Anvil Mining Co. v. Humble
153 U.S. 540 (1894)

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U.S. Supreme Court

Anvil Mining Co. v. Humble, 153 U.S. 540 (1894)

Anvil Mining Co. v. Humble

No. 323

Argued March 26-27, 1894

Decided May 14, 1894

153 U.S. 540

Syllabus

A provision in a contract for the mining, removing, and loading by the party of the first part of ore from a mine of the party of the second part that the party of the second part may be at liberty to terminate it at any time when he shall be satisfied that the system employed by the party of the first part is prejudicial to the welfare and development of the mine, and that in that event, there shall be a reference to determine the damages sustained by the party of the first part by reason of the termination, does not give the party of the second part a right arbitrarily to terminate the contract, but only to do so when it is determined that the system employed is prejudicial to the future welfare and development of the mine.

A contract made for the extract of ore from the first level of a mine provided that the ore should contain at least 56 percent of metallic iron. Subsequently the parties extended the contract so as to include the ore contained on and above the second and third levels, with the exception that the ore extracted under this contract should contain at least 58 percent of metallic ore. Held that this stipulation was applicable only to the ore taken from the second and third levels.

Whenever one party to a contract is guilty of such a breach as is here attributed to the defendant, the other party may treat the contract as broken and may abandon it and recover as damages the profits he would have received through full performance, which measure of profits was within the intent of both parties when the contract was made, and could be ascertained without difficulty.

A letter of a party to the suit bearing upon the issues introduced in evidence against him may be explained by him as a witness in his own behalf, and its effect upon the issues and the force of the explanation are proper subjects for the consideration of the jury.

By the terms of the contract in this case, the amount due the plaintiffs from time to time was to be determined by the weigh-bills, which were in the possession of the defendant's bookkeeper. The plaintiff applied to the bookkeeper for information on this point, and received a reply. Held that that was competent evidence on that point.

On May 1, 1888, John Humble, Joseph H. Johns, and James Johns, who were partners doing business under the firm name of Johns Brothers & Humble, entered into a contract with the Anvil Mining Company for mining iron ore.

Page 153 U. S. 541

The provisions of the contract, so far as they are material, are that

"they, the said party of the first part, shall and will, in a good and workmanlike manner, and at their own proper charge and expense, mine, remove, and load into the skips all the merchantable iron ore contained on or above the first level of the mine now owned and worked by the said Anvil Mining Company at its No. 1 shaft, in said Township of Bessemer. The said ore shall be mined and removed by what is known as the 'caving system,' and the ore removed shall be at least seventy-five percent (75 percent) of the merchantable iron ore contained on or above said first level, and shall be worked, taken out, and removed in such manner as not to interfere with the future workings and development of said mine. Said party of the first part shall work said mine to its full capacity, and remove the ore therefrom without unnecessary delay, and shall mine from said level at least two hundred (200) tons of merchantable iron ore per day -- that is, the average amount of ore removed each month shall not be less than two hundred (200) tons per day."

"It is understood and agreed between the parties hereto that should it be determined by said second party that the ore from the second and third levels of said mine can be removed and extracted by the caving system of mining, or by the same system practiced in removing the ore from the said first level, that this contract, at the option of said second party, shall extend to and include the ore contained on and above the second and third levels of said mine."

"It is also agreed that it shall be entirely optional with said party of the second part to extend the contract to the ore below the second level, and that the said party of the second part shall have the right of terminating this contract and the said system of mining at any time when said second party shall decide that said system is prejudicial to the future welfare and development of said mine; equitable compensation to be made said party of the first part for damage suffered by them by reason of the said party of the second part so terminating this contract, and should said parties be unable to agree upon the basis of settlement, then the matter

Page 153 U. S. 542

shall be left to two disinterested mining superintendents, one to be chosen by the party of the first part and the other to be chosen by the party of the second part, and, in case said referees fail to agree, they shall choose a third, and the decision of said referees, or the majority of them, shall be final and conclusive upon the parties hereto as to the compensation to be made said party of the first part because of the termination of this contract."

