Sunday Creek Coal Co. v. Big Bailey Coal Co.

26 Ohio N.P. (n.s.) 117

This text of 26 Ohio N.P. (n.s.) 117 (Sunday Creek Coal Co. v. Big Bailey Coal Co.) is published on Counsel Stack Legal Research, covering Court of Common Pleas of Ohio, Franklin County, Civil Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sunday Creek Coal Co. v. Big Bailey Coal Co., 26 Ohio N.P. (n.s.) 117 (Ohio Super. Ct. 1922).

Opinion

Kinkead, J.

Plaintiff seeks equitable enforcement of the contractual obligations of defendant contained in paper writings designated as a “lease to mine coal” and a “sales contract” providing for the sale and disposition of the coal produced from the leased land. Plaintiff’s predecessor in title leased the coal lands to defendant’s predecessor grantee; the lease and sales contract were negotiated for and the instruments were prepared, signed and executed on the same date, the mutual purpose and effect of their acts being to consummate a single transaction for the [118]*118lease of plaintiff’s lands for mining coal, and a contract for the sale of the coal. The negotiations for the coal lease and sales contract, their preparation and execution were continuous and concurrent, executed at the same time and bearing the same date.

The case was heard upon application- for temporary injunction, and subsequently defendant filed its answer.

Defendant claims that plaintiff breached its contract, and that it thereupon notified plaintiff on April 27, 1921, that it would no longer be bound by the terms of the sales contract.

In a third defense defendant claims that it did not give its consent to the assignment by the Ohio Land & Railway Company to the Sunday Creek Coal Company; that the plaintiff was at the time of the assignment of the sales agreement, ever since and is now engaged on its own account, in the mining and production of coal from territory near that of defendant, and-is engaged in selling, through its sales .department, the coal so produced by it, in competition with the coal of defendant.

In a fourth defense defendant claims that plaintiff has acquiesced in and consented, to the refusal of the defendant to be further bound by the contract ever since April 27th, 1921, when defendant notified plaintiff of its intention not to perform the contract until September 2, 1922, when this action was filed.

Defendant’s answer, filed since the hearing, expressly claims that plaintiff did not sell the coal at the “best obtainable market prices;” that it did not sell the coal at the “prevailing market prices;” that it failed to procure orders which should have been given defendant— to mines owned and operated by plaintiff.

Defendant complains that plaintiff failed to find a market for its coal when the demand became less active, and when more than sufficient orders were not offered the plaintiff to keep its own mines in full operation.

Defendant’s answer also complains that plaintiff sold large quantities of its production to other concerns engaged in identically the same kind of business in which [119]*119plaintiff attempted to engage, and performing the functions which plaintiff under the sales contract covenanted and agreed to perform.

When the instruments were executed it evidently was known and understood by the parties that plaintiff’s predecessor, was a proprietor and operator of mines and engaged in selling coal. One of the inducements for making the contract was the fact that plaintiff already had a sales agency equipped ánd ready for operation.

2. Shall the Sales Contract and the Lease he considered as one transaction in Equity?

Plaintiff contends that the coal lease and the sales contract executed on the same date constitutes a single transaction in equity, that the intent of the parties was that the grant of the lease to mine the coal was made contingent upon the grant to make sale. of all coal produced by defendant; that part of the consideration moving between the parties in the execution of the coal lease was the grant of the right to. plaintiff to make all sales of the coal so produced. Though the lease to mine coal is an instrument pertaining to the grant of land, the claim nevertheless is that the separate contract giving plaintiff the exclusive right to make sale of all coal produced necessarily operated as an essential part of the consideration of the lease, therefore the two instruments constituted a breach of the lease to mine coal.

The sales agreement by its terms made the coal lease part of inducing cause of the lease, but it also modified the terms of the lease. Item 9 of the sales contract stipulates that if the lessor does not furnish sufficient shipping orders that the minimum tonnage may be mined as required by the lease, then such minimum required by the lease shall be reduced to the extent that the lessee is unable to mine because of the failure of the lessor to furnish the stipulated shipping orders.

The primary clause of the sales contract recites the making of the coal lease “this day taken” “bearing even date” with the lease. When the Big Bailey Coal Company assigned to the Big Bailey Mining Company the same was [120]*120made conditional upon the acceptance and the assumption of the sales contract, the assignee being bound thereby to give to the Sunday Creek Company the exclusive right to sell the output of the defendant.

It' seems essential also to consider the agreement of plaintiff to build the railway tracks at suitable places so as to enable the lessee — defendant—to dispose of its output to plaintiff according to. contract. It does not seem probable that The Sunday Creek Company would have bound itself to build railway facilities for shipping the coal had not the sales contract been made. If the defendant had merely taken the coal lease and had intended to market its own coal, it would have been necessary to have built its own railway facilities for marketing its production. Construction of railway facilities by plaintiff to the mines leased by defendant evidently was expressly designed to enable plaintiff to market defendants production with a view of disposing of it pursuant to the sales contract. Defendant was put to no expense in connection with selling the coal; plaintiff already had the sales agency ready for action, defendant having nothing to do but to produce the coal. Defendant ran no risk of securing payments for the coal plaintiff having guaranteed payments for all coal sold.

The rule in equity is that where two or more instruments are contemporaneously and mutually prepared and executed by two parties, pursuant to a common or mutual intent and design, where the first is made contingent upon the other, or the second is inter-dependent upon the other, and the clear purpose is that the two instruments are to be concurrently executed and carried out, and each is to do the things stipulated shall be done by each and both, equity will impute and infer that the parties thus expressing their purposes mutually intended that the two instruments were to operate and be carried out concurrently, and that the instrument be regarded as one transaction.

There can only be occasion for calling this rule into use when we encounter two such instruments as we have [121]*121to deal with in this case. It matters not whether we have two radically different kinds of instruments, as here the sealed instrument and simple contract, so long as the terms and conditions of the two contracts clearly show a mutual interest to accomplish the joint purposes of the two instruments by the kind of separate and concurrent designs which are so clearly manifested by the lease and sales contract.

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Related

Butterick Publishing Co. v. Frederick Loeser & Co.
133 N.E. 361 (New York Court of Appeals, 1921)
Newall v. Wright
3 Mass. 138 (Massachusetts Supreme Judicial Court, 1807)

Cite This Page — Counsel Stack

Bluebook (online)
26 Ohio N.P. (n.s.) 117, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sunday-creek-coal-co-v-big-bailey-coal-co-ohctcomplfrankl-1922.