Jones v. Mississippi Farms Co.

• Decision Date: 10 December 1917
• Citation: 76 So. 880,116 Miss. 295
• Court: Mississippi Supreme Court
• Parties: JONES v. MISSISSIPPI FARMS CO

76 So. 880

116 Miss. 295

JONES v. MISSISSIPPI FARMS CO

Supreme Court of Mississippi

December 10, 1917

October 1917 [Copyrighted Material Omitted]

APPEAL from the chancery court of Harrison county, HON. W. M. DENNY JR., Chancellor.

Suit by the Mississippi Farms Company against J. T. Jones. From a judgment for plaintiff, both sides appeal.

On the 8th day of May, 1909, Finkbine Lumber Company, a corporation of Iowa, doing business at Wiggins, Miss., and owning a lumber railroad extending from Wiggins about twenty-four miles southeast, entered into a contract with J. T. Jones for the sale of the logging railroad; J. T. Jones being the owner of the majority of the capital stock of the Gulf & Ship Island Railroad, which said railroad was intersected by the logging railroad at Wiggins, Miss. The contract provided for the sale of the road at and for the sum of two hundred and twenty-five thousand dollars, thirty thousand dollars of which was paid in cash, and fifteen thousand dollars to be paid on the 10th day of January, 1910, and fifteen thousand dollars on the 10th day of January of each and every year thereafter until the full purchase price had been paid. The contract consisted of twelve paragraphs, but in substance the contract provided: That the Finkbine Lumber Company should have the use of the said road free of toll in the transportation of its commodities, supplies, officers servants, and employees with its own engines and cars and train crews as long as it should maintain its sawmills and planing mills or any of them upon the main line of the road and until all the timber then owned or thereafter acquired by the said Finkbine Lumber Company was exhausted, and to make and maintain connections, spurs, and laterals at such places as it might find needful or convenient in the conduct of its business, and that, as the operation of the logging road might not be begun by Jones for some time after the execution of the contract, the Finkbine Company should maintain at its own cost and keep the main line with bridges, culverts, etc., in repair, but that, whenever Jones began to use the main line road for the operation of trains, then the cost of maintaining and repairing the bed and track of the main line, other than the cost of steel, shall be paid by the parties in proportion to the amounts of tonnage carried by each, but provided that the Finkbine Company should not be bound to maintain and repair the main line after it had discontinued the use thereof, but that such use should not be discontinued until it had given Jones at least six months' notice of its purpose to do so; that from the time Jones began the use of the said main line for the operation of trains the Finkbine Company should be under the reasonable direction of the train dispatcher or other officer of Jones in the operation of its trains and that, if Finkbine Company disobeyed any such reasonable rules and regulations made by Jones after such use was begun by Jones, it should be liable for any injuries caused thereby and that each of the parties should, when using said roads, exercise due care in the selection of engines, cars, equipment, and servants, and that Jones should be liable to the Finkbine Company for all negligent and tortious acts of Jones' employees, and should hold Finkbine Company harmless from such negligence of such employees; that no interest should be charged upon the deferred installments of the consideration until Jones began the use of the road but thereafter such deferred payments should bear four per cent. per annum interest. The contract also provided for a system of accounting between the parties, and that when Jones paid the purchase money the Finkbine Company should execute conveyances for the said logging road. Then follows clause 11 of the contract, which reads as follows:

"11. In event the party of the second part shall fail to make payments to the party of the first part, as above provided, or any of them punctually and upon the times above limited strictly and literally, the said times of payments and each of them being the essence of this contract, then and in any such event this contract shall be null and void, and thereupon all rights and interest thereby granted to or then existing in favor of the party of the second part shall utterly cease and determine, and the property hereby sold, together with all improvements and betterments thereof shall immediately revert and reinvest in the party of the first part, without any declaration or forfeiture or act of re-entry and without any other act of the party of the first part to be performed, and without any right of the party of the second part of reclamation or compensation for moneys paid or improvements made hereunder or upon said property as absolutely and perfectly as if this contract had never been made. It being the intention that said payments and improvements shall be held by the party of the first part absolutely as liquidated damages for the breach of this contract."

