229 F. 652 | 4th Cir. | 1915
The material facts appear to be these: E. J. Dennis, Sr., and A. H. Dennis, his wife, were the owners as tenants in common of a tract of land in Berkeley county, S. C., containing about 660 acres. By a “deed and contract” executed May 5, 1903, they conveyed, with certain reservations, all the timber on this tract of a specified size to- Freeman S. Farr, trustee. September 24, 1904, Farr conveyed the timber rights thus acquired, together with the timber rights on a number of other tracts, to the Oneida Timber Company, a South Carolina corporation; and this company, on June 30, 1910, conveyed the same, with the standing timber on several other tracts, to the Midland Timber Company, also' a South Carolina corporation. Later, on June 28, 1913, the timber rights in controversy were conveyed by the Midland Timber Company to- the Crown Orchard Company, Incorporated, a Virginia corporation, which brings this suit. The case mainly turns upon the construction of the following paragraph in the original conveyance:
“That the said second party, his heirs, executors, administrators, and assigns, shall have, and the same is hereby granted to him or them, the period of eight (8) years, beginning from the date hereof, in which to cut and remove the said timber from lire said land, and that in case the said timber is not cut and removed' before the expiration of said period, then that the said second party, his heirs, executors, administrators, or assigns, shall have such additional time as may be desired for cutting and removing said timber; but, in the last-mentioned event, the said second party, his heirs, executors, administrators, or assigns, shall, during the extended period, pay interest on the original purchase price above mentioned, year by year, in advance, at the rate of six (b) per cent per annum.”
The Midland Timber Company was the owner of the timber rights in question when the 8 years expired, and no timber had been cut during that period. In the meantime E. J. Dennis had died intestate, and title to the land had vested in his widow and children. It also appears that one p£ the sons, the defendant William H. Dennis, had
■But we are of opinion that the case at bar is not of that character, and this seems to be made clear by examination of the pleadings. As appears fróm the bill of complaint, the sole purpose of this suit is to prevent by injunction trespass upon the timber in question by William H. Dennis, one of the defendants. He had no title to the land, or any part of it, when the other defendants; in December, 1913, executed a timber deed to him under which he seeks to justify the cutting operations which were stopped by the temporary injunction. The owners of the land were made defendants, apparently because the Supreme Court of South Carolina had held on the first appeal in the Prettyman Case, 93 S. C. 13, 75 S. E. 1012, that the landowner is a necessary party in all suits where standing timber is involved, and the only allegation against them is that they claim some interest in the matter'.in controversy. Nothing is set out in the bill which looks to
It is true that the Ambler Case was an action at law to recover damages for trespass and conversion by the cutting of timber, while this is a suit in equity to prevent such trespass and conversion on the ground that it would result in irreparable injury for which there is not adequate remedy at law. But we are unable to see any substantial difference between the two cases so far as the question of jurisdiction is concerned. The essential basis is the same in both of them, and it cannot be said that the latter any more than the former is brought upon a chose in action. However, we think all doubt is put at rest by the recent decision of the Supreme Court in Guffey v. Smith, 237 U. S. 101, 35 Sup. Ct. 526, 59 L. Ed. 856, which deals with a case of striking similarity to the one before us, and holds that it is not a suit for specific performance, but simply one to protect the property which complainant claims to own. The court says:
“Kightly understood, this is not a suit for specific performance. Its purpose is not to enforce an executory contract to give a lease, or even to enforce an executory promise in a lease already given, but to protect a present vested leasehold, amounting to a freehold interest, from continuing an irreparable injury calculated to accomplish its practical destruction. The complaint is not that performance of some promised act is being withheld or refused, but that complainants’ vested freehold right is being wrongfully violated and impaired in a way which calls for preventive relief. In this respect the case is not materially different from what it would be if the complainants were claiming under an absolute conveyance rather than a lease. In a practical sense the suit is one to prevent waste, and it comes with ill grace for the defendants to say that they ought not to be restrained because perchance the complainants may some time exorcise their option to surrender the lease.”
In the light of these authorities we think it clear that the case at bar is within the jurisdiction of a -.federal court, because it does not belong to* the class of cases referred to in section 24 of the Judicial Code.
Upon the point now considered we find no difference between this case and the Prettyman Case, so much discussed by counsel. 97 S. C. 247, 81 S. E. 484. The corresponding provision of the deed in that case is almost identical with the paragraph above quoted, except that the time -period named was 10 years from date. And the precise claim was made that the grantee and its assigns were not entitled to an extension beyond the first period, because they did not commence to cut and remove the timber within that period. The trial court in a careful opinion rejected the contention, and this opinion was approved and adopted by the Supreme Court of the state on appeal.
We think the case at bar, like the Prettyman Case, is clearly distinguishable from other South Carolina timber cases in which parol testimony has been received. When the contract or conveyance fixes a definite period after the grantee has commenced cutting, the courts properly allow parol proof of the intention and understanding of the parties as to when cutting was to begin, or else hold that a reasonable time was necessarily implied, since otherwise the grantee could delay cutting indefinitely and thus' defeat the purpose of the grantor. In -other words, parol proof is admissible in such a case for the purpose of determining when the period for removal commences. Sucia proof does not vary or contradict the written instrument, but merely supplies an omitted provision. In- this case the period of 8 years is specified to begin “from the date hereof.” Both the beginning and the end of the named period are thus made certain by the grant itself, and so there is no ground or reason for the parol proof which was admitted in the Flagler Case, 89 S. C. 328, 71 S. E. 849, for example, and other cases where the contract was silent or indefinite as to the time of beginning.
