Hunter-Benn & Co. Company v. Bassett Lumber Co., 1 Div. 700.

• Decision Date: 21 January 1932
• Docket Number: 1 Div. 700.
• Citation: 224 Ala. 215,139 So. 348
• Court: Alabama Supreme Court
• Parties: HUNTER-BENN & CO. COMPANY v. BASSETT LUMBER CO.

139 So. 348

224 Ala. 215

HUNTER-BENN & CO. COMPANY v. BASSETT LUMBER CO.

1 Div. 700.

Supreme Court of Alabama

January 21, 1932

Appeal from Circuit Court, Washington County; T. J. Bedsole, Judge.

Bill in equity by the Bassett Lumber Company against the Hunter-Benn & Co. Company and another. From a decree overruling a demurrer to the bill, named respondent appeals.

Affirmed.

Joe M Pelham, Jr., of Chatom, and Smith & Johnston and Harry T Smith & Caffey, all of Mobile, for appellant.

Robert H. Smith, of Mobile, and Adams & Gillmore, of Grove Hill, for appellee.

BROWN J.

This appeal is prosecuted from a decree of the court overruling defendant's demurrers to the bill as last amended.

The bill is filed by the complainant as mortgagor pending foreclosure, to enjoin the defendant from exercising the power of sale, for an accounting, to enforce an equitable set-off, and in the alternative to redeem; the complainant offering in its bill to do equity by paying any amount or sum ascertained to be due, secured by the mortgage.

The mortgage was executed, not to secure any specific indebtedness, but to secure the faithful performance of a contract between the parties in respect to the operation of a sawmill by the complainant in the manufacture and sale of lumber from timber on the defendant's lands, and the questions argued go to the general equity of the bill, the construction of some of the provisions of the contract respecting the right of the defendant to terminate the contract by declaring a forfeiture, and the right of the complainant to set off its alleged equitable interest in the lumber manufactured and on the mill yard against the demands of the defendant.

As a general rule, it is well settled that a mortgagor, by a bill filed prior to foreclosure, may protect his equity of redemption in real estate on an offer to do equity, and tender of the amount admitted to be due prior to filing the bill is not essential to its equity. Williams v Noland, 205 Ala. 63, 87 So. 818, and cases therein cited.

Another familiar doctrine is that where an agreement is entered into or given merely to secure the payment of money, a forfeiture either of land, chattels, or money, incurred by its nonperformance, will be set aside on behalf of the defaulting party, or relieved against in any other manner made necessary by the circumstances of the case, on payment of the debt, interest, and costs, if any have accrued, unless the remedy is prohibited, under the special circumstances of the case, by some other controlling doctrine of equity. 1 Pom. Eq. Juris. vol. 1 (4th Ed.) § 450, p. 854; 10 R. C. L. 328, § 75.

The jurisdiction to relieve against forfeitures is founded upon the principle that a party having legal rights shall not be permitted to use them oppressively to the injustice of the defaulting party, but the principle does not extend so far as to authorize a court of equity to set aside the valid stipulations of the parties upon the performance of which their rights depend. And where there is no controversy as to the balance due, and a reasonable opportunity is afforded for payment or tender, a tender of the amount due is a prerequisite to the right to invoke the jurisdiction of a court of equity to relieve from the forfeiture. Carter v. Brownell Auto Co., 217 Ala. 690, 117 So. 304.

"In ordinary cases time of performance is, in equity, regarded as formal, and as meaning only that the contract shall be completed within a reasonable time and substantially according to the agreement, regard being had to all the circumstances. Consequently a court of equity will generally relieve a party who has not performed his contract strictly, as to time, unless it appears affirmatively that the parties regarded it as an essential element in their agreement, or unless such a result follows from the nature and purposes of the contract. And slight circumstances are sufficient in a court of equity to prevent a party from taking the benefit of a time stipulation." 10 R. C. L. § 78, p. 331.

Another principle applicable to the case in hand is, where two or more written contracts are entered into between the same parties, concerning the same subject-matter, whether simultaneously or on different occasions, under some circumstances, these will be treated as one contract, interpreted together, when this is necessary to ascertain the intention of the parties. Chicago Trust & Savings Bank v. Chicago Title & Trust Co., 190 Ill. 404, 60 N.E. 586, 83 Am. St. Rep. 138; Blagen v. Thompson et al., 23 Or. 239, 31 P. 647, 18 L. R. A. 315.

