filed averring that, though the defendant had operated the mines in a workmanlike and skilful manner for about nine months, yet on account of the non-existence of sufficient ore, and its inferior and unmerchantable quality, they were unable to continue. Held, that the affidavit exhibited a good defence to the action.

Clark, J.: “If, however, it was established by actual and exhaustive search that at the time of the contract there was in fact no ore in the land, or no ore of the kind contracted for, it cannot be pretended, upon any fair or unreasonable construction of the contract, that the lessees were nevertheless bound for the royalty' of $525 annually; for the payment of the royalty was undoubtedly based upon the assumption of the parties that ore, ore of the quality specified, existed there. The subject of sale, it is true, is the exclusive right to mine the iron ore, but for that right the lessors were to be compensated according to the number of tons of clean and merchantable iron ore' mined; the lessees undertaking to mine fifteen hundred tons annually, or in default thereof' to pay $525 royalty. And how could the lessees be in default in mining fifteen hundred tons annually, if there was no ore to mine? We are not to construe the contract to require the lessees to perform an impossible thing. The $525 is not a penalty, it is the price of the ore. The grant was of the ore in place, and if the subject matter of the contract fail, the price is not payable. If there was no ore to mine, there could be no royalty to pay.

"But the contract having been made upon the assumption of the parties that ore of the quality mentioned existed in the land, when it became manifest that the parties were mutually mistaken, the contract obligation ceases. It may turn out at the trial, of course, that the ore was in fact merchantable; but as the case is now presented, we must assume the facts to be as stated in the affidavit of defence."

McCahan v. Wharton, 121, 424 (1888). A provision in an ore lease that if the lessees did not quit possession and surrender the leasehold on or before July 1, 1884, "the very act of their refusing or neglecting to quit possession and surrender this lease is hereby agreed on their part that there is a sufficient quantity of ore on said property to pay the royalty of $1,200 on Feb. 1, 1885," etc., is not to be held conclusive upon the lessees.

Such provision in the lease is to be construed as an admission which threw upon the lessees the burden of proving that there was not ore in paying quantities upon the leasehold, and if not there, the lessees were not liable for the stipulated minimum royalty. Muhlenberg v. Henning followed.

Garman v. Potts, 135, 506 (1890). Under a stipulation in a lease that the parties of the second part agree to mine the iron ore at the rate of fifteen hundred tons per annum, on an average, provided the iron ore can be advantageously mined, and as much more as they see fit to mine," it is proper to construe the word "advantageously" to mean "beneficially, conveniently, profitably, and gainfully." The covenant should not be so restricted as to relieve the lessees only from hidden defects in the mine, such as a fault, or some physical difficulty in getting out the ore; it is intended for their benefit, and entitles them to cease work at any time when it is no longer advantageous

from a commercial point of view. They are not liable for any rent or royalty, unless the ore would have been worth as much when mined as it cost to mine it.

Paxson, C. J.: "The court below gave to the word advantageously' its common and popular meaning. It is not a technical word or term of art, and the parties must be presumed to have used it in its known sense. As before observed, it was for the relief of the lessees; hence if the mining was no longer advantageous to them, they had a right to cease their operations. After defining, as we think properly, the meaning of the word, the court submitted to the jury the question whether the defendant could further work the mine to advantage, and they found specially that he could not. This settles the question of fact adversely to the plaintiff. It is to be observed. that the cost of getting the ore to the market was not allowed to enter into the case. It was only the cost of the ore at the mouth of the mine that went to the jury. Surely, if it was not worth as much there as it cost to mine it, the defendant could not mine it advantageously to himself, however beneficial it might be to the plaintiff." Springer v. Citizens' N. G. Co., 145, 430 (1891). By a lease of land for the purpose of producing oil and gas, the lessee agreed to pay a certain sum upon the execution of the lease, a royalty on the oil produced, and if gas were produced in paying quantities a certain annual rental on each well. The lease also contained a covenant that the lessee should complete a well within six months, and in case of failure to do so, should pay a certain sum semi-annually until completion.

That the land was worthless for either oil or gas was not a good defence, for the lessor was entitled to have this fact made manifest in the manner agreed upon, or to demand the sum stipulated for delay.

