Case Name: Ira Junior Keller v. Model Coal Company, et al.
Court: Supreme Court of Appeals of West Virginia
Jurisdiction: West Virginia
Decision Date: 1957-03-19
Citations: 142 W. Va. 597
Docket Number: No. 10832
Parties: Ira Junior Keller v. Model Coal Company, et al.
Judges: Judge Browning concurs in the views expressed in this dissenting opinion.
Reporter: West Virginia Supreme Court
Volume: 142
Pages: 597–616

Head Matter:
Ira Junior Keller v. Model Coal Company, et al.
(No. 10832)
Submitted January 22, 1957.
Decided March 19, 1957.
Charles V. Wehner, for appellant.
Charles H. Brown, Cramer W. Gibson, Hyer & Gibson, for appellees.

Opinion:
Ducker, Judge:
Plaintiff instituted in the Circuit Court of Preston County this suit in equity against the defendants to cancel a coal lease and option existing between the plaintiff and defendants on lands owned by plaintiff, and to obtain from defendants an accounting of the tonnages of coal removed, and discovery of the amount of coal mined on and transported from the premises. The defendants demurred to the plaintiff's original, amended and supplemental bills of complaint, and by the decree of the Circuit Court, the defendants demurrers were sustained without prejudice to the right of the plaintiff to institute and prosecute any actions at law against the defendants, to which decree plaintiff prosecutes this appeal.
The allegations of the bills of complaint are in effect: That the plaintiff is the owner of all of the Bakerstown seam of coal under two tracts of land, aggregating 805% acres in Kingwood, Preston County, West Virginia by inheritance in 1952 by plaintiff from his father as to one-half thereof, and by purchase in 1954 by plaintiff from his brother as to the other one-half thereof; that said coal was subject to a lease dated July 27th, 1951, executed by plaintiff's father to defendant, Model Coal Company, a corporation; that said lease was "for such a period as the Lessee shall be able to profitably mine and remove the coal by the deep mining method, or any other method, or until the coal that is capable of being profitably mined is completely removed"; that as advance royalty $500.00 was paid upon the execution of the lease and $500.00 paid in six months thereafter, and that a royalty of $.15 per ton, with credit for all royalty paid, should be paid monthly; that statements of all railroad and truck scale weights were to be furnished to lessor; that the lessee is given an option to purchase the property, with credit for all royalty paid, for the price of $12,000.00 within five years, or of $15,000.00 at the end of ten years; that lessee will mine and remove the coal in a workmanlike manner and maintain its operation in strict conformity with all valid State and Federal mining laws and regulations; that lessee will conduct its mining operations in such a manner as to be prepared to sell custom coal as well as coal for commercial purposes upon the open market; that upon the termination of the lease by other means than forfeiture lessee may remove machinery and other personal property from the land; that lessee has failed to mine and remove the coal that could have been profitably mined and removed; that the quality of the coal was good, the market available and all coal that could have been produced could have been sold at a profit; that lessee failed to install necessary equipment, did not conduct its mining operations so as to be prepared to sell custom coal; that numerous individuals employed by lessee were unable to mine and sell coal for lessee because lessee failed to provide necessary equipment so to do; that lessee violated the terms of the lease by failing to comply with the mining laws in at least sixteen ways, and that by reason thereof, the mine was closed on December 31, 1954 by the State Mine Inspector and is still closed; that since said closing, plaintiff has received no royalty except for 20.60 tons, and that for the period of over three and one-half years the tonnage totaled 1632.91 tons, which at $.15 per ton was $244.94; that the few reports of coal mined sent to plaintiff were signed by Marrara Coal Company; and that Model Coal Company attempted to assign the lease to Raymond Hartman, the other defendant, who, being informed of violations of the lease, had previously attempted to purchase the coal property so leased.
The grounds of defendants' demurrers are: that the plaintiff has an adequate remedy at law; that plaintiff is not in possession of the premises and therefore cannot bring a suit for the removal of a cloud on title; that the instrument sought to be cancelled contains an option to purchase as well as a coal lease, and that the facts alleged in the bill do not vitiate the option; that there are conflicts between the pleadings and the lease contract; that the bills of complaint allege only breaches of covenants in the lease for which the plaintiff has an adequate remedy at law; that the bills of complaint with its exhibit show there is no forfeiture provision in the lease; that plaintiff is asking a court of equity to enforce a forfeiture, and that there are no breaches of the provisions of the lease for which equity would declare a forfeiture; and that the amended and supplemental bill pleads evidence instead of facts necessary to establish an equitable cause of action.
The decree of the Circuit Court in sustaining the demurrers of the defendants to the bill of complaint and the amended and supplemental bill of complaint has the practical effect, though not so specifically providing, of dismissing the bills and entering judgment for defendants without prejudice to plaintiff to sue at law. The question for determination by this Court now is whether or not the plaintiff has alleged facts sufficient for a court of equity to grant, in whole or in part, the relief sought by the plaintiff.
