Carroll-cross Coal Co v. Abrams Creek Coal & Coke Co

• Decision Date: 21 January 1919
• Court: West Virginia Supreme Court
• Parties: CARROLL-CROSS COAL CO. v. ABRAMS CREEK COAL & COKE CO.

98 S.E. 148

CARROLL-CROSS COAL CO.

v.ABRAMS CREEK COAL & COKE CO.

Supreme Court of Appeals of West Virginia

Jan. 21, 1919.

(Syllabus by the Court.)

The implied authority of a general manager of a corporation extends only to such matters as come within the scope of its ordinary business.

The general manager of a corporation operating coal mines on leased territory has no implied authority to give, sell, trade, or release to another such corporation any part of the leasehold estate.

In the absence of a preponderance of evidence against the finding of a trial court on an issue as to whether such corporation conferred upon its general manager express authority so to dispose of a part of its leasehold, or ratified his unauthorized attempt to make such disposition thereof, the appellate court cannot disturb the finding.

An unauthorized and unratified agreement made by a general manager of such a corporation with another, under which the latter has mined coal within territory, covered by a lease owned by the former, does not estop it from recovery of compensation for the coal so mined nor from enforcement of the statutory penalties inflicted for mining within a prohibited area along the boundary line between the leases under which the two companies are respectively operating.

Silence and inaction of an agent as to a matter not within his authority do not estop his principal.

Knowledge of a trespass or wrong perpetrated by one fully cognizant of the right invaded, and silence respecting it after notice, do not estop the injured party from asserting his right of action for redress of the injury done.

An irregularity in the taking of depositions fully developing the merits of the cause, at which all of the litigating parties appeared and examined and cross-examined the witnesses, constitutes no ground for reversal of the decree founded upon them.

(Additional Syllabus by Editorial Staff.)

Appeal from Circuit Court, Mineral County.

Suit for injunction by the Carroll-Cross Coal Company against the Abrams Creek Coal & Coke Company. From a decree dissolving an injunction and dismissing the suit, complainant appeals. Decree affirmed.

D. L. Sloan, of Cumberland, Md., and Win. MacDonald, of Keyser, for appellant

Warder & Robinson, of Grafton, for appellee.

POFFENBARGER, P. The decree, pronounced on a full hearing and brought up for review by this appeal, dissolved an injunction and dismissed bills the object of which was restraint by an injunction of two actions at law instituted against the plaintiff herein by the defendant; one for the recovery of statutory penalties for mining coal within the area along a boundary line in which mining, without the consent of the adjacent owner in writing, is prohibited by statute, and the other for the recovery of the value of coal mined by the plaintiff beyond the boundary line and in an area covered by the lease of the defendant in this case, as well as the value of additional coal rendered inaccessible by the operations beyond the line and so lost to the lessee.

Neither party actually owned the coal in the land on which it was operating. The plaintiff was the lessee of the West Virginia Central & Pittsburgh Railway Company, by assignment of a lease made to the Denman Coal Company, and the defendant the lessee of H. C Homan, as to the tract of land encroached upon. The declaration in one of the actions at law claims right of recovery of fifteen $500 penalties, on the theory of fifteen separate violations of the statute inhibiting mining operations within five feet of aboundary line, without the consent in writing of the adjacent owner. In the other declaration, compensation for 6, 900 tons of coal alleged to have been mined by the plaintiff in this bill, out of the Homan lands, of the value of $9,660, is sought and, in addition thereto, $2,068.00, as the value of 4, 136 tons of coal, rendered inaccessible by the wrongful operation.

By way of equitable defense to the two actions at law, the original bill alleges two grounds of relief, an agreement between the two companies permitting the plaintiff to mine not only within five feet of the boundary line, but also beyond it, so as to form a connection between its works and those of the defendant, and, in the event of failure of proof of the agreement, conduct on the part of the defendant inducing such action by the plaintiff and constituting estoppel to enforce the penalties for violation of the statute and to have compensation for the coal taken out beyond the boundary line, in excess of a reasonable royalty thereon. An amended bill relies upon the statute of limitations, as to the penalties, and alleges facts constituting ground of necessity for a survey to determine the exact location of the boundary line and the quantity of coal removed.

