Kohlsaat v. Main Island Creek Coal Co.

112 S.E. 213, 90 W. Va. 656, 1922 W. Va. LEXIS 275
CourtWest Virginia Supreme Court
DecidedMarch 7, 1922
StatusPublished
Cited by14 cases

This text of 112 S.E. 213 (Kohlsaat v. Main Island Creek Coal Co.) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kohlsaat v. Main Island Creek Coal Co., 112 S.E. 213, 90 W. Va. 656, 1922 W. Va. LEXIS 275 (W. Va. 1922).

Opinion

Lively, Judge:.

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 [659]*659lease shall he sooner terminated under some provision hereof,- and in- such case until such termination, to pay to the lessors the rents and royalties for the use of said demised premises and said coal; that is to say, ten (10) cents per ton for every ton of two thousand (2,000) pounds, and, in addition, thereto, ten (10) per cent, of the selling price of said coal above ninety (90) cents per ton F. O. B. cars at the tipples.The lessors are to be paid never less than ten (10) cents per ton of two -thousand (2,000) pounds, and whenever the coal from said premises shall sell to consumers for a price above ninety (90) cent's per ton of two thousand (2,000) pounds at the tipple on an average of all grades, then, and in every such ease, the lessee shall pay to the lessors ten (10) per cent, of the price in excess of ninety (90) cents.

“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 [660]*660arbitrators shall .have been so selected, the third person selected as umpire shall fix a time and place for the purpose of meeting and hearing the parties and any evidence they may submit, and the decision of said arbitrators or any two of them in writing shall be binding upon the parties. Said arbitrators shall, after hearing the parties and any evidence that they may submit, make up their award and reduce the same to writing, and seal the same and deliver to the lessors one copy thereof and to the lessee one copy thereof.

“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 [661]*661each, ton, and, before paying royalty thereon, deducted from the gross amount for which this tonnage was sold 45 cents per ton, equal to $290,221.50 and refused to pay royalty thereon, claiming that this 45 cents per ton increase composed no part of the price for which the coal was sold, within the meaning of the terms of the lease, but constituted a fund for the payment of its miners, in which defendant has no beneficial interest. Plaintiffs claimed one tenth of this amount, $29,022.15, under the terms of the royalty provision of the lease, and thus arises the first issue.

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.

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Cite This Page — Counsel Stack

Bluebook (online)
112 S.E. 213, 90 W. Va. 656, 1922 W. Va. LEXIS 275, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kohlsaat-v-main-island-creek-coal-co-wva-1922.