Easley Coal Co. v. Brush Creek Coal Co.
| Decision Date | 23 May 1922 |
| Parties | EASLEY COAL CO. v. BRUSH CREEK COAL CO. ET AL. |
| Court | West Virginia Supreme Court |
Submitted May 18, 1922.
Syllabus by the Court.
A lessor may intervene in a suit brought by a stranger to a lease executed by him to compel an assignment thereof, on the ground of lack of right in the lessee or his assignee to assign, whether assignment without consent of the lessor is made a ground of forfeiture or not, even though it should be found on the hearing that there is right to assign; because he has a litigable interest in all of the questions upon the solution of which the right to assign depends.
Being a restraint upon alienation, a condition against assignment by a lessee or an assignee of a lessee is governed by the rule of strict construction, and it does not exist unless it has been clearly and definitely provided in the lease or some other written instrument made collateral thereto.
When there is a condition in a lease against assignment of the term by the lessee, without the consent of the lessor, and such consent is given to one assignment, without any restriction as to further assignments, the condition is completely waived, and the assignee may assign the term without the consent of the lessor.
Assumption of, and agreement faithfully to fulfill, on the part of an assignee, all of the terms and conditions of a lease containing a condition or covenant against assignment thereof by the lessee, in a deed of assignment thereof, to which the lessee and assignee only are formal parties, in which the lessor joins only for the purpose of assenting to the assignment made by it, and in which there is not, anywhere nor in any form, a specific inhibition of further assignment nor one arising by necessar y implication, do not save to the lessor the benefit of such condition or covenant; nor do they, together with a stipulation that the lease is to be a part of the deed, and recitals of the condition or covenant, and of purpose in the making of the lease to have it assigned to a person of the character of the assignee, effect such saving; and the assignee may assign the term, in whole or in part, without the consent of the lessor.
Being doubtful and equivocal in meaning, and founded upon no new consideration, negotiations by the assignee and the prospective second assignee with the lessor for his consent to the proposed assignment, and written admissions of necessity therefor, do not save to the lessor the benefit of such condition or covenant, under the rule of contemporaneous or pratical construction.
A lessor, who has threatened to eject from the leased premises an assignee of a lease holding it under a valid assignment on the ground of forfeiture by reason of an alleged second assignment without consent, may be enjoined from instituting an action of ejectment for such purpose, upon determination in a suit to which he is a party, that the assignee has right to make such second assignment, and in which he is required specifically to perform his agreement to do so, by way of award of incidental relief, in a cause of action cognizable in equity to have specific performance of the contract.
Additional Syllabus by Editorial Staff.
Forfeitures of estate under leases are not favored in law, and the right to forfeit must be clearly stipulated, and, if a forfeiture has not been stipulated for, it is presumed the injured party will be content with such right as is conferred by the ordinary remedies, and a covenant or condition merely implied, or an express one not clearly within the forfeiture clause, will not sustain a claim of forfeiture for breach.
Where the right to declare a forfeiture for assignment of a lease without lessor's consent has been clearly and unequivocally secured by the terms of a contract, it does not accrue unless nor until there has been an equally clear and unequivocal breach of the condition, and neither intent nor purpose to assign is a violation of the agreement, however manifest; nor do initial steps in the process of assignment effect a forfeiture or confer a right of re-entry, but the assignment must be complete.
A proposed agreement for transfer of rights under a lease held not a sublease, but an assignment.
Appeal from Circuit Court, Boone County.
Suit by the Easley Coal Company against the Brush Creek Coal Company and others, and from a decree therein the defendant Brush Creek Coal Company appeals. Reversed, temporary injunction perpetuated, and a decree entered requiring the Brush Creek Coal Company to assign to plaintiff a lease of a tract of land designated, and the cause remanded.
S. B Avis, of Charleston, for appellant.
J. E. Campbell, of Charleston, for appellee Coal River Mining Co.
E. L. Hogsett, of Huntington, for appellee Easley Coal Co.
POFFENBARGER, P.