Since the statute of limitations, if applicable, may be relied upon in the action at law, as fully and effectively as in this suit to enjoin that action, it obviously constitutes no ground. of jurisdiction or relief here. Whether there was such an agreement as the original bill alleges, or such conduct as. constitutes an estoppel in equity, are the only material inquiries in the cause. The lease under which the plaintiff operates was executed July 1, 1903, and the Denman Coal Company had conducted mining operations under it for a number of years, prior to May 6, 1912, on which date it assigned the lease to the plaintiff. While the Denman Coal Company was conducting its mining operations under its lease, the Abrams Creek Coal & Coke Company, the defendant here, was mining under its lease of the adjacent Homan land. The evidence well establishes the fact that the general manager of the defendant company carried on some negotiations with the Denman Coal Company, for disposition to it of the area of coal in question here, about three acres, as well, possibly, as some other small portions, because they were so situated as to prevent ready and economical mining under the plan of operations contemplated by him; and that, after the Carroll-Cross Coal Company took over the works of the Denman Coal Company, these negotiations were continued. A. Spates Brady, who was general manager of the Abrams Creek Coal & Coke Company from April, 1910, until September, 1913, testified that, when he took charge of the property, its plans of operation were unskill ful, ineffective, wasteful, and unsatisfactory; and that he altered them by dispensing with some of the openings and reducing their number and so connecting them up as to effect a great saving in expenses; and that the plan he adopted contemplated disposition of certain small portions of the coal to adjoining operators who could take them out more economically, by exchanges of coal property, mutually advantageous to the parties. He says he prepared the plans of operation, as contemplated, and furnished a copy thereof for the use of the president and board of directors, and that it indicated purpose and intention to dispose of the coal in question here to the Denman Coal Company The reason assigned by him for this purpose was the impracticability of profitable mining thereof, because of the necessity of mining it towards the "dip, " in consequence of which the headings, entries, and rooms filled with water, as the work progressed, which had to be removed by pumping, and the existence of a squeeze or breaking down of the roof, which made it necessary to abandon the headings through which the coal from that area had to be taken out. It appears from other evidence in the cause that the cost of a new entry so made as to give access to this coal and drain certain portions of the workings would have been altogether out of proportion to the value of the coal to be taken out through it. In view of this situation, A. Spates Brady says he intended, as general manager, to let the Denman Coal Company take that coal out through its workings, in exchange for some of its coal, to be taken out through the workings of the Abrams Creek Coal & Coke Company, so as to relieve the latter of the obligation imposed by its lease to take it out and pay the royalty thereon, and also afford means of draining his company's mines through the workings of the Denman Company. He swears that, some time in 1912, in pursuance of this plan, which the president and directors of this company had approved, he approached representatives of the Carroll-Cross Coal Company and endeavored to trade to them this "fag end" for an equal area of coal lying in front of some other works of his company. His proposition was not accepted at that time. In the fall of 1913, M. P. Gannon succeeded him, as general manager, and the proof Is that he, being familiar with the plan by reason of his having previously held a subordinate position under Brady, had conversations with representatives of the Carroll-Cross Coal Company, some time in 1914, which are relied upon in the evidence as constituting an agreement authorizing the plaintiff to mine the coal in question. Carroll Pattison, president of the plaintiff company, says Spates Brady discussed his plan with him on several occasions and sometimes in the presence of Gannon, and that, after Brady left, Gannon renewed the proposition and he accepted it for his company. As to the terms of the arrangement, he is very indefinite, not saying whether the coal was to be exchanged or to be taken out on a royalty basis; but he says the proposition previously made by Brady was one of exchange. Howard Cross, superintendent of the Carroll-Cross Coal Company, says Gannon came over to his mine and, together with himself and his brother Harry Cross, sat down on a pile of props at the mouth of the mine and proposed that the plaintiff company take out the coal and pay a royalty for it not exceeding six cents per ton. Harry H....