Cent. Trust Co. v. Va. Trust Co..

• Decision Date: 29 March 1938
• Docket Number: (No. 8670)
• Citation: 120 W.Va. 23
• Parties: Central Trust Company, Ext., v. Virginia Trust Company et al.
• Court: West Virginia Supreme Court

120 W.Va. 23

Central Trust Company, Ext.,

v.Virginia Trust Company et al.

(No. 8670)

Supreme Court of Appeals of West Virginia.

Submitted February 9, 1938.

Decided March 29, 1938.

1. Evidence

In the absence of a showing of illegality, fraud, duress, mistake or insufficiency of consideration, the terms of an unambiguous written agreement may not be varied or contradicted by parol evidence of statements of any of the parties thereto made contemporaneously with or prior to the execution of such agreement.

2. Evidence

An unambiguous written agreement entered into as the result of verbal or written negotiations will, in the absence of a showing of fraud or mistake, be conclusively presumed to represent the final agreement of the parties thereto, and may not be varied or contradicted by evidence of conversations or statements had or made at the time of or prior to its execution.

Kenna, Judge, absent.

Appeal from Circuit Court, Kanawha County.

Suit to bring about settlement of an estate through ascertainment of indebtedness of the testator by the Central Trust Company, executor of the last will and testament of W. D. Guyer, deceased, against the Virginia Trust Company and others, wherein the Little Fire Creek Coal & Coke Company presented a claim against the estate. From a decree denying its claim, the Little Fire Creek Coal & Coke Company appeals.

Reversed and remanded. A. G. Thompson, for appellant.

George Poffenbarger and Harry V. Campbell, for appellees.

Fox, Judge:

The Central Trust Company, executor of the last will and testament of W. D. Guyer, instituted its suit in the circuit court of Kanawha County against Virginia Trust Company, the heirs at law and creditors of W. D. Guyer, the general purpose of which was to bring about a settlement of his estate through the ascertainment of his indebtedness, and otherwise. The appellant herein, Little Fire Creek Coal & Coke Company, (hereinafter referred to as "Fire Creek") presented a claim against the estate, growing out of its alleged liability on account of a written agreement, dated the 2nd day of November, 1926, between the said Fire Creek on the one hand and W. D. Guyer, George R. Bullock and DeWitt Gallaher (hereinafter called "lessees") on the other. The court below denied the appellant a decree for any sum, from which action it appeals. The question involved herein is limited to the liability of the Guyer estate to Fire Creek.

