This appeal is from a judgment entered upon a "Motion for Judgment on the Pleadings" which had been converted into a motion for summary judgment.
Further, we agree with the appellant that the record is not deficient. The district court considered only those matters called to its attention on the motion for summary judgment.
The contract of May 4, 1953, provided that, "Foley shall have the right of first refusal to purchase any sawtimber stumpage offered for sale by Buckeye for a period of fifteen (15) years from May 4, 1953." It further provided that, "Foley shall offer to Buckeye upon usual and customary terms all pulpwood obtained in connection with its lumbering operations, wherever conducted, at the then current market price to pulpwood dealers for pulpwood in the locality where said pulpwood is located."
Buckeye insists that the judgment of the district court declaring that contract "now of no force and effect" should be sustained upon one of several grounds. First, Buckeye claims that the contract was void ab initio for lack of sufficient consideration.
The contract expressly stated the considerations upon which it was based: "Now Therefore, in consideration of Five Dollars ($5.00) paid by Buckeye to Foley, receipt of which is hereby acknowledged,
Whether or not Foley continued to engage in logging and lumbering operations, its promise while so engaged to offer to Buckeye all pulpwood obtained in connection with any such operations was sufficient consideration for Buckeye's promise to give Foley first refusal to purchase any sawtimber stumpage offered for sale by Buckeye. Each promisor bound himself not to sell any of its output to a third person before first offering it to the promisee. It is not necessary to refer to other promises and provisions of the contract of May 4, 1953, to hold, as a matter of law, that these two promises were sufficient consideration, the one for the other, to prevent the contract from being void ab initio.
Secondly, Buckeye insists that the two promises were so mutually dependent as that when Foley ceased to be engaged in any logging and lumbering operations, Buckeye was released from its promise to give Foley first refusal to purchase any sawtimber stumpage offered for sale by Buckeye; or, in other words, that Buckeye's promise was conditioned upon Foley's continuing to engage in logging and lumbering operations.
We go first to the pertinent provisions of the written contract:
If the terms of the written contract create legal obligations without any uncertainty as to the object and extent of the engagements, then under the law of Florida, as elsewhere, "it is conclusively presumed that the whole engagement and the extent and manner of their undertaking is contained in the writing." Gendzier v. Bielecki, Fla.1957, 97 So.2d 604, 608. The contract does not expressly state whether the two promises are dependent or independent. It
Professor Williston states that "* * * the presumption in bilateral agreements, unless some reason can be shown to the contrary, is that the respective promises are for an agreed exchange, that is, are dependent." 3 Williston on Contracts (rev.ed.) § 825, p. 2312. In Bank of Columbia v. Hagner, 1828, 1 Pet. 455, 465, 26 U.S. 455, 7 L.Ed. 219, the Court said:
See also, Telfener v. Russ, 1896, 162 U.S. 170, 181, 182, 16 S.Ct. 695, 40 L.Ed. 930; Kelsey v. Crowther, 1896, 162 U.S. 404, 409, 16 S.Ct. 808, 40 L.Ed. 1017. In the Comment to A.L.I., Restatement Contracts, § 266, it is said:
If we were to construe the written contract, without the aid of parol evidence, we would have to hold that the promises are dependent. In our opinion, however, the contract is not so certain and unambiguous as to preclude, as aids to its construction, evidence of the surrounding facts and circumstances to the end that the court can, so far as possible, view the contract from the positions of the parties at the time of its execution.
Before examining such evidence, however, we consider a preliminary insistence that the procedure followed by the district court wrongfully deprived Foley of a right to a trial by jury.
Actually a jury was empaneled. Prior thereto, the parties had taken some five hundred pages of depositions. Three pretrial conferences had been held, at the conclusion of which the court had undertaken to define the issues. After the jury had been empaneled, the record recites that: "Court and counsel had a discussion off the record and it was decided a further pretrial conference would be of benefit in the trial of the case."
