of the trial judge that the coal was of a merchantable grade will not be disturbed on review.

Indiana.

Kokomo Natural Gas & Oil Co. v. Albright, 18 Ind. App. 151, 47 N. E. 682 (1897). A. contracted with the company that it might have the exclusive right for five years to drill and operate a well or wells for water, oil or gas on a plat of ground, twenty feet square to be mutually agreed upon on land described, for which the company agreed to furnish free of charge gas for lighting and heating four residences and pay $100 per annum "whether a gas well is drilled or not."

In an action for rent it is not necessary to aver that gas was obtained or could have been obtained on the premises described, or that the plaintiffs had offered to agree upon and fix a location for a well. It was enough to aver that they were ready and willing to agree upon a location. The contract did not contain any covenant that gas could be found on the premises, and the company manifestly assumed the chance of a failure to find it and of its nonexistence there.

Moon v. Pittsburgh Plate Glass Co., 24 Ind. 34, 56 N. E. 108 (1900). A "gas-lease" provided that the lessee should pay to the lessor an annual rental of one hundred dollars for each gas well drilled which produced gas in paying quantities sufficient for manufacturing purposes; said payments to continue as to each of said gas wells annually during the continuance of the lease, which was to terminate whenever natural gas ceased to be used generally for manufacturing purposes. A gas well was drilled by the lessee and the annual rental paid thereon for two successive years. The rental maturing for the three following years was not paid, namely rental maturing on September 1, 1896, Sept. 1, 1897, and Sept. 1, 1898. The well had been abandoned by the lessee Sept. 1, 1896, as it did not pay to operate it. In an action for $300 unpaid rental, it was held that the lessor could recover only the ratable portion of the annual rent of $100 for the use of the well up to the date at which the well became unprofitable, but that the lessor's claim for subsequent years could not be sustained, as at such periods the well was not producing gas as contemplated by the contract and had been abandoned.

Iowa.

Bloomfield Coal & Min. Co. v. Tidrick, 99 Iowa, 83, 68 N. W. 570 (1896). A lease of coal lands for 20 years provided (1) that if coal should be found sufficient in quantity and quality to justify mining, the lessee should proceed at once to mine and continue to do so as long as coal in paying quantities should be found. (2) That lessee should pay a royalty of 1 cent per bushel, etc. (3) That lessee should mine not less than 2.400 tons per year after the first year, and that whether this amount were mined or not lessee should pay full royalty for that amount, viz., $300.

Lessee did not mine the land for five years, but paid $300 per annum after the first year. Then upon testing the land it was found to contain no coal. Lessee then brought this action to recover the money paid, alleging mutual mistake as to the existence of coal and a failure of consideration. Held he could not recover. "That the parties supposed there was coal in the land and in quantities so that the minimum amount could be mined is true; and it may be conceded that, upon the discovery of the fact that there was not, the lease would become inoperative." It was for the plaintiff to make the test and the payments made were not only compensation for coal mined, but were payments to prevent forfeiture of the lease.

Kentucky.

Givens' Ex'rs v. Providence Coal Co., 22 Ky. Law Rep. 1217, 60 S. W. 304 (1901). A coal lease provided that the lessee should "take out and ship and pay for not less than 500,000 bushels of coal each year,

* and if he shall fail to take out and ship as much as 500,000 bushels, he agrees, notwithstanding such failure, to pay royalty on stated quantity, provided however, that should the party of the second part (lessee) be prevented, by any accident or casualties, without fault on his part, or by accident or circumstances not under his control, to get out and ship 500,000 bushels in any one year, then he shall for that year pay for only so much as he does take out and sell." Held that the unexpected inferiority of the coal, making it unsalable except at such times as transportation for it could not be had, was included in the phrase "circumstances not under his control," for the lease shows that the parties had in mind not only difficulties in the taking out or mining of the coal, but also in shipping and selling. The trial court "properly refused to instruct the jury that if the coal could be gotten out, screened free of impurities, and shipped at a cost not exceeding the market price at the time the contract was made, the company (lessee) was bound to resort to such modes of cleaning it. The price of the coal at the time of the sale must control, and not the price at the time the contract was made; for if the coal was so inferior that to clean it so as to make it salable as good coal, in ordinary conditions of the market, would cost more than it would bring, the coal was in fact worthless for such purposes. * * Its (the lessee's) liability to ship the coal would depend on the market at the time, and not on what it was ten years before."

