UNIO:N PAC. RY. CO. t·. HARMON.

29

TOULMIN, District Judge. A literal denial In the answer of a material allegation of the bill, although it might be held insuffi· cient on exceptions, cannot be deemed an admission of thP. allegation. 1 Brick. Ala. Dig. 716. If a cause is heard on bill and answer alone, or upon bill, answer, and replication, the answer must be taken as true. 1 Brick. Ala. Dig. 739; Reynolds v. Bank, 112 U. S. 409, 5 Sup. at. Rep. 213; Story, Eq. Pl. 674:; 1 Daniell, Ch. PL & Pr. 843, 845. This cause is heard on bill, answer, and replication, and is thereon, by consent of parties, submitted for a final decree. The answer literally denies every material allegation of the bill, upon the truth of which allegations depends the complainants' right to the relief sought by them.. The replication, in substance and effect, reiterates the allegations of the bill, and avers. the power of complainants to prove and maintain the same. On the issue thus made, and the hearing had thereon, the court is of opinion that the complainants have failed to establish their right to relief. The bill will therefore be dismissed, at complainants' costs.

UNION PAO. BY. 00. T. HARMON et aL (Qrcuit Court of Appeals, Eighth Oircuit. January 27, 1893.)

No. 136.

The Union Pacifio. Company, having sold land, all coal underneath the surface, "also such right of way and other grounds lIB

may be necessary for the proper working of any coal mines," and for the transportation of coal therefrom, subsequently tiled a bill averring thai there WllB a vein of coal on the land of sufficient thickness to pay for workIng; that the company had a right to enter on the land for the purpose of sinking shafts to extract the coal, but that the purchasers, by force and violence, prevented such entry. The bill prayed an injunction to restrain such interference. The answer denied that there was coal on the land, or that the reservation in the deed authorized the complainant to prospect upon the land, and averred that the complainant's railroad crossed the land over a strip 100 feet wide, of which complainant owned the fee, and whereon shafts could be sunk to remove coal from the land.· The Injunction was denied, and the bill dismlssed, no evidence having been taken, as counsel intended that all material facts should be embraced in the pleadings. Held that, on the record, the appellate court could not say that the circuit court erred in refusing the injunction, but that the decree dismissing the bill upon its merits was erroneoU8, since it would probably prevent complainant from thereafter asserting the right to enter upon the land in any way for the purpose of mining coal.

Appeal from the Circuit Court of the United States tor the District of Colorado. In Equity. Bill by the Union Pacific Railway Company against W. M. Harmon, F. H. Harmon, and Guy D. Harmon to restrain defendants from preventing complainant from entering on certain land to mine coal thereon. The circuit court refused an injunCtiOD, and dismissed the bill. Complainant appeals. Modified and af· firmed.

REPOlrflm.

vol. ,54.'':

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]\;kOralioodt(J. H. :'FhurstoD.llihd 'E,., B. appellant.,i" :,}; d,L; , .' Oha:rle8"M.; tOaIi:l.pbell, ,for ;apPeHees.

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1888, HlU'n;1,Qq,F. !Wnrion; and of Oompany situated in Boulder countY,in tJl,e,$tate of 0010riJ,do, a being executed by the trustees 'of'sa1d company, ' which c6ntaiiled.".,a.. .',,,reservation as follows':" f ': . ,.,. .,.... .." .." ..,- - . '
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sa,l.4'CoD;lPany and its ,assigns all ,coal be underneath me 8Il.ttace 'Of, the' land, herein desCribed; ,l'\lS(> Such I-'1ght of way and other groUJ:idSas'may be, necessary for the proper working of any coal mines tbatD!18.'Y be.d8-tetoped upon s8.1d premises, and tor thetransporta.Uon of the coal from the same." ')'.

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, On the 7th of January, the Union Pacific Railway Company filed in the United States circuit court, for the district of Colorado, a bill in equity, wherein it was averred that the greater part of the land above described,i"UJlderlaid with a vein of coal pf' sufficient, thickness to pay for working and mining the same; the reservation in the deed; the' company has the right to enter upon the land ,for the purpose of boring for coal company entered ,upon the land for'tIle purpose of sinking a, drill hole to the vein of coal, and for the purpose of sinking a shaft and ,making an opening for the mining and .removing the coal therefrom; that, for the purposes named; the company placed llpqD. t1le land a dJ,'illand o¢,ermachinery;;thltt W. M. Harmon, F. HI tfarmon, and Guy D. Harmon removed.said drill and machinery fnlm the land, and by threats, force, and violence have prevented the employes of the company from again entering upon the land".aJ1dfrom drilling, working"or mining thereon. To this 'bill the personE! named. to wit, W. M. Harmon, F.R. Harmon, and Guy D. were made defendants, and relief, by way ,of in· junction, was prayed, restraining the defendants from in any way or manner with the company in entering upon the land; . and sinking for, mining, ,and'extracting' the coal from sILid land. To this bill an answer was filed, wherein it was in effect denied that there was any coal underneath the premises in question, and it was averred that the exception and reservation contained in the deed did not aUthorize the complainant to prospect upon the land for coal, or to sink holes thereon for any purpose;' that the C01llplainant's railroad runs diagonally through the land, over a strip lOO'feet in width, the fee of which is owned by the railway company; and that it was thevefore within the power of theeompany to remove all coal underlying the land in' question by shafts sunk up()n the premises ,of 'complainant and levels' run therefrom. It further appears that the defendants had removed the drill and otherma,;.

mueNPAO. BY. CO. tI. BABKON.

