Palmer Brick Co. v. Woodward

• Decision Date: 13 June 1912
• Citation: 75 S.E. 480,138 Ga. 289
• Parties: PALMER BRICK CO. v. WOODWARD et al. WOODWARD et al. v. PALMER BRICK CO.
• Court: Georgia Supreme Court

75 S.E. 480

138 Ga. 289

PALMER BRICK CO. v. WOODWARD et al.

WOODWARD et al. v. PALMER BRICK CO.

Supreme Court of Georgia

June 13, 1912

Syllabus by the Court.

A contract is not unilateral and unenforceable which contains mutual obligations equally binding on both parties to the contract.

A contract which grants to one of the parties thereto the use and occupation of premises for a definite term, with the right to take brick clay from certain land of the other party and manufacture the same into merchantable brick, for a valuable consideration moving from the other party thereto during a specified term of years, is a contract of lease.

Where in such a contract it is provided that the lessee, "the said brick company, [is] to have the exclusive right to take from said land, or any portion thereof, and use, in the manufacture of brick, such amount of dirt and clay as they may see proper, for the said period of 20 years," and the said brick company shall pay "a royalty of 12 1/2 cents per thousand for all merchantable brick manufactured out of the clay taken from said land herein leased, payments to be made as follows: Two hundred and fifty dollars cash and $100 on the 1st day of each month during the continuance of this lease; but, on the 1st day of January, in each year an accounting shall be had between the said parties, when the said *** trustee, as aforesaid, shall account for any overpayment made, and the *** brick company shall account for any deficit on the said basis of 12 1/2 cents per thousand for said brick, as aforesaid." Held:

(a) The lessee is to have the exclusive right to take from the land, or any portion thereof, and use in the manufacture of brick, all clay that it chooses to take therefrom, and to pay ultimately for the clay so used at the rate of 12 1/2 cents per 1,000 of merchantable brick manufactured therefrom.

(b) The payment of the $100 per month is to continue regularly as a minimum alternative sum, subject to be reduced if, at the end of each year, the company shows on an accounting that, after using reasonable diligence in operating the clay mine and brick plant under ordinary conditions, there was not sufficient clay mined to make the sum of $1,200 at 12 1/2 cents per 1,000 merchantable brick, and in that event the lessee could require the lessor to refund the overpayment.

(c) If the lessee, after operating the mine and brick plant as stated in note (b), took clay from the mine in quantities sufficient to make a sum in excess of $1,200 during the year previous to 1st day of January in each year, pending the lease, as to which the accounting was to be had, the lessor had the right to demand and receive from the lessee the amount of such excess on the basis of 12 1/2 cents per 1,000 merchantable brick manufactured out of the clay so taken.

(d) By necessary implication the lessee is bound to exercise reasonable diligence in taking clay from the mine and operating the brick plant, or else is liable to the lessor in the minimum alternative sum of $100 fixed in the contract.

(e) If the lessee failed to exercise reasonable diligence in mining the clay and operating its brick plant in the manufacture therefrom of merchantable brick, or declined altogether to mine the clay and operate its plant in the manufacture of brick, the lessee would lose its right of having an accounting on the 1st day of January of each year, and would be liable, absolutely and unconditionally, to the lessor for the $100 per month agreed to be paid, and the latter could recover of the former such payments, or deferred payments, with interest.

There being ample evidence to support the findings of the auditor on the questions of fact, and his findings of law being in accord with the rulings herein made, the judgment of the court overruling the exceptions of law and fact to the auditor's report was not erroneous.

Error from Superior Court, Fulton County; Geo. L. Bell, Judge.

Action by A. P. Woodward, trustee, and others, against the Palmer Brick Company. Judgment for plaintiffs. Defendant excepts, and plaintiffs file a cross-bill of exceptions. Judgment affirmed, and cross-bill of exceptions dismissed.

Fish C.J., and Atkinson, J., dissenting.

See, also, 135 Ga. 450, 69 S.E. 827.

