*1 years the minimum was ten would have been justified case had court considering prior been con- viction.
It judge does not trial follow that would have concluded that defendant was entitled the minimum sentence when that was year. shown to be one Under 94-2006 punish- section may ment be “for not less than one nor more than fourteen ’’ years. judge The trial punishment should fix the within those limits.
CARL and HENRY GUIDICI MEINE, Plaintiffs and Re- v.
spondents, COMPANY, MINERALS ENGINEERING BLAIR BURWELL, LEONARD A. SCHULZ, GEORGE Appel- FLEMING and R. FLEMING, M. Defendants lants. No. 9863. January
Submitted October 1959. Decided 1960. (2d) 348 Pac. 354. *2 C. J. Minerals, S. See Mines and 189. § Dillon, Emigh & Scbulz, Davis, Leonard A. & McFadden Butte, Scbulz, for Leonard A. Theo- Carmichael, appellants. McFadden, argued orally. F. Dillon, dore Butte, Burns, Dillon, Maury, & Sullivan, Collins Shone & for Dillon, Collins, Burns, F. and A. G. respondents. John Richard orally. Shone, Butte, argued Opinion
MR. the Court. JUSTICE CASTLES delivered the judgment plaintiffs appeal This is an from a favor of the parties. in t'Wo between the same The cases were con- actions Court, jury, trial solidated for before the District without by stipulation appeal. likewise are consolidated on this cause, here, plaintiffs, respondents In the first were awarded judgment against defendants, Engineering Company Minerals royalties Burwell, $2,172.42 per and Blair for at the rate month, period 1, 1953, including De- for from October 1, 1954, $32,586.30, plus interest, total cember or a all in vir- a mining tue of lease. cause, judgment,
In the plaintiffs second were awarded under defendants, against the same lease the same January 1955, same rate for the to and includ- ing February 1, $30,413.88, plus for a total of interest. *3 Plaintiffs also recovered from defendants the further sum of by $5,928.25 way royalties of additional on ores mined and stockpiled pursuant to the same lease. key provisions are to determination of this lease
cause, pertinent parts of the lease and therefore the will be set they appeared fully by paragraph out rather numbers as brevity, hereafter, original so for the discussion lease simply by paragraphs be referred to number. The certain will provisions lease are as follows: and Hold unto said
“To Have to Lessee for term of ten years hereof, expiring from the (10) date at noon on the 30th day 1961, unless sooner August, forfeited or determined through agreement violation of covenant or herein re- by Lessee, quired performed right the said but with the (10) years for a option upon and of renewal like of ten this agreement same terms and conditions as in Lease and Agreement fully recited, performed if this said Lease and expiration property operation at the the Lessee and the is in original herein demised. term let and demise, “In the Lessee covenants and consideration of such agrees follows, to-wit: with the Lessors as days
“A. the Lessors (15) To within fifteen after delivery presents, prior execution and of these and to enter- ing possession properties, into of said sum of Four money ($1,000), Thousand lawful United States Dollars Les- America, payment said as made to credited said as provided. sors as on hereinafter advance thereupon upon mines, mining “B. enter said and To claims premises investigate same, performance including and cuts, pits, open trenches or sampling, excavation of and underground work, including engineering and other work and necessary develop min- geological properties work in a ing, and said work and all thereof continuous to conduct min- diligence in accordance with sound manner with due or prevented by unless inclement weather acts ing practices, and, in con- beyond control, the Lessee has no of God work, not less preliminary expend all of such nection with upon ($10,000), of Ten Dollars than the sum Thousand Lessors, agrees Lessee further make application of said said expended as sum showing to how said has been satisfactory upon properties. said said release of record the Lessors this
“C. either To notice to them to such Agreement written effect Lease and D., 1952, or, day April, A. on or before the 1st before date, to said Lessors of election to give written notice said Agreement, said the terms proceed under Lease. fulfill, terms, as carry Lessee, out cov- and thereafter follows, to-wit: enants conditions *4 royalties, Lessors as rents pay to said or and (a) “I. To forth, upon tungsten, ores, all set hereinafter in the manner stockpiled from said de- mined and materials minerals and Fifty in the sum royalty advance Cents premises, a mised (2,000) pounds, said Two Thousand (500) per wet ton of next royalty as milling royalty advance to be credited recited. hereinafter
