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LINDA COAL AND SUPPLY COMPANY v. TASA COAL COMPANY (11/10/64)

decided: November 10, 1964.

LINDA COAL AND SUPPLY COMPANY, APPELLANT,
v.
TASA COAL COMPANY



Appeal from judgment of Court of Common Pleas of Butler County, Sept. T., 1957, A.D. No. 70, in case of Linda Coal and Supply Company v. Tasa Coal Company.

COUNSEL

Edmund K. Trent, with him G. Donald Gerlach, and Reed, Smith, Shaw & McClay, and Cingolani & Cingolani, for appellant.

Harry K. McNamee, with him Marshall, Marshall, McNamee & MacFarlane, and Plowman and Spiegel, for appellee.

Bell, C. J., Musmanno, Jones, Cohen, Eagen and O'Brien, JJ. Opinion by Mr. Justice Eagen. Mr. Chief Justice Bell dissents.

Author: Eagen

[ 416 Pa. Page 99]

This appeal is from the action of the court below sustaining preliminary objections in the nature of a demurrer to the complaint in an action of trespass. Plaintiff seeks to recover losses incurred as a result of a contract between the parties which it was allegedly induced to enter as a result of fraudulent misrepresentations by the defendant.

The facts pleaded are as follows:

The plaintiff-appellant, Linda Coal and Supply Company (Linda), contracted with the defendant, Tasa Coal Company (Tasa), in May of 1955 to stripmine coal from lands owned by Tasa in Butler County, Pennsylvania, a portion of which had already been strip-mined by Tasa in prior years. In the process of negotiations toward the execution of this contract, Tasa exhibited to Linda various maps and drill records which substantiated its representation that the vertical cover line (overburden) did not exceed a maximum of 50 feet. This representation was false, which Tasa well knew, and was made with the fraudulent purpose of inducing Linda to enter into a contract for the removal of all recoverable coal on the tract, for which Linda was to receive from Tasa $2.95 per ton. So too, the exhibited maps and drill records falsely represented the amount of overburden, as Tasa again knew, because it had prepared the maps and drill records at a time prior to Tasa's earlier stripmining

[ 416 Pa. Page 100]

    operations on the tract, during which operation Tasa had placed additional earth over the coal which was the subject of this contract.

Upon learning that the overburden exceeded 50 feet, and in fact averaged 60 feet, Linda entered renegotiations with Tasa and it was orally agreed that, as a result thereof, Linda would receive $3.15 per ton of coal removed for Tasa, instead of the originally contracted for $2.95 per ton.

Nonetheless, because the overburden averaged some 60 feet in depth, it remained economically impractical for Linda to remove the coal and Linda ceased the operations called for in the contract. Thereupon, Linda instituted this action of trespass for fraud and deceit to recover the actual loss which it suffered as a result of the fraudulent misrepresentations regarding, inter alia, the overburden made to it by Tasa.

The court below held, as a matter of law, that the renegotiation between the parties "after all the facts and true status were known to the plaintiff", and the entering into a new contract for an increased profit to the plaintiff, waived any right of action for alleged misrepresentations which were the very basis and consideration of the new contract. Further, the court below said that a mere allegation of fact that Linda did not intend to waive its ...


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