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HEILWOOD FUEL CO. v. MANOR REAL ESTATE COMPANY (12/05/61)

December 5, 1961

HEILWOOD FUEL CO., INC., APPELLANT,
v.
MANOR REAL ESTATE COMPANY, APPELLANT.



Appeals, Nos. 148 and 157, March T., 1961, from order of Court of Common Pleas of Allegheny County, July T., 1960, No. 2260, in case of Heilwood Fuel Co., Inc. v. Manor Real Estate Company. Order reversed.

COUNSEL

John A. Metz, Jr., with him Metz, Cook, Hanna & Kelly, for plaintiff.

Thomas D. Thomson, with him Pringle, Bredin & Martin, for defendant.

Before Bell, C.j., Musmanno, Jones, Cohen, Eagen and Alpern, JJ.

Author: Jones

[ 405 Pa. Page 321]

OPINION BY MR. JUSTICE BENJAMIN R. JONES.

Two appeals are before us, each appeal being from an order of the Court of Common Pleas of Allegheny County, sitting in equity. One appeal (No. 148) by Heilwood Fuel Co., Inc. (Heilwood) challenges the validity of this order insofar as the order sustained preliminary objections of Manor Real Estate Company (Manor) and dismissed Heilwood's equity complaint. The other appeal (No. 157) by Manor attacks the order insofar as the order amended a previous order which had certified to the law side of the court an alleged claim of damages by Heilwood.*fn1

In Pine Township, Indiana County, Heilwood and Manor each owned certain tracts of land under which lay coal. Manor had acquired its tract from Willmore Coal Company.

On January 31, 1956, Manor wrote a letter to Pine Township Coal Company, Inc. (Pine) and the construction and interpretation of this letter is the heart of this controversy. That letter, described as a "letter of intent" which, if accepted by Pine, would become an "interim understanding and agreement", is divided into two parts, one entitled "Exchange" and the other "Lease". Under the "Exchange" heading, the parties provided for the exchange of certain properties, the exchange to take place by June 30, 1956: (1) subject to approval of the respective titles, Manor agreed to convey to Pine and Pine agreed to convey to Manor ownership

[ 405 Pa. Page 322]

    in certain properties delineated on a map attached to the letter; (2) in the exchange it was intended that gas and oil rights be reserved and that the areas to be conveyed be equal as to coal and surface acreage; (3) in the event Manor did not convey to Pine, Manor's property would be included in the "Lease" provision. Under the "Lease" heading: (1) Manor agreed to lease to Pine certain coal seams under a 1650 acre tract of land not included in the "Exchange" heading, the lease to be prepared and submitted for execution within 60 days of the exchange of properties between Manor and Pine, i.e., June 30, 1956; (2) the provisions of the contemplated lease were set forth; (3) it was provided that the coal mined and shipped should be routed over lines of the Pennsylvania Railroad.*fn2 It is stated by Manor, in its brief, that the principal purpose of this letter "was the development of the Yellow Creek Coal Field and the production of coal for shipment via The Pennsylvania Railroad". On February 5, 1956, Pine, in writing, accepted this "interim understanding".

In returning to Manor the approved "interim understanding" on February 16, 1956, Pine stated, inter alia, that "all parties interested" understood that Heilwood, "an allied company" of Pine, owned the properties which were to be exchanged to Manor and that Pine was "in a position" to guarantee performance of that part of the contract.

On March 4, 1956, the Pennsylvania Railroad Company, Real Estate Department (Pennsylvania), wrote to Pine, the stated subject of this letter being: "Proposed exchange between [Manor] and [Heilwood]". That letter, referring to the abstracts of title and descriptions of the property which Manor was ...


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