Keller v. Model Coal Co., 10832

• Citation: 97 S.E.2d 337,142 W.Va. 597
• Decision Date: 11 April 1957
• Docket Number: No. 10832,10832
• Parties: Ira Junior KELLER v. MODEL COAL COMPANY et al.
• Court: Supreme Court of West Virginia

Page 337

97 S.E.2d 337

142 W.Va. 597

Ira Junior KELLER v. MODEL COAL COMPANY et al.

No. 10832.

Supreme Court of Appeals of West Virginia.

Submitted Jan. 22, 1957.

Decided March 19, 1957.

Dissenting Opinion April 11, 1957.

Syllabus by the Court.

1. Forfeitures are not favored in courts of equity and will not be declared or enforced at the instance of a lessor, in the absence of forfeiture provisions in a lease, unless the facts show an abandonment of the enterprise by the lessee.

2. Equity will retain jurisdiction of a suit for the purpose of affording an opportunity of relief on the basis of discovery and accounting, even though a forfeiture, the main purpose of the suit, is denied.

3. 'The facilities of a court of equity are much better adapted to settle a complicated account, particularly when a discovery is sought, than are the facilities of a court of law.' Dankmer v. City Ice & Fuel Co., 111 W.Va. 676 .

4. Where a lessor seeks a decree of forfeiture of a coal lease and an option to lessee to purchase the property embraced in the lease, and in his bills of complaint alleges breaches of the terms of the agreement by the lessee in the latter's failure to develop and mine the property, comply with the mining laws and to install adequate equipment, and also alleges the need for discovery and accounting, a demurrer on the ground that equity will not decree a forfeiture of the lease because the plaintiff has an adequate remedy at law will be sustained as to the forfeiture and overruled as to discovery and accounting, and jurisdiction of the court will be retained for the purpose of discovery and accounting.

Charles V. Wehner, Kingwood, for appellant.

Charles H. Brown, Cramer W. Gibson, Kingwood, Hyer & Gibson, Elkins, for appellees.

DUCKER, Judge.

Plaintiff instituted in the Circuit Court of Preston County this suit in equity against the defendants to cancel a coal lease and option existing between the plaintiff and defendants on lands owned by plaintiff, and to obtain from defendants an accounting of the tonnages of coal removed, and discovery of the amount of coal mined on and transported from the premises. The defendants demurred to the plaintiff's original, amended and supplemental bills of complaint, and by the decree of the Circuit Court, the defendants' demurrers were sustained without prejudice to the right of the plaintiff to institute and prosecute any actions at law against the defendants, to which decree plaintiff prosecutes this appeal.

The allegations of the bills of complaint are in effect: That the plaintiff is the owner of all of the Bakerstown seam of coal under two tracts of land, aggregating 305 3/4 acres in Kingwood, Preston County, West Virginia, by inheritance in 1952 by plaintiff from his father as to one-half thereof, and by purchase in 1954 by plaintiff from his brother as to the other one-half thereof; that said coal was subject to a lease dated July 27, 1951, executed by plaintiff's father to defendant, Model Coal Company, a corporation; that said lease was 'for such a period as the Lessee shall be able to profitably mine and remove the coal by the deep mining method, or any other method, or until the coal that is capable of being profitably mined is completely removed'; that as advance royalty $500 was paid upon the execution of the lease and $500 paid in six months thereafter, and that a royalty of $.15 per ton, with credit for all royalty paid, should be paid monthly; that statements of all railroad and truck scale weights were to be furnished to lessor; that the lessee is given an option to purchase the property, with credit for all royalty paid, for the price of $12,000 within five years, or of $15,000 at the end of ten years; that lessee will mine and remove the coal in a workmanlike manner and maintain its operation in strict conformity with all valid State and Federal mining laws and regulations; that lessee will conduct its mining operations in such a manner as to be prepared to sell custom coal as well as coal for commercial purposes upon the open market; that upon the termination of the lease by other means than forfeiture lessee may remove machinery and other personal property from the land; that lessee has failed to mine and remove the coal that could have been profitably mined and removed; that the quality of the coal was good, the market available and all coal that could have been produced could have been sold at a profit; that lessee failed to install necessary equipment, did not conduct its mining operations so as to be prepared to sell custom coal; that numerous individuals employed by lessee were unable to mine and sell coal for lessee because lessee failed to provide necessary equipment so to do; that lessee violated the terms of the lease by failing to comply with the mining laws in at least sixteen ways, and that by reason thereof, the mine was closed on December 31, 1954, by the State Mine Inspector and is still closed; that since said closing, plaintiff has received no royalty except for 20.60 tons, and that for the period of over three and one-half years the tonnage totaled 1,632.91 tons, which at $.15 per ton was $244.94; that the few reports of coal mined sent to plaintiff were signed by Marrara Coal Company; and that Model Coal Company attempted to assign the lease to Raymond Hartman, the other defendant, who, being informed of violations of the lease, had previously attempted to purchase the coal property so leased.

