( Ante, May 20, 1879, 16 Scot. Law Rep. 530, 6 Rettie 922.)
Subject_Mines and Minerals — Encroachment — Mutual Error as to Title — Measure of Damages where Defender in bona fide and Property invaded of Small Extent.
The lessees of a coal mine wrought out certain coal belonging to a coterminous proprietor, in the bona fide belief that the coal was included within their lease — a belief shared in by the true owner himself. The mine possessed by the lessees entirely surrounded the property encroached upon, which in extent amounted only to 1 acre 30 falls 21 ells. Held, in an action for damages at the instance of the coterminous proprietor, that the measure of damages was to be calculated upon the basis of the royalty of the surrounding mine, together with a sum for the surface damage, on the ground that there was perfect bona fides on the part of the trespassers, and that in the circumstances of the case the only possible way in which the owner could have made a profit out of his coal would have been by leasing it on these terms to the lessees of the adjoining mine.
Observations ( per cur.) on the mode of calculating the measure of damages in a case where the encroachment is intentional and mala fide.
This action was at the instance of James Livingstone, and concluded for payment of £2000 of damages on account of encroachments made admittedly in ignorance by the defenders the Raw-yards Coal Company, who were the lessees of certain coal mines upon a piece of ground adjoining a feu belonging to the pursuer. The defenders had wrought out the whole coal under the pursuer's feu in the bona fide belief that it had been let to them by the superior of both subjects along with the ground of which they were lessees. The Lord Ordinary ( Craighill) gave decree against the defenders, and on a reclaiming-note at their instance the First Division adhered, with a reduction in the amount of damages awarded— ante, May 20, 1879, 16Scot. Law Rep. 530, 6 R. 922.
Livingstone appealed to the House of Lords.
At delivering judgment—
My Lords, upon the main question which has been argued, the case is one of some peculiarity. The appellant is the owner of a small feu of about an acre and a-half in extent near Airdrie. The surface of the ground is occupied by miners’ cottages or houses, and underneath there was coal. When the appellant bought the feu some time ago, he appears to have been under the impression that the minerals under this feu, as under all the ground which surrounded it, had been reserved by the superior. In point of fact that was a mistake. The superior kept in his hand the minerals under all the ground around, but under this acre and a-half the coal had not been reserved in the grant of the feu to the appellant. The appellant, therefore, although he did not know it, was the owner of the coal under this acre and a-half of ground. The superior granted the whole property in all the surrounding land to the company, who are the respondents before your Lordships, and they, just as the appellant was ignorant of his rights, appear to have been ignorant of theirs. They appear to have been under the impression that they had the whole of the coal, including the coal under the acre and a-half. They had the coal which surrounded the acre and a-half, but they had not the coal which was underneath the acre and a-half. In the process of their working they worked out the coal under the acre and a-half, and when that was done it was ascertained (it is unnecessary to observe how the discovery came to be made) what the real titles were, and that this coal really belonged to the appellant, and did not belong to the respondents, who had got it and disposed of it. I ought to add that in working under the acre and a-half of ground they had by letting down or cracking the ground caused some damage to the miners’ cottages which stood upon the surface of the acre and a-half.
Now, my Lords, under these circumstances the question arises, What is the measure of damage to which the appellant is entitled? We may put aside some elements which might occur in some cases, but which do not occur in the present case. There is absent here the element of any wilful trespass or wilful taking of coal which the person taking it knew did not belong to him. What was done was done in perfect ignorance, and there was no bad faith or sinister intention in that which was done. We may put aside another element which might have occurred. It might have been the case that the support of the coal under this acre and a-half of ground had been of some peculiar advantage or benefit to the appellant, for which no money would compensate him. Either by some use made of the surface, or by some specific use intended to be made of the surface, there might have been a peculiar need for the support of the minerals underneath, which might either have made it impossible to estimate the damage, or might have made the estimate of the damage exceptionally high. Neither of these elements occurring—neither the element of what I will call wilful trespass, nor the element of special and exceptional need for support—the case is one in which your Lordships have simply
Upon that evidence the Court of Session say—“We are of opinion that the value to this appellant of this coal was the money that would have been produced if he had sold the coal, and the money that he would have got if he had sold the coal would have been £171, 7s. 6d.; but that would have been accompanied and guarded by a further payment which would have indemnified him for the damage done to the houses upon the surface in getting the coal, and that further sum he must have in addition to the £171, 7s. 6d.” My Lords, I own that under the very peculiar circumstances of this case, there being only the element to consider to which I have referred, namely, the element of value to the appellant, I think he has received in the judgment of the Court of Session that which is the proper value, and I see no reason from differing from the judgment of the learned Judges. I therefore advise your Lordships and move your Lordships that the appeal be dismissed with costs.