The plaintiff's assignments of error to the Court's decree sustaining the demurrers of defendants, treated collectively, and so far as they are necessary for a determination of the issues, are: (1) that equity will enforce a forfeiture of the lease, (2) that if the lease is forfeited, then the option given to lessee to purchase the property will also be forfeited, and (3) that the plaintiff does not have an adequate remedy at law. Of these in their order.
The several factual allegations in the hills of complaint upon which plaintiff bases his prayer for forfeiture of the lease and option are chiefly that the defendants have failed (1) to mine and remove the coal that could have been profitably mined and removed, (2) to install necessary equipment to mine and sell custom coal, and (3) to provide equipment facilities for the individuals employed by defendants engaged in the mining operations to mine the coal; and further, (4) that the mine has been closed by the State Mine Inspector on account of defendants' violation of the mining laws in some sixteen ways, (5) that the total royalty reported to plaintiff by defendants for the whole period the lease had been in effect was only $244.94, and (6) that defendant lessee had assigned the lease to the individual defendant herein who at the time of the assignment knew of the alleged violations of the terms of the lease, and who previously had attempted to purchase the property embraced in the lease.
Are these allegations of facts sufficient to entitle the plaintiff to a decree forfeiting the lease, and if so, also a forfeiture or cancellation of the option?
There was no division or apportionment of the consideration for the lease agreement between the lease and the option, and as all the consideration is for the lease and option jointly, we are of the opinion that both must stand or fall together. They are both so related and so dependent on each other in purpose and intent that if the lease is to not be cancelled, we think it is only reasonable to conclude that the land remains subject to the option, or otherwise both lease and option shall fall.
The decisions of this Court are clearly to the effect " that equity will not enforce the forfeiture of a vested estate, because of the breach of a subsequent condition. The lessor is left to his remedy at law." Engle v. Oil Company, 100 W. Va. 301, 303, 130 S. E. 491, and cases cited therein, and further that "It is familiar law that forfeitures are not favored in courts of equity." Carder v. Matthey, 127 W. Va. 1, 7, 32 S. E. 2d 640, and cases cited. In the absence of a forfeiture provision, this Court has held that a mere failure to comply with some of the covenants or the making of partial performance only would not give a court of equity jurisdiction to set aside and vacate the contract between the parties. Vaughan v. Napier, 92 W. Va. 217, 114 S.E. 526; Bankers Pocahontas Coal Co. v. Central Pocahontas Coal Co., 113 W. Va. 1, 166 S.E. 491.
This question has been in some instances, we think, properly considered on the theory of abandonment, and particularly so where there is not contained in the terms of the lease any provision for a forfeiture upon failure on the part of the lessee to develop the property as contemplated or specified in the lease. Professor Donley, in his work, "The Law of Coal, Oil and Gas in W. Va. and Va.", Chapter VII, §93, says that "The principle of implied covenant or condition for development has been mentioned in cases involving coal leases, but here again no clear distinction is made between that principle and the doctrine of abandonment", and he cites several cases in which leases were cancelled because of abandonment whether the condition as to development was express or implied, such cases so cited being Bluestone Coal Co. v. Bell, 38 W. Va. 297, 18 S.E. 493; Starn v. Huffman, 62 W. Va. 422, 59 S.E. 179; Huggins v. Daley, 99 Fed. 606; Clintwood Coal Corporation v. Turner, 133 Va. 464, 114 S.E. 117.
The doctrine of abandonment was recognized and discussed in Martin v. Coal & Oil Corp., 101 W. Va. 721, 724, 133 S.E. 626, in which the Court said: "While not attempting to point out all these distinctions, we may say an important one, however, is that, since abandonment is a question of intention, the acts of the lessee may indicate his intention to abandon the enterprise he has undertaken under the lease, when these acts would not be sufficient to show neglect or a failure to develop or produce sufficient to entitle the lessor to a forfeiture of the lease."
From the facts alleged, can it be said that the lessee has intended to abandon the lease, and that by virtue of such abandonment he is entitled to have a decree of forfeiture of the lease? We are of opinion that the plaintiff has not alleged sufficient facts to show with reasonable certainty an intention on the part of the lessee to abandon the enterprise, and that in the absence of such facts, the plaintiff is not entitled to a decree of forfeiture of the lease, and consequently no forfeiture or cancellation of the option.
We shall next consider whether the plaintiff has an adequate remedy at law as to the other relief sought by him in this suit, or whether having an adequate remedy at law he may still have the other relief in this suit. In other words, shall equity retain jurisdiction here for the purpose of granting relief on the basis of discovery and accounting as prayed for by plaintiff, even though the main purpose of the suit, namely, forfeiture, is denied?
There are many decisions of this Court relating to accounting and the right of discovery as a basis for an accounting. It is stated "Equity has jurisdiction of a suit for an accounting, when the bill prays for a discovery and alleges facts which show that a discovery is essential to the establishment of plaintiff's rights." Syl. 1, Belcher v. Big Four Coal & Coke Co., 68 W. Va. 716, 70 S.E. 712; Blue v. Hazel-Atlas Glass Company, 93 W. Va. 717, 726, 117 S.E. 612; Fredeking v. Grimmett, 86 S.E. 2d 554, (W. Va.).