Timlin v. Brown, 158, 606 (1893). T. leased to B. for ten years certain land for the purpose of mining, etc., the coal contained therein. B. agreed to pay a royalty for all coal taken, to take out at least ten thousand bushels each year, and as much more as he chose, and in case he failed to get out so much, to pay for ten thousand bushels. In assumpsit for the minimum royalty for the last three years of the . term, the exhaustion of the coal is no defence. This case is distinguished from Kemble Iron Co. v. Scott, McCahan v. Wharton, and Muhlenberg v. Henning, on the ground that in each of those cases the covenant for a minimum annual payment was not unqualified, the existence of the subject of the contract was unknown or uncertain, or if it existed, the quality could only be determined by actual use. In this case the coal was known to exist, and the quantity was as well known as it could be before it was mined out. "The ouly element of uncertainty, the quantity, they took the risk of by an unqualified covenant to pay a fixed minimum sum."

Cochran v. Pew, 159, 184 (1893). Where lessee in an oil lease had covenanted to commence a well within a certain time, it is not a defence to an action for rent that it had been ascertained by methods practised and approved by men of skill in the business that neither carbon oil or gas existed in the land leased, the exploration having been made on neighboring land.

"The conclusive answer in the present case is that the parties have

clearly stipulated for the mode in which the trial shall be made, and it is to be by a well on this land. There is no room for science, any more than there is for a jury, to say that it will be of no use to do it, the parties have explicitly agreed on the exact thing to be done, and the exact amount to be paid for the failure to do it. . . . Under such circumstances it is never open to the covenantor to say that the thing would be of no value to the covenantee if it were done."

Wilson v. Beech Creek Coal Co., 161, 499 (1894). Plaintiff leased to defendant's assignor "all of the merchantable coal contained in that certain seam," etc., for a royalty, "for each and every ton of merchantable coal mined and sold out of said seam," to be paid quarterly. "It is further agreed that should said seam of coal prove faulty in the strata or unmerchantable in its quality, so rendering it impracticable. to mine or dispose of the same in reasonable quantity, the said lessee shall have the right to abandon the same," etc.

In an action for royalty it was not incumbent on the plaintiff to prove that it was practicable to mine merchantable coal in reasonable quantity. The burden of proving the contrary was on defendant.

Boyer v. Fulmer, 176, 282 (1896). The plaintiff, being the lessee of certain timber land, for the purpose of and with the exclusive right of mining for iron ore for fifteen years, assigned her lease to the defendant, and entered into an agreement with him whereby he agreed to mine and pay for not less than one thousand tons of iron ore in each year, and to pay royalty on one thousand tons per annum whether he mined that amount or not. In an action to recover royalties it was set up as a defence that the defendant had mined out all of the ore and paid royalties thereon. This was held to be a good defence. This case is distinguished from Timlin v. Brown on two grounds: 1. The existence of the ore was not known. The land was timber land, and "was leased for the purpose of digging for and mining ore which was supposed to be there, but it had not been developed." 2. There was not an absolute agreement to pay royalty on one thousand tons per annum. The agreement was to mine that amount, and pay royalty thereon whether mined or not. "That is, if he fails to mine the quantity of ore he agreed to take out, he pays for it just as if he had mined it. But he would only pay for ore which he might have taken out if he would. If the ore is not there, he is under no duty to pay, because he never could get it. The foundation of his liability to pay is the fact that the ore is there. If the ore is not there, the fundamental condition of all liability is gone."

Lehigh & Wilkes-Barre Coal Co. v. Wright, 177, 387 (1896). D. leased to P. all the coal under and upon a certain tract "for and until such time as all the merchantable anthracite coal shall have been mined and removed." In consideration thereof the lessee covenanted to pay a rent or royalty of twenty-five cents for every ton mined, and it was also provided that the lessee should pay a minimum annual rental, but should have the right if it should fail to mine the minimum amount in any year to make up the deficiency subsequently. The lessee paid the minimum rental for nine years, but in no year mined an equivalent amount. It then refused to pay any further royalty, and sought to defeat a forfeiture on the ground that the contract was a sale of the

coal, the rental was the purchase-money, and the lessee had already paid for more coal than the land contained. This defence was held to be bad. The contract was a sale, but it was not a sale for a lump sum. By its terms the lessee was bound to pay the minimum rental as long as it retained possession, whether it mined, or could mine, an equivalent amount. The object of the provision was to promote the rapid mining of the tract, and to protect the lessor in case the lessee should choose to mine slowly.

