Tamko Asphalt Products, Inc. v. Fenix
| Decision Date | 29 December 1958 |
| Docket Number | No. 7697,7697 |
| Citation | 321 S.W.2d 527 |
| Parties | TAMKO ASPHALT PRODUCTS, INC., Plaintiff-Appellant, v. G. J. FENIX, Defendant-Respondent. |
| Court | Missouri Court of Appeals |
Roberts & Fleischaker, Joplin, for plaintiff-appellant.
Paul E. Bradley, Joplin, for defendant-respondent.
This is a suit by plaintiff, Tamko Asphalt Products, Inc. (hereinafter called Tamko), to enjoin defendant, G. J. Fenix, from interfering with Tamko's exercise of its alleged right to enter upon land presently owned by Fenix and to remove therefrom the remainder of a chat pile. Whether Tamko has such right depends upon construction of a written contract (hereinafter referred to as the contract) executed under date of August 15, 1945, on behalf of Jasper County Royalty Company (Fenix' grantor) and E. L. Craig (Tamko's assignor). By the contract, the Royalty Company sold to Craig, as 'personal property,' all chat on a described quarter section 'known as the 'Athletic Chatt Pile" for the sum of $6,000. In paragraph IV of the contract, the parties agreed that the buyer (Craig) Paragraph V of the contract provided that 'all machinery and appliances placed on the real estate * * * by buyer shall remain his property and may be removed by him at any time prior to August 15, 1955.' By paragraph VII, the buyer was given the right 'at his own expense, to construct and maintain a railroad switch or switches for use in removing said chatts.' Paragraph VIII stated 'that buyer intends to process the chatts above described' and that 'in the event buyer should process (on the described quarter section) chatts derived from any source other than the real estate above described,' buyer should pay to the Royalty Company 'a rental of $150.00 per year for each year or any portion thereof in which said processing may be conducted.'
Following trial, the court made a general finding against plaintiff Tamko on its petition for injunctive relief; and, in response to the counterclaim of defendant Fenix seeking a declaratory judgment, the court found that 'plaintiff (Tamko) failed to make performance of the contract * * * as required by the terms and provisions thereof' and entered a declaratory judgment that 'by reason of plaintiff's lack of performance * * * said contract ended and terminated on August 15, 1955,' that buyer's title to and interest in the chat 'was subject to defeasance as to such of the chats as were not removed at the time of termination of said contract,' that Tamko had no right to extend the term of the conract or to enter upon the described quarter section and remove chat therefrom after August 15, 1955, and that Tamko now has no legal or equitable interest in the remaining chat. From that decree, Tamko appeals.
E. L. Craig was president of Tamko Asphalt Products, Inc., when he purchased the chat pile in August 1945, and was chairman of the board of directors when the instant suit was tried in December 1956; and, at all times herein material, Craig has been Tamko's 'principal stockholder.' In the conduct of its principal business, i. e., the manufacturing of asphalt composition roofing, Tamko requires colored granules to cover the roofing; and, pursuant to Craig's stated contractual intention 'to process the chatts,' he promptly constructed a plant (on the land described in the contract) 'for the manufacture of * roofing granules.' Tamko 'purchased ninety-nine per cent' of the granules processed in this plant. Records showed that Craig removed a total of 2,608 tons from the chat pile on 128 days during 1946, a total of 9,198.5 tons from the chat pile on 328 days during 1947, a total of 2,990 tons from the chat pile on 159 days during 1948, and a total of 508 tons from the chat pile on 32 days during 1949. No records of removals from the chat pile were kept thereafter.
