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April 24, 1954


Appeal, No. 297, Jan. T., 1953, from judgment of Court of Common Pleas of Bedford County, Sept. T., 1949, No. 188, in case of Pennsylvania Electric Company v. Spencer S. Shannon et al. Judgment affirmed; reargument refused June 5, 1954.


Earl F. Reed, with him J. Roland Johnston, Frank J. Gaffney, Samuel H. Stewart, John H. Jordan and Thorp, Reed & Armstrong, for appellants.

Frank G. Smith, with him Robert V. Maine and Smith, Maine, Whitsett & Lee, for appellee.

Before Stern, C.j., Stearne, Jones, Chidsey, Musmanno and Arnold, JJ.

[ 377 Pa. Page 353]


All of the issues litigated below in this proceeding were fully and correctly disposed of in the opinion of Judge WALTER I. ANDERSON of the 19th Judicial District, specially presiding. A question concerning alleged rights in Spencer S. Shannon under a coal lease from Midlothian Coal Company, assigned to William Reed, which the appellants belatedly sought to raise on this appeal, was neither presented to nor passed upon by the learned court below. It cannot, therefore, be injected here: Muse-Art Corporation v. Philadelphia,

[ 377 Pa. Page 354373]

Pa. 329, 332-333, 95 A.2d 542, and Bourd v. Berman, 359 Pa. 183, 185, 58 A.2d 442. For a collation of earlier decisions, see also Montgomery County Bar Association v. Rinalducci, 329 Pa. 296, 298, 197 A. 924. Indeed, the appellants concede that the "Midlothian lease" was not offered in evidence; and a reading of the record reveals that the only use of the word "Midlothian" in the evidence was to identify a locality or district and not as the source of any legal rights in Shannon or the appellants.

Accordingly, the judgment of the court below as hereinafter modified will be affirmed on the following excerpts from the opinion of Judge ANDERSON:

"On December 3, 1943, Spencer S. Shannon, Katherine W. Shannon and Leon Falk, Jr., Trustee for Spencer S. Shannon, Jr., and Patricia Shannon, [appellants], entered into a written lease (hereinafter referred to as the Shannon Lease) with the Pennsylvania Edison Company, now the Pennsylvania Electric Company, [appellee], granting to the latter the mining rights to coal underlying certain tracts of land in Huntingdon and Bedford Counties. The lessee agreed to pay to the lessors a royalty of fifteen cents (15›) for every ton of coal mined and removed from or used by the lessee on the leased premises. The lease contained a confession of judgment and also a provision for the arbitration of disputes, substantially as follows: -- 'The Lessors and Lessee mutually covenant and agree that in case of disagreement or dispute between the Lessors and Lessee as to interpretation or application of any of the covenants, agreements or conditions of this lease, or to performance or non-performance of the same, including disagreements as to the operation of or existence of the conditions provided for in Clause 3 of the Lessee's covenants, such disagreement and disputes shall be settled from time to time by arbitration

[ 377 Pa. Page 355]

    as follows: ... (provides for the choosing of arbitrators)... Such awards by all or a majority of said arbitrators shall be final and conclusive on the Lessors and Lessee as to the question or questions of fact submitted to arbitration; their conclusions of law shall be subject to correction by the Court.... It is the intention and agreement of the parties by this arbitration clause that they are to be bound by the provisions of the Act of Assembly approved the 25th day of April, 1927, P.L. 381....' It was agreed between the parties in the lease that if the lessors 'acquire by deed, lease or otherwise, within a period of five years from the date of this lease, the coal underlying certain tracts or parts of tracts known to the parties hereto as the Gould, Everett-Saxton Company, Harnish, formerly Broad Top Coal Company, Rock Hill Coal and Iron Company and Shannon tracts or parts of tracts of land, the same, without further contract or designation herein than formal written notice by lessors to the lessee of such acquisition shall be added to and considered as part of the herein leased lands and premises.' On December 30, 1943, the Pennsylvania Edison Company entered into a written lease with William and Theresa Reed, granting to the Pennsylvania Edison Company all the mining rights in the coal underlying two tracts of land. One of them is known as Tract Number 2, or the Gould tract, involved in these proceedings; the Lessee agreeing to pay twenty-five (25›) cents per net ton ...

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