Williams v. Guffy, 178, 342 (1896). By the terms of a lease for twenty years, for the purpose of operating for oil and gas, it was provided that if gas should be obtained in sufficient quantities and utilized the lessee should pay $500 per year for each well, that he should complete one well within six months, and "if oil and gas, or neither, is found on this property within two years. . . then this lease to expire and be of no effect." The lessee completed a well within six months, found gas and utilized it, and subsequently the land became exhausted and no more gas was produced. This terminated lessee's liability for rent.

Clifton v. Montague, 40, 207 (1895). Where the West Virginia. premises in a lease are described as "the premises known as the Bedford Salt Furnace property, together with all the appurtenances thereto belonging, including six salt wells, tools and fixtures of the same," there is no implied covenant on the part of the lessor that there are on the premises six salt wells of any particular productive capacity, or suitable for the purposes for which they are leased.

II. DUTIES AND OBLIGATIONS OF THE LESSEE.

A. Lessee's Duty to mine.

When the rent in a mining lease is reserved in such a form that its amount depends upon the amount of mineral taken out of the ground, whether it be a fixed royalty or a proportion of the product, the lessee is bound to work the mine, and to work it with reasonable diligence. This obligation is an implied covenant of the lease, for a breach of which the lessor may recover in damages. But recovery of rent or royalty is a bar to an action for damages for the breach.

The lessee is bound also to work the mine with reasonable care; that is, not wilfully or negligently to prevent the expected accruing of the royalty. The payment of the minimum royalty named in the lease is not a defence, for that provision contemplates a larger return, if it can be earned by mining with reasonable diligence and care.

Even where the amount of the rental is independent of the amount of mineral mined, the language of the lease may also

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show that the parties contemplated that the mine should be worked, in which case such an implied covenant would arise. And on the other hand the lessee may be relieved of the implied obligation to mine by an agreement to the contrary.

In the absence of an express covenant to mine, etc., there can be no duty to do so where the amount of the rental is not fixed by the amount of mineral taken out. If the consideration is secure at any rate, the lessor is benefited by the failure, or at least it can make no difference to him whether mineral is extracted or not.

Owing to the peculiar nature of gas, its profitable working depending not upon its existence or quantity, but upon the pressure, the general rule, as here laid down, may be subject to modification by the surrounding conditions, as was the case in McKnight v. Manufacturers' N. G. Co. (below, p. 103), where the subject is discussed at length.

In Wisconsin, neglect to work the mine, by the usage of miners recognized by statute, works a forfeiture.1

King v. Edwards, 32 Ap. 558 (1889). K. on Nov. Illinois. 11, 1887, leased to E. the coal and minerals under certain land, the lessee covenanting to pay as rent five cents per ton for all coal, etc., sold from said premises," said rent to be paid as follows, to wit the first days of January and July of each year."

The dates for payment of rent simply fix the days for settlement, and the lease does not bind the lessee absolutely to mine coal before those days. If the lessee is proceeding with the work with reasonable diligence, no forfeiture will take place by reason of the failure to produce coal. 2

Genet v. D. & H. Canal Co., 136, 593 (1893).

The

New York. lessee by negligent mining and failure to leave proper

supports caused the collapse of the mine, which rendered it impossible to work it. In an action by the lessor for breach of contract, it was held not to be a defence that the minimum royalty had been paid. There was an implied promise not wilfully or negligently to incapacitate itself from taking out more than the minimum quantity.

"The acceptance of a minimum royalty for the safety and benefit of the lessee equally with that of the lessor, when a larger one was contemplated on both sides, involves an obligation of the lessee not wilfully or negligently to prevent the expected accruing of the greater royalty.""The question here is not one of waste or of injury to real property, or even of a tort or wrong. It is whether, under this contract, fairly and justly construed between the parties, there was an understood consideration for it, beyond the minimum royalty secured,

1 Ann. Stats. 1889, secs. 1647, 1649, pp. 987, 988.

2 See this case on p. 149.