stands aloof from any contingency or condition whatever.. The lessee was aware that it was uncertain whether or not there was such a quantity of iron ore in this mine. All per *156 •sons know, that these ore beds are liable to faults and exhaustions, and with this knowledge the lessee agreed to take out the specified quantity, or, as a substitution, to pay the specified .rent. In such a case the agreement does not depend upon a subject matter which, in the belief of both parties, has an existence ; for here the existence of this ore was, on both sides, regarded as problematical. In such a state of affairs the lessee ■runs the risk of finding the ore on the premises, and is bound ■by his absolute agreement to pay the designated rent.

This construction is, in all respects, in harmony with the ■decided cases; for in all the precedents the distinction is drawn between an agreement to pay a royalty, which is held to be dependent on the existence of the ore out of which it is to arise, and an agreement to pay a fixed sum in lieu of such royalty, in which latter condition of things such rent is held 4o be collectible irrespectively of the state of the mine. The ■rule of law upon this subject is accurately stated by Mr. Wharton in his treatise on Contracts. 1 Whart. on Cont., § '298. This author says: “ But a specific agreement to pay rent is not vacated by the fact that the property leased turns out, without the fault of the lessor, of far less value than was supposed. This, as is elsewhere seen, is the case with leases of improved land where the improvements have been destroyed by fire, and the same rule is applied to leases of mines when the mine turns out to be unworkable, which, if there be a lease covenanting to pay a fixed rent is no defence on the covenant. On the other hand, where the rent is payable in the shape of a royalty on minerals in the soil, no royalty is payable when no minerals are found.”

The same principle is propounded and illustrated in the following authorities, viz.: Ridgway v. Sneyd, 1 Kay 627; Phillips v. Jones, 9 Sim. 519; Marquis of Bute v. Thompson, 13 M. & W. 487; Jefferys v. Fairs, L. R., 4 Ch. Div. 448.

With regard to the other branch of the offer made by the defence at the trial, and which is embraced in the foregoing citation from the bill of exception, and which relates to certain alleged fraudulent representations made by the lessor as *157 to the existence of valuable beds of ore on the premises demised, it is sufficient to say that there was no issue in the pleadings which would have justified the trial of such a contest. Besides, if the form of the record had admitted of such' a trial, the result must have been adverse to the plaintiff in-error, fer he would, on that question, have been concluded by the record in the Court of Chancery in the suit already adverted to, and in which proceeding the bona .Jides .oi the lease had been expressly adjudged.

The judgment should be affirmed.

For affirmance — The Chancellor, Chief Justice,. Depue, Dixon, Knapp, Parker, Soudder, Yan Syckel,. Cole, Paterson, Whitaker. 11. • For reversal—None.