St. Regis Paper Co. v. Santa Clara Lumber Co.

55 A.D. 225, 67 N.Y.S. 149

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: November 15, 1900
• Status: Published

Opinion

Kellogg, J.:

The plaintiff seeks a specific performance by defendant of a contract and asks for a decree directing a specific performance, “and in case of the refusal or neglect of The Santa Clara'Lumber Company to cut, skid and draw the same (pulp wood) for such delivery as by said contract provided, then that the cutting, skidding and drawing thereof be done at the expense of The Santa Clara Lumber Company under the covenants of the said contract, as decreed by the court.” The plaintiff also asks for a permanent injunction against the Santa Clara Lumber Company restraining it “ from selling or disposing of any of -its said lands (fifty square miles of wild land in. the Adirondacks) or the pulp wood upon said lands in any way so as to jeopardize or prevent the complete fulfillment and performance of the contract.” (The contract is to run for ten years and at the option of plaintiff is to be continued for another ten. years ■—■ twenty years in all.) The ’ complaint does not ask for damages because of an alleged breach of the contract or damages in case specific performance for any reason is denied. • The answer for defense alleges a breach by plaintiff of material covenants of the contract, and because of' such breach a rescission thereof by defendant ; it also alleges as a defense that plaintiff has an adequate and complete remedy at law. On the pleadings supported by numerous, affidavits the Special Term made the order appealed from. The order follows Substantially the prayer of the complaint and enjoins-this defendant, during the pendency of the action, from “ selling or disposing of any of the thirty-two thousand (32,000) acres of land described in the complaint * * * or the pulp wood or timber thereon, consisting of spruce and balsam, so as to in any way jeopardize or prevent the complete fulfillment and performance of - the contract,” etc.

•The clause in the-contract upon which presumably this order is. based reads as follows : “ It is further provided that said party of the first part wil-1 not during the term of this contract,- sell any of its said lands or the pulp wood thereon so, as to in any way jeopardize or prevent its complete fulfillment and performance' of this-contract.”

To determine whether the order was discreetly made, it is necessary to consider several things. First. Is there any reasonable likelL hood that, in any event, a court of equity will commit itself to a. decree for specific performance of the positive terms of this contract ? Second. Is it a case on any ground for grave doubt, as to-how the trial will result upon the issues made, a case where conveniences should be balanced, and were these properly resolved in. favor of plaintiff ? Third. Should the court grant an interlocutory restraining order on such an indefinite negative covenant framed in such uncertain terms and with limits so undefined, leaving it, in effect, to the party enjoined in the first instance to determine whether his act will jeopardize the performance of the contract ?

The contract is all that defendant relies upon. It is in writing and provides for the sale and delivery of a certain number of cords of pulp wood. The delivery to extend over ten years, is from 11,000 to 13,000 cords a year, and at the option of plaintiff the delivery to continue for ten additional years, the same quantity annually. It is contemplated that defendant will deliver only green wood cut each year between August fifteenth and June first; that it shall be of spruce and balsam stripped of bark and cut into pieces twenty-four inches long. It makes no difference to the plaintiff where the pulp wood comes from, and there is nothing in the contract binding the defendant to take it from the land it now owns. The defendant may go into the market and buy it, or may procure it cut from other lands, or may purchase other lands and obtain it there. This is not a contract for the sale of any standing timber or trees, nor of any land or interest in any land. It is a contract for the sale and delivery of pulp wood, a marketable commodity at this time and in this country very extensively used, and bought and sold in great quantities with as uniform a market price as any other species of lumber, timber or wood. Nothing is. said in the contract about any lien or title or right accruing to the plaintiff except a lien upon the pulp wood cut, and that is limited to advances in money made by plaintiff for work done upon it. All else appearing in the contract referring to the land or standing timber is incidental, except the negative covenant not to sell the land or pulp wood thereon so as to jeopardize or prevent performance by defendant. This clause: “ 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 now owned by it, being about thirty-two thousand (32,000) acres,” is only a safety clause for defendant, a measure of quantity in a certain contingency. And the provision in ease of fire that defendant shall “not be required, (unless it shall so choose) to deliver any more wood in the aggregate than it is still able to obtain from its said lands, provided wood has not hereafter been out from said lands and sold to other parties. In such case first party agrees to purchase and deliver to second party as much wood as has been delivered to others, but not in the aggregate to exceed 120,000 cords.” This also is a limitation On quantity only and for defendant’s benefit, but it is also noticeable that in express terms the parties contemplated that defendant might Cut and sell pulp wood from these lands to other parties. Nor does the clause not to sell the land or pulp wood so as to jeopardize or prevent the performance of the contract by defendant, necessarily conflict with this, for it is obvious that performance of the contract would not be jeopardized or prevented if the defendant was able to procure the pulp wood in the market, or from other lands, to fill its contract.

