Scottish Court of Session Decisions

The pursuer of this action was the proprietor of a piece of ground forming part of the lands of Rawyards in the parish of New Monkland, Lanarkshire, and of certain miners' houses erected thereon. The extent of the ground was only 1 acre 30 falls 21 ells, and the pursuer when he made the purchase in 1869, did so mainly on account of the houses. The greater part of the coal in the district had been wrought out, including that under the ground purchased. The defenders were the lessees of the entire coal which immediately surrounded the pursuer's piece of ground. When they entered upon their lease in 1872 both they and the pursuer were under the bona fide belief that when the feu of the pursuer's property was given out to his predecessor in 1837 the superior had reserved the coal, and that the defenders' lease included this coal. It turned out that their belief was erroneous, the superior having reserved the ironstone but not the coal. This error, however, was not discovered until 1877, when the pursuer came to consult his titles in prosecution of a claim for surface damage against the defenders, who had by this time wrought out the entire coal underneath the land in question. The pursuer, according to his own account, first observed damage to his houses in the middle of 1875.

The present action concluded for payment of £2000 in name of damages, and the averments upon which that claim was based were as follows:—“(Cond. 5) The defenders having then ( i.e., in 1877) admitted the encroachment, the pursuer desired access to their books for the purpose of ascertaining the quantities of coal and other produce which had been gotten and removed by the defenders or by their order from the pursuer's feu, and the market price or value thereof at the pit's mouth. The defenders, however, refused any such access, and the pursuer claims that this account should be now taken, and, under deduction of such pit allowances for raising said coal as may be proper, the pursuer should be found entitled to said value. (Cond. 6) The defenders in the course of their said operations drove roads, levels, and passages in said area, and they carried large quantities of coal and others wrought from the coalfield tenanted by them through the pursuer's said area, without any leave being asked or obtained. The pursuer claims that an account shall be taken of the quantities of coal and other produce so conveyed through his said lands, and of the value or benefit to the defenders of said roads, levels, and passages, and a sum in name of way-leave and royalty in respect thereof shall be paid to the pursuer. (Cond. 7) The houses in said Buttery Square, the property of the pursuer, are entered in the valuation-roll at £141, 5s., and over £150 would have been collected this year but for the damaged state of the property. The pursuer has also spent considerable sums in repairing the damage done by the defenders. (Cond. 8) Said encroachments and operations by the defenders were wrongful, illegal, and most unwarrantable. They have largely benefitted therefrom, not only by the appropriation and consumption of said coal, and the using of said area as a means of transit for the material worked in their coalfield, but they have been saved large costs which they would have been compelled to incur had they abstained or been prevented from carrying on said operations in the pursuer's said property. On the other hand, the pursuer has sustained loss and damage, as before condescended on, to an extent not less than £2000 sterling; but as the defenders have refused, or at least delayed, to make any settlement thereof, the present action has become necessary.”

The defenders pleaded, inter alia—“The encroachment on the pursuer's minerals having been made in the belief that these minerals had been let to the defenders, which belief was induced by an error entertained by the pursuer as well as by the defenders, and having been made in the pursuer's knowledge and without objection by him, the defenders are not bound to pay him a larger sum than the profit which they have themselves made by working said minerals.”

The Lord Ordinary ( Craighill) after a proof pronounced the following interlocutor:—“…

