CHEYENNE MIN. AND URANIUM COMPANY v. Federal Resources Corp.

1020, (1984), rec vides in possible 79 L.Ed.2d 249 essence that to the S.Ct. extent ognize proprietary public that the interest of the works contracts benefit the citizens property the stat State with which of the state whose contributions to the ute deals is often a crucial factor deter public treasury fund projects. those discriminatory whether a statute state should not be foreclosed the invo- against Privileges non-citizens violates the cation of the Constitution of the United that, perceive and Immunities I Clause. States of loyalty America from to interests articulating concept, without such a of its long own citizens. So as a statute is Supreme Court of the United States has narrowly protect only right drawn to preserved a delicate between the balance the state to contract as it sees fit with Reservation of Powers Clause found in respect expenditures public works Amendment X to the Constitution of the projects funds, which it owns and which it I Privileg States of America and the United am satisfied that as a matter of law such a es and Immunities Clause. The line that is statute does not offend Privileges governmental drawn is that between the § IV, Immunities Clause found Art. 2 of of the function State and the the Constitution of the United States of participate marketplace, State to sat This, course, America. makes it unnec- functions, isfy proprietary its and contract essary pursue for the court to the remand freely with those with whom it chooses to technique invoked Building United contract. Construction Trades Council Camden County Vicinity Mayor v. and Coun- Orbeck, supra, In Hicklin v. at 437 U.S. Camden, City supra. cil 2490, Supreme 98 S.Ct. at Court recognized what it a mutually described as I agree exceptions would that the bill reinforcing relationship between the Privi- should foregoing be sustained for the rea- leges IV, and Immunities Clause of Art. sons. § 2, Clause, and the Commerce which it origin said stems from their in the Fourth

Article of the Articles of Confederation. Reeves, Stake, Inc. v. 447 U.S. (1980),

S.Ct. 65 L.Ed.2d 244 the Court said: “ * * * buy- The State’s refusal to sell to CHEYENNE MINING AND URANIUM ‘protec- ers other than South Dakotans is COMPANY, Wyoming corporation, a only tionist’ in the sense that it limits Appellant (Plaintiff), generated by program benefits a state v. treasury those who fund the state * * FEDERAL whom State was created to serve. RESOURCES CORPORA- TION, policies, perhaps ‘protection- while Such corporation, Nevada sense, in a loose Corporation, ist’ reflect the essential American Nuclear a Colo- corporation, rado patently unobjectionable purpose partnership doing government

state serve the business citizens under the name Federal-Amer- —to Partners, ican Appellees (Defendants). of the State.” Conceding that dealing the Court there was No. 83-69. application Commerce Supreme Court of Wyoming. Clause, mutually reinforcing because of the relationship I two clauses find Jan. concept applicable in this instance with 27,1985. Rehearing Denied Feb. respect Privileges and Immunities Clause. objectionable

It cannot be held for a sov-

ereign adopt legislation state to Brown, Apostólos subsequently assigned FAP,

B.J. Baker G.M. Drew, Sullivan, Cas- Apostólos, Massey being & concedes bound its terms. appellant. per, for executing contract, the owner and Barry G. G. Wil- Houston Williams and agreed “convey, quitclaim locators Williams, Neville, Porter, Day liams of & assign” all interest and to the P.C., Casper, appellees. for purchaser, claims to the upon, “under and nevertheless, the terms and conditions THOMAS*, C.J., ROSE, Before and hereinafter set forth.” The con- terms and ROONEY**, CARDINE, BROWN and JJ. in paragraph 4, relating ditions set forth participation, pertinent owner’s are ROSE, Justice. appeal: requires contract-interpretation This case “4. OWNER’S For PARTICIPATION: impact unantici- an examination of and in of the Assignment consideration subject pated agreements concerning the Conveyance and to Purchaser of Own- contract, agreements which matter of interest, the Purchaser covenants er[’]s by party per- into were entered whose Owner, agrees and its Appellant formance deemed to be due. successors, assigns legal or representa- Cheyenne Mining Company and Uranium tives, a constituting forty per sum cent (CMU) brought appel- against this action (40%) profits the annual net all from (FAP) and lees Federal-American Partners of uranium, vanadium and other associated corporations, seeking its to rescind member mined, produced ores minerals and and purchase for the sale of a contract and property, sold unpatented claims, computed or in from the ac- mining certain to enforce the terms. cordance with and under alternative contract’s the terms court, trial to the During the district set ad- conditions hereinafter forth. exhibits, judge appellant’s dition, of- ruled promises agrees perform it FAP, of part 20,000 fered to show bad faith on the upon of drilling a minimum feet of .Following three and inadmissible. property at such locations and days testimony, one-half of the trial court may such as manner be deemed advisa- took matter under and sub- advisement ble it twelve within months after sequently judgment awarding entered a July, 15th of 1957. $3,306 provisions, under the contract CMU “a. COMPUTATION: Net shall

plus appeal, interest and accrued costs. On deducting gross arrived from that the trial inter- CMU contends court’s proceeds items upon those listed pretation improperly the contract limited schedule deductions hereto attached its and further the trial award asserts that A[1] as Exhibit in refusing erred pertinent to admit “b. FOR BASIS GROSS PROCEEDS: grant evidence rescission. proceeds shall Gross include the reverse. We will upon prices ceeds sold based 1, 1957, “Owner,” or, Revised, On November CMU as established Circular 5 together designated sup- named individuals event schedule that such should be “Locators,” another, plemented by entered into a “Contract the schedule (hen Purchase Sale” with Vitro Minerals or the market then effect ore; Corporation convey- “Purchaser” for current such in- shall not unpatented ance of uranium claims proceeds operation clude the County. located in Natrona opera- concentration or milling * January purchaser’s survey Chief Justice Became items include the costs of development, exploration, transportation, ** argument. at time of oral Chief Justice labor, management, supplies, maintenance insurance, equipment, depreciation. A lists 1. Schedule 14 items to be deducted from computing proceeds profits. net These * * *” process might ready

tion or benefication which made (Em- for extraction. erected, phasis added.) property be erected operated by the Purchaser. owned or 27, 1973, April On FAP entered into two “c. TIME PAYMENT. FOR Distribu- agreements with Valley Tennessee Author- profit quarterly tion of net shall be made (TVA), ity agreements provided thirty days after the within close of development mining prop- numerous quarter. purpose such For the of such erties owned or controlled FAP in the distributions, quarterly periods such District, Mining Gas Hills including the March, June, day shall end on the last subject claims annual-net-profits to the 40% September year. and December of each interest principal held CMU. The agree- option, The Purchaser at its ment, make designated “Mining Agree- Lease ment,” distributions at the end of each following grant: contains the quarterly month. If the distributions ex- “A. For good and consideration of ceed the share of the annual Owner[’]s and valuable consideration and of the profits net as determined at the end of agreements covenants and herein con- year, each calendar repay Owner shall tained, hereby Lessor grants to [FAP] Purchaser such excess or may Purchaser the Lessee and the Lessee’s suc- [TVA] deduct such pay- excess from future assigns cessors and for the term herein- ments due Owner. provided after right exclusive to ex- plore, mine, develop, extract and “d. remove ACCOUNTING: Each distribution Mining from the Properties all uranium profit of net shall accompanied by and other materials, fissionable true, source complete correct and accounting including minerals, in, on, associated statement, un- showing the entering factors der, upon properties the said made, into the distribution all in accord- right thereafter to retain all title and ance with accounting practices standard interest and to all such severed miner- employed under the schedule hereto at- als. Lessee shall also have the to tached and with the terms of this instru- use so much of the surface Mining ment. Properties reasonably re- provisions “GENERAL: The hereinabove quired to exploration, conduct develop- respect made with to the Locators for ment, mining and milling activities.” availability and records, examination of FAP, As consideration statement, Interest, or Declaration of specifies in following Article III the royalty and time and responsibility payment, payments: applicable shall be to the distribution of agrees “Lessee pay Lessor profit net the follow- the Owner. ing royalties: “f. MINIMUM During PAYMENT: 6,000,000 “A. As concerns pounds of agreement, Purchaser will work the n contained in upon reserves the Min- property diligently and in minerlike fash- ing Properties presently classified as ion object with the discovering, pro- Ore, Indicated Lessee pay shall Lessor ducing and marketing commercial ores. Seven ($7,000,000), Million dollars (60) Within sixty days after Purchaser able: develops a deposit commercial of ore “(1) Four Million Five Hundred Thou- extraction, ready for it shall Owner a ($4,500,000) sand dollars closing; minimum of Five Hundred Dollars ($500.00)per profits month as net there- “(2)

