77 Ind. App. 45 | Ind. Ct. App. | 1921
Action by appellant against appellees for a permanent injunction and damages sustained as incidental to such relief.
It is averred in the complaint in substance that appellant is a corporation organized under the laws of the state for the purpose of coal mining and of doing all things incident thereto. On January 22, 1917, one Meneely was the owner of the real estate here involved and on said date, his wife joining him, entered into a written contract, lease and demise by the terms of which he granted, leased and demised to appellant all the coal and other minerals lying in and under said real estate, and the exclusive right to mine the same, and to enter upon the premises for such purpose, and to do
Appellee Schrepferman is claiming and asserting the right to go upon said real estate and to mine and remove the coal thereunder, declares his purpose so to do, is now so mining such coal, and will continue to so do unless restrained and enjoined by the court ;• appellee Schrepferman’s claim to said land, and things done by him are wholly without any right or license of any kind, are wrongful and unlawful and in violation of appellant’s rights in and to said real estate and the coal thereunder, and seriously interfere with appellant’s right to use said real estate and to mine the coal thereunder. Appellant unless prevented by appellees will remove the coal in compliance with the terms and conditions of its contract, grant and lease.
Appellant alleges damages in the sum of $500 and prays that appellees be enjoined from going upon such real estate, from placing any materials thereon in preparation for mining, from digging any shafts or remov
There was an answer by all appellees in general denial and appellee Schrepferman, hereinafter mentioned'as appellee, answered in two paragraphs, the first being a general.denlal, and the second averring in substance that on and prior to August, 1916, Meneely, who was the owner of the fee-simple of the real estate involved, at said time, entered into an option by which he optioned the coal thereunder to one Devonald which option was taken by said Devonald for the use and benefit of himself and one Scott. The option is set out in the answer and provides by its terms, so far as here involved, that Meneely in consideration of $1 paid by said Devonald and other considerations will, upon demand, within six .months from the date of said option, convey to said Devonald or his assigns by good and sufficient warranty deed all the coal and other minerals lying under the real estate here involved, and will lease the coal under said real estate for three cents per ton of run of mine coal on royalty basis, and if said Devonald fails to commence to mine said coal within twelve months after the lease is .signed, he shall pay $20 per month until he commences to mine said coal as advance royalty, said sum to be deducted from the regular royalty when he commences to mine coal. Said Devonald and Scott were then the owners of the coal and minerals underlying certain other tracts, and on September 20, 1916, they represented to appellee that they owned all the coal and minerals underlying the real estate here involved together with the other tracts. Appellee, believing that their representations were true and relying on their statements that they were the owners of the coal underlying said real estate, entered into a written lease with them, their wives joining, which lease is set out in the
A demurrer to this answer was overruled after which appellant filed a reply in denial, and the cause was submitted to the court for trial which resulted in a general finding for appellee and judgment accordingly. from which this appeal is prosecuted.
The errors assigned are: (1) Overruling .appellant’s demurrer to appellee’s second paragraph of answer, (2) overruling appellant’s motion for a new trial.
In the case of Rutz v. Obear (1911), 15 Cal. App. 435, 115 Pac. 67, it was held that where one individual owns all of the stock of a corporation, the same is but the corporate double of the .owner of the stock, and such proof destroys the separate entity of the corporation, and in such event the statements and admissions of the sole owner of the stock may be received as establishing facts from which an estoppel might arise as to the corporation.
Nothwithstanding the fact that as appears by the answer some of the stock was held by Devonald’s son, it is manifest that said Devonald and Scott were the moving spirits in the negotiations that were under consideration. . They by their representations induced appellee to lease the real estate involved from them; they caused the organization of the corporation and constituted together with the son the board of directors therein. They are the two that on January 22, 1917, induced Meneely to execute the lease to the corporation in which they were the controlling force, both as stockholders and as directors. Under such circumstances, we follow the principle announced in the case of Rutz v. Obear, supra, and hold that the foregoing facts in effect and of necessity destroy the separate entity of the corporation as to this transaction, and that it is therefore estopped to deny or repudiate their representations and acts. We therefore determine that in the further consideration of thm case, the acts and representations of said Devonald and said Scott shall be deemed as the
Appellant contends that appellee had failed to comply with the terms of the lease in that he failed to complete a shaft and to begin mining coal in good faith within the time fixed in the lease, and that the violation of such condition as expressly stipulated, operated to render the lease null and void under its terms. It relies upon the case of Island Coal Co. v. Combs (1899), 152 Ind. 379, 53 N. E. 452, but the facts in that case are substantially different from the facts in the instant case. It there appears that the lease was executed in the year. 1883, with a provision of forfeiture if appellant, lessee, should fail to operate within eighteen months from the date of the lease. Appellant performed no work upon the said leased premises for about seven years, when,
In the instant case it appears that within a reasonable time after the execution of the lease to appellee he commenced his development work, and as soon as it was discovered that there was coal that could be mined profitably he began his preparation to mine the same. He expended large sums of money for material and performed much work in the way of constructing the buildings and other structures. He was much hindered in his preparation by the fact that he was unable to secure certain necessary materials for his work, we may well assume because of industrial conditions then prevailing, but notwithstanding this hindrance, he commenced the sinking of his shaft to the coal in ample time to have completed it had it not been for the wash out which eventually compelled him to abandon the shaft and to sink another. This was an unforeseen condition and one for which he was in no manner responsible, and the one which eventually prevented him from mining coal at the end of the twelve months within which time he had agreed to commence mining the same.
In the case of Seymour Water Co. v. City of Seymour (1904), 163 Ind. 120, 70 N. E. 514, it was held that the party who seeks a cancellation of a contract which has been wholly or partially executed by.the opposite party must show a necessity for such remedy, and especially must show the lack of a remedy at law. The same principle is announced in the case of Rembarger V. Losch (1918), 70 Ind. App. 98, 118 N. E. 831, in which case it was held with reference to oil and gas leases that where exploration and development is made in accordance with the terms of the lease, and oil or gas are produced thereby as therein provided, the lessee acquires an interest in such land, and that where such interest has been acquired it will not be forfeited unless it clearly appears that it would be against equity to permit the lessee longer to assert such interest. The principle announced is directly in point with the instant case. That case, written by Batman, J., of the first division of this court is well considered and is an authority of controlling force as to the questions here involved.
Appellee’s second paragraph of answer states a defense to appellant’s cause of action and the demurrer thereto was properly overruled. The evidence fully sustains the averments of such answer and therefore the court did not err in overruling appellant’s motion for a new trial.
The judgment is affirmed.