Finds as matters of fact—(1) that the coal in the pursuer's feu, described in art. 1 of the condescendence, at the time when the operations referred to on the record were commenced, was the property of the pursuer, though he was ignorant that it belonged to him, he having purchased the subjects in 1869 under the impression that all minerals had been reserved to the superior, and having continued in that persuasion till his coal had, as after mentioned, been wrought out by the defenders; ( 2) that the defenders are tenants of the coal-field adjoining and surrounding the coal in the pursuer's feu, and the coal in that feu was believed by them, when they became tenants, and when that coal was removed as after mentioned, to be part of the minerals carried by their lease; (3) that in the course of the years 1875 and 1876 the defenders, while acting as they believed by virtue of the powers conferred by their lease, removed the coal in the pursuer's feu, and disposed thereof along with coal raised during the same period from their own field; (4) that the coal so removed from the pursuer's feu by the defenders consisted of 4300 tons or thereby of free coal, 1275 or thereby of dross, and 320 tons or thereby of gas coal, in all 5895 tons or thereby, and the value of these at the pithead, according to a reasonable calculation of the market value, was as follows:—common coal, at 6s. per ton—£1290; dross, at 1s. 6d. per ton—£95, 12s. 6d.; and gas coal, at 23s. 11d. per ton — £382, 13s. 4d.; thus amounting in all to	£1768	5	10
(5) that a fair price for working the said coal may reasonably be fixed at 4s. 3d. per ton overhead, this sum including everything except lordship and capital charges, the amount at this rate being in the aggregate	1252	13	9
And leaving as free profit or value in the hands of the defenders, derived from coal belonging to the pursuer, the sum of	£515	12	1

In the second place, Finds, as matter of law, the

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facts being as above set forth, that the pursuer is entitled to recover the said sum of £515,12s. 1d., and no larger sum, from the defenders; therefore ordains the defenders to make payment to the pursuer of the sum of £515, 12s. 1d. with interest at the rate of 5 per cent. per annum from 9th July 1877, the date of the institution of this action, till payment, in terms of the conclusions of the summons, and decerns, &c… .

“ Note.—The feu referred to in the foregoing interlocutor was purchased by the pursuer from the former vassal in 1869 for £80. His chief inducement to make the purchase was the colliers' houses which had been built on the ground. The mineral workings in the neighbourhood had to a considerable extent became exhausted; and the demand for such houses having in consequence been reduced, the subjects were procured for a price which, even at the time, must have been considered to be exceptionally small. The investment, as might be expected, has proved unusually lucrative. In every year since 1869 the rental has been greater, and in recent years has been very much greater, than the purchase-money. This, however, is a consideration which is not of much importance on the present occasion. What is more material is the fact that the pursuer in buying the property did not take minerals into account. These to a considerable extent, as was known to the pursuer and to all in the neighbourhood, had been already wrought, and what remained did not become the subject either of enquiry or speculation. The pursuer's belief and understanding was that all the minerals had been reserved by and to the superior in the original charter; and it was only after the coal in question had been so far wrought out by the defenders as to be a cause of injury to the houses on the surface that the pursuer became aware, from an examination of his titles, conducted by a professional man on his behalf, that the minerals in his feu were not reserved to the superior as had been supposed. This circumstance, of course, does not disentitle the pursuer to recover the value of the coal which has been removed by the defenders; but it renders his case one in which hardship or disappointment cannot reasonably be urged as a ground upon which more than the mere market value of the coal ought to be awarded. 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. As things are, the issue to be tried is this—Coal belonging to the pursuer having been removed by the defenders, what is the sum at which the pecuniary surrogatum ought to be fixed? In coming to a conclusion upon this point it is necessary to bear in mind that the defenders were not conscious or intentional trespassers upon the property of the pursuer. They believed that the coal in this feu, as was the case in almost all of the other feus, had been reserved to the superior, and had been carried by the lease which had been granted by the superior, otherwise it would have been left untouched. The defenders, therefore, are not to be dealt with upon the principle that something has been done for which a penalty may be enforced, and that something more than the fair or reasonable value of the coal which was removed must be rendered as satisfaction to the pursuer. The latter, as the Lord Ordinary thinks, will get all to which he is in the circumstances entitled if he receives simply the value of his coal, as that according to the light afforded by the proof shall be determined.