from, Two Million payments Five which shall Hundred Thou- be a credit sand ($2,500,000) dollars any and all on or share before Owner[’]s January 1979. net as herein defined. Such mini- payments mum shall cease 2,400,000 when such “B. As concerns pounds of body has been exhausted unless an- U3O8 contained in presently reserves body other ore developed has been classified (over as Inferred Ore 6,000,000 provides referred that “all pounds per- above the said costs incurred in the * * * above), equal sixty- in A amount formance of Operations Authorized (62½ n :) pound two and one half cents expense.” shall be at TVA’s In describing UgOg category determined product operations, the end of these Ore, 31, 1975, up March Indicated to be agreement provides: definitive to and until a maximum of One Million Mining Proper- “Title to all ore from the ($1,500,- Five Hundred Thousand dollars mill, ties fed into Contractor’s and all 000) royalty is owed to Lessor. Said therefrom, Concentrate derived U3O8 payment shall be made on or before shall remain in TVA.” March October, 1978, began FAP to mine the equal fifty percent A payment “C. subject properties in which CMU holds an (50%) the market of the amount which December, 1979, interest. Between price for exceeds the concentrate U3O8 June, 1980, concentrates, $9,000 FAP production cost of such CMU total payments cost shall include made payments in minimum called for under above, paragraphs A B pursuant to paragraph 4f of purchase the contract of (exclud- royalties and similar dissatisfied, however, and sale. CMU was however, ing, royalty paid pur- to be accounting with the information furnished III, C) paragraph suant to this Article all March, 1981, to it FAP and in initiated closing outlays TYA from date of to this action. CMU first learned of the se- n ( n concentrates, delivery date of agreements ries of FAP between TVA and plus interest at the rate of seven and one at that time. {1 n %) annum, percent half on a non- The trial court determined that CMUwas costs, compounded basis on the above entitled profits to of the annual net per pound on a allocated basis deliv- * * *” produced attributable to uranium ore from ered concentrates. U3O8 subject properties the between 1978 and implement development To the profits Net by were calculated de- mining properties contemplated by the min- ducting gross proceeds those items ing agreement, parties agreed lease to A,3 specified in pursuant para- Schedule to agreement working a embodied in the “In- graph purchase 4a contract of and Agreement.” agreement terim Under this figures gross pro- sale. The for annual FAP, contractor, assumed the exclusive extrapolat- ceeds due to uranium ore were right duty manage properties and to n 08 ed from the market values of concen- lease, mining perform in the to described trate, using one of the three alternative work, exploratory and to mill the extracted presented by methods of calculation FAP ore—all on behalf of and at TVA TVA’s adopted appellees’ trial. The court expense.2 agreement The interim was re- updated Energy method which Atomic placed year “Exploration one later by incorporating Commission Circular 5 Milling Agreement, Agree- and Definitive ment,” current values of concentrate. This fully which more describes FAP’s U3O8 contract, according method followed the to procedure duties as contractor and the court, of costs receiving TVA. The and resulted in CMU agreement contemplated performance 2. The interim its re- all sums incurred of its placement by contract, exploration milling agree- obligations including under ment, op- under which would ore, TVA establish an milling making costs of TVA lease rental erating to account cover allowable costs: costs, parties, to third and all other Agree- Exploration Milling "The definitive from its own funds and shall submit detailed provide deposit ment shall that TVAwill suffi- monthly covering invoices to TVA allowable Operating cient sums in an Account from during question. incurred the month in which Contractor withdraw sums on an Payment for such costs shall be made TVA accrual basis to cover allowable costs for (30) thirty days.” within pursuant which TVA is liable to the definitive Agreement. Until such time as the definitive 1, supra. 3. Note executed, Agreement is Contractor shall $3,306 Wyo., (1971); 485 P.2d 1031 appropriate compensation Oregon its $9,000 addition in minimum Short Line Railroad Company v. Idaho already ments Stockyards Company, received. 12 Utah 2d (1961). 364 P.2d 826 If the is in trial court’s conclu- challenges CMU writing language is clear and (1) respects: sion two calculation of unambiguous, the intention is to se solely profits tonnage on the net based cured from the words of the contract. and milled uranium ore mined Hamm, Wyo., Pilcher v. 351 P.2d 1041 1978 and 1981 denies CMU the to (1960); Goe, supra; v. Holla Fuchs pro-rata participate fully in its share of the Kolbet, Wyo., baugh v. 604 P.2d 1359 $7,000,000 royalties paid in advance to FAP (1980); Bank Wyoming and Trust Com under Article IIIA lease pany Wyo., v. Waugh, 606 P.2d (2) agreement; the calculation of (1980). And the contract as a whole using to uranium proceeds attributable considered, part should be with each be purportedly designed formula a escalate ing light of all parts. read other contrary Circular 5 values is to current Co., Shepard Hat express Top v. Land & Cattle terms of contract and to (1977); Wyo., apportion 560 P.2d Per the intent of the Rossi v. (1974); cifield, Wyo., P.2d 819 CMU its fair share of derived Shell addition, Quin supra; claims. hart v. Axford, uranium Blair En terprises, CMU asserts that it is entitled to v. rescind Inc. Julien Construction purchase the contract for and sale as Company, Wyo., 597 P.2d 945 failing result FAP’s bad faith interpretation construction in diligent ceed minerlike fashion to done the court as a matter law. ores, failing produce Kolbet, commercial to account Hollabaugh supra; v. v. Bulis failing timely proceeds. distribute Wells, (1977); Wyo., Shep 565 P.2d 487 that, We will hold under terms of the Co., Top ard v. Hat Land & su Cattle sale, purchase contract of CMU be- pra.” participate pro-rata came entitled to in its A more recent case to the same effect is $7,000,000 of the in royalties share advance Munroe, Wyo., (1983). Rouse v. 658 P.2d 74 and, further, they were to FAP when interpreting In a a conveyance of proper a proceeds calculation of interest, mineral may augment requires attributable to uranium ore de- general these considering perti rules ducting milling commercial rates from the nent, extrinsic factors. v. Dawson market value of concentrate. Finally, U3Os Meike, 15, (1973), Wyo., P.2d 18 we 508 will we hold that the trial court in erred said: denying opportunity present CMU the “ * * * find no fault with going evidence perform- [W]e to the bad-faith authority Houghton Thompson, of v. 57 purpose ance of FAP for of establish- 196, 654, Wyo. ing grounds interpret 115 P.2d that to for rescission. conveyance a contract for the of an inter- gas est in oil the court con- and should CONTRACT INTERPRETATION only writing sider not the terms of the repeated We purpose gen- the basic circumstances, surrounding but also the interpretation eral rules of contract in showing attendant facts relations Company Amoco Production v. Stauffer parties, the nature and situation Company Wyoming, Wyo., Chemical matter, the subject apparent pur- (1980): P.2d 612 465 pose making the contract. purpose construing “Our basic or in Richards, See also v. terpreting Wyo., a contract is to determine the Picard 366 understanding P.2d 119 The par purpose intention and of the basic con- Goe, Wyo. interpretation ties. tract Fuchs v. in- determine the —to (1945); same, P.2d 783 Axford, parties v. tention of the Shellhart —remains however, sale, regardless purchase it is of the form of the entitled to a 40% $76,295. Meike, $190,739,4 agreement. supra. v. share of or Dawson mind, foregoing principles With the we purchase The contract of and sale attempt probable to ascertain the intention entitled to of the vides CMU is entering into the contract annual net from all uranium appeal, they involved in this had envisioned “mined, produced proper- and sold from the the manner which the uranium ore was ty.” express language Under the is, actually rights transferred —that all contract, obligation FAP’s to distribute net prior being the ore were sold to its mined profits is conditioned the sale of produced. dispute We note that no as produced Accordingly, ap- mined and ore. material fact exists between the pellees assert that is not CMU entitled to parties. mining milling All data were participate royalties in the advance which by FAP supplied accepted by CMU at paid prior mining, production were Accordingly, face value. our resolution of sale of uranium ore. appeal solely upon the issues on turns language mining agree- The in the lease original proper implementing means of ment, surrounding well as circumstanc- light subsequent disposi- contract in es, agreement leads us to conclude that the subject property. tion of its TVA, constituted a sale of ore to notwith- standing designation the document’s as a ADVANCE ROYALTIES mining agreement lease. Under the lease mining dated lease granted FAP to TVA 27, 1973, April provides in Article III for «* * * explore, right exclusive $7,000,000 6,000,000 FAP TVA to mine, develop, extract and remove pounds of contained in reserves clas U3O8 Mining Properties all uranium and ore, (rounded n * * sified as indicated $1.17 materials, other source fissionable cent) per pound the nearest of contained and thereafter to retain all title and royalties payable These two U3O8. lump interest in and to all such severed miner $4,500,000 closing sums— added.) (Emphasis als.” $2,500,000 January on or before Pennsylvania Supreme Court Gil The nature of these as advance Fuels, Philadelphia v. berton Inc. & Read royalties is made clear in Article IIIC of Co., 342 Pa. 20 A.2d ing Coal & Iron agreement, speci lease (1941), language in construed similar $7,000,000 fies that the is to be amortized 15-year effecting lease as sale of coal “production computing as a cost” in place: pound owed to FAP on each proceeds n ( n Thus, concentrate. FAP re “The instrument the instant case con- delivered royalties, regardless templated of the exhaustion of the coal in tains the advance is, particular conveyed success or failure of a min the all the coal the land. That claim, ing royalty payments right but on deliv to mine take gave and the and (rounded are away ered reduced to It is hard to differ- $1.17 without limit. U3O8 cent) 6,000,000 per pound until opinion the nearest In entiate this from a sale. our profitably recov pounds of have been the defendant held title to the coal U3O8 * * ered. place purposes *.” A.2d at for all Testimony at trial indicated that of the 221.

