90 W. Va. 656 | W. Va. | 1922
This litigation arises out of a coal mining lease executed by Clinton Crane and James 0. Cole to the Main Island Creek Coal Company on about 27,000 acres of coal lands in Logan County, dated October 6, 1913.
The issues involved arise under the provision of the lease relating to royalties, and that relating to arbitration of controversies which might arise.
The royalty provision is: “And the said lessee, in consideration of the premises, does covenant and agree to commence at once upon delivery of this lease, the work of developing said lands as a coal producing property, and to prosecute the same continuously and with diligence; and further covenants and agrees, during the term aforesaid, unless this
“Each calendar year of the lease shall be divided into two' equal periods, and all coal mined and sold during each period, and the aggregate sum for which it was sold to consumers' shall be ascertained, and, if it appear that the coal mined during such periods sold for á sum in excess of ninety (90) cents-per ton of two thousand (2,000) pounds, then, and in such event, ten (10) per centum of such excess above ninety (90)' cents per ton shall be paid to the lessors in addition to thé' ten (10) cents per ton aforesaid. Coal used on the premises-shall be accounted for at the average price per ton for which the coal mined during such period sold.”
The arbitration clause reads: “It is further agreed that' in case of any controversy between the lessors and lessee, arising under this léase,' the same shall be submitted to arbitrators and to ah umpire in case of a disagreement, which arbitrators shall be selected in the following manner:
“The party desiring arbitration shall nominate one arbitrator, and shall notify the other party of such nomination, and the other party shall, within ten (10) days after receiving such notice, nominate an arbitrator and the two before proceeding to act shall select a third party to act jointly with them. If such other party fail and neglect in the time aforesaid to nominate an arbitrator, then the party desiring arbitration shall nominate two such arbitrators, and the -two so nominated shall elect the umpire aforesaid. After the said
“The expense of the arbitrators shall be paid accordingly as the arbitrators shall provide in their award. The persons to be selected as arbitrators and umpire shall be persons of experience in the coal mining business, and shall be men of character, intelligence and standing, in no way related to either party or interested with lessors or lessee.”
In 1916 Cole and Crane conveyed the land leased to plaintiffs as trustees of the Cole and Crane Real Estate Trust, to become effective upon the death of either of the grantors, and, Crane having died in 1917, the trust became effective. In the summer and fall of 1917 certain executive orders were promulgated by the President of the United States and the Fuel Administrator, under authority of a war measure enacted by Congress fixing a scale of prices for bituminous coal at the mines. The order of October 27, 1917, permitted an increase in price of 45 cents per ton over that formerly fixed, subject to two conditions:
“First: Increase in price to not apply to any coal sold at the mines under an existing contract containing a provision for an increase in the price of coal thereunder in case of an increase of wages paid to miners; and
“Second: That the increase in price should not apply in any district in which the operators and miners failed to agree upon a penalty provision satisfactory to the Fuel Administrator for the automatic" collection of fines in the spirit of the agreement entered into between the operators and miners at Washington, .October 6, 1917.”
Between November 1, 1917, and July 1, 1918, defendant coal company mined and sold from the leased land 644,-936 2/3 tons of coal at an increased price of 45 cents for
The second claim of-plaintiffs arises in this manner: From July 1916, to July 1, 1918, defendant coal company sold its coal through an agent, the Wyatt Coal Company. In computing royalties upon coal mined and sold it would deduct from the sales price the commissions .paid by it to its selling agent, and account to plaintiffs for royalties upon the gross sum received less these commissions paid for selling its coal. Plaintiffs claim that this deduction of selling commissions was improper; and it was stipulated by the parties that in the event of a recovery by plaintiffs against defendant for this claim, the principal amount should be $17,549.29.
Plaintiffs requested payment of the claim of $29,022.15; defendant refused payment, demanded an arbitration, and appointed an arbitrator, giving notice of the appointment. Plaintiffs refused to arbitrate or appoint an arbitrator and gave notice to defendant that they revoked the arbitration clause in the lease, and would institute a suit at law to settle the difference. Defendant then appointed another arbitrator, A. J. King, (having already appointed W. E. Dee-gans) and these two selected J. W. Dawson as umpire. The arbitrators and umpire gave notice of the time and place of their sitting, met in pursuance thereof, heard evidence of defendant, and made an award to the effect that defendant was not liable for any of plaintiff’s claim. Plaintiffs declined to participate in the arbitration, revoked the powers of the arbitrators and so notified them as soon as they were nominated, and, before the award was made, had instituted this suit to assert their $29,022.15 claim, process in which was served on defendant on August 1, 1918. The award
At October rules, 1918, plaintiffs filed their amended declaration setting up their claim for $17,549.29 on account of deduction of commissions of the sales agent, from the price at which the coal was sold to the consumer before royalties were computed , thereon. Defendant thereupon demanded arbitration upon this claim, but plaintiffs declined to arbitrate, and no arbitration was had.
