Henderson Lumber Co. v. Waycross & Western Railway Co. , 148 Ga. 69 ( 1918 )

Hill, J.

(After stating the foregoing fáets.)

1. The first headnote requires no elaboration.

2. F. B. Sirmans, since deceased, entered into an agreement, which rested in parol, with the builders of the Waycross & Western Railroad Company, whereby the railroad was to build its line of road through a large tract of timber land belonging to Sirmans, and to erect and maintain a depot or station on the land to be known as “Sirmans.” Sirmans on his part was to construct a sawmill at-or near the town of Sirmans, saw the timber into lumber and other products, and ship them over the line of railroad. Sirmans died before this project was completed, and certain receivers were appointed either before or after his death to wind up his affairs. By.authority of an order of court they entered into a lease contract with the Henderson Lumber Company, which was duly recorded, whereby it was covenanted and agreed between the receivers on the one part, and the Henderson Lumber Company on the other, that the latter would construct and maintain, on a tract of land to be purchased from the receivers, a sawmill to be situated on the Waycross & Western Railroad, and to ship the manufactured products of the timber over the railroad in consideration of the construction and operation of the railroad at or near where the timber was situated, which agreement on the part of the railroad company had been complied with at the time of the execution of the lease. The lessee, Henderson Lumber Company, without constructing the sawmill or sawing or shipping any lumber over the railroad, executed its lease of the timber to the Milltown Manufacturing Company, which lease did not refer to the covenants recited in the original lease. The Milltown Manufacturing Company proceeded to cut the timber and ship it over another railroad to Milltown and there manufacture it into lumber and other products, and did not ship any lumber over the Waycross & Western Railroad. The receivers, the Waycross & Western Railroad Company, and Mrs. Edna Sirmans Sessoms (who had purchased from the receivers the land upon which the timber was situated) brought the present suit against the Henderson Lumber Company and the Milltown Manufacturing Company, to enjoin them from cutting and shipping the timber, and for specific performance of the contract. On the hearing the court granted an interlocutory injunction, and the plaintiffs in error except to that judgment.

It is argued here with great force and plausibility that the covenants in the conveyance from the receivers to the Henderson Lumber Company are either covenants running with the land, or are restrictions in the conveyance which would bind the Milltown Manufacturing Company, which purchased from the first lessee with constructive notice. Under the facts of this case and the decision in the case of the Waycross R. Co. v. Southern Pine Co., 115 Ga. 7 (41 S. E. 271), we can not agree to this contention. The facts in the case cited are very similar to those in the present case, and the contentions there were substantially the same as in this. There, as here, a railroad brought a petition to enjoin the cutting of timber under a contract which provided that the manufactured product of the timber on certain lands should be shipped over the plaintiff’s line of railroad. But there, as here, the railroad company was not a party to the contract; and in the opinion of the court, delivered by Simmons, C. J., it was said: “There is no privity of contract between the plaintiff and the defendant. As a general rule a contract does not impose liability or confer rights upon persons not parties thereto, so as to entitle them to sue in their own names for its breach. . . We think, therefore, that there was no privity of contract between the plaintiff and the defendant, and that the former had no right to proceed in its own name against the latter, even in equity.” It was also said: “Tf what we have said above is true, the plaintiff had no right or interest in the contracts. It was not a party to any of them and had no right to enforce them against the defendant. There was no privity of estate of any kind between the plaintiff and any of the covenantors. It had never owned the land or the timber, and had never sold or purchased any interest in either. There could be no privity of estate between it and the defendant. Further than this, the covenants were not real but personal, and were collateral to the land.” And to the same effect see Atlantic &c. R. Co. v. Southern Pine Co., 116 Ga. 224 (42 S. E. 500). And. see Civil Code, § 5516, which provides: “As a general rule the action on a contract, whether express or implied, or whether by parol or under seal or of record, must be brought in the name of the party in whom the legal interest in such contract is vested, and against the party'who made it in person or by agent.” We think that, in accordance with the rulings in the cases above cited, the covenants in the lease from the receivers to the Henderson Lumber Company were not real and did not attach to the land, but were personal covenants and collateral thereto. 1 Warvelle on Vendors (2d ed.), § 421. They did not amount to covenants running'with the land, or as restrictions in the conveyance which Avould be binding on the second lessee, the MilltoAvn Manufacturing Company. Clark on Contracts (3d ed.), 468 (3). The stipulation in the lease reserving title in the lessors to the timber until the same is actually converted into lumber or crossties by the lessee, its successors or assigns, was intended to secure the payment of the purchase-money, and there is no complaint that there has been any default in this regard.

True, the lease containing the covenants from the receivers to the Henderson Lumber Company was recorded, but the most that can be said of that is that it was only constructive notice of the personal covenants contained therein. The Waycross & Western Railroad Company was not a party to the lease to the Henderson Lumber Company. Mrs. Sessoms purchased the land after the lease to the Henderson Lumber Company. The receivers were parties to the lease to the Henderson Lumber Company; and in this respect this case is different from that of Waycross Air-Line Railroad Co. v. Southern Pine Co., supra. But, as has been pointed out, the covenants in the lease were merely personal and did not run with the land, and the purchaser was not bound by them and did not assume any obligations in respect to them. There was no restriction on the Henderson Lumber Company selling the timber or on the Milltown Lumber Company cutting and shipping the lumber. The Milltown Manufacturing Company was not a party to the contract containing the covenants; and the general rule is that a contract does not impose liability or confer rights upon persons not parties thereto, so as to entitle them to sue in their own names for its breach. Waycross Air-Line Railroad Co. v. Southern Pine Co., supra.

Nor does the instant case fall within any of the exceptions to the above rule. See Clark on Contracts (3d ed.), 468 (3). What has been said with reference to the Waycross & Western Eailroad Company applies to Mrs. Sessoms, who purchased the land on which the timber stood from the receivers of the Sirmans estate after the first lease was executed, and to the receivers themselves. The cases of Sheppard v. Bridges, 137 Ga. 615, 621 (74 S. E. 245), Crawford v. Wilson, 139 Ga. 654 (78 S. E. 30, 44 L. R. A. (N. S.) 73), and Louisville &c. R. Co. v. Nelson, 145 Ga. 594 (89 S. E. 693), relied on by the defendants in error, are different in their facts from the instant case, and are not controlling. The ruling in the Sheppard ease would have to be extended beyond what was decided, in order .to apply to a case like the present.

Judgment reversed.

All the Justices concur, except Fish, C. J., absent.