Case Name: The Sun Lumber Company v. The Thompson Land & Coal Company
Court: Supreme Court of Appeals of West Virginia
Jurisdiction: West Virginia
Decision Date: 1953-03-17
Citations: 138 W. Va. 68
Docket Number: No. 10498
Parties: The Sun Lumber Company v. The Thompson Land & Coal Company
Judges: Lovins and Riley, Judges, dissenting.
Reporter: West Virginia Supreme Court
Volume: 138
Pages: 68–83

Head Matter:
The Sun Lumber Company v. The Thompson Land & Coal Company
(No. 10498)
Submitted January 27, 1953.
Decided March 17, 1953.
Lovins and Riley, Judges, dissenting.
John H. Fox, Herbert M. Blair, for appellant.
B. C. Eakle, Osman E. Swartz, for appellee.

Opinion:
Browning, Judge:
The Sun Lumber Company instituted this suit in equity in the Circuit Court of Clay County praying to be relieved of a claimed forfeiture of a certain agreement, dated July 14,1944, and for an injunction restraining defendant from interfering in any way with plaintiff's rights under that agreement. The defendant, The Thompson Land & Coal Company, demurred to the bill on the grounds that: (1) Plaintiff had an adequate remedy at law; and (2) the bill did not state sufficient grounds for relief, it appearing from the bill that any injury sustained by plaintiff is due to its own negligence.
The bill of complaint, as amended, sets forth that the defendant entered into an agreement with one G. G. Gillespie, dated July 14, 1944, by which it "sold and doth grant and convey" all timber of certain size located upon defendant's lands in Union District, Clay County, the instrument containing this language:
"Second party is to have five years from the date hereof in which to cut and remove said timber from said lands, with the right to extend such time, from year to year, not exceeding an additional five years, upon payment to first ' party of the sum. of $75.00 per year for each annual extension."
There was also a provision that, at the expiration of the agreement, all timber, whether cut over or not, and all buildings and improvements would revert to and become the property of the first party, its successors or assigns.
Subsequently, Gillespie entered into an agreement with plaintiff, dated October 31, 1944, identical with the original instrument, except as to dates and parties, and containing the same words "five years from the date hereof »
The bill then alleges that the plaintiff, not having considered it practical to remove the timber during the original five year period, forwarded a check in the amount of $75.00 to defendant in July, 1948, for the purpose of extending its rights to cover the year July, 1949 to July, 1950, which check was accepted and used by the defendant. The plaintiff, again having found it impractical to remove the timber during that year, decided to avail itself of an additional extension, but due to an oversight on the part of its personnel, perhaps a result of the misleading date, October 31, 1944, on the second agreement, their check in the amount of $75.00, covering the extension, was not issued until September 14, 1950. This check was returned by defendant with the notation:
"It is our position that all rights under the G. G. Gillespie timber contract terminated July 14, 1950. Should you cut or remove any of the timber you will be liable as a trespasser."
The court sustained defendant's demurrer, the plaintiff filed an amended petition to which defendant demurred on the original grounds, and the court again sustained the demurrer. The plaintiff declined to further amend, an order was entered dismissing the bill, from which order this Court granted an appeal and supersedeas on June 2, 1952.
In considering this case, it is of primary importance to determine the nature of the instrument that was executed between the parties. It is referred to in the bill of complaint as an agreement, and in briefs of counsel as a contract, lease and deed of conveyance. The decisions of this Court and those of other jurisdictions have rather clearly established that such an instrument is a conveyance of the timber growing upon the land of the size designated, and that it vests a defeasible fee in the grantee. 18 M. J., Trees and Timber, § 14, in giving the West Virginia rule quotes from Adkins v. Huff, 58 W. Va. 645, 52 S. E. 773, as follows: "The authorities are practically uniform in holding that an instrument granting standing timber, and containing a clause requiring or permitting it to be removed within a specified time from the date of the grant, gives no absolute and unconditional title to the property. Some courts hold the right of the grantee to be a license, others a lease, and others a defeasible title to the timber. By the great weight of authority it is determined that no right or title exists in the grantee after the expiration of the time specified in the deed or contract."
We find this statement in Keystone Company v. Brooks, 65 W. Va. 512, 514, 64 S. E. 614: "In case of a conveyance of timber, with a time limit requiring its removal from the land in a given time, the weight of authority is, that the conveyance is conditional, the purchaser taking only what timber shall be removed within that time, the balance reverting to the owner of the land, or rather remaining his." There was, as heretofore stated, a definite and unqualified reversion clause in the instrument in controversy in this suit.