On the 18th of December, 1880, Fire Creek leased to William Beury, for coal mining purposes, for a period of twenty years, a certain tract of coal situated near Thurmond in Fayette County, which lease was thereafter assigned to the Echo Coal & Coke Company; on February 20, 1899, it was extended for a term of twenty years from December 18, 1900, additional coal lands included therein, and minimum royalties provided for in the original lease increased from $2,000.00 annually to $4,000.00 annually; it was then transferred to Beury Brothers Coal & Coke Company, and on December 20, 1919, was extended until such time as the "recoverable merchantable coal in the premises * * * shall be mined and removed therefrom"; subsequently it was assigned to Beury Brothers Coal Company, and operations continued thereunder until about the year 1926, when, in an equity proceeding in the circuit court of Fayette County against the Beury Brothers Coal Company, the leasehold, and all property owned in connection therewith, was sold by a special commissioner and purchased by Arthur B. Hodges, as trustee for Fire Creek and Kanawha Banking & Trust Company, at a price which, including costs of suit and expenses of sale, approximated the sum of $18,300.00. It appears from the record that while the said lease was being operated by the Beury Brothers Coal Company, a large indebtedness had accumulated, a part of which was represented by unpaid royalties due Fire Creek and its assignee, Kanawha Banking & Trust Company; and that among other indebtedness was a series of notes, each of the sum of $2,-500.00, some of which were owned by W. D. Guyer, DeWitt Gallaher, Kanawha Banking & Trust Company and the National Bank of Thurmond. It also appears that Lewis, Hubbard & Company, for which W. D. Guyer was credit manager, also was a large creditor of the defunct coal company, and it is contended that Guyer acted on behalf of that company. This being the situation, W. D. Guyer, George R. Bullock, who was associated with the National Bank of Thurmond in some capacity and it is claimed acted for it, and DeWitt Gallaher, conceived the idea of effecting an organization for the purpose of taking over the said lease and continuing the operation of the mine located thereon. These negotiations began prior to the date of the purchase of the lease by Arthur B. Hodges, trustee, and continued after he had purchased the same and secured a deed therefor. A tentative agreement seems to have been reached with respect to this lease on or about the 2nd day of November, 1926. The negotiations leading up to the agreement made were carried on by Arthur B. Hodges, trustee, I. N. Smith, representing the Kanawha Banking & Trust Company, and H. B. Beury, representing Fire Creek on the one hand, and by W. D. Guyer, George R. Bullock and DeWitt Gallaher on the other. Beury, Smith and Guyer had died prior to the filing of the appellant's claim and their versions of what occurred during the negotiations hereafter referred to are not available. Hodges, Gallaher and Bullock testified. It is admitted by all parties that it was contemplated from the beginning of the ne- gotiations that a corporation should be formed for the purpose of taking over the lease, and the name of the corporation was probably suggested by H. B. Beury, president of Fire Creek. The interest of Fire Creek and the Kanawha Banking & Trust Company was to have repaid to them the sum of $18,300.00 which they had expended in the purchase of the lease, and in addition thereto, Fire Creek was interested in securing a tenant who would develop the lease and pay royalties. It is conceded that Hodges, representing the Trust Company and Fire Creek, submitted three plans under which Guyer, Bullock and Gallaher could take over the lease, all of which involved payment to the beneficiaries of his trust of $18,300.00, either in cash or in notes to be executed by them; two of the plans submitted provided for the conveyance of the leasehold from Hodges, as trustee, direct to a corporation to be organized for the operation of the lease, which at that time was understood to take the name of Southern Smokeless Coal Company; the third, that the lease should be conveyed by Hodges to the lessees, individually, with the idea that they should convey the same to the Southern Smokeless Coal Company. Gallaher testifies that, during the negotiations leading up to the execution of the written agreement, and while Guyer and Bullock were present, the question of the personal liability of the lessees was brought up, and that Hodges, Smith and Beury each said, "You need have no apprehension about that. Your immediate conveyance following this conveyance to your company relieves you there." Bullock, when asked whether or not in any of the negotiations leading up to the transfer of the lease there was any suggestion that he, Gallaher and Guyer would be personally liable upon the lease, stated that "They never said anything about personal liability"; and when asked, "Was that question ever discussed in any conference in which you took part?", replied, "No, sir." Arthur B. Hodges was not asked about this conversation and made no statement with respect thereto. As a result of these negotiations, Hodges, as trustee, by deed dated November 2, 1926, conveyed the leasehold and other property acquired by him under his purchase to the lessees, in consideration of the sum of $18,300.00, of which $10,500.00 was paid in cash and the residue was represented by separate notes, executed by the lessees payable to the Trust Company and Fire Creek, and secured by a deed of trust, executed by them, covering the property conveyed to them by said deed. On November 6, 1926, the lessees conveyed the same property to the Southern Smokeless Coal Company which, as a part of the consideration therefor, assumed the payment of the notes mentioned in the deed last above set out. Fire Creek acquired from the Beechwood Coal & Coke Company a tract of coal adjoining the Beury tract and, by deed dated the 2nd day of November, 1926, leased the same to the lessees, in which writing, signed by all of the parties to the same, the said lessees agreed as follows:

" * * * and the parties of the second part hereby covenant that they will work, mine and remove said coal in accordance with the terms, provisions, conditions and stipulations of the said lease made the 18th day of December, 1880, as subsequently changed and modified, and that they will fully and faithfully keep, observe, perform and comply with all of the terms, conditions, provisions and stipulations contained in said lease and the subsequent agreements or instruments changing and modifying the same, and that they will pay the party of the first part a royalty of Ten Cents ($.10,) per ton for all coal mined from the premises thereby and hereby demised, which said royalty shall be payable in monthly installments on the 30th day of each and every month for the coal mined during the preceding month, and a minimum rent of Four Thousand Dollars ($4,000.00) per annum, which shall be paid in equal monthly installments on the 30th day of each and every month for the month immediately preceding, whether the royalty on the coal actually mined during such month shall equal such installment or not, but said rent of Four Thousand Dollars ($4,-000.00) per annum is not intended as an additional payment but merely as a minimum rent or royalty."

thus unconditionally assuming all the obligations of the original lease of December 18, 1880, as subsequently changed and...