6,000,000 reasoning applica- We find this sound and pounds speci- of contained U308 mining conveyed to FAP to in Article IIIA of the lease ble the instant case. fied 163,500 mine, pounds remove, retain agreement, were located TVA the to subject in- properties to CMU’s title to all uranium. It is difficult to differ- those 40% “sale,” urges contended at trial and entiate this transaction from a not- terest. CMU that, withstanding argument by appellees contract of appeal on under the 1957 the 163,500 $190,739. = $1.1666/lb. of lbs. of x 4. U308 U308 government

that the properties the federal owned costs associated with other sub- mining the question prior ject agreement, minerals in sever- to lease no to their were made for ground. acquisition ance sale of ments to CMU from the No other Furthermore, purposes. no any uranium in form made to documentation was ever suggests roy- the so much that advance appellant’s property. TVA from TVA sim- properties ques- to the alties attributable ply product to the end retained title —milled tion consumed costs conclude, were listed on use uranium —for as fuel. We purchase of of the contract therefore, Schedule mining agreement that lease prior sale and incurred FAP to 1973. In effected a sale of the uranium ore to TVA. contrast, the evidence FAP submitted Next, FAP we must consider whether $17,- approximately that after shows ore, produced” sold “mined TVA so [and] 000,000 expended develop were to sub- pay trigger obligation as to FAP’s to CMU ject properties over above the actual resulting profits. of 40% the Under mining 1978 to agreement subsequently interim Paragraph purchase 4d of of agreement, the contract executed definitive FAP acted requires TVA, complete and sale FAP to furnish developing as contractor on behalf of accounting showing statements factors milling the ore at TVA’s convenience profits. that affected the distribution of expense. agree- The entire series view of FAP’s failure offer to docu- contemplate FAP ments between and TVA mentation whatsoever as allocation which, mining production the ore of the advance attributable to the seen, as we have was sold to At the TVA. properties question, we must conclude mining agreement moment that lease that, showing contrary a absent to on agreement signed, and the interim remand, CMU became entitled FAP obligation was under contractual royalties those their to FAP produce subject mine and ore from the agreement. under lease properties. physical The performance of pur- obligations these is immaterial our ANNUAL NET PROFITS pose determining whether FAP owed portion royalties. disagree prop as to CMU a the advance gross er important point promised determining proceeds method of that FAP TVA, develop subject attributable to the uranium ore after com Therefore, pletion of the milling process. sanctions failure to The con do so. purchase light writings, provides tract of of the terms of the and sale gross relationship parties, proceeds shall be the nature and “ * * * subject situation of the matter and the upon prices based established in purpose making agreements, Daw- Revised, or, Circular in event that such Meike, supra, son v. we hold the min- should supplemented by schedule an- ing agree- lease and the interim other, the schedule effect then or the ment constituted sale of mined market then current for such ore }} obligated duced ore such that FAP became its share of proceeds CMU re- expressly The contract excludes from sulting from those transactions. proceeds any proceeds milling the ore concentrate, cake, yellow into as it argument, FAP U3O8 also advances the commonly is parties’ called. dispute trial, successful at that its investment results the fact none of the meth- (for mining properties example, acquisi specified ods in the 1957 contract for com- costs) tion and exploration prior the 1973 gross puting proceeds extrapolate works mining depleted lease with TVA proceeds ore from the yel- market value of that, royalties the advance so after dis low cake 1978 value, counting present nothing re however, clear, mained pay CMU. It is 5 prices Circular listed that the Atomic that, regardless legitimate of Energy investment Commission would for various

73 since none of the ore based schedules concerns ore grades unprocessed of uranium processed pre- mined the Gas Hills district and all pound of per on a value of $8 mining subject properties. 5 nor a date concentrate. Neither Circular U3O8 in effect when supplemental circular was proposed by The third alternative FAP milled, ore here was mined and involved appropriate find to be the most we means Atomic Ener- since the abolishment of the calculating profits of CMU’s fair share of in 19745 rendered these gy Commission to mined uranium due ore. This method addition, In no market obsolete. schedules proceeds computes gross by deducting Hills unprocessed ore existed the Gas milling rates from the sales commercial times, making relevant district at the yellow value of cake. The base commercial determining alternate basis for contract’s milling rate was determined to $23/ton proceeds market then —“the expert by appellees’ of ore witness who had inapplicable. current for such ore”— mining the matter in for a researched dilemma, company FAP located the Gas Hills district. In an effort to resolve this calculation, purposes of trial court three different For base rate submitted to the determining gross proceeds. per year was escalated at from 1978. methods for method, prof- FAP accepted by This method awards commercial The first and the one milling operation, its for its consistent with the con- the trial court as consistent with sale, purchase the contract of based tract, update 5 to purported to Circular upon milling typical rates that are of other unprocessed of ore based reflect the values operating at that time. mills ranged from $36 on values of U3O8 per pound at the times relevant to $45.34 approve of this method as a We calculated proceeds were thus here. Gross implementing reliable means of the intent for raw by multiplying Circular 5 values compensate out of of CMU by which the value of the factor pro proceeds derived from the sale of the circular went had increased since U3O8 ore, milling profits. exclusive of cessed into effect.6 disposing royal Where the market for of a changes from that ty owner’s minerals assumes that the costs asso- This method contemplated by parties, the originally proportionally ciated with increased duty royalty court’s is to construe milling. costs associated with We to those agreement fairly so as to effectuate the assumption ig- find this erroneous since it parties. Compa intent of the LeCuno Oil technological advances nores the effects Smith, Tex.Civ.App., 306 ny v. S.W.2d procedures, respective their labor on both intensities, degree required skill and the Therefore, operation. we conclude