Parties are agreed as to the quantity of coal which was removed. The amount was 5895 tons, which consisted of free coal, dross, and gas coal in the proportions specified in the foregoing interlocutor. Upon consideration of the proof as a whole, the Lord Ordinary is of opinion that the values of these several qualities with which the pursuer ought to be credited are 6s., 1s. 6d., and 23s. 11d. per ton respectively. In this matter the evidence of the pursuer's witness Alexander Moore, and the returns rendered by the directors of the defenders' company to the defenders, are the things by which the Lord Ordinary has been principally influenced. The aggregate value at these rates is £1768, 5s. 10d.; from which, however, there has to be deducted what shall be considered a fair allowance for severing, lifting, and realising the coal. Upon this latter topic the conlusion at which the Lord Ordinary has arrived is, that 4s. 3d. per ton—the sum suggested by the pursuer's witness David Rankin—may fairly and reasonably be adopted. That allowance, as Mr Rankin explains, includes—and the Lord Ordinary thinks it ought to include—‘all charges except lordship and capital charges.’ The defenders, it may be anticipated, will not be satisfied with this result. Their counsel at the debate upon the proof insisted that all charges appertaining to capital ought to be taken into account along with other charges in estimating the value of the coal at the pithead. But the Lord Ordinary has overruled this contention, for the following reasons. In the first place, its effect practically would be to make the pursuer a joint adventurer in working the minerals of which the defenders are tenants. And in the second place, it would enable the defenders to make a profit out of the working of the pursuer's coal, by charging against the pursuer a part of the outlay connected with their pits which had been incurred solely for their own purposes, and was not to any extent affceted by the working of the coal which in the end has been found to belong to the pursuer.

In the account in which there are set forth the particulars of the pursuer's claim there are specified other items than the value of the coal which was removed. One of these is a consideration for what is called ‘wayleave,’ and this the Lord Ordinary thinks cannot be allowed. At the time

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when the defenders are assumed to have used for the purposes of passage the space left vacant by the removal of the pursuer's coal, they understood that the minerals which had been taken away and the place which it had occupied were parts of the subjects to which they had right; and therefore, even if it could be held upon the proof that the use of the vacant space was, by the facilities it afforded for passage, an advantage to the defenders, he thinks that, inasmuch as nothing was taken from the pursuer by what they did, they ought not to be subjected in liability for this item of the pursuer's claim.

Another item also claimed by the pursuer is a sum of £110, 9s. 8d., which is said to have been saved to the defenders ‘by working direct through instead of round the pursuer's feu.’ How this can be distinguished from the ‘wayleave’ already alluded to can hardly be imagined. If there is a distinction between the two items, the second is seemingly that for which least can be said.

The last of the items specified in the account referred to is for damage done to the surface, and the sum claimed under this head amounts in all to £480. Such a sum, as the Lord Ordinary reads the proof, is perfectly extravagant. Less than a half would in his opinion afford ample reparation, supposing anything were to be allowed but as he views the matter, this is an item which ought to be altogether disallowed, because the pursuer has asked and is to receive the full value of the coal by the removal of which the subsidence of the surface and the consequent injury to the houses was produced. Had the pursuer been paid for his coal by lordship, he would have been entitled to the benefit of the ordinary condition that damage to the surface must be repaired. But as he is taking the coal itself, he must be content to take with it the burden which under this head of his claim he endeavours to throw upon the defenders.

Several English decisions were cited by the pursuer in support of his claim. To these, though they are not binding as authorities, the Lord Ordinary has given effect so far as they were considered applicable to the circumstances. But it is plain that cases analagous to the present cannot be absolutely ruled by any prior decisions. This, moreover, must be observed,—though one point was decided as the pursuer thinks favourably to his argument in one case, and another was also so decided in another case, there is no instance except the present in which all the items now claimed by the pursuer were presented for decision; and the impression in the mind of the Lord Ordinary is, that were all which is now asked by the pursuer to be granted, the judgment would be one, if not against, at least without authority.

As the pursuer has asked and has led proof upon so much which has not been allowed, the expenses awarded to him would have been given subject to modification, had it not been for the consideration that the defenders have been equally extreme in the contentions which they have maintained and endeavoured to establish. As things are, the Lord Ordinary has thought it right to allow the costs to follow the result of the action.”

