Flavelle. v. Red Jacket Consol. Coal

• Decision Date: 16 April 1918
• Court: West Virginia Supreme Court
• Parties: John Dundas Flavelle et al. v. Red Jacket ConsolidatedCoal & Coke Company et al.

82 W.Va. 295

John Dundas Flavelle et al.

v.Red Jacket Consolidated

Coal & Coke Company et al.

Supreme Court of Appeals of West Virginia.

Submitted March 5, 1918.

Decided April 16, 1918.

1. Arbitration and Award Condition Precedent.

A provision in a contract that certain differences arising under it shall be submitted to arbitrators, thereafter to be chosen, will not prevent a party from maintaining a suit, in the first instance, to enforce his rights under it, except where an award is made a condition precedent to the right to sue, either by express provision contained in the contract or by one necessarily implied from its terms. (p. 290).

2. Same Action on Lease.

A provision in a coal lease merely requiring the parties in case of disagreement; to submit to arbitrators, thereafter to be chosen, the question whether the lessee has left standing in any room, working or other opening in the mine available and merchantable coal which is not necessary to be left for the proper security of the works, does not alone create a condition precedent to the right of the lessor to sue in the first instance. (p. 301).

3. Mines and Minerals Coal Leases-Grades of Coal.

Where the lessor in a coal lease reserves the right to inspect the mining operations and for a period of several years is frequently, often daily, present either in person or by agent while operations are in progress, and presumably is familiar with the screens used to separate the low from the high quality coal, he cannot later be heard to complain that coal sold by the lessee as "slack" and accounted for as such was in fact coal of a higher quality and should have been accounted, for at the rate stipulated for such grade. (p. 303).

4. Same.

In determining what coal is not within the meaning of the terms of a lease requiring the lessee to mine all available, workable and merchantable coal, important elements are its location and condition in the mine and the disproportionate difference between the cost of operation therefor and the profits to be derived therefrom if mined and sold. If the difference is such as to deter an ordinarily prudent and practical operator from mining it, such, coal is not within the moaning of such descriptive terms. (p. SOS).

5. Same Coal Lease Royalties.

Where a coal lease requires payment of an annual minimum roy alty '' whether the quantity of coal mined and coke manufactured shall produce that amount of royalty or not," and the lessee ceased mining operations on the land, with notice thereof to the lessors, within any royalty period without having mined therein coal sufficient to yield such royalty, though he left unmined coal which the contract required him to mine, he is chargeable with such share of the royalty as had accrued at the time of the notice, less the value of the coal mined during such period at the agreed rate per ton. (p. 809).

Appeal from Circuit Court, Mingo County.

Suit by John Dun das Flavelle and others against the Red Jacket Consolidated Coal & Coke Company and others. Decree for plaintiffs, and the named defendant appeals.

Modified and affirmed.

Goodykoontz & Scherr, and Greever, Gillespie & Divine, for appellant.

Campbell, Brown & Davis, and Wiles & Bias, for appellees.

Lynch, Judge:

Plaintiff's owned two tracts of land in Mingo County containing several seams of coal deposits, one of which known as the Upper Seam they leased to W. R. Hughes and Joseph S. Lipton November 1, 1897, "for coal mining and coal coking purposes only" for a period of twenty-seven years, or until all the workable coal of that seam is mined and removed from the leased premises. For the coal so mined and removed the lessees contracted to pay the lessors quarterly nine cents a ton of 2240 pounds, and for "slack" coal five cents a ton in the event only that the lessees find a market therefor, and any coal mined and used upon the premises by the lessees or furnished by them to their employes and not weighed, to be accounted for and paid for at the same time at ninety cents for every one thousand tons of coal mined during the three calendar months preceding the said quarterly payments.