The grounds of defendants' demurrers are: that the plaintiff has an adequate remedy at law; that plaintiff is not in possession of the premises and therefore cannot bring a suit for the removal of a cloud on title; that the instrument sought to be cancelled contains an option to purchase as well as a coal lease, and that the facts alleged in the bill do not vitiate the option; that there are conflicts between the pleadings and the lease contract; that the bills of complaint allege only breaches of covenants in the lease for which the plaintiff has an adequate remedy at law; that the bills of complaint with its exhibit show there is no forfeiture provision in the lease; that plaintiff is asking a court of equity to enforce a forfeiture, and that there are no breaches of the provisions of the lease for which equity would declare a forfeiture; and that the amended and supplemental bill pleads evidence instead of facts necessary to establish an equitable cause of action.

The decree of the Circuit Court in sustaining the demurrers of the defendants to the bill of complaint and the amended and supplemental bill of complaint has the practical effect, though not so specifically providing, of dismissing the bills and entering judgment for defendants without prejudice to plaintiff to sue at law. The question for determination by this Court now is whether or not the plaintiff has alleged facts sufficient for a court of equity to grant, in whole or in part, the relief sought by the plaintiff.

The plaintiff's assignments of error to the Court's decree sustaining the demurrers of defendants, treated collectively, and so far as they are necessary for a determination of the issues, are: (1) that equity will enforce a forfeiture of the lease, (2) that if the lease is forfeited, then the option given to lessee to purchase the property will also be forfeited, and (3) that the plaintiff does not have an adequate remedy at law. Of these in their order.

The several factual allegations in the bills of complaint upon which plaintiff bases his prayer for forfeiture of the lease and option are chiefly that the defendants have failed (1) to mine and remove the coal that could have been profitably mined and removed, (2) to install necessary equipment to mine and sell custom coal, and (3) to provide equipment facilities for the individuals employed by defendants engaged in the mining operations to mine the coal; and further, (4) that the mine has been closed by the State Mine Inspector on account of defendants' violation of the mining laws in some sixteen ways, (5) that the total royalty reported to plaintiff by defendants for the whole period the lease had been in effect was only $244.94, and (6) that defendant lessee had assigned the lease to the individual defendant herein who at the time of the assignment knew of the alleged violations of the terms of the lease, and who previously had attempted to purchase the property embraced in the lease.

Are these allegations of facts sufficient to entitle the plaintiff to a decree forfeiting the lease, and if so, also a forfeiture or cancellation of the option?

There was no division or apportionment of the consideration for the lease agreement between the lease and the option, and as all the consideration is for the lease and option jointly, we are of the opinion that both must stand or fall together. They are both so related and so dependent on each other in purpose and intent that if the lease is to not be cancelled, we think it is only reasonable to conclude that the land remains subject to the option, or otherwise both lease and option shall fall.

The decisions of this Court are clearly to the effect '* * * that equity will not enforce the forfeiture of a vested estate, because of the breach of a subsequent condition. The lessor is left to his remedy at law.' Engle v. Eastern Oil Company, 100 W.Va. 301, 303, 130 S.E. 491, and cases cited therein, and further that 'It is familiar law that forfeitures are not favored in courts of equity.' Carder v. Matthey, 127 W.Va. 1, 7, 32 S.E.2d 640, 642, and cases cited. In the absence of a forfeiture provision, this Court has held that a mere failure to comply with some of the covenants or the making of partial performance only would not give a court of equity jurisdiction to set aside and vacate the contract between the parties. Vaughan v. Napier, 92 W.Va. 217, 114 S.E. 526; Bankers' Pocahontas Coal Co. v. Central Pocahontas Coal Co., 113 W.Va. 1, 166 S.E....