Beyond question, I think, this contract is one relating solely to chattels and in no sense is it a contract rélating to realty. The general rule as to this class of contracts as laid down in all the cases is declared in Pomeroy on Contracts [Specific Performances] (§ 11) : “ The doctrine is equally well settled that in general, a court, of equitable jurisdiction will not decree the specific performance of contracts relating to chattels, because there is not any specific quality in the individual articles which gives them a special value to the contracting party, and their money' value recovered as damages will enable him to purchase others in the market of like kind and quality.”

- There is still another and more formidable reason why, in contracts of this kind, the court will not decree specific performance, and that relates to the difficulties in the way of executing the decree.

■ Marble Company v. Ripley (10 Wall. 339) was an action in which specific performance of the contract for getting out and delivering marble from a certain quarry was prayed for by one of the parties. Justice Strong, writing for the Supreme Court, says : It is manifest' that the court cannot superintend the execution of such a ■decree. It is quite impracticable.”

Rayner v. Stone (2 Eden, 128) was an action for specific performance brought by a lessor to compel the lessee to perform the covenants of the lease as to mending hedges and fences and keeping the ■mansion house in repair. Lord Northington said;: “ How can a master judge of repairs in husbandry ? * * * How can a specific performance of things of this kind be decreed ? The nature of the thing shews the absurdity of drawing these questions from their proper trial and jurisdiction.”

To the same effect is Blackett v. Bates (L. R. [1 Ch. App.] 117). Lord Cranworth said: “ The court has no means of enforcing the performance of daily duties' during the term of the lease; that it could do nothing more than punish the party by imprisonment or fine in case of failure to perform them and might be called on for a number of years to issue repeated attachments for default.”

To the same effect is Johnson v. Shrewsbury & Birmingham R. Co. (3 De G., M. & G. 914). Here was a contract to conduct defendant’s road and keep its rolling stock in repair. To the same effect are South Wales R. Co. v. Wythes (5 De G., M. & G. 880), a contract to construct a railway; Willingham v. Hooven (74 Ga. 233), a contract to set up a sawmill and see that it cut a specified amount of lumber; Wharton v. Stoutenburgh (35 N. J. Eq. 266), a contract for the working of mines; Fothergill v. Rowland (L. R. [17 Eq.] 132), a contract for the sale and delivery of all. the coal to be mined from a particular quarry during a term of years.

Beck v. Allison (56 N. Y. 366) was a case in which the lessee sought to compel the lessor to make repairs to a building as covenanted in the lease. It was held that, because of the attending difficulties, the court would not assume the duty. In this case Grover, J., cites with approval Rayner v. Stone (supra); South Wales R. Co. v. Wythes (supra); Lucas v. Commerford (3 Brown Ch. 166), and asks : “ How can a specific performance of things of this kind be decreed ? * * * The idea that the court can appoint a receiver to take possession of the property and cause the work to be done with money furnished by the defendant would be, in the language of Lord Worthington,

* absurd.” The process of attachment to enforce the decree he regarded as equally ineffectual, and says: “It is obvious that the execution of contracts of this description under the supervision and control of the court would be found very difficult if not impracticable. * * * It is for these reasons that such powers have never been exercised in this country.”

In Wharton v. Stoutenburgh (35 N. J. Eq. 266), Depue, J., on appeal said : “ There is a class of special and exceptional contracts in which courts .of equity refuse to exercise jurisdiction by way of specific performance. These are contracts having such terms and. provisions that the court could not carry into effect its decree without some personal supervision and oversight over the work to be done,.éxtending over a considerable period of time. * * * In such cases the court declines to interfere because of its inability to give relief by one decree.”