“ and royalties, (b) said Lessors as rents or pay To tungsten, ores, min- forth, upon all the manner hereinafter set prem- from said demised erals materials mined and milled and ises, royalty equal Five Per Centum in a sum (5%) deduction, gross millhead with- gross millhead without said Lease being purpose of this out deduction determined for mineral) (and/or Agreement by taking tungsten other and assays by weights multiplying and content ascertained and monthly price for said average previous initial factor tungsten (and/or mineral) Engineering other recited in the as containing Mining Journal, publication & other standard or price quotations currently, plus existing gov- the total then awarded, purpose royalty ernmental subsidies and for the of this (5%) figure. to then Per of this ascertain Five Centum final pay royalties “II. said Lessors all royalty To ad- production monthly basis, vances on as except- aforesaid on ing qualified, commencing day as hereinafter on the 1st of each every succeeding following month such stockpiling milling. commencing day
“III. To to said Lessors on the 1st every April, day A. D. and on the first of each and day December, including month thereafter the 1st D., royalty A. minimum sum 1952, a of Two Thousand royalty ($2,000) per month, all of shall be Dollars con- royalty as advance credited the said Lessors sidered royalties owing, milling found due and all as herein- future forth, monthly royalty shall set and such minimum before production from the payable paid until such time as let mining properties equals herein and demised ex- and/or monthly this sub-paragraph ceeds following payment In the event that set forth. of said as herein set forth a default in production, advance from *5 cause, results, paid theretofore the said the advances Lessors said shall Lessee retained said Lessors as for a rea- and for properties liquidated damages sonable rental said and as and as considered a forfeiture. thereafter, during “IV. To and of Lease life and Agreement, any option and extension thereof under the terms granted, hereinbefore to to said Lessors minimum day A. D. in January, and after first of ($3,500) sum Hundred all of Three Thousand Five Dollars as forth, Provided, III Paragraph immediately in above set Never- January, theless, February, of and during the months every succeeding year term during March of each and hereof, may, option, pay at exclusive said mini- said Lessee his monthly mum basis as aforesaid or await the royalty on either thereof, expiration any portion or make said quarter, to production in in said payment, provisions with default as Paragraph III contained. life thereafter, during and the entire of the Lease
“V. To thereof, perform according to to Agreement, and or extension mining- necessary assessment work all of said all annual law or necessary file affidavits on before due and claims every year during the term hereof. in each and date thereof of claims or fractions of claims locations In the event of further in shall be taken Lessee, the same the instance at immediately thereupon shall the same Lessors, but names of every in provision term included and of this considered and furnish to Agreement, Lessors, from time Lease and compiled prepared, copies maps, as and of all re- time, and resulting assays and data from the ports, other examination mines, mining mining- investigation of claims and and agents, any the Lessors their and to allow properties, and/or time, upon mines, in and said claims enter reasonable purposes inspection general mining properties and any samplings time and at to take from said investigation, stockpiles purpose mines, assay, or for the or other- mills wise, given upon receipt duplicate and said Lessors shall be copies information assays, pulps, reports, of all and other out, operation take properties, relation to and to of said carry any all and maintain full insurance for industrial persons employed Lessee, upon premises said operations comply fully all the laws conduct so with Montana, States, relating the State of the United mining, safety regulations every respect, other and to operations mining fashion, conduct and all in approved and not permit filing to commit waste nor or assertion of *6 liens, materialmen’s liens or mechanic’s other encumbrances against any properties, of said post and to notices in at least (3) conspicuous places mining three property on the showing property operated by that the is being Lessee the and that all creditors must look to the said Lessee for any of ac- counts operations by incurred after Lessee, commence the and Lessors, to hold harmless them, any the and each of from and all arising claims or demands or growing out of exploration, the development operation or of properties by said Lessee, the and comply with the Federal and State regard laws in to Social Security, Unemployment Compensation and withholding of taxes.
“VI. All payments to the Lessors herein by to be the Les- made, timely by see shall be made said Lessee as herein agreed, to the credit of the Lessors at the Bank State & Trust Com- pany, Dillon, at Montana.