The contracts attached to and made Exhibits A and B to the bill, and the mortgage given to secure the faithful performance of the contract, made Exhibit F, on the principle last above stated, constitute the contract between the parties, and must be construed together to properly determine their relation, duties, obligations, and rights, and we now state our judgment as to the legal effect of said contract, as a whole.

It is clear that the relation between the complainant and the defendant is that of owner and independent contractor, the complainant as such contractor undertaking to "fully equip band saw mill plant including planer and dry kiln, all of a sufficient and appropriate capacity to properly manufacture one million feet, board measure, per month, of pine lumber of the dimensions such as constitute the average run of the outputs of plants of similar character and capacity"; to "maintain said plant in good condition and operate it exclusively, continuously and to full capacity (except as otherwise provided in the contract) in the performance of this contract until all of the trees" on the land of the owner described in the contract have been removed from said land; to construct and fully and properly equip and maintain in good condition, and operate at its own expense, all logging and tram roads necessary to the performance of the contract; to cut the timber, transport the logs to the mill, and manufacture the same into lumber, furnishing all necessary capital and labor for such purpose and sell the output of the mill, collect the proceeds of such sale, and "shall within ten days from the first day of each month, furnish the owner an inventory of the lumber cut, and of the sales of manufactured products, with the terms of the sales, the price at which they were made, and the names of the purchasers, together with a statement of all collections made during (as modified) the preceding month on account of the sales of lumber covered by this contract, and pay to the owner 30% of the sales F. O. B. raft or craft at the mill."

We set out here some of the provisions of the contract deemed pertinent to the questions to be decided:

"14th. After the contractor has entered upon said lands, or any part thereof, for the purpose of removing trees therefrom, he shall continue operations under this contract consecutively as long as the manufactured product therefrom can be sold upon an average of the following prices F. O. B. raft or craft at the mill, viz.: for pine $23.33 1/3, or more per thousand feet, board measure, and for hardwood, $16.66 2/3 per thousand feet, board measure; but should the market price of said lumber at any time fall below such prices, the contractor may, at his election, discontinue operations upon said lands until the products of the mill can be sold for an average of such prices, provided the contractor shall not, on account of the prices, discontinue operations, without the consent of the owner, for more than six consecutive months, nor for more than six months in any one calendar year.

"15th. The owner shall have the right to, at any time, withdraw from sale and remove from the contractor's premises, all or any part of the lumber manufactured under this contract suitable for export that it may elect to take, upon the payment to the contractor for his services in cutting the trees and manufacturing said lumber 70% of the price at which such lumber could be sold f. o. b. raft or craft at the mill, to others at the time of such withdrawal.

"Provided, however, that in no event will the owner withdraw from sale and remove from the contractor's premises any lumber manufactured under the contract or any specific order if prior to accepting said order the contractor has given the owner opportunity to order or purchase the lumber to be so manufactured and the owner has declined to do so.

"16th. The contractor shall, except as herein provided, sell the manufactured products from said lands from time to time to the best advantage and shall retain for his services in cutting the trees and manufacturing them into lumber, selling the same and collecting the proceeds thereof, and to cover all other services he may have performed, and all other expenses he may have incurred with regard to said trees and the products thereof, 70% gross of the price at which the lumber is sold F. O. B. craft or raft at the mill. When sold deliverable elsewhere than F. O. B. craft or raft at the mill, the gross price 'F. O. B. craft or raft at mill' shall be obtained by deducting from the gross price at the point of actual delivery the cost of transportation, from the mill, of the craft or raft.

"17th. The contractor guarantees all sales of lumber made under this contract. If lumber, at any time, is not paid for by the purchaser within six months from the date of the sale, then the contractor shall become liable to the owner for the sums payable to it, therefrom just as though the said lumber had been paid for at the termination of said period of six months. [Italics supplied.] ***

"19th. The time covered by this contract shall be divided into periods of six months duration, commencing upon the day when the contractor

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