Opinion
Argued December 12, 1902
Decided January 6, 1903
Elon R. Brown and Henry Purcell for appellant. Henry W. Jessup and Albert Stickney for respondent.
The complaint was dismissed by the trial judge on the pleadings and the opening of plaintiff's counsel and judgment entered to that effect, which was affirmed by the Appellate Division without opinion on the authority of same case in 55 Appellate Division, 225 ( 66 App. Div. 617). We are now called upon to review this determination.
This case has been twice before the Appellate Division on questions of remedy; on an appeal by the defendant from an order continuing an injunction pendente lite ( 31 Misc. Rep. 695), which resulted in reversal with an opinion ( 55 App. Div. 225); again on the defendant's appeal from an order of the Special Term, made after the affirmance of judgment dismissing the complaint, denying a motion to cancel the notice of lis pendens; this order was affirmed with an opinion. ( 62 App. Div. 538. )
The plaintiff seeks in this action the enforcement of a contract providing, in substance, for the sale and delivery by the defendant to the plaintiff of twelve thousand cords of pulp wood a year for the period of ten years, with an option in the plaintiff to extend the term of the contract for another ten years.
It is the contention of the plaintiff that it has set forth in the complaint an equitable cause of action which entitles it to the remedies and protection afforded by a court of equity to litigants who are properly before it.
On the other hand, it is argued by the defendant that this contract involves merely a sale of chattels, to wit, pulp wood, which may be cut by the defendant from any premises it sees fit, and that assuming it is in default of its contract, the plaintiff's remedy at law is adequate.
The counsel for the plaintiff argues that while it is a contract for the sale of chattels, it is of chattels that are to be severed from the realty, according to its terms, for the purpose of delivery, and that by those terms its faithful performance by the defendant is secured by covenants which fastened on the land indicated therein and its products so far as is necessary to insure that the chattels will be severed and delivered.
As the dismissal of the complaint was upon the pleadings, the question as to the sufficiency of the pleading is presented as upon demurrer.
An examination of a few provisions of the contract makes it very clear that the contention of the defendant's counsel that it involves a mere sale of chattels is erroneous.
The complaint alleges, in this connection, that at the time the contract was made the defendant was the owner of thirty-two thousand acres of land situated in the county of Franklin, and gives a lengthy description of the property, and avers that this tract was all the forest land which the defendant owned, and that the contract was made and entered into with reference to such land.
We thus have the premises identified from which this pulp wood was to be obtained.
There are other provisions of the contract which show conclusively that the parties were contracting with reference to these premises.
This provision is found in the contract: "The wood so cut shall consist of all the green spruce upon the lands cut over, so as not to deliver to said second party more small wood than necessary."
It also provides that in case the mill of the defendant is destroyed by fire a reasonable time is to be allowed for the reconstruction of the same, and in this connection occurs the provision: "It is further provided that in no case shall said party of the first part be required to deliver in the aggregate (unless it shall choose so to do) more than the amount of pulp wood which may be obtained from the lands owned by it, being about thirty-two thousand acres."
There is a provision calculated to protect the defendant in case all or part of the pulp wood on these premises is destroyed by fire, or if the whole or a portion of the premises are condemned by the state of New York, to the effect that it shall not be compelled to deliver in such an emergency any more pulp wood "than it is still able to obtain from its said lands."
Then follow these significant provisions:
"It is further provided that said party of the first part will not, during the term of this contract, sell any of its land or the pulp wood thereon so as to in any way jeopardize or prevent its complete fulfillment and performance of this contract."
"It is further agreed that the said party of the second part shall be deemed to have an equitable interest in said pulp wood for advances made by them as hereinbefore provided and the equity of said second party in this contract is assignable and may be used as collateral security for the payment of any loan or obligation made by said second party."
The contract obligates the plaintiff to make advances from time to time to the defendant, as follows: "The party of the second part shall make such advances of money to the party of the first part as it may request during the progress of the work, but the party of the second part need not advance more than approximately the cost of work done."
The complaint alleges that the defendant entered upon the lands in question and commenced the cutting of the pulp wood under the contract about the first of October, 1899, and notified the plaintiff that it was so doing; that it called upon the plaintiff to make advances under the terms of the contract, which it did in the aggregate sum of twenty-five thousand dollars; that notwithstanding the plaintiff so performed its contract, the defendant assumed to rescind the contract on the ground, as alleged in the answer, that the plaintiff was in default of its covenant to make necessary advances for work done.
The complaint also avers that following this attempted rescission, the defendant entered into a contract in writing with its co-defendant, the Brooklyn Cooperage Company, which is set forth in full, wherein it appears that the defendant has covenanted to convey to the Brooklyn Cooperage Company about one-half of the thirty-two thousand acres of land.
The complaint further avers that the total amount of wood pulp upon the thirty-two thousand acres subject to the contract in question does not exceed two hundred and forty thousand cords. In other words, this allegation implies that all the pulp wood on the premises is not more than sufficient to meet the demands of the contract if it covers a period of twenty years.
There is also an averment that the defendant has refused to deliver to plaintiff the pulp wood covered by these advances and upon which it has an express lien under the terms of the contract.