“VII. In the event of the min erection of concentrating by his assigns, the Lessee or or the instance of either, on or properties near the herein let demised, and first priority in processing hereby shall be and given afforded and the ores premises leased, herein the to the then existing capacity of said mill. Upon any
“VIII. violation of covenant or covenants here- recited, inabove this Lease Agreement, and at the option agents, may or their thereupon, Lessors sixty after (60) days due in writing Avenue, notice to the Lessee at 801 4th Box Colorado, Junction,’ Grand provided and the deficiencies complained period of therein have not been said corrected within Lessee, upon premises enter dispossess per- said all occupying sons same hereunder, said Lessors shall thereupon, in termination, case of such retain all considerations damages nonper- theretofore received liquidated them formance, remedy, but, anas exclusive the Lessee shall have right machinery his a real equipment, remove not of nature, ninety (90) days properties from said for a of however, any termination, but, subject, all after express Agreement this that termination Lease and condition Lessors, may given by Agree- not be the said Lease and any may ment not be them terminated because failure perform part on the the Lessee the event conditions prevent preclude or tungsten market are such as to basis, profitable such ore on a commercial after market treat provided usual Lessee has all facilities understanding it, market raw material and behalf monthly royalties and all other cov- being that all part conditions, work, except assessment enants and mar- suspended during such adverse the Lessee shall improvement immediately upon condition, but ket *7 feasibility min- point economic market conditions for required perform be all operations, Lessee to cov- ing set In the of dis- conditions event and enants heretofore forth. parties hereto as to the existence con- between agreement operations para- as in cessation of permitting such ditions disagreement said forth, in event of between or set graph provision Agree- this Lease and any term or parties as in issue be contained, pre- matter matters shall ment arbitration an Arbitra- and final determination sented up, set and all hereto do hereinafter as Committee tion agree abide and bound and irrevocably covenant * * *. said Arbitration Committee. resulting determination 397 and this Lease essence of expressly made the “XI. Time is and every covenants each and Agreement, together [sic] with and all said covenants each agreement performed, and to be recited to agreed are and herein contained agreements and Emphasis supplied. material.” quartz lode unpatented question mineral lease covered The originally owned were The claims mining claims. Fleming, Meine, one R. M. and and respondents, Guidici Lessors, They and were the appellants. and one of defendants appellants, was Lessee. Burwell, one of the one Blair some- varied mining claims parties in the interest of each of the sold Burwell important this decision. is not what, but that Company, Engineering Minerals assigned appellant, and on March the lease interest in and to right, all of title and his Company. President of 1952. Burwell is Sugarloaf through the lease was executed Claims Nos. 9 When by Guidici, equal M. Fleming 29 Meine and R. were owned through shares; Sugarloaf Claims Nos. 8 were owned twenty-five by Guidici, percent by Meine twenty-five percent Fleming. Shortly R. thereafter R. M. fifty percent M. conveyed lease, his interest in said Fleming sold and claims Qwnership early in the title to and of the claims so that as follows: became vested 8, inclusive, Sugarloaf through
A. Claims Nos. 1 Meine As to twenty-five twenty-five percent; percent; Guidici owned owned twenty-four Engineering Company percent; owned Minerals twenty-four percent; appellant, George Fleming, M. owned Schulz, percent appellant, Leonard A. owned a two interest. inclusive, through 29, Meine Sugarloaf
As to Claims Nos. thirty- thirty-three percent; owned and one-third Guidici owned percent; Engineering Company Minerals three one-third percent; George Fleming per- sixteen M. owned sixteen owned ; percent a one and one-third cent and Leonard A. Schulz owned interest therein. *8 ownership during
This was the all of the involved May 18, 1955, George Fleming M. sold all of his until when Engineering Company. importance Minerals interest only show fact that ownership of the in the claims than under Lessors and Lessee were tenants common other dispute of the lease. There is no as to working- conditions It parties. will be seen the amounts owned each of is, Meine, are only original Lessors, Guidiei and two joined respondents; were with plaintiffs and other owners Company appel- as defendants and Engineering- the Minerals lants. Company, Lessee, paid Engineering all of
Minerals prior royalties under the lease to October which accrued They royalties respondents. paid but no thereafter Fleming until did, pay March however, continue to Meine, 20, 1953, respondent caused 1955. On October Engineering Company, wherein to be served on Minerals notice Company that it was in default whereby he notified the mini- by having pay failed to performance of lease 1, 1953; October monthly which became due on mum Paragraph VIII given pursuant notice was that the sixty within lease; that unless the default was corrected dis- notice, Company would be days after the date by the lease. possessed the claims embraced Meine, 9, 1954, Company notified January Under date royalty was occasioned writing, that its failure tungsten then market, which obtaining in the by the conditions thereto, been such prior had than months more four mining ores the cla/ims prechide the prevent and as to basis, Company having provided profitable commercial on a ores; that the Com- market and treat such usual facilities all conduct extensive would continue to pany had conducted ores in an effort to locate upon the claims work exploration permit the value to quantity thereon sufficient basis; if and and that profitable commercial the same immediately re- ore, it would found such Company when the *9 royalty provided for minimum sume of the lease. Meine respondents, 14, 1953, both
