Neale v. Jones

349 S.E.2d 116, 232 Va. 203, 3 Va. Law Rep. 925, 1986 Va. LEXIS 246
CourtSupreme Court of Virginia
DecidedOctober 10, 1986
DocketRecord No. 830518
StatusPublished
Cited by10 cases

This text of 349 S.E.2d 116 (Neale v. Jones) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Neale v. Jones, 349 S.E.2d 116, 232 Va. 203, 3 Va. Law Rep. 925, 1986 Va. LEXIS 246 (Va. 1986).

Opinion

COMPTON, J.,

delivered the opinion of the Court.

This is an appeal from an interlocutory decree in chancery, in which we determine whether the trial court properly denied rescission of leases of sand and gravel mining rights.

In 1981, appellants C. T. Neale, Jr., June E. Neale, Martha Snead Neale, C. T. Neale, III, Mary W. Neale, Albert E. Neale, and William E. Neale, filed a bill of complaint in the court below against appellee Irvin Barton Jones, III. The controversy arose from two nearly identical leases pertaining to 1,565 acres of land in Caroline County. Known as the “Goose Pond Tract,” the property lies adjacent to the Mattaponi River. The Neales were lessors and Jones was lessee along with Bernard W. Armentrout, who later assigned his interest in the leases to Jones. The lessors contended that the lessee had committed substantial and material breaches of the leases. They asked the court to enter a decree “rescinding, terminating, and cancelling” the leases and to order the lessee “to evacuate” the property.

[205]*205Following a November 1982 ore tenus hearing, the chancellor found that the lessors were not entitled to rescission and continued the cause for further proceedings. We awarded the lessors an appeal from the December 1982 decree embodying that ruling.

The evidence shows that the lessors owned, with varying interests, the land in question, consisting of two tracts. Some of the lessors had mined the land for approximately 24 years before the leases were executed. The leases, dated December 8, 1978 for terms of 99 years to commence January 2, 1979, permitted the lessee to occupy the land for the purpose of mining sand and gravel. The leases provided, for example, for payment of royalties to the lessors at specified rates, for the right of the lessors to sell the property if mining rights were reserved to the lessee, for reclamation by the lessee of all areas mined, for the lessors to grant rights to others to use the land not being mined for such purposes as farming, cutting timber, and hunting, for the right of first refusal in the lessee to purchase the property, for the lessee to have the right to mine sand and gravel until the supply is exhausted, and for termination of the leases by the lessors if the lessee did not comply with the terms governing selling tonnage or paying royalties.

The following provision, common to both leases, is the focus of this controversy:

“Two years from date of contract to mine, all the land will be tested for sand and gravel. Land not containing sand and gravel suitable for mining will be released to Lessor [sic]. Lessors must be notified in advance of tests so they may be present if they choose. At this time the full and unencumbered rights will revert to the Lessors, except those parcels containing sand and gravel [which] can be mined and have been so designated on the plat of the property as initialled by the parties hereto.”

The parties have adopted January 2, 1979 as the beginning of the two-year period.

The lessors assigned six errors in their petition for appeal but ultimately argued only one question, expressly abandoning all other assignments of error. The question raised is whether the trial court erred in failing to find that the lessee had violated the [206]*206foregoing lease provision and in failing to rule that the lessors were entitled to rescission of the lease agreements.

A detailed recitation of the evidence is not necessary. It is sufficient to note that the lessors presented lay and expert testimony that, while the lessee performed some testing, he failed to test the entire property for sand and gravel. The lessors maintained that at least one test hole per acre should have been dug. The lessors further showed that the lessee’s testing was performed in an improper and inadequate manner. In addition, the principal lessor, C. T. Neale, Jr., testified he was not given notice “in all instances” of the digging of test holes. He stated, however, that he was present when a “vast number” of test holes were dug by lessee’s agent. The lessors produced evidence that locations of test holes on a plat, prepared on the lessee’s behalf for the purpose of designating sand and gravel deposits, could not be located on the ground at the places indicated on the map and that a map required by the lease provision was never initialled by the parties. Also, lessors proved that an examination of the lessee’s test results revealed a number of areas which contained no deposits of sand and gravel.

In contrast, evidence favorable to the lessee showed that the entire property contained deposits of sand and gravel. Bernard W. Armentrout, owner of Armentrout Septic Tank Corporation and called as a witness for the lessors, testified that he tested the land at the lessee’s request. Armentrout said he used “a backhoe and dug holes over the entire piece of land, or just as close as I could over the entire piece of land.” He stated that during the fall of 1980 he performed the assigned work in 15-17 days digging 179 test holes on the property. He recorded the location of the test holes on a plat and prepared a written report of the material found as the result of the tests. The lessors admit the plat was completed during January 1981.

In addition, the lessee presented expert testimony that the testing performed by Armentrout “was more than adequate to determine that [sand and gravel] existed on the property.” In fact, according to lessee’s expert, who performed his own testing, sand and gravel were present “over the entire property in some form.”

The lessee testified that he found the plat prepared by Armentrout accurate and that the test holes were in the approximate location as depicted on the map. He said the testing was completed within the required two-year period and, in his opinion, the [207]*207property had been “overtested for the existence of sand and gravel.”

In the course of announcing his decision at the conclusion of the hearing, the chancellor expressed concern that the terms of the leases did not specifically cover some of the points of disagreement among the parties. For example, the court observed that the lease did not provide that one test be made of every acre of the property, a requirement insisted on at trial by the lessors.

The chancellor decided “that the lease should not be rescinded.” Commenting further, the court said “there are still a lot of questions unanswered as far as the future is concerned . . . .” The judge stated, “I do not think the question has been decided yet as to which portions of that property are suitable for mining in the future and which are not.” Continuing, the chancellor said, “I think that is a wide open thing right now.” The court also commented that the parties “are going to be back in court again, because . . . they cannot agree on the plat. They have not initialed the plat. They cannot agree on the areas that are suitable for mining, and the ones that are not.”

Subsequently, the chancellor provided, in the decree appealed from, that the lessors “are not entitled to rescission of the two leases” and that the lessors’ “prayer for rescission is hereby denied.” The chancellor further decreed: “This cause is continued for further proceedings to determine which parcels of the property that is the subject of such leases will be released to the [lessors] 59

There is no disagreement among the parties about the principles of law applicable to this case.

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Cite This Page — Counsel Stack

Bluebook (online)
349 S.E.2d 116, 232 Va. 203, 3 Va. Law Rep. 925, 1986 Va. LEXIS 246, Counsel Stack Legal Research, https://law.counselstack.com/opinion/neale-v-jones-va-1986.