To the first claim defendant pleaded non-assumpsit and the award; and to the second, non-assumpsit and accord and satisfaction. The facts were stipulated, the issues submitted to the court in lieu of a jury, and upon the first claim, $29,022.15, the court found for defendant; and upon the second claim, $17,549.29, found for plaintiffs and entered judgment thereon, with interest, in the sum of $20,496.01. Prom this judgment plaintiffs obtained this writ of error, and defendant assigns cross-error upon the judgment against it on the second claim.
Logically, the first question presented is whether the award is binding upon the parties as to the claim of $29,022.15. If so, it presents a complete defense to that item.
We are committed in this State to the rule firmly fixed at common law that an agreement to arbitrate is revocable at any time before an award. Kinney v. B. & O. Assn., 35 W. Va. 385; Turner v. Stewart, 51 W. Va. 493; Lawson v. Williamson, 61 W. Va. 669; Flavelle v. Red Jacket Coal Co., 82 W. Va. 295. Where the contracting parties, have stipulated that an award shall be final as to the sum to be paid upon a breach of some provision of the contract, but not as to the question of general liability, the stipulation is valid; and if it be agreed that the award fixing the amount be final, and
Some courts have held that a submission to arbitration may be revoked by either party at any time before award is made and published, notwithstanding an agreement not to revoke. Heritage v. State, 43 Ind. App. 596; Sartwell v. Sowles, 72 Vt. 270. The theory in these cases is that submissions to arbitration are revocable in their nature, and the parties cannot make that irrevocable which is of its own nature revocable.
But it is argued by defendant’s counsel that the arbitration clause in the lease is irrevocable, because upon the failure of one of the parties to appoint an arbitrator, upon request for arbitration, the other party is empowered to select both arbitrators and proceed to an award; that neither party intended that this provision for arbitration should be revoked at will, and adopted this method to force an award, not dependent upon a subsequent change in the mind of the other; therefore such a covenant is not revocable at. the pleasure of either.- It is argued that the right to revoke at common law, and under the modern cases, is based on the power of either party to defeat arbitration by refusing to provide the arbitrators to carry it out. We find that this same contention was made in Dickson Mfg. Co. v. Am. Locomotive Co., 119 Fed. 488. The court there held that a provision in an arbitration clause to the effect that failure of .either party to appoint an arbitrator shall authorize the other to make an appointment for the one in default does not prevent a revo: cation of the agreement for arbitration. Where there is an agreement in the submission that the arbitrators may proceed ex parte if either party fails to appear, this does not
Should royalties be computed upon the 45 cents per ton added to the selling price as a result of the order of the Fuel Administrator ? The plain terms of the lease are that whenever the selling price exceeds 90 cents per ton f. o. b. cars at the tipple, then the lessors shall receive 10 per cent, of the price in excess of 90 cents. It is argued on behalf of defendant that the true intent and meaning is that whenever •the coal sold above 90 cents, such excess would be considered as so much clear profit to the lessee and in that event the lessor was to receive one tenth of this clear profit. This construction would place upon plaintiffs the ordinary risks of the business which they clearly did not assume. If a community of profits governed, the relation would be in the nature of a partnership. Plaintiffs did not rely upon the defendant for careful and economic conduct of its business. 'They have no voice or control in its policies. They were not ■concerned with the salaries of its officers and the wages of its employees. Whether the business was operated at a loss or profit was of no moment to them, except the laudable concern of a landlord for the success of the tenant. If the price of labor decreased and a consequent larger margin of profit resulted tó the lessee if the price of coal to the consumer remained less than 90 cents per' ton, it was not contemplated that lessors should participate in that profit; and conversely, if wages increased and the price of coal remained stationary, they would not participate in the consequent
Somewhat applicable to the question here is the case of Columbus Ry. & Power Co. v. City of Columbus, 249 U. S. 399. The Columbus Railway, Power and Light Co. obtained certain franchises from the city which, under the laws of Ohio, were held as binding contracts, and which required the grantees to furnish street railway service for a designated period at specified rates, in return for use of the streets. Various effects of the world war, particularly an award of the War Labor Board raising the wages of the employees of the company about 50%, wrought a serious and unforseen change in conditions, making the rates under the franchise contract grossly inadequate, but it did not appear that performance was thus rendered impossible, or that the contract as a whole, extending over the entire term of 25 years would prove unre-munerative. The Supreme Court held that there was no vis major excusing their performance and that the enforee
We think the plain and unambiguous terms relating to the payment of royalties based upon the sale price to the consumer is not susceptible of interpretation. The payment of these royalties on this fixed basis is not affected by the expenses of mining or selling the coal, however brought about or incurred.
