Court Opinion

ID: 8656326
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:16:18.162932+00
Date Added: 2024-06-11T16:56:44.191751
License: Public Domain

STRAUP, C. J.
I dissent. True, the court cannot make a new contract for parties. It, however, is required to construe and give effect to those made by them. The intention of the parties as expressed in language employed by them of course must govern. The several contracts being parts of one transaction should be read together and construed with reference to each other and to the subject to which they relate and with which they deal.
The defendants purchased from the plaintiffs seven mining claims lying in the vicinity of other claims from which pay ore was being shipped, some of great value. When purchased, the claims were not wholly undeveloped. About 3,000 feet of work, running tunnels and inclines and sinking shafts, had been done upon them, and pay ore taken out of them; *162Testimony was given on behalf of plaintiffs to show the character and extent of the workings and the grade and quantity of ore exposed. One of the plaintiffs, after testifying concerning such' subjects, testified that the mining properties were of the value of $50,000. And, as shown by the report of a mining engineer, who at the request of the defendants experted the properties and submitted his report to them before they purchased, there were, among other workings, an incline shaft of 800 feet following down shipping ore in a secondary, vein and at the bottom, about 208 feet below the surface, “passed close to and probably partially entered the large primary vein.” At the bottom of another incline shaft down 300 feet and running on a secondary vein the ore pitched toward the main vein “and no doubt leads into it.” He described other workings showing ore, and about a half dozen shafts about fifty feet deep showing streaks of high grade ore assaying from samples taken therefrom values, in lead, silver, copper, and gold, a number of them, from $26 to $65, one as high .as $258, and a number from $8 to $18. He reported that at . two inclines mentioned and described in his report 300 tona of ore were exposed at an average value of $30 a ton which could be extracted, hauled, sampled, and smelted at a net profit of $8,625, and that the showing at the bottom of the 800-foot incline shaft “is extremely valuable for a very large tonnage,” and that “a comparatively small amount of work below would probably open tonnage to furnish a 200-ton mill indefinitely,” and that “the profit that could be realized by the operation of a 200-ton concentrator on ore of the grade now exposed would be * * * a net profit per month of $28,320.”
His “resume” is:
‘ ‘ Although this property has not had the advantage of any intelligent development and the worldngs in many cases resemble gopher holes, there is, nevertheless, sufficient evidence to convince me that there is here an exceptional- opportunity for developing a mine of great value. ’ ’
■ Against this the defendants gave no testimony and adduced nothing to show that the mine did not contain pay ore, or that it could not have been worked profitably, or that any *163effort was made by them to work tbe property, or to extract ore therefrom. Tbe findings of tbe court tbat tbe properties are valuable for mining purposes, and tbat they “contain valuable deposits of ore which can be mined and shipped at a profit, and that if defendants bad worked said property and mined tbe ore therein they could, within a short time after entering into said contract, have paid said $9,000 out of one-half of the net proceeds of the ores mined from said property,” but had wilfully and without cause refused to work it and meet such payment, are not only well, but substantially without conflict, supported by the evidence.
In July, 1901, the defendants unconditionally purchased the claims from the plaintiffs, but with the option to pay $16,000 in cash, payable in installments, or $21,000, $12,000 of which in cash, payable in installments, and $9,000 out of net proceeds of ore mined by the defendants, or their assigns, from the properties. The defendants chose the latter. There thus was an absolute sale and an unconditional promise to pay the sum of $21,000, $12,000 of which to be paid in cash in installments, and $9,000 out of net proceeds of ore mined by them from the properties. By their contract of July, 1901, it was provided that “the balance of the above-named purchase price [$21,000] being the sum of $9,000, shall be paid” in manner that “on and after the 2d day of July, 1902 (when the last installment of the $12,000 was due), said second parties (defendants), or their assigns, shall pay over to the said first parties, or their assigns, the net one-half of said second parties' proceeds from said mine, meaning thereby a net one-half of the proceeds of all ores mined from said property after the said second parties have deducted all moneys paid out by them for expenses incurred in mining, milling, sampling, handling, transporting, smelting, and marketing said ores.” In October, 1901, the defendants paid the full amount of the $12,000 at which time plaintiffs made their deed conveying unqualified title to the properties to the defendants. Contemporaneous therewith, and in consideration thereof, by further agreement, and in accordance with the prior or main agreement, it was provided:
“That the first parties (defendants) hereby promise and *164■agree for themselves, and their assigns, that they will pay to the second parties, or their assigns, one-half of the net ■proceeds of all ores mined by the first parties, or their assigns, from said property until the second parties shall have received the sum total of $9,000 out of said net proceeds.”
■ The defendants thus just as unconditionally agreed to pay $9,000 out of net'proceeds of ore mined by them from the properties as to pay the $12,000 in cash. The language of their contract admits of no other interpretation. But the defendants say that they had not agreed to work the properties or to mine or take out any ore. But they in no uncertain terms agreed to pay-$9,000 out of proceeds of ore mined by ■them from the properties. They, of course, could not comply •with such stipulation unless the properties were mined by them and ore extracted therefrom, for ore does not thrust itself out of the ground, nor without human agency reduce itself to a marketable product. As well say that a vendee, who, as part of the purchase price of a farm, had agreed to pay a sum definite out of net proceeds of crops raised by him on the farm, was not required to farm it or to raise any crops, for it was not nominated in the bond that he was to ■till, sow, or reap. To say one had agreed to pay $9,000 out of proceeds of ore mined by him from the property, and then say he ivas at no time required to work or mine it or do anything to obtain ore, seems to me but contradictory propositions. I thus think the defendants had a duty to perform and were required to make reasonable efforts to meet the payment out of net proceeds of ore, and that they were entitled •to a reasonable time to do that.
