1962 OK 267, 382 P.2d 109 (1962)
Willie and Lucille Peevyhouse owned a farm containing coal deposits. In November 1954, they leased the premises to Garland Coal and Mining Company for a period of five years for coal mining purposes under a strip-mining operation.1
The lease contract contained specific covenants requiring the defendant to perform restorative and remedial work at the end of the lease period.2 These included making fills in the pits, smoothing off the top of the spoil banks, and leaving no shale or dirt on the high wall of the pits. The estimated cost of this work was about $29,000, although the plaintiffs sued for only $25,000.3
All covenants and agreements in the lease were fully carried out by both parties except for the remedial work, which the defendant conceded had not been done.4 Following the expiration of the lease, the plaintiffs made demand upon the defendant to perform the restorative covenants, but the defendant failed to do so.5
In the trial court, the Peevyhouses sued Garland Coal and Mining Company for damages for breach of contract.6 Plaintiffs introduced expert testimony as to the amount and nature of the work to be done and its estimated cost. The defendant introduced expert testimony as to the diminution in value of the farm resulting from the failure to perform the work.7
The trial court instructed the jury that it must return a verdict for the plaintiffs. It also instructed that the jury might consider the cost of performance together with all evidence offered on behalf of either party.8 The jury returned a verdict for the plaintiffs for $5,000.9 The plaintiffs appealed from the judgment entered on this verdict, and the defendant cross-appealed.10
Whether the trial court properly instructed the jury on the measure of damages?11
In a coal mining lease where the lessee agrees to perform remedial work at the end of the lease but fails to do so after full performance of all other covenants, the measure of damages is ordinarily the reasonable cost of performance of the work. However, where the contract provision breached was merely incidental to the main purpose in view, the economic benefit which would result to lessor by full performance of the work is grossly disproportionate to the cost of performance. Therefore, the damages which lessor may recover are limited to the diminution in value resulting to the premises because of the non-performance.12
No. The trial court instructed the jury that it might consider the cost of performance of the work together with all of the evidence offered on behalf of either party. The established facts show that the primary purpose of the lease was the economical recovery and marketing of coal from the premises, making the remedial work incidental to that main object.13 The cost of performance estimated at about $29,000 is grossly disproportionate to the $300 diminution in value resulting to the farm.14 Therefore the proper measure of damages is the diminution in value, and the instruction permitting the jury to consider cost of performance without that limitation was improper.15
The trial court did not properly instruct the jury on the measure of damages, and the judgment must be modified and reduced to the sum of $300.16
Related opinions on this issue
Justice Irwin dissented.17 He contended that the defendant's breach was willful because it conceded failure to perform the specific restorative covenants after receiving the benefits of the coal lease.18 He stressed that plaintiffs had insisted on the remedial provisions during negotiations and would not have executed the lease without them.19 Irwin argued that the cost of performance could have been reasonably approximated at contracting and that no unforeseen conditions existed.20
Following Groves v. John Wunder Co., he concluded that the measure of damages should be the cost of performance. This would enforce the contract as written rather than allowing the breaching party to retain benefits while denying them to the non-breaching party.21