in each holding of our that CMU is enti- view gross-proceeds figures obtained participate royalties tled to in the advance 5, modified, were not suf- from Circular FAP, paid to on remand the amount ficiently permit trial reliable to court to royalties proportionate pound to each proper profits. its share of award CMU n of recovered must be deducted payable annual net to CMU. theory advanced FAP for The second determining gross proceeds involved the ESTABLISHING GROUNDS EVIDENCE averaging purchase-price three ore THE FOR RESCISSION OF CON- compiled schedules 1976. Two AND SALE TRACT OF PURCHASE Utah, to ore mined in schedules refer evi prices. agree We The trial court refused to admit one lists standard undesirability prove offered faith as to the dence CMU bad the trial court gross proceeds, part breaching on the of FAP the con- arriving this method 93-438, I, 104(a), example, multiplication would October 6. For factor § 5. Pub.L. Title be 5.335 where the current market value of Stat. 1237. pound Circular 5 $42.68 U308 pound. per is $8 value U308 74

tract purchase evidence, grantor parted estate, and sale. Such has with his the appellant contends, would parties have established transaction between the is a upon a basis which to grantor rescind the contract. closed incident. The has no fur- ther interest or property concern the FAP position appeal takes the on conveyed. very But a different situation the purchase contract of and sale is a deed presented only is when the consideration title, transferring which instrument is not cent, grantor per the is to receive is a subject express to forfeiture absent some grantee may the realize from provision re-entry such as a or a development of the estate. Under power of agree. termination. We cannot such a contract the consideration is a A number of courts have held that a one, continuing paid only by to be conveyance of a mineral interest in consid- grantee of the development labor royalties production eration of on amounts property. grantor has a con- to a may upon lease and be cancelled tinuing conveyed, interest the estate proper showing. Kentucky Court of parties transaction between the is not Appeals agreement construed an incident, grantee a closed and the is not Kentucky Asphalt Milliner, Rock Co. v. liberty at to do property with the as he 217, Ky. There, 234 27 937 S.W.2d pleases. He cannot use or fail to use it plus royalties, consideration of future $5 prejudice to the grantor who has “ appellee granted right, had ‘all of his title ” rights respected.’ that must be 27 interest, deposits oil, in and to all S.W.2d at 938-939. ” products.’ bitumen and their 27 S.W.2d Mann, 553, See also Davis v. 234 F.2d 558 Thirty-nine years at 937. grantee later the (10th Cir.1956); Co., Crain v. Pure Oil 25 develop had made no effort to property. 824, (8th Cir.1928); F.2d Oil, 830 Tennessee instrument, holding In regardless Brown, Gas & Mineral Co. v. 131 F. label, and, of its was intended as a lease (6th Cir.1904). 702-703 therefore, forfeiture, subject purchase Under the contract of and sale quoted extensively from Eastern case, in the instant the consideration is a Kentucky Mineral & Timber Co. v. continuing ongoing one. FAP’s obligations Co., Swann-Day Ky. Lumber 148 146 diligent CMU include development and L.R.A.(N.S.) (1912): S.W. “‘ * * * ore, sale of of minimum In attempt to ascertain monthly sums once a body commercial whether a deed like this was intended ready extraction, ore is for timely dis- conveyance to be a in fee tribution of of annual profits, net simple, only or a contract or lease under accountings. We conclude that such an grantees which the begin opera- must properly denominated a time, tions within a reasonable there is “lease” and be cancelled a show- no feature entitled weight to more than ing of a material breach. relating the one to the consideration and Corporation Vitro Minerals payment. the manner of its v. There is and Shoni Corporation, Uranium Wyo., should be a marked difference 386 P.2d (1963), grounds we considered the construction and nec- convey- effect of a essary mining lease, to rescind a minerals, ance of timber and or indeed land, contained a expressly clause stipulated providing interest for a con- sideration, forfeiture under payable in certain cash or in circumstances. secured We said going that evidence notes or in some other property, valuable bad faith of the lessee is and the construction and admissible and rele- effect of a con- vant in establishing grounds veyance rescission, royalty consideration of a cent., 386 P.2d quoted We approval to be out of the income Annot., grantees A.L.R. derived from the 925: proper- “ ty conveyed. When the considera- ‘But it has forfeitures, been held that satisfied, tion fully has been though even expressly provided in a min-

75 develop and er than recision. While fraud in the in- lease, ing for the failure to might void the transaction if the mine, than ducement less favored properly are even purchasers fide being rights of bona for value much generally, are forfeitures intervened, that is not the claim operator. In have not the discretion of the left to here, is that I understand made and conse- of fraud or bad the absence of evidence quently recognize right, I not a faith, be en- would such forfeitures will not forced; prop- appellants. recision in the a covenant for a breach of especially if erly premises, to work the may important This not be an matter judgment only, the due to a mistake of damages because it seems to me that are faith of the lessee wilful default or bad going remedy any That to be the event. shown, the lease being not a forfeiture of essentially appellants is what seek. ” * * * ’ 386 P.2d not be decreed. will question ap- The real then is whether the at 942. paid pellants have been that which is due of bad faith and We hold evidence agreement. them under their to establish material is admissible breach majority opinion ap- holds that the The rescission, choose should CMU grounds for pellants not is have been that which remedy a on remand. pursue them, agree. I I due find Schedule district and remanded to the Reversed “A,” to, is attached referred to and consistent with this proceedings court for Purchase part made a of the Contract of opinion. Sale, following language: proceeds any shall include and all “Gross Justice, THOMAS, concurring and Chief premium, incentive and other bonus dissenting. ments received for or sale of the agree in toto with the I find that I cannot (to law) permitted by extent ores majority opinion views of either development allowance. shall include I am in dissenting opinion in this case. Any freight allowance excess reversed for that the case must be accord freight incurred shall be included.” costs by the trial court. of law committed errors dissenting opinion major- accuses the in the dissent- agree I with the view taken parties. ity rewriting the contract for the however, that the Contract of ing opinion, fact, In was the district court which ap- entered into Purchase and Sale royalty rewrote the contract. advance appel- predecessor of the pellants and agreed million dollars which TVA of seven simply subject a lease to recision lees is not appellees pay to the advance my the covenants. view for a breach of royalty sixty-two and one-half cents limited to remedy appellants payable “inferred ore” were pound for damages. regard appellees without future They payments not point myself production. I this latter will content On advance, application of the and the saying that the transaction between royalty clause in the be- encompasses and the TVA third partners federal not have appellees does characteristics of the common- tween TVA many of the making payments recognized by this the effect of them prendre a profit law protects for costs. That clause Land Bank advance in Denver Joint Stock share in future Dixon, Wyo. 122 P.2d 57 v. Denver (1942); profits, provides addi- and Boatman A.L.R. 1270 royalties, pru- TVA Andre, tion to the advance but Wyo. P.2d 370 v. dently provided royalties that the advance authority indicates that one This latter computa- counted as costs in the profit prendre under a should be rights lose one’s appellees’ right to share seem to follow tion of It would by abandonment. profits. The advance any covenants in connec- future failure of that a Pro- within the definition of Gross profit prendre would be come tion with quoted from “A” and there- remedy damages rath- ceeds Schedule by the addressed computation trary by in of to that done the trial on fore must be included the court the profits paragraph contrary net in four basis of substantial evidence provided as and appellate and to our of the Contract Purchase Sale be- well established rule for of It A appellants appellees. tween and follows review. short addendum has added been original point appellants the were entitled to have to the dissent to a few of that out opinion. profits majority net in accordance with the in the computed inconsistencies majority opin- in the formula described the majority opinion accept The fails to the I ion. am with the conclusion of satisfied findings of fact made the trial court justi- not majority the that the record does after two day and one-half trial as is royal- fy the deduction from those advance required by repeated holdings of this court. any ties of of items included Sched- the 1923, early As as Blume noted that Justice ule “A” to of Purchase and the Contract accept testimony sup the we must as true Sale. findings porting conflicting on evidence. Ass’n, of Big respect computation v. the annu- Seaman Horn Canal With to 29 profits, agree holding the al net I also with 391, then, Wyo. 213 P. 938 Since opinion. compatible It is majority the examining often we have said that the assump- that justice with the ends of when record, supreme the court assume must respect fail to contract terms tions with the evidence favor of the successful to look the facts. The facts in is fair true, party is must not the consider evi instance the of the are dence the party unsuccessful in conflict U3O8 acceptable figure An is known. for therewith, give and must to the evidence of milling expense can be determined. party every the successful infer favorable developed property sold reasonably fairly ence which and determinable, appellants is net Winchester, v. from it. drawn 72 Metcalfe subject computa- are therefore 142, Hol 404, (1953); Wyo. 262 P.2d 407 appellees presumably tion. The can dem- brook Company, v. Continental Oil 73 expense onstrate the of the actual Twing 321, 798, (1955); Wyo. 278 P.2d 802 “A” for which found in items Schedule Schott, Wyo. v. 100, 839, 80 338 P.2d 840 they pursuant not to their reimbursed (1959); Western Standard Uranium Com contract with It is then from this TVA. Thurston, pany v. 377, Wyo., 355 P.2d 385 profit figure pro portion net that a rata Roebling, Wyo., v. (I960); Stock 459 P.2d royalties may the advance be deducted Piner, Wyo., v. 780, Piner (1969); 784 511 accounting appel- (1973); Douglas Reservoirs P.2d 95 lants. Cross, Wyo., Water Users v. Association indicated, v. (1977); Farella As I I would reverse the trial 569 P.2d and I Rumney, part, in part Wyo., (1982), affirm it in P.2d agree that the case should be remanded for and many others. proceedings.

