Wheeling Creek Gas, Coal & Coke Co. v. Elder

• Decision Date: 03 May 1909
• Parties: WHEELING CREEK GAS COAL & COKE CO. v. ELDER et al. SAME v. CROW et al. (two cases).
• Court: U.S. Court of Appeals — Fourth Circuit

170 F. 215

WHEELING CREEK GAS COAL & COKE CO. v. ELDER et al.

SAME v. CROW et al. (two cases).

United States Circuit Court, N.D. West Virginia.

May 3, 1909

In August, 1899, Staggers procured from the farm owners contracts touching about 1,500 acres of the Pittsburg or River seam of coal with mining rights in Marshall county W.Va. In these writings the same form was used in all, and they are practically identical, except as to names and descriptions of the lands. The material part of them is that the landowners 'agree to sell and convey to H. C Staggers, party of the second part, his heirs and assigns all the coal of Pittsburg or River vein' in and under the lands set forth and described, 'with the right to mine and remove all and every part of the same ' under conditions prescribed, 'for which the party of the second part, heirs or assigns, shall pay six dollars per acre, * * * one-third when deed is signed, sealed and delivered, the remainder in two equal annual installments thereafter. ' It is further provided, 'a general warranty deed, clear of all incumbrances, to be made to the said party of the second part, his heirs and assigns, when the first payment is made (party of the first part to furnish complete abstract of title) and others are secured by deed of trust mortgage on said property hereby sold. It is expressly understood and agreed that if the first payment aforesaid is not made on the 30th day of November, A.D. 1899, or as soon thereafter as the title shall be examined and accepted by the party of the second part, or his heirs or assigns, this agreement shall be considered as rescinded, and neither party shall be bound thereby. ' No consideration was paid at the time to the landowners for the execution of these writings, nor did Staggers himself sign them. On October 24, 1899, Staggers assigned all his right, title, and interest in these contracts to D. H. and S. H. Pearsall, having done nothing toward compliance with them. On November 22, 1899, 'D. H. Pearsall, Treas. Wheeling Creek Gas Coal and Coke Company,' served notices on the landowners that 'we, the undersigned, hereby accept your offer for the sale of your coal underlying your farm * * * according to the options made to H. C. Staggers, on the date of August 17th, 1899, subject to examinations and approval of the titles thereto, with complete abstract of title. ' On the same day service of notice was accepted by, and a small sum varying from $5 to $20 was paid to, each landowner and a receipt taken as follows: 'Received of D. H. Pearsall, Treasurer of the Wheeling Creek Gas Coal and Coke Company * * * as part purchase money on the within tract of coal. ' At May rules, 1901, the Wheeling Gas Coal & Coke Company filed its bills against a number of the landowners, one against each, but in each one the allegations are practically the same, setting forth the facts as above in detail, and alleging that 'before the 30th day of November, 1899, the said D. H. and S. H. Pearsall proceed(ed) to accept the terms and conditions of said options, and notified the said * * * to prepare abstracts and deeds' for the coal; 'that at the time of said notice the said D. H. Pearsall and S. H. Pearsall held the said options for and as agents of the plaintiff, the Wheeling Gas Coal & Coke Company, and the said notice and acceptance was in fact and in truth for the said Wheeling Creek Gas Coal & Coke Company. That a contract and understanding existed at that time by which the said options, contracts, and all matters pertaining to the sale of said Pittsburg or River vein of coal underlying the said tracts of lands were the property of the said Wheeling Creek Gas Coal & Coke Company. That on the 26th day of April, A.D. 1901, in accordance with a previous contract, the said options and contracts were duly assigned to the said plaintiff, by virtue of which said assignment this plaintiff became and is now fully substituted to all the rights and benefits under the said option and contract that the said H. C. Staggers and the said D. H. and S. H. Pearsall were entitled at any time. ' Refusal on the part of the landowner to comply with the contract, to accept the money, or execute the deed for the coal is then charged and specific performance is prayed. As stated, both the facts and the pleadings are substantially the same in all the cases. Quotations have been made above from the pleadings in the first or Elder Case, and future references in this statement will be made from it. This original bill was remanded to rules, and a first amended bill was filed at September rules, 1901. This amended bill is almost in haec verba that of the original one, except it makes the wife of the landowner a party defendant, charges the option to Staggers to have been made by the husband and wife, charges default and refusal in execution on both, and files copy of the assignment under date of April 26, 1901, of the Pearsalls to the plaintiff company, a corporation under the laws of West Virginia.

