Carolina Timber Co. v. Wells, 171 N.C. 262 (1916)

March 29, 1916 · Supreme Court of North Carolina

171 N.C. 262

CAROLINA TIMBER COMPANY v. R. A. WELLS and C. B. PAGE.

(Filed 29 March, 1916.)

1. Deeds and Conveyances — Timber—Defeasible Title.

The laws of devolution and transfer applicable to realty apply to timber standing and growing thereon, and conveyances of such timber, as ordinarily drawn, convey an estate of absolute ownership in fee, defeasible as to all timber not cut and removed within the specified period.

2. Same — Extension Period — Options—Title—Reversion.

A stipulation in a deed conveying timber standing and growing upon lands, that at the expiration of the period in which the timber shall be cut and removed the grantee shall acquire a further period for the purpose upon paying a stipulated or ascertainable price, is in the nature of an option; and contracts of this character do not of themselves create any interest in the property, but only amount to an offer t9 create or convey such an interest when the conditions are performed, and working a forfeiture when not complied with.

B. Same — Original Owner of Lands — Subsequent Grantee.

Where the owner of lands conveys the timber standing and growing thereon, with provision that the time for cutting and removing it will be extended upon payment of a certain sum, and the grantee of the timber avails himself of this right in accordance with his deed, but after the grantor has conveyed the land itself to another, the grantee of the land is entitled to the sum of money paid by the grantee of the timber for the extension of the period of time given for cutting and removing it.

4. Deeds and Conveyances — Timber—Extension—Title—Teases—Statutes.

An option or privilege in a timber deed for an extension of the time for cutting and removing it is a contract attendant upon the title.

5. Deeds and Conveyances — Timber—Extension Period — Consideration—Equitable Demedies — Jurisdiction.

Where the grantee of timber, in the exercise of his option, under his deed, pays the agreed sum for an extension period for cutting and removing the timber, but after the owner of the lands had conveyed the same to another, and the controversy is to ascertain whether the original owner of the lands or his grantee thereof is entitled to receive the sum so paid, the action is in the nature of a bill of interpleader to determine the rights of two adverse claimants to a fund, enforcible in equity, and properly brought in the Superior Court.

6. Deeds and Conveyances — Timber — Extension Period — Options — Title — Devolution and Transfer — Executors and Administrators.

An option to extend the period of time' for cutting timber takes effect only when its terms are complied with by the optionee; and where such is done after the death of the grantor, the price so paid goes to the heirs at law, the then owners of the title, and not to the personal representatives of the deceased owner, though in his deed it was provided that the price .be paid to himself or his personal representative. It would be otherwise had he conveyed the timber for the additional period.

(Note. — Timber Go. v. Bryan. See case next following.)

CONTROVERSY submitted without action upon case agreed, and heard in Duplin Superior Court on 26 February, 1916, before Bond, J., holding the courts of the Sixth Judicial District. From the facts agreed upon, it appears that on 25 April, 1906, R. A. Wells, then owning a tract of land, for valuable consideration in hand paid, to wit, $450, conveyed to the Cumberland Lumber Company the timber on said land of specified dimensions, with the right to cut and remove the same at any time within ten years from the date of the conveyance. The instrument contained also the stipulation that the grantee, his assigns and successors, should have additional time to cut and remove, etc., not exceeding five years, paying therefor annually, within ninety days from 25 April, 1916, of the years following and respectively, to R. A. Wells or his personal representatives, a sum equal to the interest on the purchase price; that on 26 March, 1907, said R. A. Wells sold and conveyed said land in fee simple to his codefendant, O. B. Page, who now holds same under said deed; that the title, rights and interests of the Cumberland Lumber Company under said conveyance have been acquired and are now owned by plaintiff; that the timber on said land has never been cut, and plaintiff, the Carolina Timber Company, has determined to ask for an extension of time for one year from 25 April within which to cut and remove the timber, and has so notified both R. A. Wells and O. B. Page of its purpose, and within the specified time bas tendered tbe amount due as per contract; that tbe entire amount of $27 is claimed by eacb of tbe defendants, and tbey have so notified plaintiff.