further Secondly, majority opinion accurately regarding sets forth law interpretation ROONEY, Justice, dissenting. contracts, misapplies but it —in effect re- I dissent. writing parties the contract con- trary plain to the of the words contract. in response dissent submitted This summary applicable of the law in this re- opinion, equal- earlier majority to an forth in Amoco Production spect is set ly applicable with reference final v. Company Company Chemical (1) majority opinion, especially concerning Stauffer Wyoming, Wyo., 612 P.2d 465-466 rewriting by the propriety majority (1980): agreements of opinion pertinent of the complete disregard plain of the “Our purpose construing basic or in- terpreting unambiguous language agree- a contract is to determine the (2) ments, the determination intention and understanding par- majority opinion appeal of facts on con- ties. If the contract is in [Citations.] separated they pellees’ predecessor are clear and language is writing and the appellant they pertain and as pertain se- is to be unambiguous, the intention claim third-party portion locators. The contract. the words cured from third-party claim locators pertaining as a whole And the [Citations.] them of a considered, part be- provides each should receipts parts. computed on light royalty of all other ing read in [Cita- mined, produced construc- of ores interpretation from the sale tions.] provisions matter of as court as a claims. Other done sold from the tion is payment, the time of to them concern law. [Citations.] records, taxes, maintenance of ment of resort ambiguous, “If the contract interest. royalty and statement of minimum evidence. had to extrinsic [Cita- be pro- appellant portion pertaining an The contract ‘is ambiguous An tions.] part: in its mean- vides in which is obscure expres- of indefiniteness ing, because of [Appellant’s] PARTICI “4. OWNER’S * * * meaning is sion, a double [appel- or because the Purchaser PATION: justify- Ambiguity present.’ agrees to assignor] covenants and [Citation.] lees’ generated not evidence is ing extraneous Owner, successors, assigns its pay to disagreement of the subsequent by the a sum constitut legal representatives, or meaning. concerning its [Cita- (40%) the annual ing forty per cent of uranium, tion.] all vanadium profits from net “ * * * exists is a ambiguity Whether minerals and ores and other associated of law. question mined, from produced and sold [Citations.] “ * * * computed in accordance with ambiguous property, if there an Even be contract, here terms and conditions extrinsic and under the portion of the term or * n * meaning if the forth. considered inafter set is not evidence portion or ambiguous term profits shall Net “a. COMPUTATION: from other ascertained contract can be by deducting be arrived from contract, i.e., from language upon the items listed proceeds those (Foot- as a whole. [Citations.]” attached deductions hereto schedule of omitted.) note A. as Exhibit PROCEEDS: FOR GROSS “b. BASIS must consider two appeal, we In this proceeds include the proceeds shall Purchase and Gross (1) a “Contract contracts: prices estab- upon appellees’ as- from ore sold based appellant and between Sale” Revised, or, claim third-party locators lished in Circular signors and some sup- should appeal; in this that such schedule pertinency no event who have another, instru- the schedule consisting of two basic (2) plemented a contract then Agreement” price (a “Mining Lease or the market ments then in effect super- ore; in- Agreement” which was it shall not “Interim an current for Milling “Exploration operation proceeds seded clude Ten- opera- milling or Agreement”) any concentration re- Authority, hereinafter Valley process which nessee tion or benefication or property to as “TVA.” ferred might be erected The Contract subject thereof as follows: executed November of Purchase 1, 1957, defined and Sale which chaser. erected, ^[*] owned ^{[*] [*]} operated ^[*] by the Pur- ^[*] n property con- During PROPERTY: “1. PAYMENT: “f. MINIMUM cerned, unpatented lode consists of work agreement, Purchaser will * * * appear as the same mining claims in minerlike fash- diligently and property * * added.) (Emphasis *.” of record object discovering, ion with the commercial marketing ducing and they re- of the contract provisions (60) days Pur- sixty ores. Within by ap- to be the consideration late to after deposit develops Generally, chaser necessary a commercial economical. it is extraction, ready it shall mill the mined ore before its sale value can Owner a minimum of Five Hundred Dol- milling process determined. The ($500.00) profits lars per month as net money. (uranium, gold, When the element therefrom, payments shall be a etc.) milling, is not sold until after the cost upon any credit all of Owners share milling must be subtracted the sale of net as herein defined. Such price to determine the value of the ore. minimum shall cease when There was a conflict of evidence with body such ore has unless been exhausted supplementation reference to the use or body another ore developed has been * * ” * Circular 5 Revised and to the market ready made for extraction. of ore. The trial court heard the testimony (Emphasis added.) and reviewed the placed exhibits evi- Included numerous items listed dence and found that the method and alter- a, Exhibit A in subparagraph referred to accounting nate method of contained in supra, gross receipts to be deducted from I Sections and II of A Exhibit were the are: only ones that followed the contract.2 It “3. Reserves set for aside Purchaser be must that remembered the contract was development adjust- work future 1, executed November Only 1957. ment be will made at end of each Energy Atomic year buy fiscal to reduce said Commission could reserves to ura- development year.” actual costs for the nium at that time. Circular 5 Revised was added.) (Emphasis govern purchases by created to the Com- computed It portion mission. foregoing language plain purchase price for uranium unambiguous which was at- setting in forth the inten- parties original tion of the tributable to the effect that the cost ore after subject matter of the contract subsequent concerns processing (milling) had been only undeveloped mineral claims and that accomplished. payment must wait until the final was, testimony Witness Boulton’s in “mined, claim is in worked to result ores part, as follows: sold,”