My Lords, in this case we are singularly free from any difficulty upon the point, and the parties seem to have carried on the litigation on a principle which does them credit, and on which one wishes to see all litigation carried on. They say—“The misfortune has taken place; we neither of us knew anything about this at the time; and now that it has taken place let us see what can best be done to remedy the misfortune which has so occurred.” We find the position of the case to be a very singular one indeed, and one which is not likely to recur in many, though it may in some, instances. It is this—A small piece of ground, an acre and a-half in extent, being the property of the pursuer, is surrounded by the property of the defenders; and the defenders thought (and the pursuer thought so too) that it was included in their property instead of being a separate portion surrounded by their property. That being the case, one thing was perfectly clear (and I shall make it clearer presently by reading the pursuer's own evidence) that nothing could be made by the pursuer of this acre and a-half of ground by working it himself. He would not sink a shaft or put up a steam-engine, or use any of the ordinary modes of working a mine in respect of this acre and a-half of ground; and indeed that is what he tells us himself, because, in words which were read by the learned counsel who last addressed your Lordships, the pursuer says in re-cross examination—“If the defenders had not taken away this coal, I might have arranged with them to take it away through their pit, but I don't think it would have been profitable to have done so; I would rather have it standing. I don't think there was any way in which I could have turned this coal into money;” and then he goes on to another subject. Several houses were built upon this property—they were apparently small cottages, not of a very heavy description in themselves, and he complains that if he were minded (though it does not appear that he ever was so minded) to build a manufactory or some large building upon the ground, he would not, in consequence of its being so worked by the defenders, be in a position to find a foundation for his building. Whether he refers to that when he says that he would rather have it remain as it was I do not know, because in his evidence he touches upon it very lightly; but he says that he could not work it himself, and that there were no other people to whom he could dispose of it but the defenders themselves.
My Lords, that being so, I do not know what better mode there could have been for ascertaining what the value of the property in this case was than by doing what the pursuer himself says he should have been obliged to do in order to turn it into money, and what his own witness Mr Rankine said he always advised him to do. Mr Rankine, his witness, said—“It is not workable by yourself in consequence of its small size, and of its being so surrounded by other property; so make the best you can of it, only do not let yourself be driven into a corner. You may perhaps find yourself put to a disadvantage by having only one purchaser; nevertheless, do not part with it for a less royalty than you could get from anybody else, and whatever others are willing to pay I should stand upon, and if you cannot get that I should insist upon retaining the property in its present shape.” That being so, the pursuer says in his evidence—“I don't think there was any way in which I could have turned this coal into money. It was about the middle of 1875, when the houses began to crack, that I first knew the defenders were in the course of working out coal under my feu. I spoke about the matter to Mr John Motherwell. I did not ask that the working should be stopped. I suggested that it should have been wrought stoop-and-room for the sake of protecting the property as much as possible. I made no objection to their going on with the working out of the coal below the feu; I was quite content that they should go on with the working.” That was before he knew that the coal under the property was his own. Up to that time he could not of course know very well what rights he had to stop this working; but when you put the two sentences together—one that he could not have disposed of the property to any other person, and the other that he did not think of taking any steps to stop the working, I think he cannot complain that he has got from these gentlemen the very same terms that he would have got from all the adjoining proprietors with whom he had to deal. The learned Judges in the Court below seem to have proceeded upon that footing. The Lord President says—“In addition to the consideration above mentioned, it must be kept in view that the coal in question was surrounded on all sides by the coalfield of the superior, which is leased to the defenders. As the pursuer's estate is only one and a-half acres in extent, it is evident that the coal under it could not have been worked to profit by himself working independently. Nobody but the superior or his lessees could have worked the coal to any profit. Now, let us consider the position of the pursuer before the defenders commenced to work his coal. He was then in possession of a certain piece of coal, and his object must be assumed to be to make the most of it. It cannot be assumed that he could contemplate keeping the coal as a support of his cottages in
The question of way-leave does not seem to have been argued in the Court below, but if it had been argued I should have been prepared to say that I acquiesce, in this particular case, and under all the circumstances of this case, which I think are extremely different in many remarkable particulars from those of Jeggon v. Vivian, 6 Chan. 742, in the interlocutor pronounced by the Lord Ordinary. But looking at the form in which this case has been brought before us, no question of this kind arises. Nothing could have been properly estimated and given as the value of the right exercised by the defenders of taking their waggons and coals from time to time through the ground of the pursuer, they assuming it to be their own ground. What profit can be said to have been derived from that? The profit is this—that you save distance; you save other payments which you might have had to make; and therefore inasmuch as the pursuer cannot make out that the slightest damage has accrued to him in respect of that user, what you have to pay to him is only the value of his coal, plus the damages to the surface. It appears to me to be quite consistent, and that the pursuer rightly has not pressed that case of the way-leave, because he would have done so with very little effect. Therefore, my Lords, under all these circumstances, I am prepared to acquiesce entirely in the judgment of the Court below.