"The said party of the first part agrees that the said party of the second part shall have the use of number one shaft for the purpose of raising either rock or ore from said mine, in the sinking of said shaft and developing said mine below the first level. This privilege to use number one shaft is to be considered to apply only to the removal of ore, rock, or other material necessary to be taken out in sinking said shaft, and in drifting, cross-cutting, and opening the lower levels."

"The ore to be taken out by said party of the first part under this contract shall be merchantable iron ore, containing at least fifty-six (56) percent or upwards of metallic iron, and no ore of lower grade shall be accepted or paid for by the said party of the second part."

"The said party of the first part are to mine said ore and place the same in the skips at No. 1 shaft in said mine, ready for hoisting, the ore to be hoisted at the expense of the said party of the second part, who agree to furnish all necessary power to properly run the skip in said No. 1 shaft for the purpose of hoisting the ore mined and placed therein by the parties of the first part, but this covenant shall not deprive the party of the second part of the right to use said skip for the purposes and in the manner hereinbefore provided. In case of any accident to said machinery, said party of the second party shall not be liable for any damages sustained by said party of the first part, caused by delay in replacing or repairing said machinery, provided the said party of the second part shall cause the same to be replaced or repaired with all reasonable diligence."

"The said party of the first part are to take out all the ore which can possibly be taken out under the caving system of

Page 153 U. S. 543

mining, and in no case shall the amount taken out be less than seventy-five (75) percent of the ore contained therein, as above agreed."

"The party of the second part are to have the right or privilege of superintending and directing said work, and for that purpose to enter said mine and inspect the works thereof at any time for the purpose of seeing that the work is properly conducted by the said first party and that the work so done is not prejudicial to the future interest and working of said mine."

"It is further expressly stipulated and agreed that the said party of the second part shall not under any circumstances be liable for any damage or injury to either person or property by reason of the carelessness or negligence of the said party of the first part or of their workmen, apprentices, or other persons in their employ, in the furtherance of this contract, and that the said party of the first part shall and will indemnify and forever save harmless the said party of the second part from all actions, claims, suits, and damages by reason thereof. In consideration whereof, the said party of the second part covenants and agrees to and with the said party of the first part to pay to them, the said party of the first part, the sum of sixty cents (60 cts.) for each and every gross ton of merchantable iron ore mined and removed by the said party of the first part from the said mine under this contract, each gross ton to contain two thousand two hundred and forty (2,240) pounds avoirdupois. The amount of ore shipped from said premises, and the amount due said party of the first part therefor, shall be determined by and based upon the weights as ascertained by the reports of the railroad company or companies, made to said party of the second part, of the shipment of the ore from said mine, in case of the shipment of the ore so mined from said premises."

This contract was subsequently extended by the following stipulation, dated the 10th day of July, 1888:

"It is mutually agreed by the parties to the within agreement that this contract shall extend to and include the ore contained on and above the second and third levels, as named

Page 153 U. S. 544

therein, with the exception that the merchantable iron ore extracted under this contract shall contain at least 58 percent (fifty-eight percent) or upwards of metallic iron."

The firm commenced the work soon after this contract was entered into, and continued it until the 11th of October of that year. On February 11, 1889, they began this action in the Circuit Court of the State of Michigan for the County of Gogebic to recover for work done and damages sustained. The defendant removed the case to the federal court, where issue was joined, and the case went to trial before a jury, which, on September 16, returned a verdict for the plaintiffs in the sum of $5,943.79. Pending the proceedings in the trial court, one of the plaintiffs, Joseph H. Johns, died, and the suit was revived in the name of John Humble and James Johns, the surviving partners. Upon the verdict as returned, judgment was entered, and to reverse such judgment the defendant sued out this writ of error.

Page 153 U. S. 546

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