produced with interim “A. The basic formula outlined in the ment of month to be when $500.00 contract, it, as I see is a determination of body the ore is “developed ready and made ore, unprocessed the value of which has for extraction.” All are to mined, sold, produced been ultimately amount that 40% “annual net profits” mined, produced from “ores number a deduction is made for certain sold,” gross profits on ore sold are to mining costs as outlined Schedule upon prices be “based established in Circu- profit that exhibit. One which net calcu- Revised, or, lar 5 that event such sched- lated and Owners this case are would supplemented another, ule be should participate percent in 40 prof- of that net schedule price then effect or the market it number. then current.” “Q. And on what basis would course, provisions Of these contract only gross proceeds ceeds or be calculated? practical aspect reflect the of the situation. my “A. opinion respect to tak- executed, When the contract was the na- ing my into experience, account I would ture and amount ore was unknown. The say the X/8 escalation as applied formula barren, claim turn could out to be to Circular 5 table. poor grade could be of such that cost of mining plus milling would not sfc ^{[*] [*] [*] [*] [*]} salaries, E.g., equipment, machinery, 1. applied costs of 2. The court "pro- Section I because it work, taxes, supplies, development royalty, greater de- vides the appellant. benefits to” preciation, etc. Thus, applied plain you the trial you use or have And do “Q. Okay. rel- unambiguous language of the contract revision with the X/8 used the Circular on other price of formula we of concentrate “A. Circular is $8.00? differences of “A. Yes. “Q. “A. X/8 is the 5 to whatever “Q. So, unprocessed pound. ****** ^[*] speak of Circular calculations Let me ask mean, $8.00 processed uranium Circular ^[*] Circular what 5 schedule established under Circular is. the current on ore based ^[*] formula to you, Mr. prior, properties. is the your concentrate 5 based ^[*] yellowcake value X/8, what does other Boulton, when provide X/8 market escalate the ^[*] upon the interests, uranium at $8.00 portion? selling prices price ^[*] in Circular 5 resulted the X/8 ket ceeds schedule ative to determination er, trial court erred tract until evidence and made a as occurred tween “mined, produced and sold” under the con- of the first prise the basic eighth amendment series intended the schedule then price then current.” It considered from the being majority opinion concludes that the appellees and TV should formula as in 1973 This series of instruments the market 19783 on the basis that a sale of a series of instruments be- of date Revised, or, in event such ore, i.e., “prices instrument being finding supplemented by virtue of the April applied in effect or the mar- factual price A, the first of the of date that ore labeled to the contract. or in the to Circular 5 finding established gross pro- September execution “Mining was not anoth- price com- adjustment to cur- “Q. And X/8 is the several Agreement.” There are Lease price for concentrate? majority opin- rent market reasoning in the faults respect. ion price, that based “A. To escalate value from changes yellowcake $8.00 pur- its Appellant paid is to be under yel- price current is for to whatever appellees agreement and sales with chase value. lowcake “mined, produced and the ore is when “Q. the Circular 5 with you use When considers the majority opinion The sold.” formula, year matter does it what X/8 produced” ore was “mined or fact that no in? you use that calculation from the to be a material deviation not example, if the current “A. No. As agreement since was requirements of the per pound is price $40. of uranium produced later. to be mined and “sold” concentrate, the Circular 5 yellowcake no saying that there is That is the same as dollars, upon the 8 are based Cheyenne schedules trip on a material deviation price into current re- you City, divide the 8 way of Lake Denver Salt to X, a factor ferred to as that establishes plain and unam- agreement The Utah. times, 5 multiply the Circular only of five when requiring payment biguous times which would “mined, the 5 not produced schedule and sold” ore is being price 5 escalated result Circular parties “sold.” The only when it is concentrate of uranium required the same basis all using language that specific changes. payment. operations as a condition three expressed. plainly intent was calculation is Their “Q. particular And “ * * * car(jinai unprocessed to establish an [Yjjjg used rule in the con- you have a concentrate sale? price when being struction of contracts as exhibited parties, Yes, or the intention place it is to a value on “A. they have used shall language processed.” it is before mined, produced evidence. that the ore was not 3. The fact firmly by the established or sold until 1978