The petition of the plaintiffs against the Palmer Brick Company showed substantially the following facts:

In 1876 C. Howell, father of Catherine S. Woodward, conveyed to A. P. Woodward, the husband of Catherine S. Woodward, as trustee for his wife and children, 300 acres of land, more or less, in Fulton county, situated on and near the Chattahoochee river, a large portion of which was bottom land, valuable for farming purposes, and also containing large deposits of clay suitable for making brick. In 1896 negotiations were entered into between A. P. Woodward, trustee, and the Collins Brick Company, resulting in a lease of the said lands by said trustee to said brick company for a term of 20 years, for the purpose of establishing thereon a brick manufacturing plant and using the clay for the manufacture of brick. Before the lease was executed, a petition was filed by counsel for the brick company (who was paid by the trustee) in the superior court of Fulton county, praying an order of the court authorizing the trustee to make the lease. Service was perfected on the beneficiaries, and a guardian ad litem was appointed for the minors. The order of the court authorizing the lease was granted on the 17th day of September, 1896. In accordance with the authority granted by the order, the contract of lease (prepared by the same counsel) was duly executed on the 25th day of September, 1896, the material portions of which are as follows: "This memorandum of agreement, made and entered into this 25th day of September, 1896, between A. P. Woodward, as trustee for his wife, Catherine S. Woodward, and her children, of the one part, and Collins Brick Company, a corporation, of said county, of the second part, witnesseth as follows: The said A. P. Woodward, trustee as aforesaid, by this instrument hereby leases to the said Collins Brick Company, for the term of 20 years from this date, the certain tracts of land herein described, to wit: [Here follows detailed description of tracts of land amounting to 200 acres, more or less.] The said Collins Brick Company to have the exclusive right to take from said land, or any portion thereof, and use in the manufacture of brick, such amount of dirt and clay as they may see proper, for the said period of 20 years. The said Collins Brick Company also to have the use of such part or parts of said land as may be necessary for the purpose of establishing a brickyard thereon, and building such sheds or houses, tramways, and roads, and digging such wells, ditches, and waterways, as may be necessary for the carrying on of said business of making brick, in such quantities as to them may seem proper, and for the carrying of such live stock and implements, and providing quarters for employés as may be necessary in the conduct of said business. The said Collins Brick Company shall have the further right, by themselves, or through the agency of others, to build, equip, and operate, for the carrying on of said brick manufacturing business, a railroad, of such gauge as may to them seem proper, from such point on the line of the Western & Atlantic Railroad as may be most accessible and convenient, to and across the property herein leased, or such portion of the same as may be desirable or needful, with full right of way for the same, and the privilege of changing the location of the tracks, and having such side tracks and terminals, as the exigencies of the work may seem to demand. And the said A. P. Woodward, trustee as aforesaid, further covenants and agrees, without further change [charge?] than the consideration hereinafter expressed, to procure for the said Collins Brick Company, from Nathan Lyons, trustee, etc., a right of way across his property, lying between the property herein leased and the right of way of the Western & Atlantic Railroad, for the building, equipping, and operating of the railroad hereinabove provided for, procuring from him the same right, as to the point of beginning, etc., as is provided hereinabove on his own land. It is further agreed and understood that, for the rights and privileges above granted, the said Collins Brick Company shall pay to the said A. P. Woodward, trustee as aforesaid, a royalty of 12 1/2 cents per 1,000 for all merchantable brick manufactured out of the clay taken from said land herein leased, payments to be made as follows, to wit: Two hundred and fifty dollars cash, and $100 on the 1st day of each month during the continuance of this lease; but on the 1st day of January in each year an accounting shall be had between the said parties, when the said A. P. Woodward, trustee as aforesaid, shall account for any overpayment made, and the said Collins Brick Company shall account for any deficit on the said basis of 12 1/2 cents per 1,000 for said brick as aforesaid. It is further understood that the said Collins Brick Company may take said clay from any one or more parts of said land, at the same or different times, and may have and use the right of way for such wagon roads and other ways as may be necessary for the conduct of said business. This lease is not to restrict the right of the said A. P. Woodward, trustee as aforesaid, to the use of the farming lands of said property; but the right of the said Collins Brick Company to ingress and egress is not to be interfered with by the cultivation thereof."

The brick company took possession of the leased land, and began to mine and remove the clay and to manufacture it into brick. In 1898 the name of the brick company was changed to ...