Milburn By-Products Coal Co. v. Eagle Land Co.

• Decision Date: 19 June 1956
• Docket Number: No. 10778,BY-PRODUCTS,10778
• Citation: 141 W.Va. 866,93 S.E.2d 231
• Court: West Virginia Supreme Court
• Parties: MILBURNCOAL COMPANY v. EAGLE LAND COMPANY.

Page 231

93 S.E.2d 231

141 W.Va. 866

MILBURN BY-PRODUCTS COAL COMPANY v. EAGLE LAND COMPANY.

No. 10778.

Supreme Court of Appeals of West Virginia.

Submitted April 25, 1956.

Decided June 19, 1956.

Syllabus by the Court.

1. Whether a building is a 'trade fixture', in the absence of specific provision, is to be determined by the intention of the parties as disclosed by the facts and circumstances of the particular case.

2. Whether lessee, under a lease of an isolated tract of land for coal mining purposes for a period of fifty years, subject to renewal until all coal has been exhausted, enters upon the leased premises and erects dwelling houses and garages for the use and convenience of lessee's employees, such dwelling houses and garages, in the absence of any intention or provision in the lease to the contrary, are 'trade fixtures', and may be removed or otherwise disposed of by the lessee at any time prior to the expiration of the term of the lease.

3. Where, prior to the expiration of the term of a lease, a sale of part of the leased premises, and of the 'trade fixtures' erected thereon by the lessee, is contemplated, and, in pursuance thereof certain agreements to convey, defining the respective rights of the parties, are executed, such agreements must be referred to and read together to determine the intent of the parties.

4. Where lessor and lessee enter into an agreement to sell part of the leased premises, including certain 'trade fixtures' situate thereon, neither waiving any rights or interests as they exist at the time of the agreement, and providing that their respective interests in the proceeds thereof shall be determined as if such land and fixtures had been condemned, in a proceeding in eminent domain, the lessor thereby waives any lien on such fixtures for non-payment of rental or royalty provided for in the terms of the lease, and any rights which might have arisen under the reversion clause of such lease had the lease been otherwise extinguished.

Jackson, Kelly, Holt & O'Farrell, Homer A. Holt, Thomas B. Jackson, Charleston, for appellant.

Spilman, Thomas, Battle & Klostermeyer, Robert S. Spilman, Robert S. Spilman, Jr., Charleston, for appellee.

BROWNING, President.

This is a declaratory judgment proceeding brought by Milburn By-Products Coal Company, a corporation, plaintiff, hereinafter referred to in this opinion as Milburn, and Eagle Land Company, a corporation, defendant, subsequently referred to as Eagle, to determine the respective rights of the parties in and to the sum of $81,287.05, which is deposited to the joint account of Milburn and Eagle in a Charleston bank. This sum of money was paid to the parties by the West Virginia Turnpike Commission for the purchase of 36.40 acres of land upon which were situate 17 houses and a large garage, evidenced by a deed dated October 31, 1953, jointly executed by Milburn and Eagle, the property being secured by the Turnpike Commission for right of way purposes; the conveyance by Milburn and Eagle to the Turnpike Commission of an additional tract of land upon which no buildings were located for use by the Commission in disposing of waste excavations in constructing the Turnpike, for which the Commission paid the sum of $2,562.50; and the sum of $865.60 which the Appalachian Electric Power Company paid for a right of way over the tract when the construction of the Turnpike made it necessary for Appalachian to relocate its power lines in that area. The trial court found that the lessor, Eagle, is entitled to recover the sum of $5,458.95, that being the value of the 36.40 acre tract, exclusive of the buildings situate thereon, the entire sum of $2,562.50 for the additional tract secured by the Commission for the disposing of waste products, and the entire sum of $865.60 paid by the Power Company for its right of way in relocating its power lines. The court found that the lessee, Milburn, should recover the sum of $72,400, the value of the 17 dwelling houses, and the garage located on the 36.40 acre tract of land.

The appellant Eagle complains of the action of the trial court in awarding the sum of $72,400 to the appellee Milburn, and since there was no cross-assignment of error by Milburn, the sole question for determination upon this appeal is the correctness of the trial court's decree in awarding $72,400 to Milburn.