Although it might be argued that there is a lack of complete harmony in the West Virginia cases dealing with this subject, a careful scrutiny of the cases indicates that the disharmony, if any exists, relates to those cases in which there is a conveyance of the standing timber or a reservation thereof by the owner in conveying the surface with no time limit for the removal of the timber. In Carder v. Matthey, et al., 127 W. Va. 1, 32 S. E. 2d. 640, a case involving a reservation of the timber with no specified time for removal, the Court held that twenty years was not an unreasonable time within which the grantee could remove timber from the land, but Judge Fox in the majority opinion stated: "We do not question the rule laid down in Hill v. Vencill and subsequent cases cited above; but even so, the question of whether a person should lose his right under the rule announced therein depends on the facts of the case. No fixed period of time is or can be laid down for all cases. In the case at bar approximately twenty years passed from the date of the deed in question and the institution of this suit. If we had before us a simple exception of the timber, without specification of time for removal, and nothing more, it might be said that, under the rule announced in the cases above considered, the defendants had lost title thereto;
In contrast is the agreement between the parties in Lange & Crist Box & Lumber Co., Inc. v. Haught, et al., 132 W. Va. 530, 52 S. E. 2d. 695, which provided that the purchaser would "log and remove all timber covered and conveyed by this deed on or before the 18th day of November, 1946.", the deed having been executed on July 11, 1945. There were 246 acres of timber involved in that transaction. This Court held in a unanimous decision, the opinion being written by Judge Haymond, that: "Under a written agreement between the landowners and a purchaser which, for a cash consideration, conveys standing timber but requires its removal from the land on or before a specified day and expressly provides that at that time the agreement shall become null and void, the title to the timber, acquired by the purchaser or a grantee of the purchaser, is defeasible by failure so to remove it, and after the final day prescribed for its removal such grantee has no right or title to the timber, including that previously severed but not removed from- the land."
The facts in the Virginia case of Hartley, et al. v. Neaves, et al., 84 S. E. 97, very closely parallel those in this case. The parties there agreed that the grantees should have five years in which to cut and remove'the timber, and that if it was not removed within the initial, period, the grantees should have an additional time, not to exceed five years, for the removal upon payment of $15.00 a year for the additional time. No timber was cut within the first five year period, nor was any offer made to pay the sum designated for the extension time, until more than ninety days had elapsed after the expiration of the first five year period. The Virginia court, upon that state of facts, held: " the grantees were bound to make payment and request extension before the expiration of the first five-year period, and, not having done so, their rights under the deed were lost."
It will be observed that in the instant case, the grantee had exercised its privilege of renewing beyond the initial five year period, and had made a payment of $75.00 which covered the first additional annual period beyond the initial five year period, that is from July 14, 1949 to July 14, 1950. The Court is unable to distinguish a case in which there is a failure upon the part of a grantee to extend the time within which timber could be removed by making such payment as is required prior to the expiration of the initial period, and the case under consideration wherein the failure to comply with the terms of the agreement occurred subsequent to the end of the initial period. The language of this instrument is clearly and unambiguously to the effect that the extension beyond the first five year period was to be upon an annual basis, and that the grantee could secure each of those annual extensions only by the payment to the grantor of the sum of $75.00. That this fact was-clearly understood by the grantee is evident from its action in forwarding to the grantor a check in the sum of $75.00, much in advance of July 14, 1949, the date of the expiration of the first five year period, and it is interesting to note that a voucher attached to the check recited that the $75.00 payment was for an extension of its rights from July 14, 1949 to July 14, 1950. It has been argued-ably and well by counsel for appellant that it was only by misadventure and confusion, resulting from the October 31 date upon the second agreement, that their client neglected to make the $75.00 payment for a second annual extension on or before July 14, and that it should not be penalized under those circumstances.
The instrument between these parties creates a de-feasible fee in the timber with an option to extend the period for the removal of the timber by compliance with the terms of the agreement. The fact that the grantee did not exercise its option for the second annual period beyond the original five year period was not, according to this record, in any way contributed to by the appellee.
The title of the appellant to the trees standing on this tract of land, as of July 15, 1950, depends upon the secondary question of whether payment for the annual extension was to be. made in advance. If the defeasible fee of the appellant was defeated by its failure to exercise its option to extend by the terms of the agreement on the 14th of July, then it could not revive it by payment of this sum on the 31st day of October. Title to real property does not so easily flow from one party to another. It is well argued, and strongly urged, that the agreement between these parties did not provide that the sum to be paid for each annual extension was to be in advance. The appellant, according to this contention, could make the $75.00 payment at any time between July 14, 1950 and July 14, 1951, and thereby protect its rights to the extension for that year. However, as heretofore stated, it is quite clear that the appellant understood, by the notation attached to the voucher on its check for the first extension, that the payment was to be in advance, and that the rights given it by the payment of the first $75.00 extended only to July 14, 1950.
If the contention of the appellant is tenable to the effect that it had a full year, from July 14, 1950, within which to exercise its option to secure an extension for that year, then the appellee is placed in the position of not knowing until July 14, 1951 whether the appellant had elected to exercise its option for that year. If the appellant had neither tendered payment nor given notice of his intention to renew until the expiration of that year, the appellant would not be responsible for the payment for that year, and, upon demand by the appellee, could disclaim any such responsibility by simply stating that it had no desire to renew the option after July 14, 1950. If such a position could be maintained, it would amount to the granting to the appellant of an additional year without cost, during which time it could remain silent to the detriment of the appellee who would not be in a position to cut the timber or otherwise dispose of it, and at the same time be at the mercy of the appellant as to whether it would be paid the amount agreed upon for the annual extension. We do not believe that it was the intention of the parties to create such a situation at the time this instrument was executed.