On December 30, 1950, Tamko purchased from Craig for $20,000 all of Craig's rights under the contract and the processing plant near the chat pile. In 1951, Tamko 'oiled some granules' at that plant although not attempting 'to cover any with the coloring dye,' but Tamko admittedly had not used or operated that plant for five years prior to the trial in December 1956. As designed and constructed to furnish colored roofing granules, the plant contained machinery and equipment for 'crushing, screening, drying, * coloring and storing.' At a time not fixed in the record, 'the storage bins and the coloring unit' were moved from the plant; and, about December 1952, 'the motors and electrical equipment were removed to prevent theft.' In the present condition of the plant with 'most of the lumber * * * pretty well rotted,' Fenix said that 'I wouldn't pay $500 for it'; and, although the tenor of Tamko's evidence was that the plant was more valuable, there was no showing as to the reasonable market value or worth of the plant at any time.
After Tamko's acquisition of the chat pile from 'principal stockholder' Craig on December 30, 1950, its removals of chat were relatively insignificant, trifling and unimportant in volume and obviously irregular, desultory and sporadic in time. Notwithstanding the opinion of Tamko's manager that 'we have moved some (chat) out every month,' he estimated aggregate removals of only 1,000 to 1,100 tons from the chat pile during the last five years of the ten-year term of the contract (those removals having been 'for building and road purposes' at Tamko's roofing plant, not for the processing of colored roofing granules), leaving approximately 100,000 tons in the chat pile when the ten-year term expired on August 15, 1955. Fenix thought that, after he had acquired title to the quarter section on which the processing plant and chat pile were situate, 'subject to * * * existing contracts for removal and sale of tailings (chat),' by warranty deed dated May 7, 1951, for a recited consideration of $8,800, 'less than 500 tons' of chat had been removed and 'Tamko has not removed half of that--it has been done by people that have come in and taken a load of tailings.' The only explanation of Tamko's termination of operations in its processing plant or of the marked decrease in removals from the chat pile after 1949 is suggested in this answer to an interrogatory: 'The plant * * * was last used for making roofing granules in 1949 and thereafter maintained on a stand-by basis by Tamko * * * for use in connection with the operation of its roofing plant.' (All emphasis herein is ours.)
As to the period of time within which the entire chat pile could have been removed from Fenix' land 'by reasonably diligent effort,' Tamko's evidence was that 'it would take twenty weeks at least if you loaded (chat) every day and you would have to have a market to do that.' The same witness thought that there was 'no such market as that right now' when the case was tried on December 17, 1956, apparently because the market for chat is 'not too good' in the winter; but, there was not a scintilla of evidence as to the market for chat at any time during the ten-year term of the contract. Fenix testified that 'six months would be a reasonable time to remove that (chat) pile, counting car shortages, breakdowns and only working eight-hour shifts.'
The chat pile covers an area about 500 feet square--'somewhere around two acres'--in an old mining territory about one mile north of Duenweg, Jasper County, Missouri. With a view to further mining or prospecting, Fenix made two unsuccessful efforts (the latter during the Winter of 1955) 'to dewater' an abandoned mine shaft within 75 feet of the chat pile, but 'with one 10-inch pump we can't beat the water.' The ground under the chat pile would not be suitable for agriculture. The value of the chat is between 5cents and 10cents per ton.
On July 22, 1955, Tamko mailed to Fenix its check for $150 'to renew our lease' (as Tamko's treasurer said) for a one-year period after August 15, 1955, the end of the original ten-year term of the contract. This check was returned to Tamko uncashed with a letter from Fenix (on his attorney's letterhead) dated February 8, 1956, which stated, in part, that 'I (Fenix) cannot accept the check as all your rights under the contract terminated on August 15, 1955.' Prior to August 15, 1955, Fenix had neither written to nor talked with any representative of Tamko concerning removals from the chat pile.
On this appeal, Tamko's position is, in substance and effect, that the contract permitted and provided for successive one-year extensions or renewals after August 15, 1955, as a matter of right, without regard to the nature, extent or continuity of removals from the chat pile during the initial ten-year term of the contract; but that, if the contract be construed as having required a bona fide effort on the part of the buyer of the chat pile to remove it during said ten-year period, we now should give Tamko 'a reasonable time within which to remove the chats,' Tamko's suggestion being that 'a reasonable time would have been a...
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