The trial court erred in not including in its judgment for the plaintiff the item of $29,022.15, with interest, being 4%
From what we have said it follows that the trial court properly rendered judgment for the claim of $17,549.29 with interest. It is sufficient to say that the commissions paid by defendant to its selling agent for marketing its coal is one of the expenses of the operation. Rather than expend energy, money and time in the selling of its product it employed an agent for that purpose. It carried on a necessary part of its business in this manner, and the commissions paid its agent are as much a part of the expense in the conduct of its business as the salary of its general manager, or if its mine foremen in the operating department, so far as the contract for the payment of royalties is concerned. But by special plea No. 2 defendant says that it has paid plaintiff $367,911.75 which was accepted by it in full satisfaction and discharge of the claims sued for. In support of this plea it is shown that defendants for the first six months period of the lease, July 1, 1916, to January 1, 1917, paid to plaintiff’s predecessors in title, Cole and Crane $33,863.44, which included the regular and excess royalties with a statement of the account, and for each, of the other six months periods extending to July 1, 1918, the said regular and excess royalties were paid with vouchers accompanied by statements of the accounts; for the period between January 1, 1917, to July 1, 1917, $57,653.04; July 1, 1917, to January 1, 1918, $34,089.82; and from January 1, 1918, to Jidy 1, 1918, the final sum of $99,223.60. While this last payment was tendered in full of the account as stated in the voucher, it was acceptéd by plaintiffs with defendant’s consent that it should not prejudice the rights of plaintiffs in this suit. The vouchers and statements accompanying them are in the record. Bach time a payment was made a statement was furnished showing tonnage mined and sold, the price received, the regular and excess royalties, which payment was accepted by plaintiffs, the checks being endorsed and cashed, without complaint or comment, except as to the last payment, which on
There is no question that under the contract plaintiffs are entitled to its royalties based on the price of the coal paid by the consumer. It is a mere matter of calculation, after
The contention that the payments accompanied by the statements constituted an account stated and paid, thus precluding suit, is untenable. As before pointed out, the statements and vouchers did not show the deductions made for commissions, and defendant did not so consider its payments as final, because in several subsequent statements it deducts items due it which had been omitted from previous settlements. Furthermore, an account stated can always be corrected by showing mistake. C. J. p. 709. Where there is an account stated between the parties, hnd intended to be such, it affords strong presumptive evidence of settlement, which may be rebutted by showing fraud or mistake. Harman v. Crockett, 57 W. Va. 66; McNeel v. Baker, 6 W. Va. 153; Townes v. Birchett, 12 Leigh 173.
On January 24, 1919, after the institution of the suit, defendant demanded of plaintiffs an arbitration of the controversy concerning plaintiffs’ claim of $17,549.29, which arbitration was declined and refused by plaintiffs and then no steps further were taken in that regard, and no award
The trial court did not err in finding for plaintiffs on their claim for $17,549.29, with interest to and from date of judgment.
We hereby modify the judgment of the circuit court of Logan County, entered on the 16th day of July, 1920, so as to include therein the item of $29,022.15, with interest thereon from the 1st day of July, 1918; and strike out in its entirety the last clause of said judgment order beginning with the figure “3”, followed immediately by the words “The court further finds that the plaintiffs are not entitled to recover ’ ’ etc.; and insert in the place and stead thereof the following: 3. The Court further finds that the plaintiffs are entitled to recover from the defendant the item of $29,022.15, with interest thereon from the 1st day of July, 1918, now amounting to the sum of $32,577.35 (principal and interest), the principal sum being 4% cents per ton on 110,278.19 tons mined from the leased premises during the months of November and December, 1917, and 534,658.38 tons mined from the leased premises in January, February, March,' April, May and June, 1918, the 4% cents per ton being 10% of 45 cents which the United States Fuel Administrator authorized to be added to the then selling price of coal on condition that a like sum per ton be added to the wages of its miners, and which condition was performed by defendant.