North Georgia Mining Co. v. Latimer

McCay, Judge. 1. My brother Trippe and myself join with the Chief Justice in holding that the death of one of these contractors does not exclude Mr. Latimer as a witness. In the first place, the party to the suit is a corporation, and the death of one of its members is not within either the letter or the spirit of the exceptions in the evidence Act of 1866. Nor, as we think, does the ease, even were the original contractors parties, come within the spirit of the exceptions. Here are several of the original contractors living who may and do confront Mr. Latimer, and the mischief intended to be guarded against by the exceptions, does not at all exist. 2. It has long been the settled rule, both in this country and in. England, that if a contract for land be in writing and be fair in all its parts, certain and for an adequate consideration, it is as much a matter of course for .equity to enforce it as it is for a court of law to give damages for it in other cases. It.is not a question of discretion. The party seeking redress has a right, and it is the duty of a court of equity to enforce it by decree.' It is only when the contract is unfair or uncertain, or the price inadequate, that the discretion to refuse arises: Code, 3190; See Chance vs. Bell, 20 Georgia, 142, where the rule is fully and strongly stated. 3. In this ease the contract is in writing, and whilst there is some evidence, to-wit: that of Mr. Latimer,'of fraud, yet we doubt if, under the whole evidence, that had much weight with the jury. It seems to us clear that the verdict turned on the charge of the court, “that the jury had a discretion to decree or refuse to decree specific performance.” The judge refused to charge, on request, the principle we have alluded to. In the argument here it was admitted that this was the rule in the cases it covers. But it was contended that the case at bar did not authorize the charge, because the facts — 64 — showed there was no consideration, or, at best, a very inadequate consideration. It was contended that the Dalton contract, the foundation of the bill, wras without consideration, that the land belonged to Latimer at first, and that, in effect, this agreement was an agreement to give to the plaintiff three-fourths of his own land. The line of argument by which this strange conclusion is arrived at strikes me with astonishment. It is based on the assumption that if A. has a parcel of land and contracts with B, that if he, B, will, at his own risk, develope a valuable mine upon it, he, B, may have three-fourths of it, the agreement is without consideration. It is said the land and all that is on it belongs to A, and that, as by such contract, he only retains one-fourth of it,, he gives the other three-fourths of it away. But those who reason thus forget that the minerals, though there, were hidden, and worthless because hidden; that it cost money, labor and risk to find them, and that the land gets its real value from the finding. There is justas much logic in saying that, if one should agree to give one-fourth of his land to one who should, at his own expense, clear it, this would be a gift. To my mind it is very clear that if I contract with a man to give him three-fourths of a tract of land if he will go upon it and lay bare a valuable mine, by his skill, labor and capital, I only give a fair quid pro quo. My land is of but- little value. I am not willing to take the risk of expending money in sinking shafts, etc., and if I can get a man to take this risk, and to expend perhaps three times as much as my land is worth, I to run no risk, and he to lose his money if he fails, I may do a very good thing for myself. That his skill, labor and capital, in fact, do, if he succeeds, render my land more valuable in the market than it was before, is unquestionable, and it seems to me absurd to say, if I make such a contract, that it is without consideration. It is said that in this case it was the express contract that Love was to test the land at his own expense. Certainly. And it is that very stipulation which makes the consideration, or, at least, a large part of it. Love was to run all the risk. — 65 — Had the agreement been that it was to be at Latimer’s expense, Love’s right to remuneration would be only for his labor or skill. But just because Love was to bear all the expense and take all the risk — just because, if there was a failure, Love was to lose his time, labor, skill and money, and Latimer to have the land as it was before, just for this reason, it would be fair, and just, and reasonable, that if Love should succeed, and by his risk and labor and skill, make Latimer’s land, with no work or labor of his own, of great value in the market, Love should reap a large share of the profits of the enterprise. Why should Love and his associates go to work to develop Latimer’s land? Why should they .spend their time, money and skill upon it, if, when the prize was won, they were to turn the land over to Latimer, or pay him the value of it ? Such conduct would be childish, an act of pure benevolence, that among business men would be laughed at as folly. On the other hand, I doubt if there be a man in Georgia who owns a lot of land, supposed to have minerals upon it, but which requires an outlay of $2,500 00 to test, who would not be glad to give three-fourths of it to one who, by his labor, skill and investment upon it, would make