Va.N Export Coal Co v. Row-land Land Co

• Decision Date: 13 January 1926
• Docket Number: (No. 5008.)
• Citation: 131 S.E. 253
• Parties: VIRGINIAN EXPORT COAL CO. v. ROW-LAND LAND CO.
• Court: West Virginia Supreme Court

131 S.E. 253

VIRGINIAN EXPORT COAL CO.

v.ROW-LAND LAND CO.

(No. 5008.)

Supreme Court of Appeals of West Virginia.

Jan. 13, 1926.

Rehearing Denied Feb. 10, 1926.

(Syllabus by the Court.)

[Ed. Note.—For other definitions, see Words and Phrases, First and Second Series, Contract.]

Appeal from Circuit Court, Kanawha County.

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, of Grafton, and Poffenbarger, Blue & Dayton, and Price, Smith & Spilman, all of Charleston, for appellant.

Brown, Jackson & Knight, Benj. B. Brown and Harold A. Ritz, all of Charleston, for appellee.

WOODS, J. 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, Md., and J. Roman Way, of Williamsport, Pa., 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, W. Va., 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 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 5 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 & Ohio Railway Company, the lessee should have the right within 90 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 deathof the president of the Chesapeake & Ohio Railway Company a few days 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 commence-ing 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 Foston, 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 correspondence between Poston, on the one hand, and Way and Rowland, on the other, these three parties met in New York on the 13th of December, 1920, and, after a full consideration and discussion of the new proposition, Poston and Siler accepted said option of September 3, 1920, and agreed to take said new lease, and that it was agreed between Rowland and Way, representing the Rowland Land Company, Poston and Siler, representing the Virginian Export Coal Company, and the said Siler and New York Coal Company, that the said lease of February 23, 1918, was terminated, surrendered, and rescinded, and that the Rowland Land Company should lease to the New York Coal Company, or such lessee as it should nominate, effective as of January 1, 1921, said 13, 600 acres formerly leased, as aforesaid, and the said 6, 300 acres in addition thereto upon certain terms agreed to between the parties, namely: (1) The term of said lease to be either for 30 years, with a renewal provision for a further term of 30 years, of for 50 years without renewal. (2) The royalty was to be 10 cents per net ton of 2, 000 pounds, payable quarterly, instead of the royalty of 8¹/₂ cents, provided in said old lease of February 23, 1918. (3) The lease to contain no obligation on the part of the lessee to commence work thereunder at any specified time. But (4) in lieu of commencing operations and mining coal and paying royalty thereon, the lessee to pay rental or minimum royalty as follows, payable quarterly: For the year 1921, $20,000; for the year 1922, $40,000; for the year 1923, $45,000; for the year 1924 and each year thereafter, $60,000, the royalty on all coal mined at 10 cents a ton to be credited on said minimum payments. (5) The lease to contain the customary provisions relating to abatement of minimum royalty in case of strikes such exceptions, however, to be effective only after the mining of coal had been commenced. (6) It was agreed that the sum of $10,000 paid under the option of September 3, 1920, above referred to (including the two monthly payments of $2,500 for September and October theretofore paid as above set forth, and the further sum of $5,000 paid as below stated), was to be accepted by the Rowland Land Company and applied in payment of the first two quarterly payments of minimum rentals, becoming due April 25 and July 25, 1921, under said agreement. (7) The lessee was to pay taxes on the mineral or coal in the leased premises (including said 13, 600 acres formerly leased to said Virginian Export Coal Company) and on the improvements placed thereon by the lessee, commencing with the year 1921. (8) The lessee was to have the right, from time to time, to subdivide and sublease said 19, 900 acres in such manner as it might desire and deem advisable; it being further understood that said lessee did not intend itself to operate said premises, but to act as a holding and leasing company. (9) The lessee to have the right to use all timber which the lessor owned upon said premises below a specified size, for mining purposes. (10) The lessee and the lessor jointly to have the right to use and occupy the hotel and hotel property of the lessor situate at Colcord. (11) The lessee to have the right to haul through or over the leased premises without charge coal from other lands of the lessee.

It is further agreed that, if the said lease was not made to the New York Coal Company, then the performance thereof by any other lessee to whom it should be made was to be guaranteed by said company, which, plaintiff avers, was known to said Rowland and Way to be responsible and solvent. Alease...