Kohlsaat S. v. Main Island Creek Coal Co.
Decision Date | 07 March 1922 |
Court | West Virginia Supreme Court |
Parties | John E. C. Kohlsaat et als., Trustees, etc., v. Main IslandCreek Coal Co. |
1. Arbitration and Award Provision. That Parties to Lease for Coal Mining Purposes Will Submit Controversy to Arbitrators Will Not Prevent Suit by Either Party for Asserting Rights Under It.
A provision in a lease of land for coal mining purposes providing that any controversy between the lessors and lessee, arising thereunder, shall be submitted to arbitrators and to an umpire in case of disagreement, and designating how the arbitrators and umpire shall be selected, will not prevent either party from maintaing suit to assert his rights under it. (p. 662).
Same Arbitration: Clause in Coal Lease for Mining on Royalty Basis Will not Prevent a Revocation of Agreement to Arbitrate or a Resort to Courts for Adjudication of Rights. Provision in an arbitration clause in a lease of land for mining coal on a royalty to the lessor, that upon failure of either party to appoint an arbitrator the other may make an appointment of two arbitrators, and the two so appointed may select an umpire, does not prevent a revocation of the agreement for arbitration, nor prevent a resort to the courts in the first instance for a vindication of rights under the lease, (p. 663).
Mines and Minerals Lease Construction Royalties.
Where a lease of land for mining coal stipulates that a fixed sum for each ton of coal mined shall be paid the lessor as royalty, but if the coal is sold to the consumer for a price above ninety cents per ton then the lessee shall pay, in addition to the fixed sum, ten per cent of the price in excess of ninety cents; and the lessee increases its price to consumers by the addition of 45 cents per ton under a permissive order of the Federal Fuel Administrator, which order allows such increase on condition that a corresponding increase per ton be added to wages of lessee's miners, and the lessee sells its coal to the consumer at $2.50 per ton, and increases the wages of its miners in accordance with the condition of the permissive order, the lessee, in computing royalties to be paid to its lessor, is not permitted to first deduct the 45 cents from the price of the coal sold to the consumer and calculate the excess royalty on the remainder left above 90 cents per ton. The lessor is entitled to receive royalties based on the full price paid by the consumer, (p. 664).
Same Lease Construed to Inhibit the Expense of Selling Coal to be Deducted from the Sale Price Before Computing Royalties.
Where there is a provision in a coal mining lease that royalties shall be paid the lessor on a basis of the price at which the coal is sold to the consumer, the lessee is not justified, in computing the royalty, to subtract commissions paid to a selling agent from the sale price of its coal, and calculate the royalty on the sum remaining. The expense of selling the coal is an ordinary and necessary expense of the operation, and should not be deducted from the sale price before computing royalties, (p. 668).
5. Accord and Satisfaction Liquidated Damages Payment of Less Than Sum Due Not a Satisfaction of the Debt if There be no Release Under Seal or New Consideration as to Part Unpaid.
"Payment by a debtor and receipt by a creditor of a less sum than is due upon an undisputed liquidated demand is not satisfaction of the debt, although the creditor agrees to accept it as such, if there be no release under seal or no new consideration given as to the part left unpaid." (Nixon v. Kiddy, 66 W. Va. 355.) (p. 669).
6. Settlement Mistake.
Any item omitted by reason of mistake or inadvertence from a stated and settled account, growing out of ordinary business transactions, may be recovered in an appropriate legal action, (p. 771).
Error to Circuit Court, Logan County.
Action by Jonh E. C. Kohlsaat and others, trustees, etc., against the Main Island Creek Coal Company, and from a judgment therein the plaintiffs bring error, and the defendant assigns cross-error,.
Modified and afflrmed.
Fitzpatrick, Campbell, Brown & Davis, Brown, Jackson & Knight, and B. D. Campbell, for plaintiffs in error.
E. L. Hogsett and Holt, Duncan & Holt, for defendant in error.
This litigation arises out of a coal mining lease executed by Clinton Crane and James 0. Cole to the Main Island Creek Coal Company on about 27, 000 acres of coal lands in Logan County, dated October 6, 1913.
The issues involved arise under the provision of the lease relating to royalties, and that relating to arbitration of controversies which might arise.
The royalty provision is: "And the said lessee, in consideration of the premises, does covenant and agree to commence at once upon delivery of this lease, the work of developing said lands as a coal producing property, and to prosecute the same continuously and with diligence; and further
covenants and agrees, during the term aforesaid, unless this lease shall be sooner terminated under some provision hereof, and in such case until such termination, to pay to the lessors the rents and royalties for the use of said demised premises and said coal; that is to say, ten (10) cents per ton for every ton of two thousand (2, 000) pounds, and, in addition thereto, ten (10) per cent, of the selling price of said coal above ninety (90) cents per ton F. O. B. cars at the tipples. The lessors are to be paid never less than ten (10) cents per ton of two thousand (2, 000) pounds, and whenever the coal from said premises shall sell to consumers for a price above ninety (90) cents per ton of two thousand (2, 000) pounds at the tipple on an average of all grades, then, and in every such case, the lessee shall pay to the lessors ten (10) per cent. of the price in excess of ninety (90) cents.
The arbitration clause reads: "It is further agreed that in case of any controversy between the lessors and lessee, arising under this lease, the same shall be submitted to arbitrators and to an umpire in case of a disagreement, which arbitrators shall be selected in the following manner:
"The party desiring arbitration shall nominate one arbitrator, and shall notify the other party of such nomination, and the other party shall, within ten (10) days after receiving such notice, nominate an arbitrator and the two before proceeding to act shall select a third party to act jointly with them. Tf such other party fail and neglect in the time aforesaid to nominate an arbitrator, then the party desiring arbitration shall nominate two such arbitrators, and the two so
nominated shall elect the umpire aforesaid. After the said arbitrators shall have been so selected, the third person selected as umpire shall fix a time and place for the purpose of meeting and hearing the parties and any evidence they may submit, and the decision of said arbitrators or any two of them in writing shall be binding upon the parties. Said arbitrators shall, after hearing the parties and any evidence that they may submit, make up their award and reduce the same to writing, and seal the same and deliver to the lessors one copy thereof and to the lessee one copy thereof.
In 1916 Cole and Crane conveyed the land leased to plaintiffs as trustees of the Cole and Crane Real Estate Trust, to become effective upon the death of either of the grantors, and, Crane having died in 1917, the trust became effective. In the summer and fall of 1917 certain executive orders were promulgated by the President of the United States and the Fuel Administrator, under authority of a war measure enacted by Congress fixing a scale of prices for bituminous coal at the mines. The order of October 27, 1917, permitted an increase in price of 45 cents per ton over that formerly fixed, subject to two conditions:
Between November 1, 1917, and July 1, 1918, defendant
coal company mined and sold from the leased land 644, 936 2/3 tons of coal at an increased price of 45 cents for each ton, and, before paying royalty thereon, deducted from the gross amount for which this tonnage was sold 45 cents per ton, equal to $290,221.50 and refused to pay royalty thereon, claiming that this 45 cents per ton increase composed no part of the price for which the coal was sold, within the meaning of the terms of the lease, but constituted a fund for the payment of its miners, in which defendant has no beneficial interest. Plaintiffs claimed...
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...than the logic. See also: Lawson v. Williamson Coal & Coke Co., 61 W.Va. 669, 57 S.E. 258 (1907) and Kohlsaat v. Main Island Creek Coal Co., 90 W.Va. 656, 112 S.E. 213 (1922). However, West Virginia also has a line of cases which favors arbitration. These cases resulted from this Court's de......
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