Opinion
Decided February 22, 1927.
Appeal from Pulaski Circuit Court.
DENTON PERKINS and M.L. JARVIS for appellant.
C.L. TARTAR for appellees.
Reversing.
Appellant, Rufe Ashurst, instituted this action at law in the Pulaski circuit court to recover from J.S. Cooper $3,313.96, the amount alleged to be due as damages for trespass committed by the latter by entering upon and into the mineral estate of the former and mining, removing and selling a lot of coal therefrom and converting its proceeds to his own use. Appropriate pleadings made the issues on the questions hereinafter discussed, and the trial before a jury resulted in a verdict and judgment for defendant. It may be stated that before the action came on for trial the defendant, J.S. Cooper, died and the action was revived in the name of his personal representative, the appellee herein.
Appellant urges as reasons for reversing the judgment errors in the admission and rejection of testimony and in the instructions given. The action seems to have been treated by both parties and the trial court as one to recover damages resulting from an innocent trespass as distinguished from a trespass willfully and knowingly committed. In that state of case only two issues need be submitted to the jury. Unless the parties are agreed or if the evidence is conflicting as to the amount of coal taken the jury, of course, must determine whether any and if so how much coal was taken. Further, guided by a proper instruction fixing the measure of damages, the jury will be required to fix the amount, if any, to be awarded as damages for the coal, if any, so taken. The value of the coal in place so taken, in a case of innocent trespass, is the amount of damages, and the rule for determining that value uniformly adhered to by this court is to have the jury determine from the evidence the usual and customary royalty from mining privileges in the vicinity of the mine at the time of the trespass. These questions were fully discussed in the recent opinions of this court in Middle Creek Coal Company v. Harris, et al., 217 Ky. 620, 290 S.W. ___, and in Falls Branch Coal Company v. Proctor Coal Co., 203 Ky. 307, 262 S.W. 300. Many other opinions of this court on these questions may be found quoted from and referred to in the two opinions, supra.
The erroneous misconception of the principles of law applicable to the issues and facts hereof upon the part of the trial court is indicated by the following statement made from the bench to the attorneys, but not in the hearing of the jury, after both parties had announced the close of the evidence:
"I have permitted both sides to offer proof as to whether or not the mines referred to in the evidence could be operated at a profit or at a loss. I will now permit both sides to produce evidence, the plaintiff any evidence he may desire to offer in regard to the amount of profits or loss at which the mines can be operated, and the other side may introduce testimony on the same question. Examination of the petition shows that plaintiff has sued for the value of the coal in the mine, and not for royalties. The issue, therefore, is the value of the coal taken, in the mine, at the time taken.
"There is no evidence before the jury as yet tending to show the value of the coal in the mine, or the market value of the coal at the mines. The cost of production may be shown together with the market price. The difference, if any, above the cost of production being of course the value of the coal in the mines."
Following this additional evidence was introduced for appellee to establish that the cost of mining the coal taken by Cooper exceeded the price received for it on the market, supplementing similar evidence along that line already offered, to all of which appellant objected and excepted.
Over appellant's objection the trial court then gave this instruction:
"If the jury believes from the evidence in this case that the coal in the mine referred to in the evidence had some value as it lay in the mine; that is, that it could by careful, prudent operation of the mine be taken from said mine and sold for a profit above the cost of production, then you will find for the plaintiff, Rufe Ashurst, said value according to the evidence, if anything, of the amount of coal which you may believe from the evidence was mined from said mine by the defendant, J.S. Cooper, his agent and employees, not exceeding the sum of $3,313.06, the amount sued for, but unless the jury shall so believe that said coal had value in the mine as defined in the first part of this instruction, your finding shall be for the defendant."
The trial court's conclusion as indicated by the statement quoted and instruction given that the value of coal in the mine must be ascertained by the jury finding from the evidence whether it could be profitably mined, and if so find as damages the profit that could be made, and if not to find nothing, in the light of the opinions to which we have referred was entirely erroneous. The rule prevailing in this jurisdiction for arriving at the value of coal in place is by ascertaining the usual and customary royalty paid for mining privileges under like conditions in the vicintiy of the mine at the time of the trespass.
It follows then that all the evidence as to the cost of mining the coal taken by Cooper and as to whether that was greater or less than the price received for it when marketed was incompetent and appellant's objection to it should have been sustained. The method of ascertaining the value of the coal in the mine has been indicated herein, and upon another trial the introduction of evidence will be confined to the issues indicated. Appellant was a competent witness on the question of the usual and customary royalty paid for mining privileges in the vicinity of the mine at the time of taking of the coal, because, though testifying for himself, he was not testifying "concerning any verbal statement of or any transaction with or any act done or omitted to be done" by J.S. Cooper, his adversary, who was dead when he testified. Hence, it was error to sustain the objection to this testimony from him.