Under date of November En- Minerals on the Guidici, a notice to be served caused they the whereby notified Company, wherein and gineering lease Company performance in default in the that it was that monthly royalties and pay the minimum having failed to sixty days, the Com- within unless the default was corrected given previously pany dispossessed would as had been alone. the notice Meine respondents January 9, 1954, notified both Company
On the is, that Meine, that to the effect previously as it had notified conducted under profitable operations could commercial under the terms that therefore existing market conditions and monthly paid. would not be lease, minimum joined by pleadings The issues are as the follows: The re- spondents complaint in first seeking filed the cause to re- appellants, Engineering cover from the Burwell and Minerals proportion $3,500 Company, their of each of the monthly royalties, they alleged accrued under the lease 1953, day 1, succeeding as of October and on the first of each including 1, 1954. month to December A action was filed between same second on Feb- ruary 7, 1956, seeking royalty recover the same minimum payments succeeding period. is, lease That from Janu- ary 1, February 1955, 1, action, 1956. In the second cause of respondents prayed accounting also for an of all ores and stockpiled by Company minerals mined and from the claims January 1, 1955, February beginning up 1956. appellants’ respondents’ complaints answers to denied any 1, 1953, accrued under the lease as of October any thereafter, they
or at time and further denied that were respondents indebted to the amount virtue of the lease, by way alleged or otherwise. The answers further of an during defense, that all times between
affirmative 1, 1953, of the second action October the commencement tungsten market February 1956, conditions were profit- preclude mining as ores from claims on a Company provided all commercial basis after the had able con- or treat raw material usual to market facilities had times during Company all of said provided; tract development investiga- exploration, an conducted extensive suf- upon in an to locate ores of work the claims effort tive permit thereof on quantity and ficient value profitable basis, and in connection with conduct commercial certain and extracted the claims of such work had mined be milled and thereafter caused to ores, all of which it had refined. *10 affirmatively further answer in the first cause of action
The recovered from the claims that of the ores so alleged the value $29,- by amounted to the action during the embraced mining, milling, of 879.64, that reasonable cost the but the $60,500.29, amounted to refining such ores transporting and $30,620.65. of resulting Company loss the in a to thus affirmatively alleged action the second cause of The answer in mining claims recovered from the the the value of ores that $154,747.93; but amounted to period there involved during the milling, transporting and mining, the reasonable cost of in a $180,894.25, resulting thus refining the amounted to ore $26,146.32. Company loss the affirmatively alleged giving the the answers further Each respondents Company that it unless of notices the mentioned, sixty days, the within the defaults therein corrected thereby pursuant be and become terminated lease would affirmatively the notices. It provisions also the contract of termination Company answered the notices alleged that the it why payments had made by explanations as to 1, explan- October which provided lease after profitable a commercial ations were as to the failure have tungsten market. of the production because of the condition allegations of Respondents’ replies the affirmative denied giving notices men- appellants’ answers save as to the tioned. and the facts
Before we shall discuss of the evidence up appellants’ specifica- thereby, we shall set established interpretation an inquiry direct our tions of error order to previously set out. lease contract errors, group- thirty-seven separate appellant specifies The parts. grouping The first relates to ing them into five to the effect Findings of Fact and Conclusions of Law court’s VIII, Paragraph provision lease, of the contained that the royalties under the suspends all mineral (save Lessee assess- performance thereof lease or other claims) any period that conditions during ment work on the prevent pre- tungsten market become such basis, profitable repugnancy on is a mining clude the of ore a yield lease. provisions which must to other Findings grouping goes of error court’s second milled whether or not tonnages of Fact on mined and its conclusions of law that profit was or could be made and show, by preponderance appellants had failed to market tungsten evidence, there were conditions de- prevent preclude of ore from the such as to basis, and as a mat-' premises profitable mised commercial perform. law for failure to ter of had no excuse grouping goes of error The third failure to court’s *11 in law that a termination find facts and conclude of the lease by respondents’ had the notices been effected of termination. grouping goes the findings The fourth of error court’s stockpiled Company premises that the had ore from the and was royalties. for respondents indebted to the advance grouping goes findings fifth of error The court’s fact, and in the sums upon judgment conclusions of law which given. previously mentioned was appellants’ grouping error, From this it is the contention that: Engineering Company,