In that conference Buckeye made a motion for judgment on the pleadings, which, as heretofore stated, was converted into a motion for summary judgment. Each of the parties was given full opportunity to present testimony on the question of the existence of disputed facts material to the issue of the interrelationship of paragraphs two and three of the agreement of May 4, 1953. The procedure was described by the district court as follows:
Foley had actual notice, and ample time to prepare to meet the questions presented by the motion. Being prepared to try the case, Foley does not claim that it was unprepared to prove the existence of disputed issues of fact. We do not agree with Foley's criticism of the procedure followed by the district court. See Dinwiddie v. Brown, 5 Cir., 1956, 230 F.2d 465, 468; Herron v. Herron, 5 Cir., 1958, 255 F.2d 589, 593.
Upon the hearing on the motion for summary judgment, Buckeye called attention to Foley's admission in its answer, "that at the time of the May 4, 1953 agreement was entered into it was actively engaged in a major logging and lumbering operation as alleged, etc."; that it "was in the process of constructing a new sawmill at Shamrock, Florida, etc." Foley further admitted that "the successful operation of its new mill at Shamrock, Florida, would require defendant to buy and cut large quantities of timber on lands owned by the plaintiff and others in the area, and all of this was well known to the plaintiff as well as to the defendant." Foley's answer further disclosed that in 1955 it sold its sawmill at Shamrock, Florida, and undertook to assign its rights under the May 4, 1953, agreement, but that Buckeye refused to permit it to assign said rights and the assignment never became effective. Its President, Lester Foley, admitted by deposition that it never did conduct the lumbering operations contemplated at the time of the contract. It answered an interrogatory requesting it to list "the total number of all officers and employees in the employ of Foley Lumber Industries, Inc. on May 4, 1953 and on each anniversary of May 4, 1953 up to and including May 4, 1959" as follows:
Foley offered evidence that Buckeye's mill was not completed until late 1954 or early 1955, so that on May 4, 1953, Buckeye had no need for pulpwood. Foley introduced an earlier contract between it and Buckeye dated October 10, 1951, relating to Foley's management of timberlands acquired by Buckeye from P. C. Crapps & Son. That contract provided that, "When Buckeye's proposed pulp mill is in operation, Foley shall deliver so much of the pulpwood from Buckeye's Lands as Buckeye may direct to Buckeye's Mill, and Buckeye shall pay therefore (sic) on the same basis as outlined above, Paragraph 15." That contract was terminated by the agreement of May 4, 1953. Foley offered evidence that Buckeye had other areas and sources of getting pulpwood; that at Foley's request in the negotiations of the contract of May 4, 1953, Buckeye had agreed to the striking from paragraph 2 of a provision "but only for processing in its (Foley's) own sawmill." Foley's letter of objection to that provision read in pertinent part:
At the conclusion of the hearing on the motion for summary judgment, the district court rendered the following oral opinion:
We agree with the district court that the evidence offered by Foley on the hearing of the motions for summary judgment did not prove the existence of any genuine issue as to any material fact, and that only one inference can reasonably be drawn from that evidence. The undisputed facts showed that Buckeye furnishing Foley a source of supply of sawtimber was to be in return for, and in effect conditioned on, Foley furnishing to Buckeye a source of
Foley's motion for an amendment of the judgment of the district court should, however, be granted to the extent of determining the time as of which the contract of May 4, 1953, became inoperative or ineffective, and as to whether evidence of Buckeye's breach of the contract while it was effective presents a genuine issue of fact which should be determined by the verdict of a jury. To that end the judgment dismissing Foley's counterclaim is reversed. The costs of appeal are taxed three-fourths against Foley and one-fourth against Buckeye.
Affirmed in part and in part reversed and remanded.
TUTTLE, Chief Judge (dissenting).
With deference I dissent. I agree that this case should have been disposed of on motion for summary judgment. However, I think it should have been disposed of by a judgment that the obligations of Buckeye were outstanding subsisting obligations.