By section 12 of the contract it is provided that the term "party of the first part" shall be applied to and include the successors and assigns of the Finkbine Company, and that the party of the second part should include the assigns, heirs, and legal representatives of Jones. This contract seems to have been in furtherance of a scheme of colonization and development of the territory contiguous to Wiggins, Miss., and contemplated that the Finkbine Company should sell and develop cut-over lands owned by it along and contiguous to the logging railroad and to the Gulf & Ship Island Railroad. Considerable correspondence passed and also personal conferences concerning the development project between J. A. Jones, the son of J. T. Jones, and the manager of the Finkbine Company.

On March 9, 1911, a supplemental contract was entered into between J. T. Jones and the Finkbine Company, in which it was provided that, whereas the contract of May 8, 1909, had fixed no time for the commencement of the operation of the said road by Jones, in consideration of the other contract and of one dollar each to the other in hand paid and receipt acknowledged, it was agreed that Jones shall within six months after receiving written notice from the Finkbine Company of its discontinuance of the operation of the main-line logging road, and upon the vacation of the road by the Finkbine Company, Jones will within six months equip, maintain, and operate said main line road from Wiggins to Tiger Branch for a period of three years, and during the said time run at least one train each way daily, except Sunday, carrying passengers, and furnish such facilities for the transportation of freight as in the judgment of Jones may be required, and that the Finkbine Company was not bound to maintain the roadbed, ties, culverts, or any portion thereof after it should cease to use said road, and provided that, whereas Finkbine Company has ceased to use the east twelve miles of the main line of the logging road, and it was desirable to maintain thereafter until such times as Jones could enter upon the operation, the Finkbine Company would employ such labor and furnish such material as may be necessary to maintain the east twelve miles of such line, keeping an account thereof, and that the same would be paid by Jones in monthly sums not to exceed two hundred and fifty dollars per month. And it was further provided that this contract shall not alter or affect in any respect any of the provisions of the said contract of May 8, 1909, except as specifically stated. The Finkbine Company not having abandoned the use of said road, and Jones not having begun the operation thereof on the 5th day of September, 1913, Jones wrote to Finkbine Company giving notice that on the next period for payment he would default and decline to make any further payment on the contract, having paid at that time a total amounting to one hundred and two thousand dollars. This letter, in full, is as follows:

"It will be some time until the payment becomes due, the failure to meet which would, by the terms of the contract render it null and void, but thinking that you are entitled to notice of my intention in that respect I wish to advise you that I will make no further payments upon the contract executed on the 8th day of May, A. D. 1909, and that consequently you may now consider that contract, together with the agreements supplementary thereto, dated respectively the 8th day of March, A. D. 1911, and October 26, A. D. 1911, canceled and henceforth inoperative. Of course the property about which the agreements were made now reverts to you."

To this letter Finkbine Company replied as follows:

"Your letter of September 23d came duly to hand, but inasmuch as our Mr. W. E. Guild was absent from the city we have withheld answer to same until his return.

"We are sorry that you do not look at this matter the same way as we do, as we feel assured that our view of it is correct. We realize that you have a perfect right to stop payment on the road that you bought, but we are sure that you have not a right to refuse to operate the road for three years from the time we gave notice of turning it over to you as stated explicitly in the secondary contract, and we must reiterate what we said in a previous letter in regard to your operating the road."

Jones refused to make the payment, and the Finkbine Company insisted that he should make the payment. The Finkbine Lumber Company after the execution of the contract of May 8, 1909 and before the operating contract of 1911, caused the Mississippi Farms Company to be organized for the purpose of carrying out a development scheme contemplated by the parties; the Finkbine Lumber Company having no charter power to engage in buying and selling lands...