It is not necessary for us to affirm that the Préttyman Case established a rule of property in South Carolina which we are bound to apply. We follow it upon the question in dispute, not merely out of deference to the court which decided it, but because the decision commends itself to our judgment as just and correct.
It is also suggested, as bearing upon the asserted lack of equity,that complainant is a corporation of small capital, that it is not in the business of cutting timber, and that it has no other timber property in South Carolina.' But we fail to see how facts of this sort afford a reason for denying to it the protection of its property. What difference does it make whether complainant’s capital is large or small, or whether it is equipped for lumbering operations? Granting that it is not, it appears nevertheless to be no worse off in that regard than any of its predecessors. The original grantee was evidently known by the grantors to be buying up timber lands as trustee for the purpose of transferring the rights acquired to other parties. The Oneida Timber Company and the Midland Timber Company are both holding companies, and neither of them has carried on the business of cutting timber for market. Moreover, the argument here referred to seems to prove too much, since it implies that, if the suit were brought by a company strong financially and suitably equipped for cutting the timber from this tract, it would presumably be entitled to a permanent injunction. We are convinced that want of equity, as that phrase is commonly understood, cannot be predicated upon the facts here considered. If the right to cut and remove the timber from this tract was preserved for an additional time beyond the 8 years by the tender and offer of the Midland Company in accordance with the terms of the deed, and if that right was transferred to- complainant and continued in force up to the time when this suit was brought, it should now be protected from invasion by the effective interposition of a court of equity, although complainant may not itself be able to cut and remove the timber or have the intention to do so.
As to other reasons assigned for dismissing the complaint we refer again to the decision of the Supreme Court, rendered since this case was heard below, in Guffey v. Smith, supra. Except that it did not involve the right of extension, which we hold in this case survived the failure to begin operations within the 8-year period, it appears to us to sustain fully the plaintiff’s contention. In that case the want of mutuality was asserted because the lessee had the reserved option to surrender the lease at any time, just as in this case it is said there is want of mutuality because the grantee has the option of an extension and may exercise it for one or more years and then discontinue at pleasure; that is, since the Dennises cannot enforce an extension or control the period of extension, therefore it is claimed to be inequitable to enforce an extension against them at the will and in the interest of the grantees. With reference to this question the Supreme Court says:
“It next is insisted that according to the general principles and rules of equity administered in the federal courts the surrender clause constitutes an*659 insuperable obstacle to granting the relief sought; the argument being that, as the complainants have a reserved option to surrender the lease at any time, it cannot be specifically enforced against them and therefore cannot be similarly enforced in their favor. The rule intended to be invoked has to do with the specific performance of executory contracts, is restrained by many exceptions, and has been the subject of divergent opinions on the part of jurists and text-writers. * * * We think this option, which has not been exercised, and may never be, is not an obstacle to the relief sought.”
Without quoting more at length from this recent decision of the Supreme Court, it is sufficient to say that the principles therein announced appear to warrant us in holding that the instant case is not one for specific performance, but for injunctive relief; that it is a proper case for injunction, because complainant has no adequate remedy at law; that the extension period provided for in the deed does not create a tenancy at will; that there is no want of mutuality; that subsequent grantees succeed to all the rights of the original grantee; that enforcement of the rights conveyed would not be harsh or unconscionable; that the value of the timber at the date of the sale must be taken into account in determining whether the consideration is adequate; and that the South Carolina decisions, so far as they establish a rule of property, are binding upon this court.
As to the alleged inadequacy of consideration, which is urged as one of the reasons for refusing an injunction, it may be noted that 10 years later the owners of the land granted to William H. Dennis substantially the same right to cut and remove the timber from this tract for $2,000, which he had not paid when the case was tried, and that in the answer of the Dennises it is denied that the matter in controversy herein exceeds the sum and value of $3,000. In view of 'these facts, and bearing in mind that the owners have had the use of $1,500 since 1903, we are unable to see that it is unconscionable or in any sense inequitable to enforce against them the rights originally conveyed to which the complainant has succeeded.
The opinion of the court below holds “that in no aspect of the case is the complainant entitled to a decree extending the period for 25 years,” and we are not prepared to say that this is an erroneous conclusion. The right granted in this regard is measured by the terms of the deed, which are that ‘the grantee and his assigns “shall have such additional lime as may be desired for cutting and removing said timber,” by paying in advance the yearly sum of $90. but this language should be so construed as to give effect to the intention of the parties. Neither the Midland. Timber Company, nor the complainant as its successor, could exercise the right to an extension for a period fixed by an arbitrary or capricious desire'. It must be an honest and justifiable desire, not a pretended or fantastic desire. In short, we take the phrase to mean such additional time as may be reasonably desired by the party having the right to an extension. That a considerable period was in contemplation, and that the extension should have reference to substantial needs and business requirements, is inferable from the use of the phrase “as may be desired,” and from the provision for paying the 6 per cent, “year by year.” But the language is not to be stretched beyond its fair import, and this excludes an insincere or un
Without prolonging the discussion, we sum up our conclusion as follows:
First. The right to an extension was not lost by failure to commence cutting within the 8 years named in the conveyance.
Second. The complainant has succeeded to all the rights of the original grantee, including the right to additional time for cutting and removing the timber, and the latter right has not been lost through lapse of time or otherwise.
Third. The complainant is entitled to a permanent injunction to prevent an invasion of its property rights because it has no adequate remedy at law.
Fourth. It will be for the court below, to which the case will be remanded, to determine by such means as may be deemed most appropriate the maximum period of extension to which complainant is entitled and to take further proceedings in accordance with this opinion.
Reversed.