Rust v. McWilliams
Rust v. McWilliams
Opinion of the Court
The facts, as disclosed by the evidence, seem to be as follows: These defendants were, on October 29, 1902, and for a considerable time prior to that-date, the owners of a group of mining claims known as the Aurora Borealis properties, situated some three or four miles from the beach of Yankee Cove. Some time prior to that date, and on-the 8th day of December, 1897, these defendants had given to one A. Nappack, of Portland, Or., a mortgage for $2,000 upon these properties. This mortgage was, on December 30, 1897, duly filed for record in the office of the rer corder of that district, and on October 29, 1902, it was still of record and unsatisfied.
The portions of the contract which are germane to the present case and upon which the defendants rest their contention of ownership are as follows:
“The second party [the Bessie Gold Company] shall erect upon said property, not later than, the 1st day of November, 1903, a 10-stamp mill, with power to operate the same, and a tram or road, the whole amount, to be so expended not to be less than the sum of $10,000, by the date aforesaid, to wit, the 1st day of November, 1903.”
“That the second party shall, at the end of each month, pay to the duly authorized agent of the said first party one-fourth of the net proceeds of all sums received from working the ores of the Bessie group and one-half of the net proceeds of all sums received from mining on the claims of the said first parties, for the period of two years from the 1st day of November, 1903, until the whole amount of said $60,000 is paid as herein provided, and no more.”
The two clauses relating to forfeiture are:
“It is further agreed by the parties hereto that, in the event the payments made in the manner herein provided shall not amount to the whole sum of $60,000’within two years from the 1st day of November, 1903, to the 1st day of November, 1905, and the said second party shall fail on said last-mentioned date to pay the balance due, then the said second party shall forfeit the payments feo made, and the property and machinery upon the property of the said first parties, and be released from all claims and demands arising under this contract.
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“It is further agreed between the parties hereto that no forfeiture shall be claimed or shall be binding upon either of the parties hereto to any of the terms or conditions of this agreement until the party claiming such forfeiture shall have first given sixty days’ notice in writing to the party in default, during which time the said party in default shall be permitted to make good such breach or forfeiture.”
Upon the signing of the agreement from which we have just quoted, the Bessie Gold Company went into possession of the claims and proceeded to work. A 10-stamp mill of the Alli$-Chalmers type was purchased, and early in the spring of 1903 was delivered on the beach at Yankee Cove. The company then intended to build a plank road, or tramway, from the beach to the mining property by the middle of the summer; but this was not completed until the latter part of November of that year, and the machinery composing the stamp mill was allowed to remain crated at the beach where delivered Until
On October 28, 1904, these defendants, the owners of the Aurora Borealis properties, prepared a notice of forfeiture, the duplicate of which is in evidence (Defendants’ Exhibit No. 1). This notice was on October 31st mailed, registered, to E. ■M. Shelton, president of the Bessie Gold Company, and was •.received by him, as shown by the registry receipt (Defendants’ .Exhibit No. 3), on the 7th day of November, 1904. The Bes.sie Gold Company made no attempt to comply with the provisions of the notice, and took no action whatever with regard to the property, not even attempting to withdraw therefrom any •of the materials or machinery which it had placed upon the ground. These defendants went again into possession of the mining properties. Some four months after the service of this notice on the Bessie Gold Company, and on March 29, 1905, ’the B. M. Behrends Mercantile Company, of Juneau, com
Since the defendants contend that W. R. Rust is not the real party in interest in this case, it may be well at this point to examine his connection and that of Mr. Shackleford, who employed McLaughlin to make the bid, with the transaction. The evidence seems to show that at this time L. P. Shackle-ford had been the attorney for the Bessie Gold Company in one or two cases, and was at the time in question attorney of record in one case. Personally he was not then acquainted with Rust, but had been directed by Mr. Bogle, a former law
The case seems to turn on a construction of the agreement between the owners of the mining property and the Bessie Gold Company, particularly upon that clause which provides-that upon failure to conform to certain conditions:
“The second party shall forfeit the payments so made and the-property and machinery upon the property of the said first parties, and be released from all claims and demands arising under this contract.”
While the phrase just quoted is part of the paragraph providing for payments, it was, I think, clearly the intention of the parties to the agreement that these provisions as to forfeiture were to apply to forfeiture for any cause. From the agreement, it is evident that it was the intent of the parties that the Bessie Gold Company should proceed at once to erect the mill and commence mining operations, in order that the payments might be made as agreed, within two years after the 1st of November, 1903. The erection and operation of this' null was undoubtedly essential to the carrying out of the contract, and without it the agreement could not literally, or even generally, be complied with; and even though the two years in which the payments were to be made had not expired when the notice of forfeiture was given, the conditions existing on the property warranted it, for not only had the mill not been set up, but the Bessie Gold Company had ceased work, discharged its men, and practically abandoned the ground. Nor when the notice of forfeiture was served was any attempt made by' the company to meet the demands of the owners. So that, even though it is true, as urged by the plaintiff, that the two-year period within which the payments were to be made had not lapsed, it is also true that the Bessie Gold Company had failed to comply with its contract to erect the stamp mill, and
We now turn again to an examination of the phrase used in the paragraph of the agreement relative to forfeitures, which is as follows:
“Property or machinery upon the property of the first party.”
It is contended by the plaintiff that this meant only such property as had become a fixture by being attached to the soil. Defendants insist that by this language it was contemplated that any machinery or property of the company which might have been placed upon the ground, whether it had become a fixture or not, was subject to forfeiture. The language of the contract itself seems to bear out this construction, and the acts of the Bessie Gold Company are' a strong indication that they so understood it. The notice of forfeiture was duly given as provided in the contract, and after the notice had been served the Bessie Gold Company took no action whatever to comply with the terms of the contract or the notice. Several months passed, during which this machinery, which had been deposited by the company upon the ground, might have been removed. These months were the most favorable of the year for such action; and, if the Bessie Gold Company, it having determined, as Mr. Shelton testifies in 'his deposition, to abandon the option, interpreted the contract in the manner now urged by the plaintiff, it is but reasonable to presume that there would have been some attempt made to save an asset worth, as shown by the evidence, some $5,000; but no such attempt was made on the part of the company. In the interpretation of this agreement, this attitude of the parties toward it and their acts under it give much light as to what was intended by them.
The contention that the attitude of the company with respect to the contract was due to prior incumbrances upon the claims, which were discovered after the contract was entered into, is not, I think, sustained by the evidence. On the contrary, it appears that several of the directors knew of the existence of this mortgage before the contract was signed, and the search of the records in the recording office, which Shelton says was made, must have disclosed that fact. It may be that Shelton, personally, did not know of the mortgage; but it cannot be doubted, on examination of the record in this case, that the fact was personally known to some of the directors prior to the taking of the option. This of itself was sufficient. It also appears from the record in the case that the understanding was that this mortgage should be taken care of by the owners of the property and not by the company.
The owners of the mining claim were by the contract bound to do no more than they did in order to comply with the con
Judgment for defendants.
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