80 Goe, Wyo. 62 ed

govern.” subparagraph Fuchs v. Exhibit referred to in (1945). a, supra, (a 783, 791, special problem involving 166 A.L.R. 1329 a 163 P.2d surface, geologic fault in these claims did thing interpret one a contract or “It is causing expense), extra would have to be intent of the to discern the contractual known in advance. This would be an im- legal pursuant to established situation, practical obviously and one not rules, make thing but it is another parties. intended obliged parties. for the We are former, prohibited we are do The “Mining association of the Lease doing McCartney v. the latter.” Agreement” Agreement” and the “Interim (1981). Malm, Wyo., P.2d 1020 superseding “Exploration with the * « * * Milling Agreement” will be discussed infra. supreme court not re- will [T]he Nor write clear contracts. [Citation.] Turning then to the two issues as court rewrite contracts under will this appellant appeal presented by on of this * * * ” interpretation. guise case: Machinery Wyoming Company v. Unit- I: DID THE ISSUE CONCLUSIONS OF Guaranty Fidelity ed Com- States THE LAW CONTAINED IN DIS- Wyo., pany, 614 P.2d TRICT COURT’S FINDINGS OF FACT AND CONCLUSIONSOF LAW Additionally, payment appellant prior 2, 3, NOS. AND 4 REFLECT PROPER being produced to the ore mined and is not LEGAL AND STANDARDS PRINCI- practical possible. Mining Lease PLES? Agreement and TVA many great concerned claims findings The two of fact and conclusions (Appellant’s Hills area. claims Gas two argued by appellant of law to and referred 75.) among are about The evidence re- read: appellant’s flected ore in claims 27, 1973, April “2. On defendants en- production. borderline for economic tered in an TVA to de- Mining Agreement provided Lease velop property question and other n “pounds ment for concentrate” properties. Defendants were (milled uranium). Obviously, profits. for their agreed costs and TVA ore, develop- the cost the includes its to million to defendants $7 before milling. ment and the To determine the production an on as advance costs. proportion appellant amount due participate Plaintiff is entitled to in this “pounds from the advance payment to in the extent reflected Exhib- require advance determina- an would A its and B of defendants. U308” produced appel- tion of the ore to be October, 1978, “4. From through lant’s claims in proportion few to that from produced Defendants mined and uranium the claims in other addition to advance de- by from the claims held plaintiff. The milling termination of the and other costs. stage was not sold at that but was The Circular X/8 formula used could be by milled Defendants and then transfer- separate milling to the from the ore costs contract, red to TVA under that where- only figure but if there an accurate to upon Defendants were for both min- apply which figure to the formula. Such ing milling in one sum. Neverthe- prior could not exist less, to determination the the by contract held Plaintiff and price actual received for milled ore applied Defendants be to can this situa- appellant’s gross profit claims. Even if a tion and even anticipated have been figure established, could by contract, be the at- costs the provides which in the taking tributable the ore from these few first for computation instance claims, i.e., salaries, equipment, proceeds application predeter- etc. as list- by of a brief, appellant objections In its withdrew its Conclusions of Law. paragraph Findings 3 of the of Fact and formula, the owned the United not States. Consistent mined Circular therewith, Mining Agreement the Lease the actual for which be- application of Therefore, appellees and tween TVA was one to “de- might be sold. the the ore velop” “unpatented the lode computed can due Plaintiff amounts The trial court claims.” so found. Other by apply- the contract in accordance with provisions Mining Agreement of the Lease prices, supplement- ing the Circular appellees between TVA and reflect the in- mined, ed, tonnage deducting the the tention of the for it agree- to be an contract, paying in allowed “develop” grant ment to the claims. The is Plaintiff, giving Defend- of this to explore, “the exclusive develop, monthly payments. ants credit for the mine, extract and remove” minerals from A in of Defend- This was done Exhibit claim, to retain all ants, I. This method and Section “thereafter right[,] title and interest in and all in II alternative one Section of Exhibit grant severed minerals”—not a to owner- accountings presented which only are the ship place. of minerals in The instrument The method in Sec- follow the contract. requirements also contains for annual as- I the one first mentioned tion is work, provisions sessment for forfeiture greatest provides bene- breach, and it is called a lease—all one fits to Plaintiff. Therefore is the inconsistent with a sale of minerals adopted. Accordingly, which should be place. The trial court would erred if have entered in favor of judgment will be agreement it found the to be a sale of against Defendants in the Plaintiff and place plain minerals in in view of the $3,306, together with court amount unambiguous language agreement. legal costs and interest at the rate from 1, 1979, January liquidated as this is a any language paragraph I cannot find sum could be determined math- Findings 2 of the of Fact and Conclusions ematical calculations from the contract of Law from which it can be inferred that January was due on formula and which property developed jointly was to be appellees, by appel- 1979.” TVA and contended finding lant to have been an erroneous paragraph appellant With reference to language trial the trial court. The court’s (1) agreement contends that there re- plain stating appellees is “entered in to, i.e., Mining Agree- ferred Lease develop with TVA to ment, “develop property was not to property.” Certainly, language question properties” and other but awas Mining Agreement grant the 1973 Lease (2) place; paragraph sale of minerals in positive between TVA development improperly infers that the plain setting forth the fact joint appel- one TVA and development was to “the exclusive” be lees; (3) the costs were all those of TVA right of TVA. none, appellees and had wherefore the appellees paid Considering together appellant’s statement that “were to third error; (4) para- for their costs” was and TVA’s and fourth contentions relative to agreement pay appellees graph findings to million to 2 of the court’s and conclu- $7 5, production parties of ex- before was not an “advance on sions the intention as Mining pressed in the contract of which the costs.” part, properly Agreement Lease is a is noted, already appellees’ ownership As of findings in court’s and conclu- reflected “property” acquisition as defined its sions. agreement ownership “unpatented was of i.e., claims,” ap- mining undeveloped April lode min- The 1973 contract between place doc- pellees eral claims. The minerals were and TVA was contained two agreement appel- $7 TVA million to 5. The costs were all those of and and TVA’s none, wherefore, appel- production was not an "advance on had the statement that lees before error, lees "were to be for their costs” was costs.” uments, day. it, part the same One strument a of both executed the two will be Agree- “Mining together agreement construed as document was titled Lease * * * ” parties. pages It and had 23 17 Am.Jur.2d ment.” consisted Con- § 263, pp. already tracts 666-667. pages attached schedules. As noted, peri- it 8 times over a was amended general “The rule is that in the absence (81 years pages od of about 4 in amend- anything to contrary indicate a inten ments). tion, The other document titled was instruments executed at the same time, Agreement.” “Interim It consisted of 7 by parties, contracting same pages recited that: purpose, the same and in the course of same transaction will “WHEREAS, be considered have hereto together, are, they and construed since Mining date into a this entered Lease law, eyes one contract or in (hereinafter ‘Lease’), Agreement copy a ” n * * strument. 17 Am.Jur.2d Con is attached hereto Exhibit A as * * § 264, p. tracts 668. part made a hereof *.” Exploration Milling Agreement The pages It also had an additional 10 of exhib- contemplated a refinement of the Interim provided its and schedules. It it was that Agreement April executed on entered into: *“ * * * * * The Interim Agreement provided ap- until time that par- as [the pellees’ “costs incurred in develop performing are a Ex- able to definitive its ties] obligations agreement ploration Milling Agreement.” to TVA under this as a pages of its execution. It the Interim er detail. pages). “Interim Lease ment ment.” Interim more than one document. Kilbourne-Park “ traneous ingham, “ * * * len, Wyo., “A written agreement may consist of * * City Cheyenne, On * * Where a written single agreement April n ! “Mining Agreement * Agreement April It It exhibits. Agreement” Exploration [Reference executed. 11, 1974, writings Busch made reference to the consists of 75 Agreement s*i Wyo., 404 P.2d 244 550 P.2d 1137 Lease 1976 and generally provided for indicated as sj: It was Corporation Development, “is the “definitive” renders them Wyo., one of Agreement” are to be considered It between the in a but much hereby n ^[5] provided May amended times 645 P.2d pages Milling contract refers the bases for Allen Al- mining properties. jfc superseded purposes. v. Buck- that the and 125 parties. Inc. v. part Mining Agree- 65, 68, (1965); agree- great- v. as did n ex- (68 TVA would by setting up of year year cessed standby and for milling costs expand “management they “include but not be are included. rectors’ istrative tion “on the erally accepted accounting principles;” that under this sets forth the shall be “reasonable” and The appellees required mill and “exploration work” “[t]o if 290,000 definitive by ores directed to the mill salaries be the mill was reimbursed upof payment by TVA costs;” the extent the mill. Similar mill,” deposit money existing reasonable start-up paragraph.” for allowable costs. requirement tons order to operating “Exploration $250,000 that officers’ and di- excluded; It acceptance accordance with agreed mill” be approved provided It capital expenditures the extent allowable TVA of idle; repair, general limited provided account to which plus that for withdrawal were upon, year excluded, maintain, and properties,” $50,000 priority for provided and admin- of various respect shutdown, paragraph deprecia- not TVA, for each taxes on costs be such as for the Milling “gen- TVA but to another Agreement” instrument and makes the expanded on the terms terms and conditions of such in- Agreement. other It required Interim detailed evidence; spe- geologic this in- may and it evidence budgeting planning, and annual deposits in detail. comparison clude of similar the allowable cified type. completely Bodies that are con- required “Mining Agreement” Lease may specific cealed included if there is be of: by to payment TYA geologic presence. evidence of their Es- (50%) by of the amount “fifty percent timates of inferred ore should include a price for concen the market which u3°8 special statement of the limits within production cost of such trate exceeds the the inferred ore lie.” which shall include which costs concentrates, pursuant para to payments made adequately These instruments reflect * * B graphs A and (Empha above parties appel- contract intention of added.) sis up operate to set lees uranium A paragraphs referred to in The costs cessing plant process- near Riverton for the or advancements made to- B as many ing they of ore from the claims which production costs were: ward (in- had under lease in the Gas Hills area 6,000,000 pounds of “A. As concerns cluding appellant), the two of and to sell in reserves the Min contained U3°8 product the milled to TVA. The costs to be ing Properties presently classified as by appellees exploration, mill- incurred Ore, shall Lessor Indicated Lessee ing, operations, property administrative ($7,000,000) pay dollars Million Seven etc., management, were to be advanced able: Appellees profit to the ex- TVA. “(1) Four Million Five Hundred Thou- amount tent of the 50% ($4,500,000) closing; dollars at sand the concentrate exceeded market production costs. “2. Two Million Five Hundred Thou- unqualified recognition by There was an ($2,500,000) on or sand dollars before parties forming to the instruments January the amount be 2,400,000 pounds of “B. As concerns (including appellant) lessors of the numer- presently contained in reserves clas u3°8 properties by appellant leased would ous be (over as Inferred and above sified Ore milling process. The determined after pounds referred to the said 6,000,000 money large amount of to be received above), equal sixty-two an amount “Mining Agree- appellees under the Lease (62V2<t;) pound one half cents contemplated to ment” could not have been category in that determined U3°8 and thus consist of for ore be Ore, up March to be Indicated among the numer- subject allocated be and until a maximum of One Million specifically lessees inasmuch as it was ous ($1,500,- Hundred Thousand dollars Five * * * ” “produc- “payments included in made” for 000) is owed to Lessor. costs, tion” and inasmuch as the interest as: “Indicated ore” was defined not determined until “ * * * each lessee could sampled that has been [0]re milling process resulted in a cer- after that as- reasonably close intervals pounds of concentrate at- tain number of continuity, sumptions can be made on the claim, many until the tributable to each by the grade and amount of ore bounded extraction, etc., claim costs of for each points.” sample gross amount. could be deducted from the as: “Inferred ore” was defined noted, As the contract between “ * * * [Ojre quantitative for which es- unambiguous in this plain was also largely are based on broad timates payment of respect, requiring knowledge geologic character of net “mined, produced and profit from ore few, deposit and for which there are sold.” any, samples if or measurements. noted, money if received Also as even conti- estimates are based on an assumed by appellees in 1973 was taken nuity repetition for which there is lessees, (100%) among many THE OF VALUE OF THE apportionment the same. The after- the result be URANIUM REMOVED FROM THE would determined, CLAIMS, have to be milling LESS price would REASONABLE each claim pounds would of ore COSTS MINING AND MILLING OF determined, the develop- URANIUM, costs of have to be SAID BECAUSE OF AP- determined, and the ment would have to BREACH OF DEPEND- PELLEES’ profit up with the same net would end IN ENT COVENANTS CONTAINED as appellant amount due was reflected THE CONTRACT OF PURCHASE the evidence. AND SALE NOVEMBER OF OR BECAUSE OF APPELLEES’ BAD days over three The trial court heard FAITH IN FAILING TO ACCOUNT operations testimony of the relative AND PAY NET PROFITS AS CON- accountings resulting parties TEMPLATED BY SAID CONTRACT were the contract. Exhibits numerous. AND, SALE; OF AND PURCHASE same, considering properly After it THEREOF, AAS RESULT DID THE appellees paid found that were to be IN COURT ERR REFUSING AD- TO their TVA that the million $7 MIT AND CONSIDER APPEL- agreed by TVA to be LANT’S EXHIBITS 27 THROUGH production before advance on costs. was IN OF SUCH SUPPORT CONTEN- Finally with to Issue reference No. TIONS? appellant error contends the court’s already That I which have said relative Finding of Fact Conclusion of Law No. misconceptions majority of the opin- 4 in that it sale of the finds the ore to have appellant’s ion argument and relative to on occurred produced, after it was mined and presented the first and in issue reflects the lack properly that the sale was part error on the of the district determined of the Circular use X/8 already formula. said connection this issue. That answers this with agreed contention. if it Even were that plain language of the contract re- passed title to the ore before it was mined appellant payment flects that not to was produced, could not its value be ascer- “mined, produc- be made until ore was Appellant tained until after was milled. it sold,” ed and and that the minimum accept would have testimony this court ment of month “as net $500 expert of its damages witness while therefrom, payments shall be a cred- acknowledging damages could not be upon any and all owner’s share of net accurately testified him on the basis profits” days shall made within “af- of the information at hand. The trial court purchaser develops ter depos- commercial opted to the other believe witnesses. As ready it of ore Implicit for extraction.” noted, accept this court must the evidence judgment district court is the support findings by the trial court $9,000 finding paid by appellees that the disregard conflicting evidence. was the under amount due the minimum Findings The trial court’s of Fact and clause, required which clause supported by Conclusions of Law were sub- payments days begin after the ore stantial evidence and were in accordance ready implicit for extraction. Also the intent of the to the two judgment finding is the that the claims pertinent contracts to this case. developed ain minerlike fashion as ISSUE 2: DID required. THE DISTRICT support COURT There was evidence to

