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Pa. Coal Co. v. Mahon - 260 U.S. 393, 43 S. Ct. 158 (1922)

Rule:

The general rule at least is, that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.  The Pennsylvania Kohler Act cannot be sustained as an exercise of the police power, so far as it affects the mining of coal under streets or cities in places where the right to mine such coal has been reserved.

Facts:

On August 26, 1921, plaintiff homeowner Mahon was bound by a valid covenant to permit defendant Pennsylvania Coal Company, which had sold to the homeowners or to their ancestor the surface rights only in their lot, to exercise without objection or hindrance by them, its reserved right to mine out all the coal, without liability to them for damages occasioned thereby. Damages had been expressly waived as a condition for the grant. On August 27, 1921, the statute completely annulled this covenant, by giving them the right, by injunction, to prevent such mining. A bill in equity was brought to prevent the coal company from mining under the property in such way as to remove the supports and cause a subsidence of the surface and of the house. Mahon contended that the Kohler Act, 1921 Pa. Laws 1198, extinguished the coal company's right to mine under the land. The Kohler Act forbid the mining of anthracite coal in such way as to cause the subsidence of, among other things, any structure used as a human habitation. The Court of Common Pleas found that if not restrained, the defendant coal company would cause damage, but denied an injunction, holding that the statute if applied to this case would be unconstitutional. Mahon appealed, and the appellate court reversed, finding that although the coal company had contract and property rights protected by the Constitution of the United States, the Kohler Act was a legitimate exercise of the police power. The appellate court directed a decree for Mahon. The coal company sought review by the Supreme Court of the United States.

Issue:

Was the Kohler Act a legitimate exercise of police power?

Answer:

No

Conclusion:

The Supreme Court of the United States reversed and held that the Kohler Act was unconstitutional as a taking of the coal company's rights under a valid contract. The Court found that the Kohler Act was not a legitimate exercise of police power, but rather was an unconstitutional taking of the defendant's contractual and property rights because it served to take away those valid rights without adequate and just compensation. 

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