Rowland v. Core, 28 Ky. Law Rep. 307, 89 S. W. 215 (1905). A. contracted to sink an oil well to the depth of the first sand, his lease providing that "unless said test well proves fruitful, that is, produces oil, then this lease and contract shall be considered null and void, and of no effect whatever." At the depth of 489 feet A. salted the well and then conveyed to B., who in turn conveyed to C. On discovery of the fraud C. began suit against B. to recover his purchase money. Held that the plaintiff was entitled to recovery even though B. was wholly innocent in the case. This is not a case where the purchaser speculated and lost. He did

speculate as to the actual amount of oil in the well, but C. bought on the idea that the well was oil producing; he was not speculating on the chance that there was no oil in the well. It is true there was a mutual mistake, but A. had nothing to convey (his abandonment of the well before discovering oil terminated his lease), hence B. could no more retain C.'s money thau A. could retain B.'s.

B. set up that the lease called for boring to first sand, and that it might yet have produced oil. But the well, when abandoned, was not oil producing; the contract contemplated the continuous boring of the well, hence the termination canceled the lease.

Michigan.

Blake v. Lobb's Estate, 110 Mich. 608, 68 N. W. 427 (1896). B. leased a tract of land to L. for 20 years "for the purpose of exploring for, mining, taking out and removing therefrom the merchantable iron ore which is or which hereafter may be found on, in or under said land." The lessee agreed to pay rent of $6,000 per annum and also royalty on ores removed, royalties, however, to apply to the payment of the rent. Lessee had the right to terminate the agreement "so far as it requires (him) to mine ore on said land or to pay a royalty therefor" by giving 60 days' written notice.

Such notice was given and this suit was brought for rent accruing prior to the notice. The defense set up was that no iron ore in minable quantities existed on the premises. The court charged that if it was found that there was no iron ore, no merchantable iron ore, on the property in sufficient quantities to make it pay and the lessee had used all reasonable endeavors to ascertain that, plaintiff could not recover. This was approved on authority of Gribben v. Atkinson, 64 Mich. 651, 31 N. W. 570. "The lease by its terms presupposed the existence of ore and upon its appearing that no such ore was to be found, the purpose of the lease failed and the defendant should not be charged with the consideration." It makes no difference whether the consideration is called rent or royalty. Hewitt Iron Min. Co. v. Dessau Co., 129 Mich. 590, 8 Det. Leg. N. 1093, 89 N. W. 365 (1902). Where a mining lease provides that the lessee shall pay a certain royalty on all ore mined, that there shall be mined each year enough of the ore to pay a certain amount of royalty at the rate thus fixed, and that that amount shall be paid whether such quantity be actually mined or not, the lessee is not obliged to pay royalty after the exhaustion of the ore and inability of the lessee to discover further deposits in paying quantities; thereafter the lessor is entitled only to the royalty actually earned.

Minnesota.

Diamond Iron Min. Co. v. Buckeye Iron Min. Co., 70 Minn. 500, 73 N. W. 507 (1897). Plaintiff leased land to defendant for 25 years "for the purpose of exploring for, mining, taking out and removing therefrom the

merchantable shipping iron ore which is or which may be hereafter found on, in or under said lands." Lessee was given the right to terminate the lease at any time on 60 days' notice, and covenanted to pay royalty on ore mined and removed; to mine and remove at least 10,000 tons each year, and if it failed to do so to pay royalties on that amount. Lessor had the right, at its option, to cancel the lease if lessee failed to take out the minimum amount.

Both parties executed the lease on the supposition that the premises contained large quantities of merchantable shipping iron ore, although at the time none had been actually found. Defendant spent $40,000 developing the land and demonstrated the fact that no such ore existed upon the land. Plaintiff brought this suit to recover minimum royalties.

