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McMillan v. Bailey-Darby Coal Corp.

May 2, 1952

MCMILLAN
v.
BAILEY-DARBY COAL CORP. ET AL.



Cullen

CULLEN, Commissioner. This appeal involves a controversy between the owner of the timber rights, and the lessee of the coal rights, in a tract of 1600 acres situated on the west side of Big Black Mountain in Harlan County.

The owner of the timber rights, A. Dale McMillan, who was the plaintiff below in a declaratory judgment action, is appealing from a judgment which found that he could not cut and remove the timber from the tract in question without materially interfering with the mining operations of the defendant, Bailey-Darby Coal Corporation, but which granted to McMillan the right to cut and remove the timber, notwithstanding such material interference, upon his executing a bond conditioned that he would pay all damages resulting from such interference and further conditioned that he would comply with certain specified requirements in conducting his logging operations.

The controversy grows out of the terms of the instruments under which the parties acquired their respective rights.

The coal company acquired its rights under a lease from the owners of the tract of land in question, dated August 24, 1945. The lease is for a term of 30 years, or until all the coal is mined out. The lessee is granted the right and privilege, during the term of the lease, of mining coal and of constructing necessary facilities for coal mining operations, and the lessee is further given the right to use all timber upon the land measuring 15 inches in diameter or less, except poplar and locust, necessary for mining purposes. The lease provides that the lessee 'shall have said premises for the purposes set forth in this lease without let or hindrance from the lessors and free from any person or persons claiming the same, or any part thereof.' However, the lease recites that it is contemplated by the parties that the lessor may desire to cut and remove the timber other than that granted to the lessee, and therefore the lessor reserves the right to bring logs to the side tracks on the coal mining operations and load the logs on railroad cars, provided that such loading will not interfere with the lessee in the mining and shipping of coal. The lease calls for a royalty of 30 cents per ton, with a minimum royalty of $25,000 per year.

Immediately following the execution of the coal lease, the coal company entered upon the premises and commenced its mining development, the nature and extent of which will be hereinafter described.

On September 27, 1946, the owners of the tract of land sold to McMillan all timber on the tract measuring 16 inches or more in diameter, except locust. The contract of sale included the following provisions:

'It is understood and agreed by the parties hereto that second party shall have full rights of ingress and egress and necessary rights-of-ways in, over and through the lands upon which the timber is situated by which second party may remove said timber. However, this contract of sale is executed with full knowledge of the coal lease of August 24, 1945, between Turner Fuel Company, Henry Turner and Amanda Turner, his wife, of the first part, and Bailey-Darby Coal Corporation, of the second part, wherein and whereby said Turner Fuel Company, Henry Turner and Amanda Turner leased the coal underlying the land upon which the timber is situated and this sale is executed subject to all the rights granted in that coal lease, which said coal lease shall be regarded as superior to this contract of sale if there is any conflict between the two.

'It is agreed by the parties that in using the right-of-way herein granted and in cutting and removing the timber herein sold such work by second party shall be done and such rights-of-ways to be used shall be used so as not to conflict or interfere with the lessee in the coal lease in the mining and operating of the coal underlying the land.

'Second party is granted the right to erect and maintain saw mill sites, stacking grounds for lumber, skidways, dumps and the like wherever necessary or expedient on the premises, but such will not be constructed or erected or maintained as will interfere with the lessee in the coal lease, its successors and assigns, from mining and shipping the coal embraced in said lease.

'It is further understood between the parties that the right to use the timber on these premises which measures 15 inches in diameter and down has been granted to Bailey-Darby Coal Corporation under the above named coal lease, and therefore no rights are granted to second party in any way as to the timber on said premises which measures 15 inches in diameter and down. While second party is granted the right to build roadways, haul roads, skidways and mill sites on the premises he shall not have the right to use any of the timber on the premises 15 inches and under.

'Under the coal lease hereinabove referred to certain rights were reserved by first parties and Turner Fuel Company to the use of the side tracks located on the mining operation. First parties hereby grant to second party such rights as they have in order that he may bring his timber products to the side tracks located on the operation and to loan such products on the railroad cars without charge but at second party's own expense, but such loading shall at no time be permitted to interfere in any way with the Coal Company operating on the lease in the mining and shipping of its coal.'

Sometime following the acquisition of the timber rights, Mr. McMillan and representatives of the Vestal Lumber and Manufacturing Company, to which company McMillan proposed to sell his timber rights, had some discussions and correspondence with the coal company concerning the commencement of logging operations. In one letter the Vestal Company offered to purchase from the coal company any timber less than 15 inches in diameter necessary to be cut in making roadways and skidways for logging purposes. The coal company took the position that the timber could not be cut and removed without materially interfering with the mining operations and declined to consider any agreement with the owner of the timber rights concerning the commencement and carrying on of logging. McMillan then brought the present action seeking a declaratory judgment as to the respective rights of the parties.

Considerable proof was taken, directed to the question of whether the timber could be cut and removed without interfering with the mining operations. From the proof it appears that the only way of bringing timber out would be down one of the three valleys made by the various forks of Bailey's Creek, which flow from the crest of the mountain to the bottom, where Bailey's Creek enters Clover Fork. The three forks are known as the left fork, the middle fork, and the right fork, the latter being in reality the main creek extended. The coal company has substantial installations on the left fork, where it has a number of entries in the Kellioka Seam.

The valley of the left fork from the foot of the mountain up to the entry is occupied by a haul road constructed by the coal company and used in trucking its supplies and equipment. Around the ridge of the mountain to the valley of the middle fork the coal company has constructed a grade for a tram road, and steel tracks for mine cars have been constructed on part of the grade. The company also has built roads up the valley of the middle fork and up the ...


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