Tennessee Valley Kaolin Corp. v. Perry

526 S.W.2d 488, 1974 Tenn. App. LEXIS 119
CourtCourt of Appeals of Tennessee
DecidedDecember 5, 1974
StatusPublished
Cited by87 cases

This text of 526 S.W.2d 488 (Tennessee Valley Kaolin Corp. v. Perry) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tennessee Valley Kaolin Corp. v. Perry, 526 S.W.2d 488, 1974 Tenn. App. LEXIS 119 (Tenn. Ct. App. 1974).

Opinions

NEARN, Judge.

. On June 25, 1953, J. C. Kirby and Ollie Kirby, owners of a tract of land located in [489]*489the 7th Civil District of Carroll County, granted a 30 year clay and mineral lease on their land to H. C. Spinks Clay Company, Inc. (hereinafter Spinks). The lease was recorded in the Kegister’s Office of Carroll County and under the terms of the lease Spinks agreed to pay 15 cents per ton for all clay or minerals sold and shipped from said tract of land with a guaranteed minimum annual payment of $10 for the first year, $25 for the second year, and $50 for each year thereafter.

On April 3, 1957, J. C. Kirby and Ollie Kirby conveyed said tract of land to J. P. Perry for the sum of $1,000, such sale being subject to the aforesaid mentioned lease to Spinks. On April 5, 1957, J. P. Perry conveyed a one-half undivided interest in said property to R. L. Roland and W. D. Roland, Jr. in consideration of $1,000.

On March 20, 1963, J. P. Perry, R. L. Roland, and W. D. Roland, Jr. entered into a lease agreement with D. H. Whittington, President of Tennessee Valley Kaolin Corporation, granting Whittington a 30 year mineral lease in this same tract of land. Under the terms of this lease, Whittington was to pay the lessors 50 cents per ton for all clay and minerals sold or removed with a guaranteed minimum annual royalty of $25,000 to keep the lease in effect. In addition, a bonus of $5,000 was paid to the lessors.

On March 8, 1964, D. H. Whittington received written notice from Bpinks that said tract of land was subject to the recorded mineral lease in favor of Bpinks Clay Company. Out of court attempts to solve this problem of the alleged two leases on the same tract of land were unsuccessful. D. H. Whittington individually, and as President of Tennessee Valley Kaolin Corporation, filed a suit in Chancery Court against Joe P. Perry, Alzemme Perry, R. L. Roland, W. D. Roland, Jr. and H. C. Spinks Clay Company. The bill prayed that the lease agreement between Kirby and Spinks be declared void and forfeited because of Spinks’ failure to pay the minimum annual rental; or in the alternative, that the lease between Whittington and the lessors, Per-rys and Rolands, be declared void and that Whittington be permitted to recover sums expended in reliance on the lease. The defendants, Perrys and Rolands filed an answer and a cross-bill praying the lease with Whittington be declared void because of non-payment by Whittington and that the Kirby-Spinks lease be declared a cloud on their title and be removed as Spinks, because of a failure to mine the minerals and pay annual rental payments, had forfeited all rights under that lease.

Spinks filed demurrers to the original bill and the cross-bill, both of which were overruled by the Chancellor. A discretionary appeal was prayed and granted to the Supreme Court from the order overruling the demurrer. The Supreme Court upheld the Chancellor and remanded for further proceedings. Spinks filed an answer alleging the validity of their lease and the non-validity of the Whittington lease.

During the pendency of the trial, R. L. Roland died and his next of kin were substituted as party defendants and cross-complainants.

Before a final decree was entered on the hearing on remand, Whittington-Kaolin and the Perrys-Rolands settled their differences. Whittington-Kaolin were dismissed with the Perrys-Rolands reserving all rights against Spinks on their cross-complaint.

The final decree was in favor of Spinks. The Perrys-Rolands have appealed from the adverse decision and Spinks has appealed from a portion of the Chancellor’s findings. The posture of the matter on appeal now being as if the original suit had been between the Perrys-Rolands and Spinks with the Perrys-Rolands seeking a forfeiture of the Spinks lease and Spinks seeking a declaration of validity.

The controlling facts found by the Chancellor were that Spinks had failed to pay the minimum annual payments for the years 1957,1958,1959, and 1960 as specified in the lease; but that the lessor had also [490]*490failed to give the notice of non-payment as required by the lease to effect a forfeiture. The Chancellor then held there had been no forfeiture of the Spinks lease and same was a valid subsisting agreement.

The pertinent portion of the lease is as follows:

“It is agreed and understood by and between the parties that if Spinks shall fail to pay for clay or minerals shipped, or fail to pay the guaranteed minimum annual payments, within sixty days after same shall have become due, and, provided written demand therefor shall have been made by First Party not later than thirty (30) days after same shall have become due, then the First Party may terminate this grant and it is further agreed and understood that the failure of Spinks to prosecute mining operations shall cause a forfeiture unless Spinks shall pay the minimum annual payments . . . ”

The Chancellor interpreted this portion of the lease as requiring notice of default by the lessor (First Party) before any forfeiture for non-payment could be declared.

Defendants Perrys-Rolands assign as error the finding by the Chancellor that the Spinks lease had not been forfeited. Defendants argue that Spinks had an implied or express duty to mine the property; that the Chancellor’s interpretation of the contract provision was not correct; and that the provision in the contract requiring notice is unconscionable.

Spinks assigns as error the Chancellor’s finding that the annual payment checks had not been properly mailed to and received by defendants Perrys-Rolands.

We will first consider the appeal of Spinks.

It is the Spinks argument on appeal that the evidence preponderates against the Chancellor’s finding that the checks for the minimum annual payments were not received by the lessor for the years 1957, 1958, 1959, and 1960. An issue such as the one presented by its nature, is largely dependent upon the credibility of the witnesses. Spinks maintained it mailed the checks and the lessor denied receipt of them. There is some confusion in the record created by Spinks as to whether the checks in question might have been mailed to the wrong address. A Chancellor, on an issue which hinges on witness credibility, will not be reversed unless, other than the oral testimony of the witnesses, there is found in the record clear, concrete and convincing evidence to the contrary. State v. Town of Madisonville (1968) 222 Tenn. 272, 435 S.W.2d 803; Hall v. Britton (1953 W.S.) 41 Tenn.App. 72, 292 S.W.2d 524. We find no such other evidence of that category and the Assignment of Error is overruled.

Now we turn to the Perrys-Rolands appeal.

There is proof that in 1953 at the time Spinks executed the lease, there was little or no market for the type of clay (the mineral sought to be mined) found on lessor’s land. The proof further indicates that Spinks has expended monies in an effort to produce a market for the clay, but as of the time of suit Spinks had mined no clay. The record further reflects that recently a market has developed for this type of clay.

It is the argument of these appellants that the lease created an express and/or implied covenant to mine clay.

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Cite This Page — Counsel Stack

Bluebook (online)
526 S.W.2d 488, 1974 Tenn. App. LEXIS 119, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tennessee-valley-kaolin-corp-v-perry-tennctapp-1974.