#6655 - Philips V. Homfrey No. 1 - Commercial Remedies BCL

Philips v. Homfrey (No. 1)

Facts

Joseph Phillips and John Phillips were the owners of a farm of 116 acres copyhold of the manor of Abercarne, in Monmouthshire. Their predecessor in title had sold to the Tredegar Iron Company fourteen acres, formerly part of the farm, reserving the minerals. It appeared that, according to the custom of this manor, the minerals belonged to the copyholders, subject to certain rights in the lord. The farm was subject to a mortgage for 4800. In 1859 the Tredegar Iron Company, whose mineral property surrounded the farm, negotiated, through their then manager, R. P. Davis , with the Messrs. Phillips for a lease of the coal under the farm to the company at 6s. per ton royalty, the minimum rent being 250. The company, upon the commencement of these negotiations, drove headings under the farm from an adjoining colliery for the purpose of testing the coal. About October, 1860, the company refused to take a lease, but, without the knowledge of the owners, went on working under the farm, and extracted from it a considerable quantity of coal. In January, 1863, the farm was put up for sale by auction, but it was bought in. On the 14th of April, 1863, an agreement for sale to the company of the farm and of the minerals under the fourteen acres (subject to the rights of the Lord of the Manor) for 5000 was signed by James Reed, the manager of the company, and by Joseph Phillips, who was treated by the agreement as sole vendor. At the time when this agreement was entered into the coal taken by the company from under the farm amounted to upwards of 2000 tons, and it was not known to either of the Messrs. Phillips that any coal had been got, except the trifling quantity which had been got in the process of testing. The agreement for sale was entered into by Joseph Phillips without the authority of John Phillips, who, when informed of it, objected, and said that the price was too low; but the solicitors of the mortgagee informed him that if he refused to carry the sale into effect the mortgagee would sell under his power. John Phillips, therefore, did not inform the company that he repudiated the sale, but allowed the matter to proceed, though it did not appear that he in any way actively concurred. An abstract was delivered, and considerable difficulties were found in the title, which caused great delay. In July, 1866, the Messrs. Phillips received information which led them to believe that the company had been working under the farm. They thereupon applied for leave to inspect the underground workings, which was refused. They shortly afterwards instructed two persons, who, on the 16th of May, 1866, succeeded in surreptitiously getting into the mine, and discovered that the workings had been going on. Joseph and John Phillips accordingly, in September, 1866, filed their bill (Phillips v. Homfray) for an account of all coal and ironstone gotten by the company under the farm; for an account of all coal and ironstone conveyed from the company's mines through passages under the farm; and of coal and ironstone gotten out of mines of the company which had been drained or ventilated through roads, passages, aircourses, or watercourses under the farm; and that the company might be decreed to pay for the coal and ironstone gotten from under the farm at their values when first severed from the mine, and to pay for all underground wayleave and privileges which they had used under the farm in getting coal and ironstone from their own mines; and that they might be charged with a wayleave rent or royalty in respect of their user of the aircourses, watercourses, and roads under the farm; and be restrained by injunction from using any aircourse, watercourse, or road under the farm.

Order by the Vice-Chancellor

The cause came on to be heard before Vice-Chancellor Stuart, and His Honour made a decree in both suits, dismissing the bill in Fothergill v. Phillips with costs, declaring the agreement for sale not binding on the Messrs. Phillips , and ordering it to be delivered up to be cancelled. Then, after a declaration of the liabilities of the several members of the company and the representatives of deceased members, the following inquiries were directed in respect of the matters to be inquired after:—1. An inquiry what quantities of coal, ironstone, and other produce had been gotten or removed by the partners or any of them, or by any other person or persons by their or any of their order, &c., from or under the Messrs. Phillips ' farm; and it was ordered that the market price or value, or as near thereto as might be, of all such coal, &c., at the pit's mouth—all just allowances being made to the...