The period of eight years they had to do so certainly was more than reasonable time. The stipulations in the first or main contract that “the extent or manner of managing and developing said property shall be left solely to the sound and reasonable discretion of said parties of the second part, ’ ’ and that the plaintiffs should be given employment under orders and directions of the defendants “when the property is being worked,” do not imply that the defendants, in compliance with their contract to pay $9,000 out of net proceeds of ore mined by them, were not required to work the property, but *165rather imply an intention that the property was. to be worked, bnt under the exclusive management and control of the defendants. Notwithstanding the conveyance to them of an unqualified title, their exclusive possession of the properties, and, as found by the court and shown by the evidence, of valuable deposits of ore which could have been profitably extracted, and out of one-half of the net proceeds thereof the obligation of $9,000, shortly after entering into the contracts and the conveyance, could have been discharged, the defendants, nevertheless,, for a period of about eight years, did nothing, made no effort, and wilfully refused to do anything, and when, on numerous demands that they proceed and work the property they but replied that they were not required to work it, that they were interested in other properties and would work those purchased from plaintiffs when they got ready, and that it was none of their business whether they worked them or not. And thus, for eight years before this action was commenced, and for seven more before judgment was rendered in the court below, have the plaintiffs been deprived of the unpaid purchase price of their claims conveyed to and exclusively possessed by the defendants.
Contracts, with such stipulations respecting payment as here', are and should be liberally construed in favor of the payee. Smithers v. Junker, (C. C.) 41 Fed. 101, 7 L. R. A. 264. So construing those in hand I think it clear that the defendants had a duty to perform' respecting the discharge of their obligation as to payment of the unpaid $9,000 purchase price. I do not think it was contemplated by the parties that the $9,000 could become due only at the pleasure or will of the defendants regardless of lapse of time or the rights of the plaintiffs. To uphold the defendants in their contention but means that they have the sole right to say when such unpaid balance shall be paid, or that it shall never be paid. Surely that was not contemplated by the parties. I think the provision in the contract to pay the unpaid balance of the purchase price out of proceeds of ore mined by the defendants from the property constitutes but the means and not the end. And though the means had been inadequate to accomplish the end they, nevertheless, are not to control the *166end, but must yield to it. 2 Story, Eq. Jur. (11th. Ed.), Section 1064A; Sears v. Wright, 24 Me. 278. For much stronger reasons must this be true when the means are adequate and when the defendants wilfully refuse to resort to or to avail themselves of them. The plaintiffs conveyed and warranted an unqualified title to the defendants, not only in consideration of the payment of the $12,000, but also in consideration that the defendants, out of net proceeds of ore mined by them, pay the further sum of $9,000. Though the parties thought, as no doubt they did, that such net proceeds would, in a reasonable time, discharge the debt, yet, if such proceeds fail to accomplish the object of the conveyance and to discharge the debt, the provision that the $9,000 was to be paid out of net proceeds, does not prevent the application of the property itself thereto. Gisborn v. Charter Oak Ins. Co., 142 U. S. 326, 12 Sup. Ct. 277, 35 L. Ed. 1029. Again, for stronger reasons, must that be true if the proceeds fail through the fault and refusal of the defendants to resort to the stipulated and available means to obtain them.
I do not see wherein the case of Consolidated Arizona Smelting Company v. Hinchman, 212 Fed. 813, 129 C. C. A. 237, cited and relied on by the defendants, supports them in their contention. The only thing there decided was that the provision of the contract there considered respecting payments of net proceeds from the operation of mining properties was not a part of the purchase price and not a covenant running with the land, but was merely personal, and did not create an equitable charge on the land. That is apparent from the syllabi, and is expressly so stated by the court in its opinion. Here the $9,000 to be paid out of the net proceeds admittedly is a part of the purchase price. The contracts in unmistakable terms so recite; in the one “the balance of the above-named purchase price ($21,000) being the sum of $9,000 shall be' paid” out of net proceeds; in the other, “in consideration of the conveyance by”, the plaintiffs of the claims, the defendants “promise and agree for themselves and their assigns that they will pay” the plaintiff net proceeds until the sum of $9,000 is paid; and by express provisions of the contract confessedly are covenants running with the land *167charging it with the upaid purchase price of $9,000 in accordance with the terms of the contract.
Thus, from these considerations, do I think the judgment right declaring the unpaid purchase price of $9,000 due and unpaid, adjudging it a lien on the property and ordering it sold in satisfaction thereof. Something is said concerning interest. The court allowed no interest for the period of about eight years before the action was commenced and which time the defendants had to comply with their contract. It allowed interest only from the filing of the complaint to judgment, a period of a little more than seven years. If the plaintiffs were entitled to interest, as I think they were, they certainly were entitled to it for the period allowed.