Livingstone v Rawyards Coal Co

Factual and Procedural Background

The Appellant owned a small feu of approximately one and a half acres near The City. Although the surface was occupied by miners’ cottages, the underlying coal was not reserved to the superior in the original grant and therefore belonged to the Appellant—an ownership interest of which the Appellant was unaware. The surrounding land (and its minerals) had been conveyed to the Respondents, who, also acting under a mistaken belief of ownership, mined the coal beneath the Appellant’s land and sold it. Subsidence from the extraction caused cracking and other damage to the cottages on the surface.

When the true state of title was discovered, the Appellant sued in the Court of Session for damages. The Lord Ordinary awarded a higher sum based on the market price of the coal less the Respondents’ working costs. On reclaiming, the First Division reduced the award, fixing damages at (1) the royalty the Appellant could reasonably have obtained for the coal in situ, and (2) compensation for surface damage. The Appellant appealed that interlocutor to the House of Lords.

Legal Issues Presented

1. What is the appropriate measure of damages where a party, acting innocently and without bad faith, removes and disposes of coal that in fact belongs to another?
2. Should additional sums be awarded for (a) way-leave through the Appellant’s land and (b) any advantage gained by the Respondents from working through, rather than around, the Appellant’s feu?

Arguments of the Parties

Appellant's Arguments

• Sought damages calculated on the market value of the coal after extraction, less working costs—an amount greater than the royalty approach adopted by the First Division.
• Claimed further allowances for way-leave and for the Respondents’ convenience in being able to work straight through the feu instead of detouring around it.

Respondents' Arguments

• Contended that because the extraction was entirely innocent, damages should be limited to the value of the coal in situ to the Appellant, measured by the royalty a neighbouring operator would have paid, plus compensation for surface damage.
• Submitted that no separate sums were due for way-leave or operational convenience, as the Appellant suffered no independent loss from those factors.

Table of Precedents Cited

Court's Reasoning and Analysis

The House, per Judge Cairns (L.C.), accepted that two potentially aggravating elements were absent: (1) wilful or fraudulent trespass and (2) any special need of support for the surface beyond ordinary damage. Consequently, the only question was the ordinary value of the coal to the Appellant at the time of its removal.

The Court reasoned that the Appellant himself could not have profitably mined such a small, land-locked parcel; his only realistic option would have been to sell access to an adjoining operator—namely, the Respondents—at a royalty per ton. Evidence from the Appellant’s own witness (referred to as Witness R) established £171 7s 6d as the royalty that would reasonably have been insisted upon for the coal in question. The Court therefore treated that figure as the true value in situ.

To restore the Appellant to the position he would have occupied absent the wrongful extraction, the House added the undisputed £200 necessary to repair the surface damage. The claims for way-leave and for the advantage of working through rather than around the feu had not been renewed before the First Division and were accordingly disregarded in the appeal.

Judges Hatherley and Blackburn delivered concurring opinions. Judge Hatherley stressed the equitable distinction between fraud and mutual mistake, while Judge Blackburn reiterated the general compensatory principle: damages should equal the sum that places the injured party in the same financial position as if no wrong had occurred, subject to qualifications where the trespass is innocent.

Holding and Implications

Appeal dismissed; interlocutor of the First Division affirmed with costs.

Immediate Effect: The Appellant recovers £171 7s 6d for the coal plus £200 for surface damage, with no additional sums for way-leave or operational advantage. Broader Significance: The decision re-affirms that, in cases of innocent mineral trespass, damages are calculated on the value of the minerals in situ to the owner—commonly evidenced by the royalty that would have been negotiated—rather than on the profit realised by the extractor. The judgment also clarifies that ancillary claims (e.g., way-leave) will not be entertained absent demonstrable separate loss.