Shrader v. Commercial Coal Mining Co.

Citations

• 260 Pa. 576
• 104 A. 151
• 1918 Pa. LEXIS 570

Syllabus

<p>Mines -and mining — Leases—Construction — Share of profits — Deduction of losses — Intention—Partnership—Practice—Equity— Parties — Assignee.</p> <p>1. A mining company leased to another mining company two coal mines known as mine No. 2 and mine No. 5; the lease provides that during the life of mine No. 2, the lessee shall apply two-thirds of the net profits to the reduction of the indebtedness of the lessor; and, upon cancellation of such indebtedness, that share shall be paid to the lessor; it further provides that the net profits or earnings of mine No. 5 shall be applied, “until the payment in full of the cost of equipping, developing and putting-in condition for operation of said mine No. 5 with interest at the rate of six per cent, per annum,......to the reduction and payment thereof, the same being applied monthly so far as the same will suffice such payment or reduction. After said indebtedness is liquidated and paid in consideration of the assignment of said lease and use of the machinery and equipment of the lessor, the lessee agrees to pay to the lessor during the life of this agreement a sum equal to one-half of the said net profit derived from the operation of the said mine No. 5, and also one-half of the net profit derived from the operation of the adjoining tracts leased or purchased by the lessee in the operation of which the plant and machinery of the lessor is utilized. This sum shall be paid to the lessor quarterly in each year during the continuance of this agreement.......The amount of the profits shall be ascertained and applied as herein provided, at least once in every three months and a statement thereof rendered by the lessee to the lessor at that time and in the month of January in each year during the continuance of this agreement a full statement shall'be rendered of the entire operation and transactions hereunder up to the 31st of December preceding.” It is also agreed that the monthly and quarterly statements shall be conclusive if