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PITTSBURGH NATIONAL BANK v. ALLISON ENGINEERING COMPANY (07/11/80)

filed: July 11, 1980.

PITTSBURGH NATIONAL BANK, TRUSTEE UNDER THE WILLS OF WILLIAM R. MARSHALL, AND LLOYD N. TATEM, ASSIGNEE OF GARRETTSVILLE LUMBER COMPANY,
v.
ALLISON ENGINEERING COMPANY, A PARTNERSHIP, APPELLANT



No. 532 April Term, 1979, Appeal from the Judgment of the Court of Common Pleas, Civil Division, of Allegheny County, at No. 2014 July Term, 1974

COUNSEL

Zeno Fritz, Pittsburgh, for appellant.

Michael W. Balfe, Pittsburgh, for appellees.

Spaeth, Hoffman and Van der Voort, JJ.

Author: Van Der Voort

[ 279 Pa. Super. Page 444]

The issue in this case is the correct interpretation of two coal leases, each of which provided for a minimum royalty of $50.00 a month prior to the commencement of mining operations, payable quarterly in advance, and thereafter a tonnage royalty of twenty cents a ton for coal mined and removed from the premises.

The leases were entered into February 26, 1949 between Garrettsville Lumber Company, a partnership composed of William R. Marshall and Lloyd N. Tatem as lessors and Allison Engineering Company, the appellant herein, as lessee. Mr. Tatem died September 29, 1950 and Mr. Marshall on June 14, 1966. Pittsburgh National Bank, the appellee herein, is a trustee under the Wills of both men, and instituted this action in that capacity.

The royalty provisions of the leases were identical and read as follows:

"2. Lessee covenants and agrees to pay the Lessor the sum of $.20 per ton for 2,000 pounds for all mineable, merchantable and marketable coal mined and removed from said premises . . .".

"3. Lessee covenants and agrees to commence mining operations upon said premises within ___ from the effective date of this lease and in event of failure so to commence mining operations agrees to pay Lessor as a minimum royalty the sum or price of $50.00 per month, payable quarterly in advance."

The leases were prepared on identical printed forms, with typewritten provisions filled in. No time period was inserted in the blank space in Paragraph 3. There was no elaboration of, or reference to, either royalty paragraph elsewhere in the lease, and no explanation or definition of the intended nature of the minimum royalty. There was no reference to a right of recoupment of the minimum royalty against later tonnage royalties.

The appellant did not begin mining operations under the leases until 1973, but made ...


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