Mitchell, J.: "Upon a quite thorough examination of the numerous cases cited by counsel three facts have impressed themselves upon us, viz.: First, that the courts have frequently made their decisions to turn upon the form of words used in this particular covenant, rather than upon an entire consideration of the various provisions of the instrument, in order to ascertain its scheme and subject matter; second, that they have often failed to distinguish between the subject-matter of the contract and mere matter of inducement to its execution; and third, that the courts have been more or less influenced by their familiarity with the doctrines of the common law relating to landlord and tenant, which are usually favorable to the landlord.

"Mining leases containing a covenant for the payment of a minimum rent or royalty may be divided into two general classes: First, those which require its payment as a dead rent, irrespective of produce; and second, those which require the mining of a stipulated amount of ore, or upon failure to do so, payment of the royalty upon it. Where the covenant is of the first class, the lessee is liable to pay this minimum royalty as a dead rent, even if no ore existed. Where the covenant is of the second class, it has been generally construed as an obligation to pay for the stipulated quantity of ore, whether mined or not; not whether it existed or not, that is, that the lessee contracts for diligence and promptitude in mining, but not for the productiveness of the mine. In our opinion the covenant in the leases under consideration is of the second class.

"Of course, we understand that the mere fact that the leased premises proved to be of less value than was supposed is no defense to an action for rent. In other words, the nonexistence of things which were mere matters of inducement to the execution of the contract will not relieve a party from its obligations. But the case is entirely different where the thing contracted for, and which constituted the subject-matter of the contract, had no existence.

"In the present case, merchantable shipping iron ore, which the parties supposed existed, and not the land, was the subject-matter of these contracts. It is true, they start out in form as leases of the land; but this is only for mining purposes, and every right which the defendant is given in the land is merely incident and auxiliary to the mining and taking out merchantable

shipping ore.

The reddendum clauses all provide for the payment of 'royalty' on ore, which is never spoken of as rent for the land.”

"The fact that defendant had not formally terminated the lease does not interfere with its right to resist payment of royalty on the ground that it had not accrued due by reason of the nonexistence of merchantable shipping ore."

Missouri.

Lennox v. Vandalia Coal Co., 158 Mo. 473, 59 S. W. 242 (1900), affirming 66 Mo. App. 560 (1896). Plaintiff leased land to defendant to mine coal for twenty years, lessee to "continue mining operations until all the workable coal shall be taken out," paying royalty therefor, on a minimum monthly prescribed production. The lease also gave to lessee the use of a part of the demised premises for the purpose of removing coal from adjoining land. Held defendant cannot defend an action for minimum royalty on ground of exhaustion of the coal, so long as it retained possession of the land for any purpose under the lease.

Ohio.

Brick Co. v. Pond, 38 Ohio, 65 (1882). By agreement P. leased to the Brick Co. "all the clay that is good No. 1 fire clay" on certain land for the term of three years, upon condition that the Brick Co. should mine 2,000 tons of clay each year and pay a royalty therefor, as it was taken away. The right was reserved to cancel the lease at any time after the first year in case P. should sell the land.

The court stated that this agreement was properly pleaded as a contract; that it is not a lease of the land, but of the clay; that it is "a contract for the privilege of mining and removing the kind of fire clay specified, as distinguished from a lease of the land."

The action was to recover royalty for the term on 2,000 tons per annum. It was held to be a good defense to this action that clay of the quality and quantity specified in the agreement did not exist on the land. The burden of proving this was on the defendant, but it was error to hold him liable during his possession, while searching for clay, if none of the quality named was on the land.

Hankey v. Kramp, 12 Ohio Circ. Ct. R. 95 (1896). A lease of lands for oil and gas purposes provided that should gas be found in sufficient quantities to justify marketing the same, the consideration to the lessor should be $100 per annum for the gas from each well so long as it was sold therefrom. The fact that lessee had connected wells with its pipe line from which it sold gas was conclusive of the right of lessor to recover rental therefor, and lessee could not defeat that recovery by evidence that these wells did not produce gas in sufficient quantities to justify marketing it.