Proctor Coal Co. v. Strunk

123 Ky. 520 | Ky. Ct. App. | 1906

Opinion by

Judge Lassing.

Reversing.

On the 17th of December, 1900,. the Proctor Coal Company, by A. Gatliff, its president, made a written contract with David Strunk, by the terms of which said Strunk was to mine the coal within a certain area for a definite sum of money per ton, and was to comply generally with certain restrictions and regulations imposed by the agreement for the benefit of the Proctor Coal Company, Subsequently one H. F. Fenley succeeded Gatliff as president -of the company, and a new contract was entered into by and between the company and David Strunk, by the terms of which Strunk was to mine coal for the company in the same territory, but the contract was an annual contract. By the terms of the first contract 5 per cent.- of the contract price for mining' was reserved by the company until final settlement between the parties, 'which by the terms of the contract would have been when all the coal to be mined within the area specified in the contract had been taken out. By the terms of the second contract the same part of the cost of mining per ton was retained, but the settlements were to be made at the end of each year while the contract was ip force. This second contract required of the said Strunk a compliance with certain rules and regulations governing mining imposed for the mutual benefit of both parties to said contract. This second contract was entered into about the 9th of June, 1901. The defendant, Strunk, continued to operate the mine until about tbe 1st of July, 1902, when he quit and brought bis suit for damages against tbe company, and based bis claim upon bis rights as defined in tbe first contract. Tbe company pleaded as a defense to this suit tbe execution of tbe second contract, and that tbe second contract superseded and annulled tbe first contract. Tbe plaintiff by an amended pleading admitted tbe execution of tbe second contract, but claimed that there was no consideration for its execution, and that it was procured through fraud and misrepresentation. Tbe allegations of tbe petition as amended and of tbe reply were traversed, and upon a trial before a jury' a verdict for $900 was returned for plaintiff. Judgment was entered upon this verdict, and defendant appeals.

Appellant company complains that tbe trial court should have given to tbe jury a peremptory instruction at tbe conclusion of plaintiff’s testimony, as be entirely failed to establish either want of consideration for the second contract, or that tbe execution of it was procured through fraud and misrepresentations. Appellee contends that tbe execution of tbe second contract did not nulify tbe first contract, but was merely a modification of same. A careful examination of tbe two contracts discloses this fact, that tbe only material difference between tbe first and second contracts is that tbe first contract provided for tbe mining of all tbe coal within a given area, and tbe retention by the company of 5 per cent, of tbe cost of tbe mining until tbe contract bad been completed, be that 1, 5, or 10 years. Tbe second contract provided that a settlement should be bad at tbe end of each year, and that the contract might continue by mutual consent as an annual contract. Each contract contained certain stipulations and regulations as to tbe manner in which tbe mining should be done. In order to determine tbe question as to whether or not it was the intention of the parties that tbe second contract should do away with and annul or supersede the first contract, the testimony of the parties themselves is the best evidence. The company through its president testified that he told the plaintiff, Strunk, that the first contract was an unsatisfactory one, and not acceptable to the directors of the company, and that they wanted to enter into a new contract which would be more beneficial in its terms to both parties, and proposed the execution of the contract, showing plaintiff that by its terms he would be enabled to withdraw from the hands of the company the 5 per cent, of his money which it had retained each year, and not have it withheld from him until the completion of the contract. Plaintiff himself testifies even stronger upon this point than did the president of the company for he testified that the president of the company told him that Gatliff, the former president of the company, had no right to make the first contract, and that it had never been ratified or approved by the directors of the company. Thus, from the testimony of the two parties to this contract, it is clear that they each understood that the second contract was intended to take the place of the first contract, and plaintiff operated under it for a year or such a matter after he had signed it.