As was stated in Hartley, et al. v. Neaves, et al., supra,: " If appellants could wait over 90 days before giving such notice and paying or tendering the money to be paid by them for an extension of time for the removal of the timber, they could have as well waited till the end of the year following the expiration of the five-year limit of the time and thus left appellees in suspense as to their right to dispose of their timber, and as to the use they could make of their land upon which the timber is standing. No duty was imposed upon appellees in their contract with appellants with respect to an extension of the time for the removal of this timber other than to grant an extension not to exceed five years upon proper demand being made of them for the extension and the payment or tender of the stipulated amount therefor."
We believe that under the decisions of this Court, and by the great weight of authority elsewhere, that a conveyance which creates a defeasible fee in a grantee of standing timber, with an option for renewing the time for removal, is to be strictly construed in favor of the grantor. Hartley, et al. v. Neaves, et al., supra; Hall v. W. M. Ritter Lumber Company, (Va.), 187 S. E. 503; Tuxbury Lumber Company v. Byrd, (S. C.), 127 S. E. 267; and Williams v. Roper Lumber Company, (N. C.), 93 S. E. 741.
The appellant also advances the theory that a denial of its title to the timber involved amounts to a declaration of forfeiture, and we are well aware of the elementary principle of equity jurisprudence that equity looks with disfavor upon forfeitures, and that equity never enforces a penalty or forfeiture if such can be avoided. In Carder v. Mattkey, et al., supra, it was stated that: " no£ onjy wju a court of equity refuse to act affirmatively in the enforcement of a forfeiture, but will often relieve against it." The Court, in the same case, quoted Engel v. South Penn Oil Co., 106 W. Va. 339, pts. 2 and 3 syh, 146 S. E. 385, and said further: "A condition subsequent defeating the title upon non-performance must be clearly expressed or arise by necessary implication from the language used in the deed."; "After an estate has been vested by apt and proper deed the courts will always construe the deed so as to prevent a forfeiture or defeasance of the estate conveyed thereby, if possible." Craig v. Hukill, 37 W. Va. 520, 16 S. E. 363, and several other West Virginia cases to the same effect are quoted in that opinion supporting the well established principles with which this Court has no quarrel.
It will be observed that assuming that a forfeiture was involved in this case that the grantor is not attempting to enforce it in a court of equity, it having been the defendant in the lower court. Furthermore, the condition subsequent, if such there was, was clearly expressed in the agreement between the parties and does not arise by implication, assuming again that forfeiture is involved. However, it is the position of this Court that forfeiture is not involved. The word "forfeiture" has been somewhat loosely invoked by the courts to describe various terminations of rights where the nature of the termination was unessential to a decision upon the issue involved. In its broad meaning, a forfeiture is the loss of a vested interest in consequence of a breach of duty. McCutcheon, et al. v. Enon Oil & Gas Co., 102 W. Va. 345, 135 S. E. 238; Sands, Exr. v. Holbert, 93 W. Va. 574, 117 S. E. 896.
As heretofore stated, it is the opinion of this Court that the instrument involved in this case conveyed to the grantee a defeasible fee with an option for an extension of the time within which to remove the timber conveyed to it. In order to avail himself of the right, the optionee must comply with the conditions set out in the option contract. 1 Warvelle on Vendors and Purchasers (2d Ed.) § 175; Williston on Contracts, Vol. 6 (Rev. Ed.) § 1970.
This Court has held that an option is a mere personal right, not an interest, and that, as such, it differs materially and essentially from a condition subsequent capable of working a forfeiture. Woodall, et al. v. Bruen, et al., 76 W. Va. 193, 85 S. E. 170.
In Lake Shore Country Club v. Brand, et al., 339 Ill. 504, 171 N. E. 494, it was stated: " An option contract does not come within the equitable rule against forfeitures. The question of declaring a forfeiture is not involved. An option contract gives to the optionee a right under the named conditions. If those conditions are not met, the optionee does not acquire the right. Such a situation involves none of the elements of a forfeiture. It deprives no party of any right and abrogates no contract, but, on the other hand, is but the enforcement of the contract made by the parties. "
In Blackstone Mfg. Co. v. Allen, (Va.), 85 S. E. 568, the court in construing a timber contract, similar to the one in question here, said: " there is no forfeiture of the timber remaining uncut or unremoved after the time limit, because there is nothing to forfeit;
The Virginia court in Wilson Bros., et al. v. Branham, et al., 131 Va. 364, 109 S. E. 189, referred to the doctrine laid down in the Blackstone case as to forfeiture, but intimated that it would apply only where there was an express and limited right to enter and remove the timber, not an unlimited right. In this case, the right of. entry, and the time therefor, was definitely limited and expressly set out in the agreement between the parties, and, upon the appellant's failure to exercise its option to extend such period at the proper time, all of its rights under the agreement were terminated.
The decree of the Circuit Court of Clay County is affirmed.
Affirmed.