Appellee insists that he was entitled to a directed verdict at the close of the evidence herein, because appellant failed to show title in himself; and because his intestate appears to have mined the coal while in possession as a purchaser for a valuable consideration without notice of appellant's outstanding claim. The parties herein stipulated and agreed that they both claim title to the land in controversy from a common source and remote grantor, J.H. Thurman, and that the record in the case of Rufe Ashurst v. V.D. Roberts, et al., heard and determined in the Pulaski circuit court, and thence appealed to this court, together with the opinion of this court in the case found in 200 Ky. at page 755, might be considered as offered and read in evidence upon the trial hereof, and that the title papers of both parties might be considered as offered and read in evidence to the jury. Under this stipulation, and in view of the fact that both parties trace their title to a common source, it was unnecessary for either party to read in evidence any of their chain of title back of the common remote grantor, J.H. Thurman. The argument for appellee that under the opinion of this court, in Ashurst v. Roberts, 200 Ky. 755, 255 S.W. 528, it was held that appellant did not have the title of the land in question is incorrect. It was held in that opinion that the deed executed on the 14th day of March, 1912, by J.R. Cook, master commissioner of the Pulaski circuit court, to J.H. Thurman for the lands therein described, which had been sold in the action of W. Boyd Morrow, trustee, etc., plaintiff, v. The Pitman Creek Coal Company, etc., defendants, in view of the contract entered into between J.H. Thurman and Rufe Ashurst, the effect of which was before this court for consideration, was merely a mortgage to secure Thurman in the payment of certain indebtedness owing to him by Ashurst, and that under the deed, in view of the written agreement between the parties, Thurman merely had a lien upon the land therein described to secure him in the payment of the balance due under the contract found by that opinion to be $1,425.00, with interest, less a credit of $62.50. It was further held in that action that the conveyance of a part of the property to Warren and Hughes should have been cancelled. The judgment from which that appeal was prosecuted was reversed, with directions that a judgment in conformity with that opinion be entered. The chain of title in appellant from the common remote grantor is found to be complete, and the contention that appellee's motion for a peremptory instruction should have prevailed because appellant failed to show title in himself can not be sustained.
Appellee's further contention that he was entitled to a directed verdict because the record without contradiction establishes that he was a bona fide purchaser for value without notice of appellant's claim to ownership can not be sustained. This contention grows out of the fact that in the action of W. Boyd Morrow, trustee, etc., plaintiffs, v. The Pitman Creek Coal Company, etc., defendants, then pending in the Pulaski circuit court, the land, from which the coal mined by J.S. Cooper was taken, which is in controversy herein, was sold by the master commissioner. J.H. Thurman bid the property in at the sale; the sale was reported as having been made to him and confirmed; and the deed was made and delivered to him and recorded. The contract between J.H. Thurman and appellant, Rufe Ashurst, the effect of which was considered and determined by this court in Ashurst v. Roberts, supra, though in writing and signed by the parties, and though actually recorded in the county court clerk's office of Pulaski county, was never acknowledged by the parties; and consequently under the provisions of section 500, Kentucky Statutes, the fact that it was recorded was not sufficient to charge J.S. Cooper with notice thereof. It is stipulated that no lis pendens notice was ever filed by appellant, Ashurst, when or after he instituted his action against Roberts, etc., supra. Appellee by amended answer herein pleaded that he purchased the tract of land from which he mined the coal in controversy for value and without notice of appellant's rights therein growing out of the contract between him and Thurman above referred to. The difficulty in sustaining that plea arises from the fact that on that question the burden was upon him to establish by proof that his purchase was without notice, actual or constructive, of appellant's outstanding superior title, and there is a total failure of proof that he did not have actual notice. In addition to this the record title was in J.H. Thurman. Appellee under the stipulation that the title papers might be considered as offered and read in evidence has had copied and filed with the record herein the deeds constituting his alleged chain of title from himself through his predecessors in title to the common remote grantor. Among them is a deed from Mae Thurman Roberts, V.D. Roberts and Susan Emma Thurman to Joe S. Warren and Tom Hughes. The record contains no evidence as to how the parties grantor in that deed ever acquired the title of the land in question. If the record title was in J.H. Thurman under the deed from the commissioner to him of March 14, 1912, there is no evidence as to how the title ever came to rest in the parties grantor in the deed from Roberts and Thurman to Warren and Hughes. In addition this deed seems to be the one referred to in the opinion of Ashurst v. Roberts, supra, which was thereby directed to be cancelled. For these reasons appellee's contention that he was entitled to a directed verdict upon the theory that his intestate was an innocent purchaser for value without notice cannot be sustained.
For the reasons indicated the judgment herein is reversed and cause remanded for further proceedings consistent herewith.