"We come, then, to the two vital questions in the case: (1) Was there any consideration for the execution of the second contract? (2) Was there any. fraud practiced by the company upon the plaintiff in . procuring its execution? By the terms of the second contract the company agreed to make an annual settlement with plaintiff, and to pay to him the amount of money which it had retained in its hands, to wit, 5 per cent, of the cost of all coal mined by him during that year. This clause of the second contract was more favorable to the plaintiff than was the provisions regulating the payment of this retain .in the original contract, and this was the chief consideration or benefit accruing to plaintiff in the execution of the second contract. By the execution of the second contract plaintiff waived his right to mine all the coal within the given area defined in the first contract, unless he should mine same within one year, or unless the contract should continue after the expiration of the first year by mutual consent. This was of benefit to the company, as it gave it the right to take charge of and mine the coal in such portion of said area as plaintiff should fail to mine within the year, if it desired to do so. In the case of Collyer v. Moulton, 9 R. I. 90, 98 Am. Dec. 370, the Supreme Court of Rhode Island held that where a contract remained executory it might be annulled by agreement, and the agreement to annul on one side was a consideration for an agreement to annul on the other. We are of the opinion that the second contract of itself shows there was a consideration sufficient to support its execution. In Parish, etc., v. U. S., 8 Wall. (U. S.) 489, 19 L. Ed. 472, the Supreme Court held that, if a party to a contract had any objections to the provisions of the contract, he should have objected before signing it, and that, having signed it, his mouth was closed against any denial that it superseded all previous arrangements upon the same subject. And in the case of U. S., etc., v. Lamont, Secretary of War, 155 U. S. 303, 15 Sup. Ct. 97, 39 L. Ed. 160, where the plaintiff in error had made a contract for certain work at a given price, and subsequently the parties had executed a contract at a lower price, and an attempt was made to compel the Secretary of War to execute the former contract, the court said: “We cannot perceive any duty which under those circumstances rested upon the Secretary of War to sign such a contract with the relator as would be required by the mandamus which is prayed. It cannot be reasonably contended that he is under any obligation to sign two contracts with the same parties for tho same work at a different price and under different conditions. Nor can it be urged with any greater reason that the relator was entitled to have signed a contract to do work for 197/10 cents per cubic yard which he had subsequently made a voluntary contract to do for 177/10 cents per cubic yard, and upon conditions different form those mentioned in the first proposition. In order to justify the issual of the writ, it would be necessary to hold that the second contract was void, and thereby relieve the relator from obligations which he has assumed, and release him from the binding force of terms and stipulations to which he has subjected himself. Inasmuch as no such duty as that which the granting of this writ would seek to enforce exists, and no right subsists in the relator which this writ could secure him, there is no ground for issuing it.” The court then referred with approval to the case of Gilbert v. United States, 8 Wall. (U. S.) 358, 19 L. Ed. 303, quoting with approval the language of Justice Miller, who said: “If the claimants had any objection to the provisions of the contract they signed, they should have refused to make it. Having made it and executed it, their mouths are closed against any denial that it superseded all previous arrangements.” Following the rule laid down in these cases, it is plain that plaintiff having signed the second contract, and operated under it for almost a year, he cannot now complain that the second contract did not take the place of and supersede the first.

The only remaining question is, was the execution of the second contract procured through fraud? We have carefully examined the testimony in this case, and fail to discover wherein, even in the slightest degree, it tends to support the contention of the appellee that the execution of the second contract was obtained through fraud or misrepresentation. The ■company’s president testifies that he talked the matter over fully with appellee, and that they agreed upon the terms of the second contract, and he directed the secretary of the company to reduce their agreement to writing in duplicate form, one copy of which, when signed, was to be retained by the company and the other by appellee. Upon this point appellee says that he did not want to sign the second contract as prepared and submitted to him by the secretary of the company, but that thereafter he did sign it. He does not claim, nor is there any testimony tending to show, that the president of the company, or any one else, made any statement to him that was untrue, or that induced him to enter into the second contract. And while the proof shows appellee to be a man of moderate means, in the humble walks of life, there is nothing in either the proof or the provisions of the second contract indicating that he was overreached, or that any advantage was taken of him or his condition in the execution of the second contract. Nor does he claim that he did not thoroughly understand the second contract when it was prepared by the secretary and presented to' him for his signature. Hence his contention that the second contract was procured through fraud and misrepresentation is not supported by any evidence whatever. And, this being true he is bound by the terms and provisions of the second contract, which (bearing evidence that there was ample consideration for its execution and no fraud being perpetrated on appellee in its execution annulled and superseded the first contract. Appellee’s cause of action, if any he had, was upon the second contract. He sought by the pleas of no consideration and fraud to avoid the force and effect of the second contract, and, having failed to support his pleadings by any proof, the trial court should, at the conclusion of appellee’s testimony and at the conclusion of p,ll the testimony offered, have given a peremptory instruction to find for appellant company.

For this reason the judgment is reversed, with instructions to the trial court to dismiss the petition.