The defenders reclaimed, and argued—The English authorities were not altogether consistent. At common law it was laid down that the proper estimate of damages was the value of the coal when it first became a “chattel” — that is to say, as it first became a chattel when it was severed from the ground—under deduction of the cost of bringing it to the surface, but not under deduction of the cost of hewing— Marlin v. Porter; but in the following year Baron Parke, one of the Judges who decided Marlin v. Porter, charged the jury in another case that unless they found that the defendant had been guilty of fraud or of negligence, the damage was the value of the coal at the pit-mouth under deduction not only of the cost of haulage but also of hewing— Wood v. Morewood. And that rule had since been followed in equity— Hilton v. Woods; Jegon v. Vivian; United Merthyr Collieries Company; Ashton v. Stock. But it was doubtful whether this Court would ever apply the severe principle of Martin v. Porter, which was based on the technicalities of English law. At any rate, there was here the most perfect bona fides, and that brought the defender within the milder alternative; and so the Lord Ordinary had held. He had, however, as the evidence showed, under estimated the cost of hewing the coal and bringing it to the surface; and he had also declined to deduct anything for depreciation of capital, which was inequitable to the defenders who had thus virtually lost so much capital. A greater deduction ought therefore to be made even on the Lord Ordinary's principle; but the case was so peculiar in its circumstances as to bring it within another rule. For the coal which the pursuer had owned was of very small amount and was entirely surrounded by the defenders' pits. He never could have worked it to profit himself, and no one else could have done so except the defenders. He was therefore not entitled to the profits, but only to the lordships which he would have got under a lease of this coal to the defenders. And of course he was, on this view, entitled to something for surface damage. [lord president—But was he bound to use the coal at all? He might have wished to put up some heavy building on the surface.] That was not alleged on record, and in a district like the present was out of the question. Besides the coal underneath was already partly worked out before the defenders interfered. It was a jury question — What was the value to the pursuer of the coal he had lost?

Authorities— Martin v. Porter (1839), 5 Meeson and Welsby, 351; Wood v. Morewood (1840), 3 Adolphus and Ellis, 440; Hilton v. Woods (1867) Law Rep., 4 Equity 433; Jegon v. Vivian (1871), Law Rep., 6 Chanc. 742; The United Merthyr Collieries Company (1872), Law Rep., 15 Equity 46; Ashton v. Stock (1877) Law Rep., 6 Chanc. Div. 719; Houldsworth v. Brand, May 18, 1875, 2 R. 683; Jan. 8, 1876 3 R. 304; Jan. 27, 1877, 4 R. 369; Buchanan v. Duke of Hamilton, Jan. 25, 1878, 5 R. 588.

Argued for the respondent—The law in England was by no means so settled in favour of deducting the cost of severing the coal from the amount of the damages. Wood v. Morewood was merely a nisi prius decision, and was disregarded by the Court of Queen's Bench in Morgan v. Powell. In the Equity Courts too the cost of severing had recently been deducted— Ecclesiastical Commissioners v. North-Eastern Railway. But here there was undoubtedly the most complete bona fides; it might therefore be granted that all necessary expenditure ought to be deducted. Now, the deduction allowed by the

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Lord Ordinary was on the evidence more than enough. It was said that account should be taken of depreciation of capital. That was untenable. All the capital which the defenders had expended would have been expended in any case on their own pits; or rather, both the capital expenditure and the annual outlay would have been much greater had the defenders been obliged to go round instead of being allowed to go through the pursuer's property. The pursuer had thus the advantage of position, and would make his own terms; a mere lordship therefore on the scale of the surrounding coal-fields was quite inadequate. The Lord Ordinary's interlocutor was the equitable one in the circumstances, and ought to stand.

Authorities— Morgan v. Powell (1842), 3 Adolphus and Ellis 279; Hunt v. Peake, Johnson's Reps. 705; Ecclesiastical Commissioners v. North-Eastern Railway (1877), Law Rep., 4 Chanc. Div. 845; Bainbridge on Mines and Minerals, 4th ed. 310.

At advising—