Tressler Coal Mining Co. v. Klefeld.

• Decision Date: 02 February 1943
• Citation: 125 W.Va. 301
• Court: West Virginia Supreme Court
• Parties: Tressler Coal Mining Company v. Julius Klefeld et al.

125 W.Va. 301

Tressler Coal Mining Company

v.Julius Klefeld et al.

Supreme Court of Appeals of West Virginia.

Submitted January 13, 1943.

Decided February 2, 1943.

1. Deeds of Trust

Where a deed of trust conveys sundry tracts of land to secure payment of a debt, and subsequently two of said tracts are leased with the consent of the trust deed creditor, who is not in possession of the land, otherwise interested therein, or obligated by an agreement to pay the taxes, and thereafter the remaining tracts are forfeited and sold for the nonpayment of taxes, such sale does not preclude said creditor from enforcing the deed of trust by sale of the leased tracts.

2. Equity

Doubt as to the meaning and effect of a decree may be determined by examination of the pleadings, exhibits, and other papers filed in the cause.

Rose, Judge, absent.

Appeal from Circuit Court, Barbour County.

Suit by the Tressler Coal Mining Company against Julius Klefeld and others to enjoin the sale of two tracts of coal under a deed of trust. From a decree dissolving temporary injunction and dismissing defendants Julius Klefeld and H. H. Rose, trustee, from the cause, the plaintiff appeals.

Modified and affirmed.

Wm. T. George, for appellant.

Tusca Morris and Robert C. Morris, for appellee Julius Klefeld.

Lovins, Judge:

The Tressler Coal Mining Company prosecutes this appeal from a final decree of the Circuit Court of Barbour County, entered on March 5, 1942, dissolving a temporary injunction and dismissing defendants, Julius Klefeld and H. H. Rose, Trustee, from the cause. The questions herein arise from proceedings following a remand of the cause by this Court upon a prior appeal.

In 1935, the Tressler Coal Mining Company instituted this chancery suit in the Circuit Court of Barbour County for the purpose of enjoining the sale of two tracts of coal upon which it held a lease for mining purposes, the two tracts being part of nine tracts of coal conveyed to H. H. Rose, Trustee, in 1925, to secure an indebtedness of $25,000.00, evidenced by notes. The holder of the notes transferred the same to Julius Klefeld, who, in 1928, agreed in writing to the execution of a mining lease by the deed of trust debtor to S. B. Tressler; in 1934, Tressler assigned his rights thereunder to plaintiff. This injunction suit followed the Trustee's advertisement for sale of the leased tracts, at the direction of Klefeld. From a decree dissolving a temporary injunction which had been issued at the time of the filing of the bill, the coal company appealed, and on February 1, 1938, this Court reversed that decree and remanded the cause for further development, on the principal ground that the leased tracts were "protected in equity from the operation of the deed of trust until recourse is had to the unleased tracts, in the absence of a showing that the unleased tracts are unavailable for sale under the deed of trust." Tressler Coal Mining Co. v. Klefeld, et al, 119 W. Va. 567, 195 S. E. 202.

Upon the remand, Fllefeld filed an amended answer in which he alleged that the seven unleased tracts were unavailable for sale under the deed of trust; that one tract had been released for valuable consideration applied on the trust debt, prior to the execution of the mining lease to Tressler; that the other six tracts had been sold both to the State and individuals in 1929 for nonpayment of 1927 taxes, without Klefeld's knowledge, and that he had lost all rights of redemption. By demurrer and special replication to the amended answer, the coal company asserted that Klefeld had wrongfully created the unavailability alleged therein, the replication pleading equitable estoppel. The demurrer to the amended answer was overruled and Klefeld's demurrer to the special replication was sustained. After depositions were taken, certain facts stipulated and exhibits filed on the issues thus raised, a final decree was entered which found that: (a) Royalties from the coal company's development of the leased tracts had not been applied on the notes secured by the deed of trust as provided in the lease and the Klefeld agreement for the execution of the lease; (b) all the minable and merchantable coal, as described in the lease, had not been removed; and (c) that the other seven tracts covered by the deed of trust were unavailable for sale thereunder through no failure of duty on the part of Klefeld.

By the terms of the Tressler lease, the lessee is required to pay lessors or assigns a royalty of fifteen cents on each ton of coal mined, with a specified yearly minimum royalty of $1,500.00; it also provides that lessee is not required to mine "any area where the coal seam is less than FIFTY (50) INCHES in thickness, or is faulty making it unreasonably hard to mine, or where the coal is not merchantable", and that when all coal has been mined from the leased premises, except 20, 000 tons, further payment of royalty would not be required. In the written agreement of 1928, by which Klefeld consented to the execution of the lease by the deed of trust debtor, the following appears: "It being understood that the royalties due under said lease are to be paid to the said undersigned in discharge of said indebtedness and the interest thereon until the same is paid off by said royalties or otherwise."

On this appeal the coal company contends that it was error to overrule its demurrer to Klefeld's amended answer; that it was error to sustain the demurrer to the coal company's special replication to the amended answer; that the record is without evidence to warrant the finding that all the royalties were not applied on the notes held by Klefeld; that no finding was made as to the existence of a seam of coal over fifty inches in thickness, and, therefore, it could not properly be held that minable and merchantable coal remained in the premises, and that the finding of unavailability of seven tracts through no failure of duty on the part of Klefeld ignores Klefeld's duty to protect the security for payment of the debt; and that Klefeld should not have recourse to the two tracts held by the coal company under its lease.

The findings of the trial chancellor as to the unavailability of the seven tracts, his rulings on the demurrer to Klefeld's amended answer and on the demurrer to the special replication of the coal company are interrelated and will be discussed together. The opinion of this Court on the former appeal, Tressler Coal Mining Co. v. Klefeld, et al., supra, states the law of the case. Kaufman v. Catzen, et al, 108 W. Va. 1, 150 S. E. 371. On the first appeal there was no pleading or proof to show the unavailability of the seven tracts. It was there reasoned that such showing was necessary before Klefeld could have recourse to the two leased tracts for satisfaction of his lien. On remand it was made to appear by pleadings, proof and stipulation that the seven tracts are not available to Klefeld for the satisfaction of his lien, for the reason that they have been sold, one of the tracts having been sold at...