Alabama Vermiculite Corp. v. Patterson

130 F. Supp. 867, 1955 U.S. Dist. LEXIS 3441
CourtDistrict Court, D. South Carolina
DecidedApril 23, 1955
DocketCiv. A. No. 1313
StatusPublished
Cited by1 cases

This text of 130 F. Supp. 867 (Alabama Vermiculite Corp. v. Patterson) is published on Counsel Stack Legal Research, covering District Court, D. South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alabama Vermiculite Corp. v. Patterson, 130 F. Supp. 867, 1955 U.S. Dist. LEXIS 3441 (D.S.C. 1955).

Opinion

WILLIAMS, District Judge.

This action was originally instituted in the United States District Court for the Western District of South Carolina on September 4, 1952, by Alabama Vermiculite Corporation against J. T. Patterson, W. A. Patterson and T. M. Patterson, for a declaratory judgment under Title 28 U.S.C.A. §§ 2201 and 2202, adjudicating the rights and liabilities of the parties under a lease for the mining of vermiculite ore, dated May 22, 1951 and for specific performance thereof.

On April 20, 1954, after trial of the issues, this Court handed down an order which held in substance that the petitioner had not breached said lease as contended by respondents but on the contrary that the respondents had failed and refused to perform the obligations thereby imposed upon them and that by reason thereof, petitioner, Alabama Vermiculite Corporation, was entitled to exclusive possession of the premises for the purpose of mining vermiculite ore in accordance with Paragraphs 4, 5 and 6 of the lease agreement.

The Court retained jurisdiction of the cause for the purpose of enforcing compliance with the terms of its order.

This order became final on June 14, 1954, when a consent order dismissing respondents’ appeal was signed by the Court. See Alabama Vermiculite Corp. v. Patterson, D.C., 124 F.Supp. 441.

Thereafter, plaintiff went into possession and between the middle of September and the first of November, mined 24 carloads of ore from the premises, tendering the respondents payment therefor at the rate of 75 cents per ton for each ton mined. The respondents refused to accept said sum in payment and by letter dated November 4,1954, advised the petitioner that it had breached the lease by failure to pay a premium on ore where the yield from one ton of merchantable vermiculite exceeded forty (40) bags per ton. ■

Alabama Vermiculite Corporation by letter dated November 12, 1954, denied that the provisions of the lease with respect to payment of a premium in the event the yield should exceed 40 bags per ton applied where lessee had been put into possession and was mining after breach of the lease by lessor.

After exchange of this correspondence between the parties, petitioner mined two additional cars in December of 1954.

Thereafter, on December 13, 1954, Alabama Vermiculite Corporation brought this proceeding to determine whether the provisions of Paragraph 2 of the lease providing for' payment of a premium if the merchantable vermiculite ore from one ton should exceed 40 bags per ton is applicable to and binding upon petitioner-lessee after it has been put into possession following a breach by respondent-lessors.

Respondents filed an answer alleging in substance that said provision is applicable under the circumstances and also alleged that the petitioner had committed waste with respect to the ore and timber on said land.

Subsequently, on February 21, 1955, the Alabama Vermiculite Corporation filed a supplemental verified petition upon which this Court issued a rule to show cause against the respondents, returnable on March 3, 1955, as follows:

1) Why the respondents should not be enjoined from occupying or exercising any control over the premises and from intei'fering in any way with petitioner’s right to exclusive possession of said premises under the order and lease herein-above referred to; and

2) Why they should not be ordered and directed to forthwith deliver exclusive possession of said premises to petitioner ; and

3) Why respondents should not be adjudged in contempt of Court for failure to carry out the terms of the order of April 20, 1954.

During the February term of Court for the Greenville Division, a pre-trial conference was held before me at Green-[870]*870ville, South Carolina, on February 26, 1955, at which time counsel for petitioner and respondents were present. At this conference, by agreement of counsel, it was decided that the Court would determine the following questions:

I. Do the provisions of the lease relating to premium payments apply where the lessee is in possession and mining under the terms of the lease because of a breach by the lessor?

II. Have the respondents delivered to petitioner exclusive possession of the premises for the purpose of mining vermiculite ore in accordance with the order of the Court dated April 20, 1954?

It was agreed that the Court would determine the first issue upon the written lease itself and the second issue upon affidavits to be submitted on behalf of petitioner and respondents. Both parties have submitted affidavits on the second issue and written briefs upon both issues, upon which the Court bases this order.

I. Do the provisions of the lease relating .to premium payments apply where the lessee is in possession and mining under the terms of the lease because of a breach by the lessor?

After certain formal recitals of the desire of the respondents “to convey their rights to the vermiculite ore that may be removed from the premises” and the desire of the petitioner “to purchase the vermiculite ore, which may be located upon said premises”, Paragraph 1 of the lease states that “the lessors do hereby grant unto the lessee the exclusive right to go in and upon .the lands hereinafter described and mine therefrom vermiculite ore for a period of five years” with the right of renewal for an additional five-year period.

In Paragraph number 2, the parties agreed upon a price of 75 cents per ton of unprocessed vermiculite, or the prevailing market price. In this same section, Alabama Vermiculite Corporation, the lessee, appoints the respondents, the lessors, its agent to mine vermiculite ore from the demised premises and load the same on railroad cars at Lanford Station, South Carolina, for which they were to receive 75 cents per ton for the raw ore and $4 per ton for their work in mining and loading the same, railroad weights to be accepted in computing the tonnage. This paragraph then contains a penalty provision if the lessors should deliver ore which exceeded an allowance of 10% for moisture and 10% for other waste materials. If this is done, the lessee may reduce the price to be paid proportionately. This same paragraph then gives the lessors a premium if the yield of merchantable vermiculite from one ton of ore should exceed forty bags per ton.

It will be seen from a reading of this paragraph that it relates solely to the situation where the lessors are mining the vermiculite as agents of the lessee. All the provisions relating to ore specifications, that is the moisture allowance, the allowance for waste material and the provisions regarding yield, are contained in this paragraph of the lease which relates to conditions under which the lessors are mining as agents for the lessee.

The parties obviously intended that the lessors, as agent for the lessee, should be required to deliver ore to the railroad cars, meeting minimum specifications, that is to say, ore having not more than 10% moisture content and 10% waste material. The petitioner-lessee was required to pay freight charges as well as extraction costs. These are very large and important factors in the mining of vermiculite ore. In the absence of such a provision, petitioner might be required to pay for mining and shipping material from which it could derive a very small quantity of merchantable vermiculite. By the same token, if the lessors delivered a higher quality of unprocessed vermiculite ore from which a yield

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Related

Patterson v. Alabama Vermiculite Corp.
149 F. Supp. 548 (W.D. South Carolina, 1957)

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Bluebook (online)
130 F. Supp. 867, 1955 U.S. Dist. LEXIS 3441, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alabama-vermiculite-corp-v-patterson-scd-1955.