Legal action; Cowie's Trustee's v. The Airdrie Mineral Oil Co. Ltd., 1870

type: Companies - litigation

The Scotsman
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Cowie's Trustee's v. The Airdrie Mineral Oil Co. Ltd.

JURY TRIALS – FIRST DIVISION (Before the Lord President)

This case was commence yesterday.

George Cowie, coalmaster, Airdrie, deceased, was the original pursuer; and the cause is now insisted in by Archibald Cowie and Richard Cowie, coalmasters, Airdrie, as his trustees. The defenders are the Airdrie Mineral Company (Limited), registered under the Companies Act, 1862. The issue sent to trial was as to whether, is or about September 1866, and between that time and 31st October 1868, the defenders, in breach of an agreement which had been entered into between them and the original pursuer, failed and refused to accept delivery of, and to pay in terms thereof, for quantities of coal and shale which were specified in the agreement. Damages were laid at £4000.

The condescendence for the pursuers bore that, by an agreement dated the 17th, 18th, and 26th April 1866, the original pursuer agreed to sell to the defenders the whole produce and output of the seams of fine gas-coal and shale contained in the seam known as the Musselband seam, and which was in connection with the Musselband ironstone at Rochsolloch, declaring that the seam of fine gas coal and shal consisted of the gas coal lying immediately above the ironstone and the seam of shale, which lay immediately above the said gas coal, and was then being used in the district for the purpose of oil manufacure, but did not include blaize, at the price of 8s, 3d. per ton, and that as the same was put out from the pursuer's mineral workings, without reference to the respective proportions of each; as also the produce and output of the seams of parrot coal in connection with the Kiltongue seam, at the price of 3s per ton, and that for the whole period of eleven years from and after Whitsunday 1866.

It was further provided by the minute of agreement, that the said seams of coal and shale should be wrought out by the original pursuer, and supplied to the defenders in their own waggons at the pit mouth, and that the defenders should be bound so to accept delivery, and to pay the price of the same, in the following quantities, namely – the pursuer, at or prior to 31st March 1866, should work out and deliver at the put mouth, 300 tons, during April, 400 tons; May, 600 tons; June, 900 tons; July, 1200 tons; August, 2000 tons, and each month thereafter such quantities exceeding 2000 tins, but not exceeding 3000 tons, as the defenders might require; declaring that, in the event of the price or value of each monthly delivery not being paid to the pursuer as stipulated in the minute of agreement, he should not be bound to continue his delivery of coal or shale until the price or value of such monthly delivery should have been adjusted and paid. It was also provided by the agreement, that the prices stipulated were and should be independent of the thickness of the aforesaid seams, and of the respective proportions of the gas coal and shale, as wrought out and delivered by the original pursuer from his mineral workings; and that the defenders should pay the amount of the prices stipulated, as they might be ascertained from the books kept at the weighingmachine or steelyard, upon the last day of each month, for the quantities delivered during the preceding month. Upon the agreement being completed, the original pursuer proceeded to deliver to the defenders, and they took delivery monthly, of the quantities of coal and shale specified, or at least a portion of them; but the pursuer received payment of only £300 to account on 6th June 1866.

The defenders, about the time of this payment, and subsequently, evinced a desire to get a rid of their contract. In their correspondence with the pursuer in July and August 1866 they took up the position that only output from part of the seams of coal and shale specified in the agreement should be sent to them, and refused to hold as delivered or to accept delivery in future of output from the whole of the seams, and refused at the end of August and beginning of September 1866 to pay in terms of the agreement for deliveries made up to 31st July 1866.

The pursuer was ready, and offered to continue his deliveries of the coal and shale contracted for upon performance for the defenders' obligations which had been undertaken by them. The original pursuer, at great expense, executed very extensive mining operations to enable him to dlive to the defenders the quantities of coal and shale for which they had stipulated. This expenditure had been rendered entirely unproductive; the original pursuer was deprived of the returns which he was entitled to expect on the faith of the agreement; and his arrangement for colliery operations had been injuriously disturbed. An award by an arbiter who had been agreed upon between the parties – Mr John Geddes, mining engineer, Edinburgh – had been disregarded by the defenders.