By the decree complained of on this appeal, a bill by a mining corporation claiming right to an assignment of one of two certain leases of land for coal mining purposes, against the lessor and a former assignee of the leases, praying specific performance of an agreement to assign and an injunction inhibiting the lessor from proceeding at law to eject the complainant from the property embraced in the lease it claims to have contracted for, was dismissed, after full development of the cause in respect of both pleadings and evidence.
But little dispute as to the facts is found in the record. The rights of the parties are determinable, for the most part, by application of the law to a state of facts disclosed by documentary evidence, the lease, a clause therein, forbidding assignment without the consent of the lessor in writing, and the previous assignment made with such consent. The vital and controlling inquiry in the cause seems to be the effect of the lessor's written assent to the prior assignment. For the plaintiff and one of the defendants, the former assignee, it is insisted that the lessor, by such assent exhausted the right and power reserved to it by the restrictive clause, and that further assignments can be made without its consent. In other words, it is claimed that, by reason of the assent to the assignment, the lease in the hands of the assignee may now be assigned as freely as if no restriction upon assignment had been inserted in it.
The two leases are both dated May 24, 1917, and were executed to A. J. Dalton and Edward H. Butts by the Coal River Mining Company. Clause 17 of each of them reads:
"This lease shall not be assigned or mortgaged by the lessees, or any part thereof sublet, except by consent of the lessor in writing."
An assignment of both was made by Dalton and Butts to the Brush Creek Coal Company, a corporation, and bears date June 19, 1918. It contains a preamble reciting the execution of the leases, the said seventeenth clause of each, an understanding and agreement that the lessees would transfer them to a corporation to be organized by them, and the desire of the Brush Creek Coal Company to accept them, under the terms and conditions therein contained, as in the assignment set out. For and in consideration of $1 and a royalty of 3 cents per ton on all coal mined, used, manufactured, or removed from the property, the lessees bargained, sold, transferred, and assigned to said company, its successors and assigns, all of their property rights and privileges as set forth in the leases, and by stipulation made the leases parts of the deed of assignment, and required said deed to be recorded in connection with them. Another stipulation or covenant reads in part:
"The Brush Creek Coal Company hereby assumes and will faithfully fulfill all of the terms and conditions imposed upon the said A. J. Dalton and E. H. Butts in the lease agreements hereby assigned."
The formal parties to the deed of assignment are Dalton and Butts of the first part and the Brush Creek Coal Company of the second; but the Coal River Mining Company joined them in the execution thereof, by way of assent to the assignment, and such assent is expressed in these words:
"The Coal River Mining Company by its duly authorized representatives hereby assents to the assignment of said lease agreement to the Brush Creek Coal Company as witnessed by its signature."
One of the leases embraces two lots or parcels of land, containing in the aggregate 1,635.40 acres, designated leases Nos. 6 and 7. The other covers four tracts, containing in the aggregate 2,790.99 acres, designated leases Nos. 4, 5, 8, and 9. The contract for a second assignment, enforcement whereof is sought by the bill, is limited to lease No.
6, containing about 600 acres, and part of lease No. 7, containing about 735 acres. As to No. 6, there is a written memorandum of the agreement, but, as to No. 7, the agreement was oral.
At the date of execution of the two leases the country in which the land lies seems to have been new and undeveloped, wherefore they were not made effective in all respects, if at all, until after the lessor had constructed a railroad into the territory. By the 20th clause of each lease it was provided that it should not go into effect except upon conditions set forth in certain agreements between the parties, to which it was annexed. But by declarations written in them they were both made effective on and after August 1, 1918, one such declaration having been made by Dalton and Butts and the other by the Brush Creek Coal Company.
The negotiations for the assignment from the Brush Creek Coal Company of lease No. 6 and lease No. 7 were commenced about May 1, 1920, and resulted in an agreement as to lease No. 6, about May 8, 1920. On that date a letter in duplicate was written by the Brush Creek Coal Company to Fred Easley, promoter or organizer of the Easley Coal Company, in...
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