In Standard, Fashion Co. v. Siegel-Cooper Co. (157 N.Y. 60) Vann, J., says: “Contracts which require the performance of varied and continuous acts or the exercise of special skill, taste and judgment, will not, as a general rule, be enforced by courts of equity, because the execution of.the decree would require such constant superintendence as to make judicial control a matter of extreme difficulty.” The exceptions to. the rule, he says, are Cases which involve the rights of the public, and where the convenience of the court is opposed by the convenience of the public the public interest must prevail, as in the matter of railroads, etc. It was .held in that case that the injunction prayed for, based upon the negative covenant of the contract “ not to sell or allow to be sold on its premises during the duration of this contract any other make of .paper patterns,” might properly be granted as partial relief, as it would shield the plaintiff from part of the loss caused,” although the positive terms of the contract could not be enforced.

The cases of Daly v. Smith (38 N. Y. Super. Ct. 158) and Hayes v. Willio (11 Abb. Pr. [N. S.] 167) are also cases where injunction was deemed proper to enforce .the negative terms of contracts not to sing in a rival theatre, though the agreements to sing in the plaintiffs’ theatres could not be enforced, the object being to prevent the injury to the plaintiffs which might reasonably be expected to flow from loss of patronage and prestige to the play houses of the plaintiffs if the singers were permitted to sing at a rival theatre in the same locality. This would be relief pro tanto. “ The presence of an express negative stipulation will not be found a sufficient ground for jurisdiction unless the contract is of a kind of which specific performance can be granted. * * * The court will - *. * consider whether the contract in respect of which the injunction is sought is or is not of a kind fit for specific performance.” (Fry Spec. Perf. § 843.)

In the case before us it is obvious that the injunction prayed for — not to sell the land or pulp wood growing thereon — would afford plaintiff no relief or partial relief in any event, unless specific performance of the positive terms of the contract to' cut and deliver pulp wood was decreed. It would seem from the record before us that this contract is of such a character requiring a constant and continuous supervision by the court for so long a term, the exercise of skill, the performance of labor, the expenditure of large sums of money, duties continuous and daily for a period of ten or twenty years, involving all the details of a lumbering business on fifty square miles of wild land in the heart of the Adirondacks, that a court of equity might properly refuse to undertake the work as in all similar cases it heretofore in this State has refused. This consideration is of the highest importance as bearing directly upon the propriety of granting an interlocutory order enjoining defendant in aid of specific performance pending the litigation. “ Where an agreement is of such a nature that it is practically impossible for a court to enforce it, and the bill for an injunction is in effect a bill for specific performance, equity will not interfere.” (High on Inj. § 1162.)

The answer in this case alleging such breaches of covenants in the contract on the part of'plaintiff as entitled defendant to a rescission on its part, supported by the correspondence set forth in the affidavits, also makes the result of a trial so doubtful that a case is on this issue fairly presented for balancing conveniences in considering the propriety of an in junction order pendente lite. In the language of many of the cases, the plaintiff must show himself “ ready, willing, desirous, prompt and eager ” to perform all the essential and material acts required of it by the agreement. “ There must be no willful or intentional departure, and the defects of performance must not pervade the whole, or- be so essential as substantially to defeat the object whicli the parties intended to accomplish.” (Miller v. Benjamin, 142 N. Y. 617.)

Lack of good faith on the part of plaintiff would move a court to deny specific performance where otherwise it might properly grant it. Any willful act of obstruction, gross neglect of a duty towards defendant, any act which tends to make performance materially more difficult, will be taken into account by a court of equity in passing upon the question, whether it will grant specific performance. (McClellan v. Darrah, 50 Ill. 255; Quinn v. Roath, 37 . Conn. 25.)

In Stone v. Pratt (25 Ill. 25) Catón, Ch. J., said of a complainant in such a case: “ He must stand before the court prepared to m'eet its scrutiny without a blush, relying upon the advocacy of a well regulated conscience in his favor.”