Upon these facts tbe court being of opinion that tbe entire amount was due and owing to O. B. Page, so entered its judgment, and defendant R. A. Wells excepted and appealed.

Stevens & Beasley for plaintiff.

H. D. Williams for defendant.

Hoke, J.,

after stating tbe case: Our decisions bold that standing timber is realty, subject to tbe laws of devolution and transfer applicable to that kind of property, and that timber deeds of this character, as ordinarily drawn, convey an estate of absolute ownership, defeasible as to all timber not cut and removed within tbe specified period. Williams v. Parsons, 167 N. C., 529; Midyette v. Grubbs, 145 N. C., 85; Lumber Co. v. Corey, 140 N. C., 467.

Tbe cases on tbe subject are to tbe effect, further, that a stipulation of tbe kind now presented, providing for an extension of tbe time within which tbe timber must be cut, is in tbe nature of an option, and it is held by tbe great weight of authority that contracts of this character do not of themselves create any interest in tbe property, but only amount to an offer to create or convey such an interest when tbe conditions are performed and working a forfeiture when not strictly complied with. Waterman v. Banks, 144 U. S., 394; Hacher v. Weston, 197 Mass., 143; Gaston v. School District, 94 Mich., 502; Newton v. Newton, 11 R. I., 390; Bostwick v. Hess, 80 Ill., 138.

Our own decisions are in general approval of these principles: Ward v. Albertson, 165 N. C., 218; Winders v. Kenan, 161 N. C., 628; Bateman v. Lumber Co., 154 N. C., 248; Hornthal v. Howcott, 154 N. C., 228; and from this it follows that where tbe time first provided in one of these timber deeds and paid for bas passed, and it becomes necessary for tbe grantee to bold by reason of tbe performance of tbe stipulation for an extension, that tbe estate or interest arises at tbe time tbe conditions are complied with, and, in tbe absence of any provision in bis deed to tbe contrary, tbe price paid belongs to him who then bas tbe title and from whose ownership tbe interest is then created. Tbe option or privilege obtained, to tbe extent of tbe right conferred, is a contract attendant upon tbe title, and, as stated, unless otherwise specified in tbe deed conveying tbe title, tbe price for tbe interest arising on proper performance of tbe conditions will inure to the- owner. It is from bis estate that tbe interest passes, and be must receive tbe purchase price.

It was urged on tbe argument that tbe judgment could be upheld on tbe principle that gives tbe owner of tbe reversion tbe right to receive tbe rental accruing after title descended, botb under tbe principles of tbe common law and of our statute applicable to tbe question. Holly v. Holly, 94 N. C., 670; Rogers v. McKenzie, 65 N. C., 218; Revisal 1905, sec. 1989. Neither tbe decisions nor tbe statute are directly authoritative, for tbe reason that we have held that tbe interest here conveyed is not a leasehold interest, but an estate in fee. There is, therefore, an absence of tbe tenure required to constitute rent. Hawkins v. Lumber Co., 139 N. C., 160; Bunch v. Lumber Co., 134 N. C., 116.

Tbe position, however, affords a strong analogy in support of our construction of tbe contract and its effect upon tbe rights of tbe parties. It is suggested that tbe actual amount in controversy being only $27, tbe Superior Court is without original jurisdiction to determine it. Tbe controversy, however, involves an action in tbe nature of a bill of in-terpleader to determine tbe rights of two adverse claimants to a fund, and being an exercise of tbe powers of tbe court enforcible by bill in equity under tbe old system, tbe Superior Court properly assumed jurisdiction to bear and determine tbe matter. Fidelity Co. v. Jordan, 134 N. C., 236; Berry v. Henderson, 102 N. C., 525; Fisher v. Webb, 84 N. C., 44. There is no error, and tbe judgment of tbe court below is

Affirmed.