it as valuable in the market as the Ducktown copper mines. And it is equally clear that there are very few men of any experience in such things who would he willing to risk $2,500 00 in testing a lot, even under an agreement- to get three-fourths of it if the mineral was found. The truth is, that such things are so uncertain, that the risk of so large a sum ought to insure a very large reward upon success. The true rule of division between the parties, on equitable principles, by Avhich both would get equity, would be that the owner of land should have such a share as his investment, to-wit: the value of his land before testing, with no risk of the loss of anything, is proportioned to the time, skill and money spent by the other party, with the risk of the loss of all. Whether this is one-half, one-fourth, one-tenth, or any other fraction, would depend on circumstances, though, ordinarily, one-fourth would, in my judgment, be a good share for the land — 66 — owner. It does not appear positively what the parties supposed a lot equal to the Ducktown mines would be worth. The Love contract fixed, however, upon $50,000 00 as Mr. Latimer’s price for the land if it should be equal to those mines. And as all parties seem to have agreed that Mr. Latimer was entitled to his $50,000 00, and as they also agreed the land was worth $300,000 00, it would seem to follow that $300,000 00 wras what they supposed the land had been counted worth at the time the Love contract was made, should it turn out equal to Ducktown • $50,000 00 is one-sixth of $300,000 00. And I do not believe there is a man in the state who would not be glad to give five-sixths of any undeveloped lot to one who should prove it, by a test, at his own expense, to be equal to the Ducktown mines. When, therefore, these parties met at Dalton, in 1856, it is a great mistake to say that this was Latimer’s land. Under the contract with Love the plaintiffs had acquired an equitable interest in it. They had the right, fairly acquired, and honestly paid for, under a written agreement, to buy it at a price to be fixed by its relative value as compared with Duck-town. Had there been no Dalton contract, and this been a bill to compel the specific performance of the Love contract, how would the matter stand ? Love was to test the land at his own expense. If he found copper he was to have a right to buy for $50,000 00, in case he had found a Ducktown, and for as much less as the mine should be of less value than the Ducktown. The parties would, without the Dalton contract, have a right to á decree on the payment by the complainant of a sum bearing the same relation to $50,000 00 as this lot bears to Ducktown. When they met at Dalton, the very first thing to settle was, what was the value of the new discovery as compared with the Ducktown mines? All parties seem to have agreed that the testing was a success; that the plaintiffs, by their skill, labor and expenditure, had developed a valuable property out of a lot of land of but trifling value. It seems to have been agreed all round that $50,000 00 was the price to be paid. Why? Because that was the value — 67 — of the IctncH Evidently not. The very fixing of this price shows that they considered it equal to Ducktown, and, so considering, that it was worth $300,000 00. Yet, by common consent, and by the written agreement with Love, Love and his associates had the right to buy for $§0,000 00. It follows, it seems to me, incontestibly, that they all, including Mr. Latimer, recognized that the meaning of his contract -with Love was, that if a valuable mine was found Love should have the right to buy it for one-sixth of its value; that thus, and thus only, was Love to be compensated for his labor, skill and rish of the money necessary to test it. As I have said, I do not think this an unfair, but a just and reasonable contract, one that almost any owner of undeveloped mineral land would be willing to make, and one that but few speculators would care to go into on the other side. Latimer knew, and Love knew, that- if a Ducktown mine was found $50,000 00 was but a small fraction of its value. But they also knew that there were large chances that Love would lose his time, his labor and his capital. No one who has ever heard or read of the uncertainties of such enterprizes can hesitate as to which party, under this Love contract, was taking the greatest risk. By the original contract, therefore, it is plain that if a mine of value was found Love had a right to buy the land at far less than would then be its value, and this for the plain reason that in such a case it would be his skill, labor and risk of capital that gave it value. Assuming that this was the state of the case,*how can it be said to be unfair to Mr. Latimer? How can it be called a foolish contract, or one not founded on an adequate consideration, if he agreed to take for his $50,000 00 oiie-fourth of the land, or one-fourth of the stock of a company formed by the owners of the land ? If they were right in their estimate, he got $75,000 00 instead of $50,000 00 for his land; and if they were not right in their estimate, he was not entitled to $50,000 00. That sum was to be lessened according to the failure of the mine to come up to Ducktown. It was only on the presumption that the land was worth $300,000.00 that — 68 — he was to get $50,000 00 for it. It seems to me absurd to say that this is not a fair discharge of the