Gove v. Colborn
Gove v. Colborn
Opinion of the Court
These two causes were argued together. One is a suit to set aside, on the ground of surprise, a sheriff’s sale under foreclosure proceedings, and the other to enforce a mining agreement. The connection of the two subjects will appear by the subjoined statement. On the 9th of April, 1877, Francis N. Gove, who was then the owner of a tract of land (containing minerals) of about seventy-five acres, in Morris county, leased the lands and mines to David B. Jardine for five years, at a royalty of fifty cents per ton of twenty-two hundred and forty pounds for all ore mined, raised and carried away from the -demised premises during the term. On the 28th of the same month Gove made an assignment to Cornelius L. Leport, under the assignment act of this state, for the equal benefit of his creditors; which trust Leport accepted. On the 7th of July, in the same year, Jardine assigned the lease to Mrs. Leport, the wife of Cornelius L. Leport, and she, on the 28th of August following, assigned it to Henry F. Gove (son of Francis N.), who, on the 31st of that month, leased the mine, with all the engines and machinery on the demised premises, to the complainant, at the same royalty. That lease contained an agreement that Francis N. Gove should have the exclusive privilege of doing the work of the mining, raising and delivering (the delivery to be on board the Delaware, Lackawanna and Western railroad at Shippenport) of all the ore to be mined and raised during the continuance of the lease, and that the complainant should pay him the sum of $3 per ton for each and every ton of iron ore so raised and delivered. And it was thereby further provided and agreed that Francis N. Gove might at pleasure, at any time, relinquish that privilege, in which case the complainant was to do the work and pay the royalty; and that while he (Gove) did the work and received the $3 per ton, she was to be released from payment of the royalty. And the complainant thereby bound herself to advance to him 11,000, half on the execution of the lease and the rest in sixty
By one of these suits the complainant seeks to set aside the sale as a surprise, and as fraudulent as against her; and by the other she seeks to obtain what she regards as her rights under the lease. That the sale was a surprise upon the complainant there can be no doubt; and it is manifest that if it be permitted to stand, the very provision (the purchase of the decree) made for •her protection against Gove will have been made the means of effectuating the purpose against which she sought to guard herself. It is clear that the fact that the sale took place was really due to Gove alone. He produced the only bidder, having previously provided him with the means to purchase the property on that day, and it is not denied that the purchase was made in Gove’s interest. The property, it may be remarked, appears to have been sold for an inadequate price. Clarke has obtained title, by purchase, to all the claims except two (together amounting to less than $30) which were proved against Gove’s estate. If the complainant is not to be held to have abandoned her lease or to have forfeited all claim to the aid of equity, the sale ought to be set aside. The sheriff’s deed was, as before stated, delivered in a very few days after the sale, and the purchaser appears
To consider the merits of the controversy as to the complainant’s claim under the lease: The complainant advanced to Gove $3,100 between the 2d of September, 1878, and the 29th of January following. For this she has received only about four hundred and fifteen tons of ore, equivalent to about $1,600. In December, 1878, or January, 1879, Gove and Blackwell urged Mr. Colborn to advance more money, untruly representing that there were three thousand tons of ore mined and on the bank, while in fact there were less than fourteen hundred. He did not advance the money, however. He sayS the reason was that he heard of the encumbrances on the property, and was unwilling to make any more advances until some arrangement had been made as to them. About that time Colborn appears to have ascertained, for the first time, that the property was advertised for sale under foreclosure proceedings, and Clarke, to befriend the complainant by assisting her to hold the lease, and thus secure himself against loss for his advances of money to her (for she had obtained all the $3,100 from him), immediately set about obtaining control of the mortgages, and- got it accordingly. And he otherwise (by obtaining the instruments of confirmation) fortified the complainant’s title to the lease. It is urged that Mr. Colborn was well aware of the existence of the mortgages before the lease was made; and in this connection, it may be added, it. is also said that he or his attorney was at the same time told that the lease was legally of no binding effect whatever. It is enough to say on both those points that if (and there is a contrariety of evidence on the subject) the complainant or her agent or attorney was, when the lease was made, apprised of tbs fact that there were encumbrances on the property, it is quite evident that they were led to suppose that they were in hands entirely friendly, and that no trouble or disturbance was to be apprehended from them ; and it is very improbable that the complainant would have advanced over $3,000, as she did, on a lease that she was informed, when she entered into it, was legally entirely worthless.
According to the evidence, the lease was not only not intended to be a fraud on Gove’s creditors, but it was regarded, both by Gove and his assignee, as a legitimate means of enabling the former to pay off, by means of the royalty,, the claims of his creditors against him. Gove was at liberty, at his pleasure, to surrender the privilege of mining, but he did not do so. On the contrary, he proceeded with the work in October, 1879; and when, in December following, the complainant had found a purchaser for twelve thousand tons of the ore, to' be paid for in advance, in lots of one hundred tons each, Gove refused to deliver the ore or recognize the complainant’s right to it. There is no evidence that the complainant intended to abandon the lease. The evidence adduced by Gove on the subject shows only a-desire on his own part to substitute, if he could, a lease with Clarke as lessee Fot the lease to the complainant. He did not take the steps necessary, under the lease, to put an end to it. If he was unwilling to work under the agreement which it contained, he should have notified the complainant of the fact. He did not do so, but, as before stated, continued to work under it. The non-payment of the money due him under the agreement did not-work a forfeiture of the lease; nor could there.be any for non-payment of royalty or failure to take out ore while he continued to work the mine under the agreement; for, by the terms of the agreement, there was to be no forfeiture for failure to pay royalty, or to mine less than five thousand tons a year during that time. Nor can the complainant, under the circumstances, be defeated in her claim under the lease by the fact that the original assignee had no power, as assignee, to recognize the lease. As before shown, the rights of the creditors under the assignment are not involved in this controversy, Clarke having acquired them all with the exception of two insignificant claims (the owners of which cannot be found), which can be perfectly
This decree unanimously affirmed.
Reference
- Full Case Name
- Henry F. Gove v. Laura A. Colborn
- Status
- Published