Case ID: ala_151/html/0207-01.html
Source: Caselaw Access Project
Author: {"author": "HARALSON, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Collins v. Abel.
    
      BUI to Annul Lease Contract.
    
    
      Lease; Requisites; Consideration. — A lease of lands for tbe purpose of mining coal and talcing oil from certain lands upon a consideration of one dollar and a specified royalty on the coal and oil taken therefrom which provides that the operation of a mine shall be begun and continued at the discretion of the lessee, and that no cessation of operation and mining, or the availing by the lessee 'in any other manner of the privileges of the lease, should operate as a forfeiture, is a mere unilateral contract and without consideration, subject to cancellation by the lessor; the lessee having taken no steps to operate thereunder for more than three years from theexeution of the deed.
    Appeal from Jefferson Chancery Court.
    Heard before Hon. Alfred H. Benners.
    Bill by Joseph D. Abel against James A. Collins to cancel and annul a lease on coal lands. The facts are sufficiently stated in the opinion of the court. From a decree for complainant respondent appeals.
    Affirmed.
    Robert N. Bell, and Caldwell & Carmichael, for appellant.
    Where the lease does not name a period in which the mining is to be begun, the law annexes the agreement to begin Avithin a reasonable time. — Taylor’s Landlord & Tenant, p. 120. If the contract is open to two constructions, one of which Avill invalidate the contract, and the other uphold it, the court Avill adopt the latter construction. — Blue Stone Coal Co. v. Bell, 18 S. E. 497; Island Coal Co. v. Combs, 152 Ind. 379.
    Vaughan & Davidson, and Smith & Smith, for appellee.
    -The agreement is unilateral, without mutuality of obligation on the part of the lessee and lacking in mutuality of remedy in favor of the lessor. — Parsons on Contract, pp. 449-450, and note; 94 Tenn. 397; 89 Tenn. 381, 61 N. E. 12; Campbell v. Lambert,36 La. Ann. 35; Ry. Go. v. Scott, 72 Tex. 70.
   HARALSON, J.

The bill was filed by Joseph B. Abel against James A. Collins, and sought the cancellation of a certain written lease, of 255 acres of coal land. The consideration expressed in the lease was $1. The lands were leased for the purpose of mining the coal thereunder and all other minerals, and was for the term of 99 years, from the date of the lease, it being the intention of the parties, as expressed in the lease, that the lessee, Collins; should have the exclusive right to the privileges' granted “and that the operation of said mines shall he begun añil continued at the discretion óf the party of the second part (Collins), and no cessation of operation in mining or availing himself in any other manner of the privileges of the lease, shall operate as'a forfeiture thereof,” and party of the second part agreed tó p%, ;each’ mbrith,,to tlie party of the first part, his lieirS, etc,, The' sum (if'3 cents per ton for all coal, ore or oil ihihe'd' or taken fey the party of the second part, and pay the sum of $1 per thousand for all timbers used as props Or caps Off Of said land, and that party of second part, his' successors and a signs, should have the exclusive right to operate sawmills on said lands. The lease Was signed by complainant but not by respondent.' ' ' •

The bill alleges, that defendant had never taken any steps Avhatever, for over three years, to mine said cóál, nor in any manner, or to any extent, made any effort to comply Avith any of the provisions of said lease; that said agreement does not shoAv on its face that its terms have not been complied Avith, nor that it has been forfeited by the lessor; but the failure thereof, are matters to be proven by extrinsic parol evidence; that said instrument is a unilateral agreement and voidable at the option of the lessor, before Avork has been commenced by the lessee under the agreement; that complainant, before filing this bill revoked said lease contract and declared the same forfeited, and notified the lessee thereof, and demanded a cancellation and surrender of the same, and, at the same time, tendered to him the said sum of $1 and the interest thereon to date, and that the respondent refused said tender, and refused to cancel and surrender said lease contract. Complainant also averred, that he Avas noAv, and had been in the adverse and peaceable possession of said land, and that said instrument was a cloud on his title, and depreciated the market value of his lands, and further, that the defendant did not in good faith procure the lease for the purpose of operating the mines, but only for speculation thereon, and the said agreement and the action of defendant in respect thereof, are grossly inadequate and unconscionable.

The prayer of the bill is for a decree adjudging that said instrument is unilateral and void; that the same be removed as a cloud upon complainant’s title; adjudging that the same was procured by a fraud' practiced upon complainant in its procurement, and ordering that the same be surrendered to the register for cancellation, and that said lease contract be held to be void; and that defendant be perpetually enjoined from transferring or assigning the same, and for general relief.

The defendant moved to dismiss the bill for want of equity, which motion was overruled by the court-. The appeal is to reverse that decree.

