Title: Cochran v. Ollis Creek Coal Company

State: west-virginia

Issuer: West Virginia Supreme Court

Document:

206 S.E.2d 410 (1974) Alex J. COCHRAN v. OLLIS CREEK COAL COMPANY et al., Defendants below, Interstate Development Co., Appellant. No. 13368. Supreme Court of Appeals of West Virginia. July 9, 1974. *412 James E. Spurlock, Richard W. Cardot, Elkins, for appellant. Morton & Garrett, Ernest V. Morton, Jr., and Wm. C. Garrett, Webster Springs, for appellee. *411 NEELY, Justice: This is an appeal from a final order of the Circuit Court of Webster County which entered judgment on a jury verdict in favor of Alex J. Cochran in the amount of $6,427.15. The plaintiff below, Cochran, brought this action against the appellant, Interstate Development Company, upon the grounds that certain coal mined and stockpiled by Ollis Creek Coal Company (who made no appearance in this action) was assigned to Interstate in consideration of Interstate's undertaking to pay and discharge obligations of Ollis Creek, which included claims for wages, and plaintiff's claim against Ollis Creek for trucking services performed by his company. Plaintiff maintained that in order to induce plaintiff to transport stockpiled coal to the railroad, and to induce plaintiff to refrain from attaching coal already stockpiled by Ollis Creek, Interstate agreed to pay plaintiff the debt owed to him by Ollis Creek. Interstate Development Company and Ollis Creek Coal Company were independent corporations which worked closely together for the production of coal. Interstate Development Company leased to Ollis Creek the land on which Ollis Creek's mines were located. The tipples used for loading the Ollis Creek coal were managed by Interstate Development Company. The equipment used by Ollis Creek in its deep mining operation was owned by Ollis Creek; however, much of the equipment was purchased from Interstate under an agreement which permitted Interstate to deduct fifty cents from the purchase price of each ton of coal shipped by Ollis Creek to Interstate in payment for the equipment. The evidence discloses that Ollis Creek obtained financial advances and loans from Interstate for operating capital and arranged to repay these loans through deductions in the purchase price of each ton of coal sold by Ollis Creek to Interstate. The two corporations were separately owned and managed, and neither corporation had common owners of stock, common officers, nor common directors. Interstate provided advisory and coordinating services to Ollis Creek with regard to such subjects as mine safety and labor relations. In January 1972 Ollis Creek ceased operations for lack of funds and the employees of Ollis Creek attached a certain stockpile of coal near the Ollis Creek mine to enforce their wage claims. On January 19, 1972 employees of Ollis Creek, Interstate officials, and the plaintiff, Mr. Cochran, met at Summersville, West Virginia for the purpose of reaching a settlement with regard to the Ollis Creek debts. As a result of that meeting Interstate advanced $18,000 to Ollis Creek for the specific purpose of paying Ollis Creek's employees and obtaining a release of the attachment in return for an assignment of all of Ollis Creek's interest in its mining equipment to Interstate. As a result of this meeting a memorandum was issued by Interstate Development Company which provided as follows: That part of the memorandum which the Court has set forth in italics, particularly the last sentence referring to Mr. Cochran, is the part upon which plaintiff relied in his contract action. The appellant maintains that the admission into evidence of the relationship between Ollis Creek and Interstate was prejudicial error as the plaintiff did not demonstrate any unity of ownership, unity of control, fraud, or agency which would permit the Court to pierce the corporate veil and hold Interstate directly liable for Ollis Creek's debt. The trial court agreed that the corporate relationship was not of such a nature as to make Interstate directly responsible for Ollis Creek's debts. However, this Court finds that plaintiff fairly tried the issue of corporate unity, and while plaintiff was not successful in proving either unity of control, fraud, or agency, those questions were placed in issue by plaintiff's theory of the case, and we hold that the evidence introduced for the purpose of establishing direct liability of Interstate for Ollis Creek's debts was not prejudicial, as the court correctly declined to give plaintiff's instruction on that subject and gave defendant's instruction