That, I apprehend, is what is to be done here, and that is what both the Lord Ordinary and the First Division of the Court of Session have endeavoured to do. They have come to different pecuniary results, and the question really comes to be, which is correct. Upon that, my Lords, the Lord Ordinary, as I understand, has gone upon this position. He said—“I have taken evidence, and the result of that is that it is agreed on all hands that this coal when it was brought to the surface actually did sell for £1768, 5s. 10d. I look at the evidence, and I take the evidence to be that the actual amount expended by the defendants (there is contradictory evidence on such points, as might have been expected, and it is not all very clear) was 4s. 3d. per ton, and deducting that from the £1768, 5s. 10d. he makes it £515, 12s. 1d., which is what he says is the sum that the pursuer ought to recover, taking off all the expenses that the defenders have incurred. But, then, as it would necessarily follow when you took away the coals that were below the land, that the surface of the land would come down, you must not take the sum which would be given as compensation for the injury to the surface twice over; you must not take that sum as being a matter which you are to be paid for, and also take the coals as if they had been got out without damage.” On the Lord Ordinary's figures, as it seems to me, the £515, 12s. 1d. would be right, and if there was no other way of getting at the figures, if you could get evidence of the value of the coal in situ in a more correct way, I suppose it would be right to take it in that way. It is always a difficult thing to ascertain the actual expenses, and you may go wrong, but you must come as near to it as you can. But then the Lord Ordinary himself observes, that taking that way of getting it, and giving the pursuer £515, 12s. 1d.—“The truth of the matter is, that the removal of the pursuer's coal by the defenders, in place of being a misfortune, has been to the pursuer a singular stroke of luck. The size of his feu is less than an acre and a-half, and the coal which it contained could not have been wrought to profit by itself. The expense of sinking a pit and providing machinery would many times over have exceeded the value of the minerals. Possibly, no doubt, the pursuer might have endeavoured to make with the defenders terms upon which his coal might have been raised along with the coal of which they were the tenants. But the return which would have been rendered to him under such an arrangement must have fallen far short of what has been awarded by the Lord Ordinary. The lordship in the circumstances could not be expected to be higher than that paid by the defenders for the adjoining portions of the seam, and this upon the quantity taken out, even if increased by reasonable damages for injury through subsidence to the houses on the surface, would certainly have fallen considerably short of £500.” Now, when you find that the Lord Ordinary himself, who is professing to ascertain what is the money value of the damage that the pursuer has received, says, “I have got at it in this particular way, but that money value is very considerably above the damage you have received, and it has been a singular stroke of good luck to you that you should get it,” it occurs to one at once, prima facie, that there must have been something wrong in the way in which that money value was got at, and I think that there was an error in it, and that error was that the Lord Ordinary thought that he was bound by decisions (which I do not think he was) to take that mode, and that mode only, of getting at the value of the coal in situ, namely, the price which the coal fetched when it was sold, deducting from that the cost of hewing and drawing and so forth, and so to ignore totally the fact that this was an isolated small patch of land from which the pursuer, as he himself admits, could not possibly have got coal by any practical means whatever except by bargaining with the defenders. I think there the Lord Ordinary was under a mistake. It is there, I think, that the Lord President and the First Division go right when the Lord Ordinary went wrong. The Lord President points out very clearly to my mind that the pursuer could not have made any use of his coal at all as long as he did not let it to the defenders, who were the only people who could take it. He cannot do more than ask for his damage to the surface. That he is of course entitled to, as the defenders have taken his coal without his leave and against his will. If they had taken it with full knowledge scienter, there would have been very much more damage given, but they have innocently and ignorantly taken away his coal. “And then,” says the Lord President, “we must see what was the value of the coal in situ as it stood there to the pursuer at the time when the defenders by mistake took it away, and for that we must give compensation.” Then he takes the evidence of Mr Rankine and says—“That is the best evidence that we could have of the value of the coal;” and that sum is what the Court of Session has given. My Lords, I only wish to say one word to guard against misapprehension on a point which I at first a little misapprehended. I do not think that this decision of the Court of Session is that the royalty is the measure of the damages. It is only that it is evidence of the value which is the measure of the damages.
As to the other matters about the way-leave and so forth, I quite agree with what has been said by my noble and learned friend on the woolsack, that inasmuch as in the Court of Session on appeal from the Lord Ordinary those questions were not raised again, they were not before this House at all. If they were, I should be inclined to agree with what has been said by my noble and learned friend opposite (Lord Hatherley), and the pursuer would gain very little benefit from that contention.
Interlocutor appealed against affirmed, and appeal dismissed with costs.
Counsel for the Appellant — Davey, Q.C.— Guthrie Smith. Agent — Andrew Beveridge, Solicitor.
Counsel for the Respondents — Kay, Q.C.— Gloag. Agents— Simson & Wakeford, Solicitors.