Va.n Export Coal Co. v. Rowland Land Co.

• Decision Date: 13 January 1926
• Docket Number: (No. 5008)
• Citation: 100 W.Va. 559
• Court: West Virginia Supreme Court
• Parties: Virginian Export Coal Company v. Rowland LandCompany.

100 W.Va. 559

Virginian Export Coal Company

v.Rowland Land Company.

(No. 5008)

Supreme Court of Appeals of West Virginia.

Submitted March 17, 1925.

Decided January 13, 1926.

1. Contracts Default in Contract Fairly Entered Into by Parties, Sui Juris for Purposes Not Immoral, Unlawful, or Impossible of Performance is Not Excusable.

Though the obligations of a contract do not inhere or subsist in the agreement proprio vigore, the law so regards contracts and attaches to them such sanctity that, when fairly entered into by parties sui juris for purposes not immoral, unlawful or impossible of performance, it will not excuse non-compliance with the unconditional and unqualified terms of the undertaking. It requires both parties to be faithful to their covenants. If they have made no provision for a dispensation, the law gives none. (p. 577.)

(Contracts, 13 C. j. 706.)

2. Same Contract Should Provide Against Contingencies Which May Render Difficult, or Prevent, Performance.

It is the duty of contracting parties to provide against contingencies, as they are presumed to know whether the completion of the duty they undertake be within their power, (p. 577.)

(Contracts, 13 C. j. 706.)

3. Same Right of Election of Promisor to do One of Tivo Things by Given Day is Lost if Such Day Passes Without His Election, and Right of Election is Thereafter in Party to Whom Promise is to be Performed.

The law is that, where the promisor has the right to do one of two things by a given day, his right of election is lost if that day passes without his election, and the right of election is thereafter in the party to whom the promise is to be performed, (p. 578.)

(Contracts, 13 C. J. 706.)

4. Same Care Should be Taken in Construing Correspondence Not to Construe as Agreement What Parties Intended to be Preliminary Negotiations; Method of Determining Whether Parties by Correspondemce Intended to Make Contract Stated; Intention of Parties to Make Contract by Correspondence Must be Determined From Circumstances and Surroundings of Each Case.

While a valid contract may be made between parties by memorandum, telegrams and correspondence, care should be taken not to construe as an agreement that which the parties only intended to be a preliminary negotiation. The question in such cases is, did the parties mean to contract by the memorandum of agreement, or were they only settling the terms of an agreement into which they proposed to enter after all its particulars were adjusted, which was then to be formally drawn up, and by which alone they designed to be bound? Such intention must necessarily be determined from the circumstances and surroundings appearing in each particular case. (p. 580.)

(Contracts, 13 C. J. §§ 100, 114.)

5. SAME Fundamentals of Legal "Contract" Stated; Meeting of Minds Essential.

The fundamentals of a legal contract are competent parties, legal subject matter, valuable consideration and mutual assent. There can be no contract if there is one of these essential elements upon which the minds of the parties are not in agreement, (p. 579.)

(Contracts, 13 C. J. §§ 44, 40, 145, 160, 339.)

6. Mines and Minerals' Evidence Field to Show That Negotiations and Dealings of Parties Were Based on Consummation of Lease to be Subsequently Executed Causing Failure to Execute Such Agreement to Nullify Preliminary Promises.

Evidence in this suit held to show that the negotiations and dealings of the parties, concerning which the BellevueStratford memorandum dealt, were based on the consummation of a lease to be subsequently executed and signed by the parties, and the failure to bring about such enforceable agreement for the completion of the whole object of such negotiation nullified the preliminary promises, which were interdependent, (p. 580.)

(Mines and Minerals, 27 Cyc. p. 692 [Anno]).

(Notk: Parenthetical references by Editors, C. j. Cyc. Not part of syllabi.)

Appeal, from Circuit Court, Kanawha Comity.

Suit for injunction by the Virginian Export Coal Company against the Rowland. Land Company. From the judgment of dismissal, plaintiff appeals.

Affirmed.

Robinson, Warder & Robinson, Poffenbarger, Blue & Dayton, and Price, Smith & Spilman, for appellant.

Brown, Jackson & Knight, Ben;]. B. Brown and Harold A. Ritz, for appellee.