31

chinery belonging to the complainant from ,the land, and had forbidden the cornpany from entering upon the land for any purpose whatsoever. To this answer a replication was filed, and the case was submitted, to the court upon the pleadings, no proofs being taken, and the:court adjudged that "the injunction prayed in com· plainant's,', bill, of complaint be denied, and that the bill of complaint hereilo. be dismissed,' at complainant's cost." Thereupon the ,®mpla.inant moved the court to let l!-side the, deoree or judgment, and, for, leave to take testimony upon the question of the usual manner of mininJt ooal,and espeoially in regard to the manner, in whiCh the same would have to be mined upon the land described in the bill of complaint. The court'refused to grant a rehearing, or to open the case tor ,the. taldqg of testimony, and thereupon the complainant compltIlyappealed to this court. , It is, stated in the brief of counsel f.orthe appellant that "it was intended by counsel for appellant, and we think counsel for the appelleeiJhad·the same understanding, to have all the material facts necessary, for a prop.er decision of. this case' embraced in the pleadj.ngs."Fr9m charaoter of the pleadings and the arguments of counsel, ,we have no doubt that this statement of the intention of counsel is well founded. With regard to part of the issues in the 9ase,the recitall in the pleadings are sufficiently full to enable the court to deal understandingly therewith; bUt, upon the main question in dispute, we do not think the facts necessary to a proper adjudication of the legal rights of the litigants are admitted in the pleadings. It is not made clearly to appear that there is coal in workable quantities upon this land, nor whereabouts thereon it is located:, if in fact it exists. On part of the appellees it is strenuously contended that all the coal in the land owned by them can lle readily removed by means of shafts sunk upon the premises owned by complainant. and levels connected therewith, thus leaving the suface of the land purchased by the appellees undisturbed and uninjured. From the averments of the answer it appears that the defendants forbade the company from entering upon the land for any purpose, and yet it is not made to appear clearly that the sinking of shafts upon the premises. in the number and at the points proposed by the company, is reasonably necessary to the proper enjoyment of the rights secured to the complainant company by the exception and reservation contained in the deed under which the defendants claim title to the land in question. The record being in this condition, it would have been entirely proper for the trial court to have required the parties to' have submitted evidence upon the matters which were left uncertain by the allegations of the pleadings, but which were necessary to a proper disposition of the case. This, however, was not done. and the case was heard finally upon an imperfect record. As thus submitted, we cannot say that it was error to refuse the of an injunction as prayed for in the biJJ; but we are satisfied that, upon the record as it now is, the circuit court should not have undertaken to pass finally, upon the rights of the parties., It is entirely possible that the circuit oourt did not inI

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FEDERAL 'REPORTER,

vol. 54.

teJidtoiijomore:than to ,refuM the injunction prayed for,but the dea$ entered; dismisses the bill upon its merits, which wouldprobably halVe the effect of preventing the company from hereafter assertingtheright to enter upon the land in 'any mode for the purpose of removing the coal therefrom. Sufficient appears upon the record to show that the complainant has some rights, under the 4eed to, the defendants, but the facts necessary to fully ascertain and adjudicate the extent of such rights are not made to appear. Thi8 court cannot, therefore, render a decree upon the merits; nor, on the . other hand, do we deem equitable to affirm a decree which in effect holds that the company has no right to enter ,upon the land in question, under any circumstances, or for any purpose. In our judgment, it would have been entirely proper for the circuit court to have refused to pass upon the case until evidence had been taken upon the matters in dispute, or, if that course was not deemed advisable, to have dismissed the bill, without prejudice to future proceedings in court, incase the parties could not agree upon their respective Under these circumstances, the lismisstng the bill of complaint will be affirmed, but with the modification that such dismissal shall be without prejudice to the right of the Union Pacific Railway Company to hereafter institute such proceed. ings at law or in equity as may be necessary for the ascertainment, protection, and enforcement of its rights in the land in question.
PEPPER v. TAYLOR et aL (Circuit Court ot Appeals, Sixth Circuit. No. 77.
SALE-RESCISSION.

February llS, 1893.)

'

The buyer ot a horse gave his notes, indorsed by a third person, tor the purchase price, but subsequently sent back the horse, with a notification that he rescinded the sale. The seller accepted and kept the horse, but did not return the nGtes, having already negotiated them. The holder of the notes subsequently sued the maker and indorser, and a compromIse judgment was entered, and paid, tor part of the a,mount, and all of the notes were surrendered. Held, that the seller, by receiving back the horse, became bound to return the notes, and. as he tailed to do so, he was liable to the maker and indorser for the sum they had paid thereon.

Appeal from the Circuit Court of the United States for the Distriot of Kentucky. In Equity. Bill by T. F. Taylor and W. M. Parrish against R. P. Pepper for the cancellation of certain promissory notes. Taylor had bought a horse from defendant, Pepper, and given his notes in pay· ment, secured by Parrish's indorsement. Subsequently, and before any of the notes fell due, Taylor, being about to fail in business, sent the horse back to Pepper, with a request to deliver up the notes. Pepper received back the horse, but did not return the notes, having already negotiated them. Subsequently Parrish and Taylor were sued by the holder of the notes, and a compromise judgment was entered, and paid, for the amount of two of the notes, and all of them were thereupon surrendered. The circuit court entered a de-