As a further ground of equitable relief, it is alleged that at the time the plaintiff entered into the contract it was but recently organized, and was then engaged and is now engaged in the construction of a large paper and pulp plant in Wilna, Jefferson county, which is being completed as rapidly as possible and involves an expenditure of about one million of dollars; and that the failure of the defendant to perform its contract works irreparable damage to the plaintiff.
It is further averred that since the execution of this contract the price of pulp wood has greatly advanced owing to the increasing scarcity of the timber from which it is cut.
From the situation of the parties as disclosed by the contract and the allegations of the complaint, which for the purpose of this appeal stand admitted, it is apparent that the plaintiff's remedy at law is inadequate. Any attempt to prove damages that might result to the plaintiff by the non-performance on the part of the defendant would encounter insuperable difficulties, as the contract extends over a term of ten years, and at the election of plaintiff may cover a period of ten years more.
The market price of pulp wood, the cost of transportation and the rate of wages, all essential in determining damages, would be unknown quantities in a problem involving so long a period. Furthermore, the contingencies contemplated by the contract, of the destruction in whole or in part of the timber by fire, or the taking of all or some portion of the land by the state in the exercise of the right of eminent domain, prevent an accurate computation of damages in the future.
The view we entertain of this case renders it unnecessary to decide at this time whether a court of equity should enforce the specific performance of this contract, or should confine the relief granted to the enforcement of its negative covenants.
The time over which a contract extends is not necessarily controlling as to specific performance. This court has decreed specific performance of a contract between railroad corporations extending over a period of twenty-one years. ( P.P. C.I.R.R. Co. v. C.I. B.R.R. Co., 144 N.Y. 152.)
In a late case we have refused to decree the specific performance of a contract, involving a period of only two years, on the ground that it required various and continuous acts and the exercise of such special skill, taste, judgment and supervision as to render judicial control extremely difficult, but confined the relief to the enforcement of the negative covenant which afforded some protection to the plaintiff. ( Standard Fashion Co. v. Siegel-Cooper Co., 157 N.Y. 60.)
The relief of plaintiffs by the enforcement of negative covenants is very common and has been extended to cases involving a contract for the sale of or interest in chattels. ( Donnell v. Bennett, L.R. [22 Chan. Div.] 835; Peabody v. Norfolk, 98 Mass. 452; Goddard v. Wilde, 17 Fed. Repr. 845; Equitable Gas Light Co. v. Baltimore Coal, Tar Mfg. Co., 65 Md. 73.)
The plaintiff insists that it has fully performed the contract and asks for its specific performance and the usual relief in equity, while the defendant admits that it has attempted to rescind the contract on the ground of plaintiff's non-performance, has covenanted to convey to another corporation fully one-half of the premises in question, and in a general way proceeded in a manner as if the contract no longer existed.
We have here distinct issues that should have been tried by the Special Term, and the dismissal of the complaint under these circumstances was error.
The Appellate Division in affirming the judgment dismissing the complaint did so upon its opinion written on reversing the order granting an injunction restraining the defendant from conveying any portion of the land in question in violation of the terms of the contract during the pendency of the action. In that opinion it held, in substance, that in view of the difficulties involved in compelling obedience to its decree the specific performance of the contract would not be directed. It also held that as the plaintiff's ultimate success was doubtful, and the injury to the defendant which would follow the injunction would be greater than any possible injury which would result to the plaintiff from its denial, afforded an additional reason for denying the injunction pendente lite. ( 55 App. Div. 225.)
The questions of the propriety of granting the injunction pendente lite and of setting it aside on appeal are not before us, and we refrain from expressing any opinion in the premises.
After the issues have been tried and the precise facts in this case established, the trial judge will be in a position to determine whether the court will decree the specific performance of the contract and issue its injunction in aid thereof, or confine the relief to the enforcement of the negative covenants.
The trial of the issues will present to the judge presiding a different state of facts than were before the Special Term on the motion to dismiss the complaint on the pleadings, controlled, as it was, by the decision of the Appellate Division setting aside the injunction pendente lite.
Counsel suggested on the argument that the plaintiff's interest in the defendant's thirty-two thousand acres of wood lands is analogous to the legal estate of profit a prendre. The right of profit a prendre has been defined to be the right to take something which is the produce of the land, such as coal or mineral from the earth or seaweed from the shore. (Jones on Easements, §§ 49, 56, 57.)
The Court of Errors said in Post v. Pearsall (22 Wend. 425, 433) that this right "when not granted in favor of some dominant tenement cannot properly be said to be an easement, but an interest or estate in the land itself."
There is some conflict of authority as to the precise limits of the definition of profit a prendre, and while it may be true that the plaintiff's claim under this contract bears some analogy to the right suggested, we content ourselves with holding that the complaint states an equitable cause of action, and, read in connection with the contract, shows that the plaintiff has acquired certain rights in connection with the land in question that can only be definitely ascertained and defined after the trial of the issues presented by the pleadings.
The judgment appealed from should be reversed and a new trial ordered, with costs to the plaintiff in all the courts to abide the event.
PARKER, Ch. J., GRAY, O'BRIEN, HAIGHT and CULLEN, JJ., concur; VANN, J., absent.
Judgment reversed, etc.