91 W. Va. 291 | W. Va. | 1922
By the decree complained o’f on this appeal, a bill .by a mining corporation claiming right to an assignment of one
But little dispute as to the facts is found in the record. The rights of the parties are determinable, for the most part, by application of the law to a state of facts disclosed by documentary evidence, the lease, a clause therein, forbidding assignment without the consent of the lessor in writing, and the previous assignment made with such consent. The vital and controlling inquiry in the cause seems to be the effect of the lessor’s written assent to the prior assignment. For the plaintiff and one of the defendants, the former as-signee, it is insisted that the lessor, by such assent, exhausted the right and power reserved to it, by the restrictive clause, and that further assignments can be made without its consent. In other words, it is claimed that, by reason of the assent to the assignment, the lease in the hands of the as-signee may now be assigned as freely as if no restriction upon assignment had been inserted in it.
The two leases are both dated, May 24, 1917, and were executed to A. J. Dalton and Edward H. Butts, by the Coal River Mining Company. Clause 17 of each of them reads; ‘ ‘ This lease shall not be assigned or mortgaged by the lessees, or any part thereof sub-let, except by consent of the lessor in writing.” An assignment of both was made by Dalton and Butts, to the Brush Creek Coal Company, a corporation, and bears date, June 19,1918. It contains a preamble reciting the execution of the leases, the said 17th clause of each, an understanding and agreement that the lessees would transfer them to a corporation to be organized by them, and the desire of the Brush Creek Coal Company, to accept them, under the terms and conditions therein contained, as in the assignment set out. For and in consideration of one dollar and a royalty of three cents per ton, on all coal mined, used, manu
One of the leases embraces two lots or parcls of land containing in the aggregate 1,635.40 acres, designated Leases Nos. 6 and 7. The other covers four tracts containing in the aggregate 2,790.99 acres, designated Leases Nos. 4, 5, 8 and 9. The contract for a second assignment, enforcement whereof is sought by the bill, is limited to Lease No. 6, containing about 600 acres, and part of Lease No. 7, containing about 735 acres. As to No. 6, there is a written memorandum of the agreement, but, as to No. 7, the agreement was oral.
At the date of execution of ithe two leases, the country in which the land lies seems to have been new and undeveloped, wherefore they were not made effective in all respects, if at all, until after the lessor had constructed a railroad into the territory. By the 20th clause of each lease, it wms provided, that it should not go into effect, except upon conditions set forth in certain agreements between the parties, to which it was annexed. But, by declarations written in them, they were both made effective on and after August 1, 1918, one such declaration having been made by Dalton and Butts and the other by the Brush Creek Coal C.ompanj'-.
On one side, the' pleadings and argument seem to proceed upon the theory of a forfeiture of the lease, by reason of the attempted assignment, and, on the other, of impossibility of such forfeiture and right of re-entry, because, it is urged, the restriction upon assignment was exhausted and rendered ineffective by the written assent given to the assignment to the Brush Creek Coal Company. In this way, the'argument has been reduced to a single question. Solving it in their own ways, the attorneys on each side predicate their respective claims of results, and consequences upon their own solutions. Whether the Coal River Mining Company has the right of re-entry it claims depends upon the interpretation of the lease, as to the status of the covenant or condition in question, with reference to the re-entry or forfeiture clause.
Forfeitures of estates are not favored in law. The right to forfeit must be clearly stipulated for in terms, else it does not exist. Every breach of a covenant or condition does not confer it upon the injured party. It never does, unless it is so provided in the instrument. Such breaches are usually compensable in damages, and, if a forfeiture has not been stipulated for, it is presumed that the injured
Another principle to be observed is that, in so far as a covenant is .relied upon to sustain a claim of forfeiture it is always strictly construed, in respect of that claim. The instrument must give the right of forfeiture in terms so clear and explicit as to leave no room for any other construction, or it does not exist. Peerless Carbon Black Co. v. Gillespie, cited; Jackson v. Silvernail, 15 Johns. (N. Y.) 278; Elevator Cases, 17 Fed. 201; Finley v. King’s Lessee, 3 Pet. 346; Doe v. Carter, 8 T. R. 61; Phila. & E. R. Co. v. Catawissa R. Co., 53 Pa. St. 20; Tiffany Real. Prop., sec. 69; Jones Real Prop., see. 632; 4 Kent’s Com. 129. In obedience to this principle, it is uniformly held that, in case of a doubt as to.whether a clause in a deed is a condition subsequent, breach of which would divest an estate, or a covenant breach of which would merely create liability for damages, the provision is such a covenant and not a condition. Millan v. Kephart, 18 Gratt. 9; Doe v. Phillips, 9 Moore 46; Boone v. Clark, 129 Ill. 466; Rawson v. School District, 7 Allen (Mass.) 125; Graves v. Deterling, 120 N. Y. 447; Woodruff v. Woodruff, 44 N. J. Eq. 349; Hoyt v. Kimball, 49 N. H. 322; Scovill v. McMahon, 62 Conn. 378; Chicago etc. Ry. Co. v. Titterington, 84 Tex. 218; Thornton v. Trammell, 49 Ga. 202; Hawley v. Kafitz, 148 Cal. 393; St. Peter’s Church v. Brogaw, 144 N. C. 126; Ecroyd