The insistent of the defendant is, that the instrument is not unilateral, but binding on him, and that he should be alloAved a reasonable time to open and develop the mines, and that the lease, as for anything set up, should not be decreed to be forfeited. That of the complainant is, that the instrument of lease is unilateral, and without mutuality of obligation on the part of the defendant.

In 1 Parsons on Contracts, 449, note 20, it is said: “One party to a contract is not bound thereby, Avhen it does not bind the other party; when there is no liability there is no obligation.” The author states that, in concluding a valuable article in 32 Am. L. Rev. 409, 419, the author of that article says: “I assert, unhesitatingly the rule, supported alike by reason and authority, that AAdiere a consideration is sought for to uphold a promise to perform given acts, that consideration must be something of value; is a.promise, one capable of enforcement in some tribunal, legal or equitable, and that failing, the agreement is a mere nude pact, void for want of mutuality in the obligation, lacking the reciprocal tie, and consequently without avail in any forum.” “To be binding-on one, it must be binding on the other. Each party assumes fixed and definite obligations.” — Howard v. E. T., V. & G. R. Co., 91 Ala. 269, 8 South. 868; Comer v. Bankhead, 70 Ala. 144; Evans v. C. S. & M. R. Co., 78 Ala. 841; Fulenwider v. Rowan, 136 Ala. 306, 34 South. 975.

In Petrolemn Co. v. C. C. & M. Co., 89 Tenn. 381, 18 S. W. 65, similar in its main features to the case before us, it was held: “This (contract) becomes nudum pactum, if construed to impose no legal obligation upon the lessee to explore and discover mines or to work them when discovered. That construction would convert it into a mere voluntary option, that' the lessors could withdraw, at any time before acceptance.”

In the course of the opinion, it is said: “A fair construction of this lease would leave it optional as to whether the lessees should make any effort whatever, to discover the mineral value of any particular lease, and if tested and minerals developed, it seems to depend upon their judgment as to whether said mines should be worked. * * * No other consideration for these leases is pretended, than a share in the net profits resulting from such mines, as they shall deem it advisable to test the work. No penalty is agreed on, if they shall fail to Test’ and no rent or other compensation is provided, if they shall fail to work developed mines of minerals. If this construction be the right one then these contracts, when actual mining has not been begun, are void for want of any consideration to support them.”

In Bluestone Coal Co. v. Bell, 18 S. E. 497. 38 W. Va. 297, quoting from case of Iron Co. v. Trout, 83 Va 409, 2 S. E. 713, 5 Am. St. Rep. 285, it was said: “Tlie lease was fox* a term of 20 years (here it is fox 99 years). Yet, looking to its nature and object, it cannot be contended that the lessees had the option to work or not to work the ore mines for axx indefinite time, and thxxs convert what was designed to yield a. handsome daily income to the lessor,'into a mere barren incumbrance'on his land— a cloud on his title — an incubus and a xxxanacle, which would'oppress him, and destroy the marketable value of his land. No lease of laxxd for a rent for a. return to the landlord out of the land which passes, can be construed to be intended to enable the tenant merely to hold' the lease for the purpose of speculation, without doing and performing ixx connection therewith what the lease contexnplated. Such a construction would indeed, make all such contracts a snare for the entrapment and injury of the unwary landlord.”

To the same effect is the case of Giger v. Green, 4 Gill (Md.) 472, where it was held that a. contract “xxnequal in its stipulations and bearing, which binds one party, and leaves the other unfettered, as it respects the observance of its terms, in which there are to be seen no mutual or reciprocal engagements, and which must be regarded, therefore, as unreasonable axxd inequitable, can never be enforced by a court of equity.”

The lease contract in this case expressly provides, that the operation of the xxxines shall be begun and continued at the sole discretion of the lessee, axxd that no’ cessation of operation in xnining, or availing himself in any other manner of any privileges of the lease, shall operate a forfeiture thereof. There is no binding obligation on him to mine any coal, or to cut any timber from the land. The discretion of the lessee is to govern, as to whether or not, the xnines shall be operated during the whole period of 99 years; as to when the work shall be begun, within a reasonable or unreasonable time. As has been said, tlie defendant, has mined no coal from said land, and has exercised none of the privileges of said lease, and has not in any manner or to any extent complied with any of the provisions of said lease, and has refused on tender of the one dollar and interest thereon from the date of the lease to the demand for its surrender, to surrender said lease.

From what has been said sufficient reasons appear for affirming- the decree of tlie chancellor, overruling the motion to dismiss the bill for want of equity. — Collins v. Smith, 151 Ala. —, 43 South. 838.

Affirmed.

Tyson, O. J., and S-impsox and Dexsox, JJ., concur.