Mr Geddes found that there was no limitation in the contract to any specific thickness or portion of shale, and no reference whatever to the blue ball referred to in a proof which had been led, and that the contract included the entire seam of shale from the gas coal up to, but exclusive of, the bleas of blaize, or, as it was otherwise termed, the bonnets, at which seam he found the natural parting between the shale and blaize to be. He also found, as in his opinion the sound construction of the contract, that the pursuer was not entitled to sell any part of the shale between the gas coal and the said blaize where the parting existed until he had fully supplied the quantity of shale which the defenders had bargained for; and that the works "presently used in the district for the purpose of oil manufacture" were merely a further specification of the seam of shale bargained for, lying between the gas coal and the blaize, and to distinguish it from all other seams of shale which might be found or known to be in connection with any other coal or ironstone, and more clearly to restrict the shale with which the parties were dealing to the seam of shale lying immediately between the Musselband ironstone and the blaize in the pursuer's mineral field and workings.

The statement of facts for the defenders set forth that, in disregard of the agreement, the late pursuer furnished to the defenders, along with the gas coal and shale contracted for, blaize or shale of bad quality from a seam lying above a seam of bastard ironstone, called the blue ball. This blaize or inferior shale had never been used in the district for the purpose of oil manufacture, and it could not be so used with profit. Further, the late pursuer furnished to the defenders, along with the gas coal and shale contracted for, not only the said blaize or inferior shale, which was expressly excluded by the agreement between the parties, but also quantities of a worthless material called 'bonnets', and sometimes called blaize, which was utterly unfit for the purpose of oil manufacture. This material called 'bonnets', was found in the district, in a seam lying above the inferior shale called blaize. According to the common language of the district, all shales above the blue ball were called blaize, and none of these are or were used for the purpose of oil manufacture. The late pursuer furnished to the said defenders the blaize or inferior shale and 'bonnets', knowing that they were worthless, and that to furnish them was a breach of the agreement. The defenders, in consequence of this twofold breach of contract on the late pursuer's part, refused to pay for the blaize or inferior shale and 'bonnets' so furnished by him. After they had done so, on or about September 1866, he refused to deliver to them any more shale or coal, and on or about the 15th of that month, he sent away from his pit or pits their waggons, which had been sent for shale and coal, without any load whatever. He never, after they refused payment, tendered to them any shale or coal, but, on the contrary, refused to deliver to them any coal or shale, brought the defenders' works to a complete stand.

The opinion of Mr Geddes, in so far as adverse to the defenders, was grossly at variance with law and fact, and was arrived at in total disregard of the declaration in the agreement that the shale to be furnished should be of the kind then being used in the district for the purpose of oil manufacture, the shale objected to by the defenders never having been so used. The seams of blaize in the late pursuer's pits were quite distinguishable from the seams of "fine gas coal and shale" contracted for, and the mixing of the fine gas coal and shale with inferior shale or blaize was a breach of the agreement on his part, for which the present pursuers, as his trustees, were liable to the defenders in damages.

The late pursuer had never, since September 1866, tendered to the defenders any of the material specified in the agreement. On or about September 1866, he broke his agreement with the defenders, to their loss, injury, and damage; and they reserved their right of action against his estate therefor. The late pursuer lost no profit, whereas the defenders had lost nearly their whole capital, and had no funds left wherewith to pay damages. A number of witnesses were examined; and the case was adjourned till this morning.

Counsel for the Pursuers – Mr Watson and MR Vary Campbell. Agents – Messrs Maitland & Lyon, W.S.

Counsel for the Defenders – Mr Shand and Mr Campbell Smith. Agent – Mr James Bruce, W. S

The Scotsman, 29th July 1870