The rights conferred by the lease passed by mesne assignments to the defendant and appellant, Red Jacket Consolidated Coal & Coke Company, June 21, 1904, and it assumed the obligations imposed by the lease upon the original lessees, Hughes and Lipton, and thereafter went upon the land and began to prepare for mining operations thereon, and when these were completed also entered actively upon the performance of the lease covenants, which being performed fully, as it claims, appellant proposed to retire from and abandon the premises and of that purpose notified the lessors by letter dated July 30, 1912, to which notification the lessors through C. B. Taylor, agent for himself and co-plaintiffs, replied August 6. 1912, and after acknowledging the receipt of the letter used this language: ''Our engineers report to us that you have left at least 50, 000 tons of available, merchantable coal standing which ought to be mined and taken away, and I do now, on behalf of myself and my co-lessors, demand that you at once proceed to mine and take away said coal according to the directions and provisions of said lease, and I do hereby notify you that if the work of mining said coal is not commenced within one week after receipt of this letter, which you are to take in lieu of the formal notice provided by the clause of said lease above quoted, I shall demand that the matter be arbitrated, as in said lease provided."

Disregarding the demand to proceed with mining operations for the removal of the residue of the seam of coal leased and the invocation of the arbitration provision of the lease, the appellant did not resume mining operations but abandoned the enterprise. The lessors then brought this suit and obtained a decree ascertaining 200, 318 tons of the leased seam as the quantity of coal remaining unmined and unremoved therefrom, though minable, available and marketable according to the requirements of the lease; fixing the value thereof at $18,028.62, computing the tonnage at the greater rate stipulated in the lease; apportioning the amount among the lessors pursuant to an agreement among them, $6,760.73 to John Dundas Flavelle and Mary Ann Flavelle, and $11,-267.89 to R. N. Taylor, administrator of Charles B. Taylor, deceased, and Barbara J. Taylor; and the operating lessee has appealed.

A preliminary question, one that strikes at the very foundation of the right of the plaintiffs to maintain the suit, is presented. It involves that provision of the contract whereby they promised and agreed to provide and furnish the lessees with an accurate map or plat based upon an actual survey of the tract and showing its corners and the calls of the deed to enable them to avoid encroaching upon the coal of the same seam within adjacent tracts, and with greater caution and facility to effectuate their mining operations, and concluding with the express declaration: "And no forfeiture or penalty shall be incurred (by the lessees) under the provisions of this lease, unless the lessors furnish said map and description of said lands above specified."

With this requirement, it is said, the lessors made no attempt to comply; but, so far as we can discover from the voluminous record, the lessees did not at any time during the mining operations conducted by them on the leased premises demand such survey and map. There was of course no real necessity for such demand since the contract does not require it, but if the survey and map were indispensable to the proper mining of the coal or to enable them to guard against the danger of incurring the statutory penalty for mining coal within the boundary area forbidden by statute, and protection seems to have been the real reason for the requirement, such a demand, though not expressly required, would doubtless have been heeded and the map produced. At least, compliance therewith would have aided the lessees to avoid encroachments upon the rights of coal owners and operators of the same seam on adjacent lands and also to prevent a violation of the express mandate of the statute. But whether the survey was or was not made or the map or plat furnished, no proof shows with certainty. The original brief of the appellant does not point to any positive testimony upon that subject, as our rules necessitate, nor does the reply brief respond to that of the appellees wherein it calls attention to the inconclusive nature of the testimony introduced by the appellant to show failure to furnish these papers. The testimony is only that the witnesses do not remember seeing them. Nor is there any serious attempt to show such failure, and the entire eight or nine years of active mining operations continued without their production, if indeed neither was furnished, and during that time no complaint was made that this requirement was disregarded until this controversy arose. Besides, as appellees contend, their failure ought not now to be permitted to excuse performance of the obligation assumed by the appellant to mine and remove all the available, workable, minable and merchantable coal of the upper seam contained within the leased premises, if it be true that appellant has left unmined large areas of coal identifiable by these descriptive terms. It prosecuted the work it engaged to do just as if the map were spread out before it; nor was it necessary in the prosecution of the work except as the operations approached the statutory five-foot boundary lines of the tract, within which coal could not lawfully be mined by any operator. The only apparent injury that resulted from the omission was a negligent encroachment upon adjacent coal lands during these operations.

The next three assignments for convenience are considered and determined together since they involve the same clause of the lease, the clause that provides for notice and arbitration. After the covenant...