To this bill written demurrer was filed by the landowner, alleging the bill to show on its face a noncompliance with the conditions of the option within the time required. That it appears from the face of the bill that plaintiff company had no interest in the contract prior to April 26, 1901, by which time the contract was forfeited and void. That a deed exhibited with the bill showed the Pearsalls had only an undivided eighth interest in the option, and the balance of interest belonged to persons not made parties. This demurrer was sustained by the state court, and a second amended bill was filed. This second amended bill alleges the plaintiff to be a corporation under the laws of the state of West Virginia, and, after repeating the allegations of the two first bills as to the option given Staggers and his assignment thereof to the Pearsalls, alleges that at the time of this assignment the Pearsalls had been commissioned by a number of persons named to purchase a suitable coal field, and that the assignment taken by the Pearsalls was for the benefit of themselves and these associates; that on November 7, 1899, the Pearsalls and their associates met and ratified the taking of the assignment of the option, organized themselves into a company or association by the name of the Wheeling Creek Gas Coal & Coke Company, agreed to be incorporated under this name and to act under this name until incorporated; that at this meeting S. H. Pearsall was elected president, D. H. Pearsall treasurer, and T. H. Patton secretary, and the affairs of such association were conducted by such officers until the company was incorporated on January 9, 1901, whereupon on April 26, 1901, the Pearsalls assigned to it the options. It is further alleged that the association and the landowner agreed at the time the notice was accepted and the small sum was paid that the association and landowner would join together with other interested owners in employing an attorney to make abstracts of titles and prepare deeds, and did employ attorneys for this purpose; that no further payment of purchase money was to be required until these abstracts were made; that defects in title were found and corrected, but when the company sought to pay the money and perform the contract the landowner refused on his part to comply. Specific performance is again prayed. To this second amended bill written demurrer was entered based on the same grounds as the former one, and, in addition thereto, alleging the notice served on the defendants not to be in accordance with the option, and that acceptance of the option was made upon condition the defendants surveyed the lands, a condition not required by the contracts; that the bill seeks to set up verbal contracts, indefinite and uncertain, relating to the sale of real estate, and therefore void under the statute of frauds. On April 18, 1902, the circuit court of Marshall county sustained this demurrer to the second amended bill, and, the plaintiff not seeking further to amend, dismissed the several causes with costs. No suspension of these decrees was asked for, but an appeal was subsequently taken to the Supreme Court of Appeals of the state in the Elder Case, and the decree in that case, by that court, was on December 5, 1903, reversed, the demurrer to the second amended bill was overruled, and the cause remanded with direction to require further amendment by making Staggers, the Pearsalls, and their associates parties. After the final decrees dismissing the bills in the lower court and before appeal taken, the landowners sold and by deeds conveyed their coal to the defendant Josiah V. Thompson and 13 others. These deeds were duly admitted to record. These conveyances were made on July 11, 1902, and it was not until October 7, 1902, that the appeal was taken in the Elder Case. As stated, no appeal in the other cases was taken to the decrees of April 18, 1902, dismissing the causes, but after the reversal in the Elder Case on February 12, 1904, an order was entered in each, by consent, setting aside such final decrees and overruling the demurrers in each to the bills.

On March 26, 1904, the plaintiff filed its third amended bill against the original landowners and wives, Staggers, the Pearsalls and their associates, and the defendant Josiah V. Thompson and his 13 associates reiterating in great detail the allegations and statement of facts set forth in its former bills, the sale to Thompson and associates, and praying that the landowners be required to specifically perform the option contracts, and to this end that their deeds to Thompson and associates be set aside and canceled.

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