Reynolds v. Pike-Horning Granite Co. ( 1921 )

Dibell, J.

Action for the specific performance of an agreement to convey an undivided one-half of certain lands. There were findings for the defendant. The plaintiff appeals from the order denying his motion for a new trial.

1. ' The agreement which it is sought to enforce specifically is contained in a lease dated September 9, 1908, made-by the defendant to the plaintiff, covering by government description 200 acres of land in Kanabec county. Hpon this land was a partially developed granite quarry of small extent. The lease ran for 10 years and included buildings and machinery which had been used by the defendant in working the quarry. The plaintiff was given the right to use the timber on the land in the conduct of the quarry. He agreed to pay one dollar per year rental for the first five years, but was to pay no royalty. After the first five years he was to pay, in addition to the one dollar annual rental, a stipulated royalty per cubic foot upon the granite of a stated quality quarried and shipped, and for granite not of the stated quality no royalty was to be paid. He paid the annual rental for the first five years and tendered the rental for the second .period of five years and it was refused.

The plaintiff took possession. He operated the quarry after a fashion for a total of 10 months in two different periods. Work ceased about September, 1912. The quarry pit was not substantially enlarged by the work done. Some granite was removed. Since work stopped the buildings and machinery have deteriorated. The land was worth $40,000 when the lease was made.

The lease provided "that upon the termination of said term of ten years hereby granted, providing this lease shall then be in force, the party of the first part [defendant] will upon the demand of the party of the second part [plaintiff], his heirs or assigns, without further con-' sideration, convey to said party of the second part, hás heirs or assigns, an undivided one-half of all’of the personal property and real estate hereinbefore described, * * *; or, if the party of the second part, his heirs or assigns shall then demand, the party of the first part, its’ successors or assigns, will convey the entire property * * * to the party of the second part, his heirs or assigns, for the sum of $40,000 free and clear of 'all encumbrance.”

It was agreed that “this lease is made for the purpose of enabling the party of the second part [plaintiff] to develop and operate a granite quarry upon said leased premises and that it is to the advantage of both parties that such quarry should be developed; but that the party of the second part does not bind himself to create a paying quarry upon said leased premises or to take out therefrom at any time during the continuance of this lease, any specified amount of granite; nor shall the party of the second part, his representatives or assigns be liable for failure from whatever cause to create and operate a successful quarry on said land.”

The so-called annual rental was nominal. The stipulated royalty might never accrue, for the plaintiff did not agree to take out royalty bearing granite. He expressly exempted himself from liability for a failure to develop a quarry. What the parties had in mind, as a vital part of the consideration of the agreement to convey without further consideration one-half of the land, was the development of a working quarry, or at the least a genuine and good faith effort to develop such a quarry. At the end of the 10-year -period the quarry had not been developed; altogether but a few months work had been done-, none at all for six years, and there had not been an effort to develop meeting the requirement -stated. Such development, or effort to develop, was an implied condition -of the right to have, without further -consideration, a deed of one-half of the land.

The contract is an unusual one and a parallel case is not found. The following illustrate a kindred principle: People’s Gas Co. v. Dean, 193 Fed. 938, 113 C. C. A. 566; Eastern Ky. Mineral & Timber Co. v. Swan-Day Lumber Co. 148 Ky. 82, 46 L.R.A. (N.S.) 672; Florence Oil & Refining Co. v. Orman, 19 Colo. App. 79, 73 Pac. 628; Hawkins v. Pepper, 117 N. C. 407, 23 S. E. 434; Shenandoah Land & Anthracite Coal Co. v. Hise, 92 Va. 238, 23 S. E. 303. In Mineral Land Inv. Co. v. Bishop Iron Co. 134 Minn. 412, 159 N. W. 966, L.R.A. 1917D, 900, an implied condition was negatived. The plaintiff is not entitled to specific performance.

2. We find nothing of merit in the plaintiff’s claim of accident or surprise entitling him to -a new trial. There was a prior contract -dated March 21, 1908. The defendant pleaded it in its answer. The plaintiff claim's that the defendant failed to perform, that damages accrued to him, and that his giving up the right to recover such damages and enering into the September contract furnished an adequate consideration for the -defendant’s -agreement to convey.

The trial court did not err. At the trial both parties somewhat de- ■ parted from the claims in -their pleadings, but neither was misled by the claims of 'the others. Whatever the merits of the controversy over the March contract, the September contract contemplated as a condition to a grant of one-half of the land the development of or a genuine effort to develop a quarry, and the outstanding fact is the absence of both.

Order affirmed.