This Court, in Hays v. Bowser, 110 W. Va. 323, 326, 158 S.E. 169, said "It is equally well settled, however, that equitable and legal remedies are concurrent in matters of account. Equity may entertain a bill on behalf of the owner of property against one entrusted with its operation, when a discovery is needed by the owner and he is entitled to an account."
In State v. Rodgers, Judge, 138 W. Va. 562, 569, 76 S.E. 2d 690, Judge Lovins expressed the principles, with a citation of authorities, in the following language: " 'When equity can do complete justice between the parties, it will never turn them out of court to pursue their remedy at law; but a court of equity having complete jurisdiction of the parties and the subject matter, should make such decree as will settle the rights of the parties, do complete justice between them and close the controversy.' Though equity has jurisdiction upon one ground, a court of equity should give complete relief even 'in matters as to which, considered alone, it would not have jurisdiction.' The foregoing rule is qualified to the effect that facts must be alleged in the pleadings and established by proof, i.e., rightfully invoked before the rule is applicable."
Also, in Dudley v. Niswander, 65 W. Va. 461, 64 S.E. 745, there is the following language: " ' Equity has jurisdiction of a bill seeking to substitute an equitable for a legal forum when there is a prayer for discovery and there are averments showing the indispensibility thereof ' ". And this Court has further held "The facilities of a court of equity are much better adapted to settle a complicated account, particularly when a discovery is sought, than are the facilities of a court of law." Dankmer v. City Ice & Fuel Co., et al., 111 W. Va. 676, 163 S.E. 430. See also 6 Michie's Jurisprudence, page 190, Discovery, §5; 1 Hogg's Equity Procedure, Third Edition, Chapter 8.
The plaintiff's bills of complaint are phrased and drawn primarily for the purpose of pleading a case of forfeiture of the lease and option, and only secondarily for the purpose of discovery and accounting. Apparently the plaintiff is not as much concerned with seeking a recovery of what royalty might be due him as he is with the recovery of the possession of the property, hence the paucity of extensive allegations as to the need for discovery and accounting. In addition to the allegations relating to the lack of development, the small amount of royalty received and the improper use of the property, the plaintiff has alleged "the need for discovery of whether the-true and accurate amount of coal shipped from said premises is the same as that reported to your plaintiff has been paid the full amounts due by defendant". And in the prayer of the bill, plaintiff prays for "an accounting of the tonnages of coal removed from said premises, the information for which was not furnished monthly to your plaintiff, and is peculiarly within the knowledge of the corporate defendant herein, discovery of the amount of coal transported, by truck and by railroad weight, or otherwise, the amount of custom coal removed and sold, and a court of law being inadequate to render the plaintiff the relief he seeks and to which he is entitled, that this Court of Equity takes cognizance of the complete matters between and among the parties to this suit". The matter of discovery is often necessary to an accounting, and an accounting is likewise often necessary in order to determine whether there is anything due under such a contract as is here involved. Furthermore, it can hardly be gainsaid that courts of equity in most instances afford more convenient and more thorough procedure for determining satisfactorily such matters. May then these allegations be considered sufficient for the Court to retain jurisdiction of this cause for the purpose of either discovery or accounting, or both?
Although the bills of complaint may be considered as lacking to some extent in specific allegations stating facts to support the need for discovery and accounting, we think that the many allegations relating to the various failures of the defendants to comply with the terms of the lease and the extremely poor results of the defendants' operations thereunder, particularly the small amount of coal accounted for, add definite support to and supplement both the plaintiff's allegations of his need for discovery and his prayer reciting that the facts as to such matter were peculiarly within the knowledge of the defendants. The allegations and prayer are, when read together and considered as a whole, sufficient to require the Court to retain jurisdiction for the purpose of enabling the plaintiff to have the discovery and accounting prayed for by him as a part of the relief sought in this suit. The defense that the plaintiff has an adequate remedy at law may not be definitely determined at the present stage of this suit, and even if it does now or eventually appear that he has or may have an adequate remedy at law, such facts will not, according to the authorities cited, deprive a court of equity of jurisdiction in such a matter.
Inasmuch as the bills allege several grounds of relief, any one of which shall be sufficient in law, the demurrer should not have been sustained. Sperry v. Collieries Co., 87 W. Va. 223, 104 S.E. 486.
Our decision on the principal issues as hereinbefore expressed renders it unnecessary to consider as pertinent or material any other points raised by the demurrers, assignments of error, or specified in the briefs of counsel filed herein.
Accordingly, we are of the opinion that the Circuit Court was correct in sustaining defendants' demurrers as to forfeiture, but that the Circuit Court erred in sustaining the defendants' demurrers as to discovery and accounting, in which latter respect the demurrers should have been overruled, and therefore the order of the Circuit Court is in that respect reversed, and the cause remanded for further proceedings in accordance herewith.
Affirmed in part; reversed in part; and remanded with directions.