When the right has been clearly and unequivocally secured by the terms of the contract, it does not accrue unless nor until there has been an equally clear and unequivocal breach of the condition. Neither intent nor purpose to assign is a violation of the agreement, however manifest, nor do initial steps in the process of assignment, effect a forfeiture or confer a right of re-entry. The assignment must be complete. A cropping contract between the lessee and a third person is not an assignment. Bedford v. Grayhill, 7 Ky. L. Rep. 373. To effect an assignment, an instrument relied upon for such purposes must contain apt words. Brewer v. Dyer, 7 Cush. (Mass.) 337. A declaration by the lessee that he will stand possessed of the term for the benefit of a trustee for his creditors and assign it as the trustee should direct does not suffice. Gentle v. Faulkner, 2 Q. B. 267. An executory contract to assign is not a breach of the condition, even though the prospective assignee has been let into possession. Livingston v. Stickles, 7 Hill (N. Y.) 253; Horsey v. Steiger, 2 Q. B. 79; Cox v. Bishop, 2 De G. M. & G. 815; Doran v. Kenny, Ir. R. 3 Eq. 148. See 24 Cyc. 973. The rule is equally strict as to breach of a covenant not to' sublet. A cropping contract between the lessee and a third person is not a sub-lease. McLaughlin v. Kennedy, 49 N. J. L. 519; Guest v. Opdyke, 31 N. J. L. 552. A mere permissive use of land is not a sub-letting. Lowell v. Strahn, 145 Mass. 1; Pence v. St. Paul etc. R. Co., 28 Minn. 488; Leduke v. Barnett, 47 Mich. 158; Hancock v. Austin, 14 C. B. (N. S.) 634.
Although the letter proposing the assignment of Lease No. 6, called the proposition one of sub-leasing, the designation was manifestly erroneous. Read in the light of the terms and provisions of the lease and the prior assignment, it was one of assignment. No reversion was reserved. The Easley Coal Company was to be put exactly into the shoes of the Brush Creek Coal Company, as to that lease. A royalty of nine cents went to the original lessor and three cents to
Whether there is a forfeiture or can be one, on the ground of assignment, is not decisive of the case, however, and, for that reason, the question will not now be decided. There may be in the lease, at least a covenant not to assign without written consent either express or implied. If it is only a covenant in law, an implied one, it may suffice for all ordinary purposes, though it might not constitute a basis for a forfeiture. Peerless Carbon Black Co. v. Gillespie, 87 W. Va. 441. Though only implied, it may impose a binding obligation for breach of which damages could be awarded, ’and, in proper cases, it might constitute sufficient ground for a decree of specific performance and for injunctive relief. A breach of it, though not made a ground of forfeiture of title, might confer upon the lessor a right of action for damages. As a matter of common sense and justice, it seems to be perfectly clear also, that a court of equity would not compel specific performance of an agreement to assign, by one who is under another agreement not to assign. In other words, a court of equity would not require any person to break one agreement, by way of compliance with another. Here, the Brush Creek Coal Company, while protesting that it has been released from its covenant not to assign without consent of the lessor, either expressly or by estoppel, declines to perform its agreement to do so, because its claim ofi such release is denied by the lessor. If it were the movant for relief here its pleading
On the decisive question already suggested, the 'Brush Creek Coal Company, and the Easley Coal Company, rely upon the original terms of the restrictive clause, extending only to the lessees; the terms of the assignment, going beyond the assignee and including its successors and assigns; and lack of any terms in the written assent, forbidding subsequent assignment without such assent. The appellee, on the other hand, emphasizes the express assumption by the as-signee, of the terms and conditions imposed by the leases upon the lessees; the terms of the written assent going only to the Brush Creek Coal Company; the recitals' in the deed of assignment, above referred to; and negotiations with the ' lessor for its consent to the assignment claimed here, treated as amounting to a contemporaneous construction of the limitation clause, prior assignment and consent. The rule known as that of Dumpor’s Case, 4 Co. 119 Cro. Eliz. 315, decided about the year 1603, is invoked by the appellant, on the ground that it is part of the common law adopted and in force in this State and remaining unmodified and unrepealed by any statute. For the appellee, the soundness of that decision and the rule it enunciates is challenged; but, if it is to be recognized as law, it is then urged that the peculiar circumstances of this case and the form and substance of the assignment and assent thereto preclude application of the doctrine.