ERR IN findings, REJECTING APPELLANT’S these the court in- awarded THAT delay IT CONTENTIONS WAS EN- terest $963.72 TITLED payments. TO CANCELLATION OF of some of the minimum Also THE implicit CONTRACT OF judgment finding PURCHASE is the AND SALE AN AND ACCOUNTING deviation from the terms of the Con- FOR ONE HUNDRED tract of PERCENT Purchase Sale of the claims

85 covenants, countings, dependent was evi- are not one. There not a substantial was findings which are support these the violation of which are material dence to devia- implied judgment. in the tions from the terms of the contract. The by appellant case cited for definition of a that called for Appellant received dependent supports finding; covenant this It received Purchase and Sale. Contract of finding implicit in the judg- trial court’s profits from the sale of the of the net 40% ment. the two claims. It contended ore from profit it entitled to a share of was “A dependent goes covenant is where it milling process, obviously such was but to the whole consideration of the con- of Purchase required not the Contract tract; part where it is such an essential and Sale. bargain that the failure of it must destroying be considered as the entire accounting present- found the

The court contract; or where it is such an indis- proper, rejected and it by appellees ed to be pensable part of what in- testimony appellant’s of accountant both Appellees’ accounting reflected witness. tended that the contract would not have gross proceeds received from the two been made with the covenant omitted. *** ” by application determined House, claims as Barnett, Steak Inc. v. propriety Circular X/8 formula. The of Fla., 65 So.2d 738 supra. method was discussed Accountings by appellees required tons, grade, pounds monthly itemization of Sale, under the Contract Purchase and contained, etc., price, market was set forth. only payments when but distribution accounting pit The lists the Appellees was made. contended that such reclamation, (waste removal, mining, items distributions were never order because taxes, etc.) production year since for each produce the claims did not one sufficient began prof- operation 1978. The net fact, profit. appellees for a net contend- it was the difference developing ed that a loss occurred from awarded proceeds and costs. these two claims. The trial court found profit of the net so determined to 40% resulting prof- otherwise found small $9,000 minimum appellant, less the faith cannot said to it. Fraud bad made, already plus ment the accrued appellees part simply have existed on be- interest of $963.72. cause the trial court found their sincere Appellant argues that the Contract of position wrong. further noted to be It is Sale, Purchase and dated November appellant was authorized the Con- 1957, was a lease and not a deed and that tract of Purchase and Sale to examine the obligation pay appellant (cid:127) appellees “during business records dependent covenant wherefore the is a each hours and not oftener than once made, if not lease must fail appellant reasonably and if be- month” appellant is entitled to and not 40% incorrect, payments lieved the to be it had profits. only proper pay- the net Not right an to made of “the to cause audit made, ment but the instrument has the * * * by independent certi- the records requisites appellant of a deed since in it public fied accountant.” It did not do so. third-party claim locators to it appellant’s final foregoing refutes “convey, quitclaim assign” the claims erred in re- contention that the trial court (see Whalon v. predecessor appellees’ 27 Co., fusing appellant’s to admit Exhibits North Platte Canal & Colonization evidence, being in through they 64 into (1903)). P. Wyo. Since support appellant’s position relative to reentry without a was a deed But, being dependent cove- reversion, there a breach of it would not fail. even if it lease, of Purchase and Sale performance nants the Contract were a was made under it, part faith on the failure to make some of the and the existence of bad time, appellees. minimum on or furnish ac- of “ “ * * offered, objection the When was for the right exclusive explore, only purpose mine,

reason that the develop, served would extract and remove support appellant’s punitive count be to Mining Properties all ura- damages already which the court had nium ruled and other fissionable source ma- terials, against. Appellees argued had to the dis- to retain thereafter punitive damages right trict court that all title are not and interest in and to all * * * ” usually (Em- such severed awarded breach of minerals.’ contract ac- tions, phasis omitted, in original Trenckmann, empha- Wyo., Waters v. added.) sis P.2d The propriety of ruling the trial respect court’s is not may It “rights be that the to the ore” before Appellant argued us. to the district prior were sold being to its mined and court that the exhibits were offered for all produced, as recited in quotation, the first proof issues the case. An offer of majority but the opinion completely disre- dispensed was with because the exhibits gards the word “thereafter” the second were included in the record. quotation language plain which is and un- — ambiguous reflecting the time of trans- The exhibits consisted of material from fer of “all title and interest” in the appellees’ They files. were interoffice ore to be it is produced. extracted and memorandums, after letters appellees appellees and TVA and between and their Additionally, quotation the second indi- legal They counsel. concerned the cates agreement econom- that the was for a sale feasibility ic developing “notwithstanding the two designa- claims document’s Then, and the time tion as a doing table for lease.” They subsequently, so. majority opinion necessity referred to the reads: beginning “ * * * minimum proper time, at the We conclude agree- that such an similar matters. properly ment is denominated a ‘lease’ cancelled a showing of It would seem that their admission into a material breach.” evidence bearing would have little on the The inconsistency is obvious. matter way event, one or the other. appellant’s failure of theory relative to Since I court, find no error the trial I requirements pertinent two con- would affirm. tracts makes the admission or nonadmis-

sion of the exhibits to be They immaterial. pertinent

would be only if the wording of changed contracts were to require payment appellant when transaction between and TVA was entered into rather than when the ore NUANES, Appellant Francis “mined, produced and sold.” (Employee-Claimant), v. ADDENDUM Wyoming STATE of ex rel. WYOMING The majority opinion alleges that: WORKER’S COMPENSATION DIVI “ * * * all rights to the ore were sold SION, Appellee (Objector-Defendant),

prior being to its produced. mined and * * * ” (Emphasis Co., Inc., original.) Lower & (Employer-Defendant). again: language “The No. agree- lease 84-88. ment, as well as surrounding circum- Supreme Court Wyoming. stances, leads us to conclude that Jan. agreement constituted a sale of ore to TVA, notwithstanding the document’s

designation as a lease. Under the lease granted FAP to TVA

Case Details

Case Name: CHEYENNE MIN. AND URANIUM COMPANY v. Federal Resources Corp.

Court Name: Wyoming Supreme Court

Date Published: Jan 21, 1985

Citation: 694 P.2d 65

Docket Number: 83-69

Court Abbreviation: Wyo.