Love contract, and that, instead of $50,000 00, Mr. Latimer only gets stock, which is mere paper, and may be, perhaps, is worth nothing. If it be worth-nothing, it is because the land is worth nothing. He was not, by his contract, to have $50,000 00 at all events, but only if the land is equal to Ducktown. If it be equal to Ducktown — if it be worth a sum which would entitle him to $50,000 00 — his one-fourth of the stock is worth $75,000 00. True, it is not cash, and perhaps it may be a long time before he will get $75,000 00 for it, but if so, it will be only because it is not a Ducktown copper vein — only because he and they were mistaken in supposing he was entitled to $50,000 00. He gets by the Dalton contract more than his contract with Love called for. He gets one-fourth instead of one-sixth of the land, anddf he saw fit to take his $50,000 00 in stock, based upon the same estimate of the value of the land that fixed $50,000 00 as his interest in it “ after the mine was found,” is that unfair? I do not think so, and a jury might well think this Dalton contract was a fair and just one, based on an adequate consideration, according to the evidence of Mr. Latimer himself. He was the owner of a tract of land of but little value, save upon the idea that it contained a copper mine. It would cost a good deal to test it. As all experience proves, money’thus spent is generally thrown away, as valuable copper lots are very, very scarce. Mr. Love was ready to take the risk. He would spend his time, his labor and his money. If there was a failure, the loss was to be his, and his alone. Latimer ran no risk. It was but fair that the man who ran the risk should, if successful, get the largest share. They fixed Ducktown as the standard. If the, test was a failure, Mr. Latimer lost nothing; he still had his land. But Love lost, as the proof shows, $2,500 00. On the other hand, if a Ducktown mine was the result, Mr. Latimer’s land, worth almost nothing before the test, now made him a rich man. He got $50,000 00 for it. The Dalton contract is based on the assumption that a new — 69 — Ducktown Avas found. On that assumption, $300,000 00 is Ioav for the land,, and $75,000 00 in stock is a fair substitute for the $50,000 00. If the stock is not worthi the money, it is not a Ducktown. Just as much as it falls beloAV Duck-town, $50,000 00 is too much for Mr. Latimer’s 'interest. He does not get $50,000 00 for his land in cash, Avhich he was to get if it proved a Ducktown; but he does get $75,000 00 in slock, which is worth $75,000 00 if it is a DucktoAvn. By the very terms of his contract Avith Love, he was to sell his land at a price to be proportioned according to its approach to Ducktown. He and they, at Dalton, evidently believed they had got a DucktoAvn, since it Avas understood that he Avas entitled to $50,000 00. If he sold at all, some comparison with DucktoAvn Avas to be made. They all agreed it Avas equal, and fixed $50,000 00 as the price. If they were right, his stock is Avorth more than $50,000 00. If they Avere not, then $50,000 00 is too much. In other Avords, the Love contract is itself dependent on the value of the land, and the Dalton contract does nothing but keep up the same idea. Mr. Latimer, instead of $50,000 00 in cash, Avas Avilling to take $75,000 00 in stock, in a company which had a mine equal to Ducktown. If this be so, he is not hurt. If it be not so, and the land be Avorthless, Love and his associates have lost more than he has. As a matter of course, in saying so decidedly that this Avas a fair contract, Ave only give our opinion, and the reasons for it. We do not intend to dictate to a jury Avho may think otherwise. We express this opinion because the effect of the refusal of the judge to charge as requested Avas, in effect, the expression of a different opinion. To conclude, then, upon this point, my brother Trippe and I think a jury might well consider that this Dalton trade was not only founded on a valuable consideration, but AAras in fact only putting into another form the Love contract Avhich nobody pretends AA'as anything but fair and reasonable. We think, therefore, the court erred in refusing to charge “.that it was a matter of course for equity to decree specific performance of a contract for the sale of land if it Avas in — 70 — writing and was fair and for an adequate consideration/’ since there was evidence to justify and require it. For this reason we think there ought to be a new trial. We do not think the jury could, under the evidence,, have given much weight to the evidence of imposition or fraud in the execution of the Dalton contract. It is not a very reasonable story, to say the least of it. It is contradicted by everybody else, and it is utterly inconsistent with the frequent acts of Latimer in subsequent ratification and approval of it. As to the variance between the corporation as actually got and that agreed upon, that is a small matter — more a matter of form than substance— and we cannot suppose the verdict was based upon that. Mr. Latimer seems always to have been perfectly willing to take his $50,000 00 in stock, provided only the stock was worth what it would be if they had in fact found a Dúcktown ; and 'had they found a purchaser, even at a less rate than $300j000, it is quite plain he would have been satisfied with his $75,000 in stock. Judgment reversed. Tripee, Judge, concurred, but furnished no written opinion.