Woods, Judge:

This suit was instituted for the purpose of enjoining an action at law brought by the Rowland Land Company against the Virginian Export Coal. Company to recover unpaid royalties and taxes accruing under a lease, bearing date of February 23, 1918, on 13, 600 acres of coal land, situate in Raleigh County. The circuit court of Kanawha county, on the hearing, denied the relief sought by the Virginian. Export Coal Company, and dismissed its bill. From this ruling the plaintiff appeals.

To a proper understanding of the controversy it is necessary to set forth somewhat in detail the allegations of the bill and answer.

The substantial allegations in the bill are as follows: That prior to February 23, 1918, Elias M. Poston, of Columbus, Ohio, who was then and still, is, president of the New York Coal Company, entered into negotiations with S. C. Rowland, of Baltimore, Maryland, and J. Roman Way of Williamsport, Pennsylvania, who then were and still are, vice-president and president, respectively, of the Rowland Land Company, owning and controlling a majority of the stock thereof, for a lease from the Rowland Land Company for coal mining purposes for a tract of land owned by it in Raleigh County containing 13, 600 acres, including part of a tract known as its "Lease 15"; that pursuant to such negotiations it was agreed between the parties that said Poston and T. E. B. Siler, of Charleston, West Virginia, should cause a corporation to be organized under the laws of this state, for the purpose of taking said lease, and that Poston and Siler and their associates should subscribe $500,000.00 par value of the capital stock of such corporation; that, thereupon, the plaintiff, Virginian Export Coal Company, was chartered under the laws of this state, with an authorized capital of $1,000, 000, Poston and Siler associating with themselves, J. L. Murphy, chief engineer of the New York Coal Company, Matthew Slush and James P. Cummiskey, who were associated with Siler in other coal mining enterprises; that these five subscribed for practically all of the capital stock; that upon an organization of the company, the Rowland Land Company executed and delivered a coal mining lease for the aforesaid property; that at the time said lease was made it was understood between the parties thereto that in order to operate the leased premises successfully it would be necessary for the lessee to make proper arrangements with the Virginian Railway Company, whose line was then constructed to a point within five miles of the leased premises, for the connection and operation of a railroad connecting said premises with said line of said railroad, and there was attached to said lease a written stipulation or agreement, signed by the attorneys for each party to said lease, to the effect that if said lessee should be prevented by reason of anything contained in the twenty-first clause of said lease, requiring the lessee to give preference to the Chesapeake & Ohio Railway Company in all traffic coming to or going from the demised premises, or by reason of any contract or relation existing between the Rowland Land Company, and the said Chesapeake and Ohio Railway Company, the lessee should have the right within ninety days to surrender said lease. The plaintiff further avers that before negotiations were concluded for the lease it had a tentative promise from the Virginian Railway Company to build such spur track, and the Chesapeake & Ohio Railway Company, providing for the delivery by the latter over its tracks, of cars to be used in shipping coal; that this plan was frustrated by the death of the president of the Chesapeake & Ohio Railway Company, a few clays after the lease was executed; that the effort to secure the needed railroad facilities, by connection with the Virginian Railway Company, was blocked by the failure to secure the consent of the United States Government to the construction thereof, as at that time the Government was controlling and operating all interstate carriers, including the said Virginian Railway Company. The plaintiff further avers that because of such refusal and of the inability of the lessee to obtain access to the line of the Virginian Railway Company, the right of the lessee to surrender the lease was recognized by the lessor, and the time for the commencing mining operations under said lease, and for the payment of royalties, was extended by the Rowland Land Company, from time to time, until September 3, 1920, at a meeting at the Waldorf Hotel in New York, at which Poston, acting as the agent of the New York Coal Company, Siler, and also for the Virginian Export Coal Company, and S. C. Rowland, acting as agent for the Rowland Land Company, a memorandum option was agreed upon for a new lease, to the effect that the Rowland Land Company would give to Siler and Poston the option or right to lease the land included in the old lease of February 18, 1918, and about 6, 300 acres in addition thereto, which would furnish access to the railroad of the Chesapeake & Ohio, at certain royalties, minimum rental and terms agreed upon between the parties; and that, if the New York Coal Company and Siler exercised said option to take said new lease, the old lease should thereupon become terminated and no longer binding upon the parties. The plaintiff further avers the payment of $2,500, on September 28, 1920, and $2,500, on October 30, 1920, due under said option and that the Rowland Land Company agreed to an extension of time for the payment of minimum royalty under the old lease, on account of the recognized inability of the plaintiff to obtain connection with the Virginian Railway Company; that after considerable...