Midwest Fuel & Timber Co. v. West

• Citation: 106 F.2d 973
• Decision Date: 24 October 1939
• Docket Number: No. 1808.,1808.
• Parties: MIDWEST FUEL & TIMBER CO. v. WEST.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

106 F.2d 973 (1939)

MIDWEST FUEL & TIMBER CO. v. WEST.

No. 1808.

Circuit Court of Appeals, Tenth Circuit.

October 24, 1939.

Albert E. Zarlengo, of Denver, Colo. (Anthony F. Zarlengo, of Denver, Colo., on the brief), for appellant.

Cass M. Herrington, of Denver, Colo. (G. Walter Bowman, of Denver, Colo., on the brief), for appellee.

Before PHILLIPS, BRATTON, and HUXMAN, Circuit Judges.

BRATTON Circuit Judge.

This appeal brings under review an order made in a bankruptcy proceeding. The Midwest Fuel and Timber Company, hereinafter called petitioner, owns certain coal mining property in Weld County, Colorado. By written instrument, the property was leased to two individuals for a period of twenty years. The lease provided for the mining of coal and the monthly payment of specified royalties and rentals. Section 11 provided that the lessees should obtain and keep continuously in force insurance covering their employees as required by the Workmen's Compensation Laws of the state, and that failure to do so should forthwith terminate the lease without notice, and should authorize petitioner to re-enter possession of the property, with or without process of law; section 12 provided that on termination of the agreement, either by expiration of the term or option of the petitioner as therein above provided, the lessees should have the right to remove all rails, ties, pipes, pumps, houses, buildings, machinery, and other equipment placed thereon by the lessees, except rails, pipes, mine and shaft timbers then set in place, but that no such equipment or material should be removed until all royalties then due should be fully paid and satisfied and the lease fully performed in all respects by the lessees; and section 19 provided that at the expiration of the lease or prior thereto upon demand for forfeiture, the lessees should deliver up to petitioner such premises together with machinery and equipment, except as provided in the last paragraph of section 12, in good order and condition. By written instrument, the lease was assigned to the American Coal Company, hereinafter called the bankrupt. The bankrupt operated the property, but in April, 1938, its board of directors determined that it was not financially able to continue operations in accordance with the lease, and petitioner was so advised by letter the following day. In May, 1938, bankrupt allowed its workmen's compensation insurance to lapse for nonpayment of premium, and on the following day petitioner declared the lease terminated for that reason and went into possession of the property.

The bankrupt thereafter filed its voluntary petition in bankruptcy, an order of adjudication was entered, and a trustee was appointed. Petitioner filed in the proceeding its petition for reclamation of certain property. The petition divides the property into four parts, designated as schedules A, B, C, and D. Schedule A consists of air hose, cable, jacks, mule collars, harness, and a car mover. The bankrupt furnished and placed all of this property, except the car mover, on the mining premises to replace other like property which was there at the execution of the lease and afterwards became worn out. New handles were furnished and placed on the car mover as replacement of old handles. Schedule B consists of a smokestack and a three compartment wagon bin. The bankrupt furnished the material and installed the smokestack in lieu of one in use at the execution of the lease; the old one was cut up and used for other purposes; and the bankrupt also furnished the wagon bin. Schedule C consists of mine props and mine ties. The bankrupt furnished these and the referee found that they were on the premises but not in place in the mine. Schedule D consists of shovels, forks, tubes, drill, bradtice cloth, shaker plates, and transformer. The referee found that these belong to the bankrupt but there is no finding that they were replacements. It is alleged in the petition that on the day preceding the lapse of the workmen's compensation insurance and two days prior to the declaration of forfeiture and retaking of the premises, the bankrupt went to the mine and removed all of the property described in schedules A and D, but the summary of the testimony is silent in respect of the matter. It is also alleged in the petition that the trustee has possession of all of the property described in schedules A, C, and D, and that he claims the property described in schedule B, but the testimony is likewise silent in respect of that matter.

The referee granted the petition as to the collars, harness, and smokestack, but denied it as to all other property. On petition for review the court approved and confirmed the action of the referee. Petitioner appealed.

The first question is whether petitioner is entitled to possession of the property described in schedule A. The bankrupt furnished such property for replacement of other like property in use at the mine at the time of the execution of the...