I am unable to understand just what legal issue was decided by the trial court and I am equally unable to understand what legal principle has been applied by this Court to sustain the judgment below. The majority opinion seems to base its affirmance of the judgment on the proposition that clauses 2 and 3 express mutually dependent obligations. With that I agree fully. Moreover, the opinion seems to hold that the contract was valid when executed, and that all that was required to make it a valid contract was Foley's promise, while engaged in logging and lumbering operations, "to offer to Buckeye all pulpwood obtained in connection with any such operations," and the opinion holds that this promise "was sufficient consideration for Buckeye's promise to give Foley first refusal to purchase any saw timber stumpage offered for sale by Buckeye." I agree with all of this. Having done so, I then believe that this ends our inquiry, because we have thus construed the language of clause 3 as merely requiring Foley to offer to Buckeye all pulpwood it obtains, and there was no requirement on Foley to continue in the logging or lumbering business to obtain pulpwood in order for it to insist on Buckeye's performance.
Now, however, the majority seems to confuse the doctrine of dependency of provisions with the entirely different one of failure of consideration. The Court seems to say that if the obligations are mutually dependent, then Foley was required to remain in a position to supply pulpwood to Buckeye. I think this has nothing to do with dependency, but is purely a matter of construing clause 3. All that the dependency principle requires is that before Foley can require performance from Buckeye it must be in performance of its obligations.
We thus come to a construction of clause 3 to determine what it required Foley to do. I understand that the majority agree with me in that it requires merely that if Foley obtains any pulpwood from logging and lumbering operations, it is required to furnish such pulpwood to Buckeye. On that construction Foley has no duty or obligation to "obtain" a cord of pulpwood. It has no obligation to stay in a business that would enable it to "obtain" any.
We are bound to assume that the parties knew what they were doing if each of them, assuming that they both "contemplated" staying in their respective business, was satisfied to agree, as the majority opinion seems to hold that they did, "not to sell any of its output to a third person before first offering it to the promisee."
The majority, however, holds that the sale of the mill by Foley or some other action by Foley somehow caused the contract to "become inoperative or ineffective." These are strange words in dealing with obligations under a written contract. The Court reaches them by a statement that "the undisputed facts showed that Buckeye furnishing Foley a source of supply of saw timber was to be
It seems to me that if the Court is construing the language of clause 3 to mean that if Foley obtained no pulpwood then it had no right to demand performance by Buckeye of its obligation, that should be said. The difficulty with that, I apprehend, is that the trial court could not have so construed clause 3 on a motion for summary judgment. This is true for Foley attempted to show that Buckeye was not looking to it as a source of supply of pulpwood from its logging and lumbering operations because Buckeye did not even have a pulpwood plant for something over a year after the contract was entered into, and because it knew that the logging and lumbering operations then carried on by Foley would not produce any pulpwood for Buckeye. Some of this evidence was rejected by the trial judge, who then ruled that the evidence was "undisputed."
However that may be, I think it plain that the majority, having correctly interpreted the contract as not requiring Foley's continued operation, abandons that interpretation when it appears that, after some subsequent act by Foley, it seemed inequitable for Foley to hold Buckeye to its admitted obligation. I know of no principle of contract law that permits a court thus to remake the agreement of the parties.
I agree that the judgment can not stand, and that under the construction adopted by the majority there must be a trial on the damages suffered by Foley prior to the time the Court finds that Buckeye's obligation became "inoperative or ineffective."
However, I think the judgment should be reversed and that judgment should be rendered in favor of the appellant holding that the obligations of Buckeye are still binding and subsisting so long as Foley carries out its promise to give Buckeye first refusal of any pulpwood obtained by it from its logging and lumbering business.
"* * * If anything material to either party is omitted from the record on appeal by error or accident or is misstated therein, the parties by stipulation, or the district court, either before or after the record is transmitted to the appellate court, or the appellate court, on a proper suggestion or of its own initiative, may direct that the omission or misstatement shall be corrected, and if necessary that a supplemental record shall be certified and transmitted by the clerk of the district court." Rule 75(h), Federal Rules of Civil Procedure, Title 28, U.S.Code.
"We can't just simply take the whole file to New Orleans. The court certainly has not considered those matters which have not been called to its attention. * * * I think this can get out of hand. I am not going to let you introduce everything because the record is quite clear upon which I based my ruling on there * * *."