No. 1 which said that if past services rendered by plaintiff were not rendered at Interstate's request, then such past services alone without more would not constitute sufficient consideration to sustain Interstate's promise to pay plaintiff. The rule is well stated in 29 Am.Jur.2d, Evidence, § 255, as follows: *414 Appellant's primary assignment of error is that plaintiff did not prove any contract between himself and Interstate which would permit him to hold Interstate liable to him for Ollis Creek's debt. This Court disagrees and finds that the memorandum quoted above is evidence of a contract between Cochran and Interstate, the consideration for which was Cochran's forbearance in not prosecuting his legal rights by attaching the stockpile of coal. Accord: First National Bank v. Marietta, 151 W.Va. 636, 153 S.E.2d 172 (1967). The evidence in the record discloses that Cochran contacted his attorney and was advised that he had a right to attach the assets of Ollis Creek. Cochran did not immediately pursue this remedy, but rather waited until the meeting at Summersville at which time he was satisfied that his claim would be paid by the statements of the officers of Interstate. Cochran introduced evidence that it was in reliance upon those statements that he refrained from attaching the coal and that the officers of Interstate bargained for such forbearance in promising to pay Ollis Creek's debt. Appellants maintain that Cochran's action required reliance upon the doctrine of promissory estoppel, and that Cochran could not successfully invoke the doctrine because he failed to prove that his rights had been prejudiced as he did not demonstrate that at the time of the suit he still could not have attached the coal. While successful reliance upon the doctrine of promissory estoppel may require an irremediable change in position, Norfolk & W. R. Co. v. Perdue, 40 W.Va. 442, 21 S.E. 755 (1895) this Court holds that Cochran's suit in contract did not require reliance on promissory estoppel, as he had a contract, the consideration for which was forbearance in the enforcement of a legal right. See annotation, 78 A.L.R.2d 1414, § 15 and cases cited in that annotation. In general promissory estoppel is an equitable doctrine which, under certain circumstances, will nullify the defense of lack of consideration in a contract action. 7 M.J., Estoppel, § 14. Thus in certain circumstances where the promisor leads the promisee to rely to his detriment courts will permit the promisee to recover in spite of a lack of consideration to the promisor. However, in this case there is no question of promissory estoppel as the promisor received the traditional consideration of forbearance in the enforcement of a legal right. By such forbearance plaintiff accorded the defendant an immediate benefit in return for the defendant's assurance that the debt to plaintiff would be paid. The defendant acquired the immediate right to dispose of the coal without hindrance by any writs of attachment and the plaintiff suffered the detriment of potential removal of the coal beyond his power to enforce a lien. Forbearance in the enforcement of a legal right is a traditional consideration in contract law. As this Court said in Huff v. Bank, 110 W.Va. 389, 158 S.E. 380 (1931): Therefore, in the event of breach of a contract grounded upon the consideration of the promisee's forbearance in the enforcement of a legal right, it is not necessary for the promisee to prove that he has suffered a deterioration in his original position, and he may elect either to enforce the original right or sue directly on the contract. While the Court has discovered no West Virginia case directly on point with regard to the promisee's right to elect his remedy under the factual circumstance of forbearance, the cases of Bare v. Victoria Coal & Coke Co., 73 W.Va. 632, 80 S.E. 941 (1914) and Annon v. Lucas, W.Va., 185 S.E.2d 343 (1971) stand generally for the proposition that in a contract action where one has been wronged and has a *415 number of remedies, he may select the most efficient one. In the case at bar, the promisee elected not to attach the coal after breach, which he could have done, but rather to sue Interstate directly on the contract. Under the evidence in this case we find plaintiff's instruction No. 6 to be a correct statement of the law, particularly when read in conjunction with defendant's instruction No. 4. Plaintiff's instruction No. 6 said: Defendant's instruction No. 4 said: Accordingly the judgment of the Circuit Court of Webster County is affirmed. Affirmed.