A substantial breach of the agreement to advance the money at defendant’s request might be good cause for rescission at law. (Kokomo Strawboard Co. v. Inman, 134 N. Y. 92; Gardner v. Clark, 21 id. 399; Flaherty v. Miner, 123 id. 382.)

This presents a question of fact to be disposed of by a trial. That the injury to the defendant which naturally follows the order here granted is greater than any possible in jury which can be reasonably anticipated as happening to plaintiff in case it be not granted is easily seen. The injury to plaintiff is purely speculative and conjectural. If the price of pulp wood shall go down in the future, plaintiff reaps a benefit by a rescission of the contract. If the price should go up, the measure of its damages is certain and easily calculated, and the defendant is solvent and able to make good to plaintiff the damages suffered, and it is to be presumed defendant will continue to be solvent. The injunction compels defendant to let plaintiff have- the 12,666 cords (worth at contract price $113,994) already cut or suffer a total loss by decay. It compels defendant to deliver all pulp wood cut in the future to the plaintiff, whether plaintiff performs on its- part by making advances or by payment for wood delivered or not. It practically ties up the business of • the defendant, makes its mills idle, subjects defendant to the perils of forest fires on its timber lands, and to any depreciation in the value of its lands, with no protection by bond or undertaking in this respect, and practically decrees an unconditional specific performance during the pendency of the action, on the part of defendant, with no reciprocal provision for any performance by the plaintiff except that it .shall give bonds to take the pulp wood. The damages likely to result to defendant in case of its refusal to go on under the contract seem immeasurable.

We come now to an examination of the terms of the order itself-The defendant is “ enjoined from selling or disposing of any of the thirty-two thousand (32,000) acres of land described in the complaipt * * * or the pulp wood or timber thereon, consisting of spruce and balsam, so as to in any way jeopardize or prevent the complete fulfillment and performance of the contract.” It will be noted that this order is not an order not to sell any of the land or any of the pulp wood, but the defendant is permitted to sell any or all of the land, or to sell any or all of the pulp wood timber growing thereon in case it shall not jeopardize or prevent the performance of the contract. What is it that will jeopardize or prevent performance of the contract ? The defendant has clearly the right to get all the pulp wood needed to fill the annual quota of cords from other lands, or to procure the same by purchase in the market. So long as defendant has the means it has the faculty to perform, but at every sale of an acre of the land or of a cord of the wood the question must arise to be litigated : “ Does this jeopardize or prevent performance of the contract ? ”

Collins v. Plumb (16 Ves. Jr. 454) was a case involving like vague, indefinite and uncertain terms. The action sought an injunction on the covenant of a contract ‘‘ not to sell or dispose of the water from tire said well to any persons or person whomsoever, to the injury of the proprietors of the said water works.” The injunction was refused. The lord chancellor said: “ Observe the situation of the defendant. Upon every application to commit for breach of the injunction, the only mode of giving effect to the decree, a trial must in each instance be directed to ascertain whether that act which might be done without injury to the plaintiffs has been done without injury.”

Caswell v. Gibbs (33 Mich. 331) is a similar case. An injunction was sought to prevent the violation of a covenant to “ never tow vessels in competition” with plaintiffs. The bill was dismissed, the court saying: “ Should we attempt to enforce this agreement by restraining and enjoining- defendant from competing with complainants in the business of towing vessels * * * the question must still arise in every instance where it is alleged that defendant has violated his agreement, or the decree of the court, whether the defendant did in such case really obtain that which, had'he not interfered, the complainants would have obtained ? ”

These cases illustrate the fatal difficulties' which attend a contract or a decree or an injunction order made in such fast and loose .language, giving scope to the exercise of judgment on the part of the one sought to he enjoined. It is not conceivable that a court of equity will deliberately set a trap of that-nature and then presume to punish a party for falling into it. An injunction order, to be enforcible, must define specifically what the party enjoined must not do or must do. To leave it to the judgment of the party, and then punish him for any mistake of judgment, would be inequitable.

For the reasons stated, the order granting ■ an injunction herein pendente lite should be set aside, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs'.

All concurred.

Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.

Sic.