Hemenway v. Peabody Coal Co.
United States Court of Appeals for the Seventh Circuit
159 F.3d 255 (7th Cir. 1998)
Relevant factsFree
In 1969 Peabody Coal (defendant) and Hemenway (plaintiff) signed a mineral lease letting Peabody mine coal for a royalty of 12 cents per ton plus 10% of the difference between the coal's sales price and a base price (which fluctuated only with labor costs, not excise taxes). Peabody sold coal at $28.635 per ton and added $1.10 per ton to pass excise taxes to customers, but paid royalties without including that added charge. Hemenway sued for royalties on the excise-tax amount.
IssueFree
Whether contracts are generally interpreted according to the plain meaning of their terms.
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