The Eagle Collieries Company, predecessor in title to Eagle, on October 1, 1912, leased to one McClanahan for a term of fifty years, a tract of land consisting of 2,600 acres lying in Raleigh and Fayette Counties, which lease gave the lessee the exclusive right and privilege to mine coal from all seams upon this tract with the rights '* * * generally for any purpose or purposes the Lessee may desire and which are properly incidental to the business of mining coal, manufacturing coke, and shipping the same * * *.', and the right and privilege to take from such tract the necessary timber for the operation of lessee thereunder, or for construction or improvements of any kind.

Inasmuch as Eagle relies strongly upon the provisions of Sections 6 and 10 of that lease, they are quoted in full: § 6--'The rent and royalty hereinbefore mentioned shall be treated and considered as rent reserved for the demised premises, and the Lessor shall have for the collection thereof all the rights and remedies which landlords now have or may hereafter have for the collection of rent reserved upon contract under the laws of the State of West Virginia. And it is hereby expressly understood that the Lessor shall have for said rent or royalty a lien upon all the improvements and property of the Lessee upon the demised premises and also upon this lease and leasehold estate thereby created to secure all rent or royalty becoming due it hereunder, until the same is paid, and when any payment of rent or royalty or any part thereof shall have been due and unpaid for ninety (90) days or more after written demand upon the Lessee, his successors or assigns, all the property of the Lessee upon the demised premises and this lease and lease-hold estate hereby created or so much thereof as is necessary, may be distrained and sold to pay such rent or royalty, and in addition the Lessor shall have the right if it so desire to enforce by suit or action in any court of competent jurisdiction the lien hereby given it.'; § 10--'At the termination of this lease, the Lessor may re-enter upon and take possession of the demised premises, and all the buildings, improvements, tracks, tipples, drum houses, and wires at that time attached to the freehold thereof and the same shall revert to and become the property of the Lessor. All cars, tools, store goods, wares, merchandise, boilers, engines, machinery and loose equipment, may, if the Lessee is not in default be removed from the demised premises within six (6) months after the termination of this lease or the extension thereof.'

In 1913, the lease was assigned by McClanahan, with the consent of the lessor, to Milburn Coal Company, and in 1918, Milburn Coal Company assigned to the plaintiff Milburn, with the consent of the defendant Eagle, as successor to Eagle Collieries Company, the deed of assignment conveying 'all of the mines, buildings, tipples, inclines, houses, tracks, rails, sidings, machinery, equipment, tools, supplies and improvements and structures of every kind whatever * * *.' Milburn Coal Company, prior to its assignment to the plaintiff Milburn, built approximately 97 dwelling houses for its employees, this construction having taken place between 1913 and 1918, and Milburn, in 1920, constructed 4 such houses and an additional 20 in 1942. The garage was constructed by Milburn in 1923. Four of the houses razed by the Turnpike Commission were constructed by Milburn in 1942, the other 13 having been constructed by Milburn Coal Company, the plaintiff Milburn's predecessor.

The evidence shows that O. R. Colan, Right of Way Agent for the Turnpike Commission, believing Milburn to be the owner in fee of the tract in question, approached the general manager of Milburn relative to the purchase of the property for right of way purposes, and the general manager sent Colan to see Mr. Thomas, President of Eagle. On April 15, 1953, Mr. Thomas wrote the President of Milburn a letter informing him that: 'We have asked for $150.00 per acre for the land alone, which amount has been accepted by the Commission and to which amount is to be added the value of the houses and other buildings, if any, upon the land in determining the total amount to be paid by the Commission. We suggest that you name a figure which you think represents the fair value of the houses and other buildings, and that such amount be added to the $150.00 per acre representing the value of the land, and that an offer then be made by Eagle and Milburn, as Lessor and Lessee, to the Road Commission [Turnpike Commission] to convey the entire right of way over the property, viz., land and houses, for the total sum determined upon the basis stated. * * *' It was suggested also in the letter that the total amount agreed upon should be deposited in a certain Charleston bank, and if the parties were unable to agree as to the division of the money, that question should be determined by arbitration. Milburn agreed to all of the terms except the bank in which the deposit was to be made, and as to arbitration. Milburn suggested that if the parties were unable to agree, the matter should be determined by a proper court proceeding and designated a different bank as a depository, to all of which Eagle agreed. Thereafter, Colan negotiated with the general manager of Milburn, and the sum of $72,400 was agreed upon as the value of the 17 houses and the garage, which were located upon the tract.

On May 12, 1953, an agreement was entered into between Eagle, Milburn and the West Virginia Turnpike Commission, authorizing the latter to enter upon the land in question...