As carefully gathered and stated from the opinion delivered by the learned Chief Justice McSherry, in Reid v. Wiessner Brewing Co., 88 Md. 234, decided as late as 1898, the rule in Dumpor’s Case is this: “When there is a condition in
Upon the inquiry as to whether the benefit of the covenant has been lost, by reason of the former assignment, under this rule, its form and terms are important. A covenant by a lessee for himself and his assigns, not to assign without consent, runs with the land and is binding upon the successive assigns. Taking the lease, they take upon themselves the covenant, and it seems that, in such case, one assent by
Whether the assignee, in this instance, has hound itself by some form of agreement, to remain under the condition against assignment, depends upon the interpretation of the deed of assignment, the terms of which have been already disclosed. The assignment assented to by the lessor was to the assignee, its successors and assigns, unless the assent clause, naming only the assignee, limits the words of assignment so as to eliminate or render ineffective the words, “its successors and assigns.” It contains no negative words. Successors and assigns are in the deed in which the lessor joined. The Brush Creek Coal Company was the only immediate assignee. Its successors and assigns were not formal pai’ties to the deed. The assignment was to it for itself, its sucessors and assigns. The words of the assent clause presumptively refer to the formal and known assignee, to which the title was to pass, not to the legal effect of the deed. Their purpose was mere description of the paper or document, not declaration of its effect. Hence, manifestly, they do not restrict, limit or qualify the terms. But, if they did, it is difficult, if not impossible, to perceive how such elimination or restriction could alter the situation. Under the rule in Dumpor’s Case, an assignment to the Brush Creek Coal Company only, with assent, would terminate or waive the condition forever and as to everybody. Under such an assignment, the lease could be passed on to other persons.
But the assignee’s assumption of “all of the terms and conditions imposed upon” the lessees, “as set forth in the lease agreements,” and agreement faithfully to fulfill them, are express covenants, and, if they extend to the condition against assignment, it is impossible to say the assignee does not remain under and subject to that condition. Against this suggestion, the decision in Reid v. Weissner Brewing Co. 88 Md. 234, is invoked; but, in that case, there was no express covenant on the part of the assignee to perform the covenants and conditions of the lease. In support of it, Consumers’ Ice Co. v. Bixler, 35 Atl. (Md.) 1086, is invoked, but, in that case, the issue was one of liability for rent, to payment of which the assignee had bound itself by express eonti'aet. In the effort to escape such liability, it relied upon a subsequent assignment without consent, because, although “bound by all the covenants and agreements contained in the original lease,” it has not in terms agreed to pay the rent. The court held, agreeably to uniform authority, that one bound to pay rent for a full term, cannot exonerate himself, by an assignment not assented to, whether there is a stipulation in the lease against assignment without consent or not. Little aid on the question of interpretation is afforded by that case, if any at all. In each of two other cases relied upon by both sides, Kew v. Trainor, 37 N. E. (Ill.), 223, and Springer v. Chicago Real Estate Loan and Trust Co., 66 N. E. (Ill.) 850, there was in the written assent constituting part of the agreement among the parties, an express inhibition of further assignment without the lessor’s consent. In each of them, there was also an express assumption by the assignee of all the covenants, conditions and obligations of the lease. The first one of these two cases involved the question of forfeiture of title, by assignment without consent, and there was a recovery by the lessor. The other involved only liability for rent, avoidance of which
In all three of the cases just analyzed, the court’s .emphasized the assignee’s assumption of the covenants, conditions and obligations of the leases, and also discussed the condition against assignment, which in two of them was not important at all. In the one in which it was vital, the as-signee’s agreement not to further assign without consent was made conclusive of the question of right involved. What the court’s conclusion in that ease would have been, if that provision had not been in the agreement, cannot be certainly determined from the opinion. It was distinctly held, however, that the assignee’s express assumption of all the terms and conditions of the lease carried and made effective the forfeiture clause which was in the lease and not expressly referred to in the written assent to the assignment.
A condition or covenant against assignment is a restraint upon alienation, wherefore it is not favored in law and does not exist, unless expressly and clearly provided for in the
In view of the application of the rule of strict construction, it is hardly necessary to say the recitals of the assignment have no appreciable bearing upon the question involved. Only an implication could arise out of them. . Besides, there is no recital or admission of mere agency in the lease, on the part of the lessees.
It is not perceived that' secs. 21 and 24 of ch. 72 of the Code, have any bearing upon the question at issue. One of them defines a short form of covenant against assignment and the other a short form of the covenant for right of reentry.
• The rule of contemporaneous construction has no application. When assent to the proposed assignment was refused, the Brush Creek Coal Company claimed right to assign without it. In this transaction, the question of the existence of the condition against assignment, came into controversy for the first time, and, when it was asserted in a man
Upon these principles and conclusions, the decree will be reversed, the temporary injunction perpetuated, a decree entered, requiring the Brush Creek Coal Company to assign to the plaintiff said lease of the tract of land, designated Lease No. 6, and such portion of the tract designated Lease No. 7, as it agreed to put into the assignment, and the 'cause remanded.
jReversed; Injunction perpetuated,; Remanded.