1. Minerals of the Neither nor alleged appellants, particulars other breached the lease the per- respondents; Company appellants and other lease; all and that formed of the terms and conditions has now in full force and at all lease been and times the effect; lease; provisions No exists repugnancy
2. between Company did not If, notwithstanding foregoing, 3. monthly royalty failing minimum pay breach lease 1953, 1, terminated on November lease was which accrued days sixty than after November and came an end not later Company 1953, respondents upon the 17, served when the lease performance it had defaulted notice monthly royalty accrued by failing the default was corrected and that unless on November dispossessed of the days Company sixty within would en- respondents became termination, claims; upon the they all thereto- retain considerations titled to retain and did liquidated lease as by them under the terms fore received remedy as an exclusive nonperformance, and as damages for lease; provided in the respondents prayed The are not entitled to the relief for
4. complaints upon which in either of their the consolidated judg- tried, appellants and that the entitled to were are actions complaints dismissing upon the merits. ment repugnancy first the shall so-called contained "We discuss Paragraph lease, VIII of the which the District found to Court repugnant. up provisions plain unambiguous,
The of the lease are the intent of the unmistakable. first point, Lessee of cer- question provides clause
403 tain, definite minimum during the term of lease. clause, second Paragraph VIII, merely contained in modi- fies and limits first, by the effect of providing during any period existing the claims cannot be mined under market profitable conditions on a commercial basis of such minimum royalties suspended shall improvement until adverse market conditions.
We see no basis repugnant to call this second clause properly interpreted. first if by suspending The second clause payments during such adverse merely conditions modified first, and seems entirely to be an reasonable and usual con- tractual safeguard for mining property. the Lessee of a
Our own statutes provide in 13-702, section R.C.M.
that:
“A interpreted contract must be give so as to effect to the mutual intention as it at existed the time of con- tracting, far so same is ascertainable lawful.”
Section provides: 13-707
“The whole aof contract is taken together, to be so toas give every part, reasonably practicable, effect to if each clause helping interpret the other.” provides:
Section 13-709 “A must contract receive such an interpretation as will make it lawful, operative, definite, reasonable, capable being effect, carried into it done, if can be violating without in- tention parties.”
Also, must give courts every part effect to of a contract so
as to make its terms operative; may a new contract parties, made for the nor language other read into or elimin ated from thereof, the lawful terms employed unless the words meaningless absurdity. are anor Union Central Life Ins. Co. v. Jensen, Mont. 237 Pac. 518. general application
To show the “escape of clauses” quote (2d) we will from 28 A.L.R. 1013, on an annotation en- titled provision “Construction and effect in mineral lease royalty.” said
excusing payment of minimum rent or It is page 1015: pro- in a lease
“It is common to insert practice Usually for a minimum rent. the minimum vision basis, although payments installment are stated on an annual *13 monthly. are made or There required quarterly often to be common purposes requiring payments, in more several spur steady lessor and being to a income to the to insure development operation prompt diligent lessee into a property. of the obviously be un- would
“However, there are times when it rentals, and is it just require the lessee minimum to responsible impossible a sign often to induce a miner to lease exceptions requiring payments there are certain unless exception saving or clauses. These clauses of an infinite assume variety content, of form but almost all of them have in payments the element that no minimum shall common accrue prevented operating during a when the lessee is beyond variety A his control. because circumstances wide clause, including in may excepting referred to an of causes war, by God, strikes, epidemics, riots, interference acts of transporta- shortages government, car and difficulties in tion, floods, inadequate supply, fires, explosions, water break- damage inability machinery, improvements, ob- down of labor, machinery, mine, exhaus- supplies, faults tain seam, that mineral minerals, and the tion loss of fact quality or cannot mined and sold at is not merchantable profit.” Emphasis supplied. a constructing that in contract we must have also said a
¥e provisions possible all its if so. Backer reconcile do Parker-Morelli-Barclay Co., 87 Mont. 289 Pac. Motor v. 571. provides: 93-401-21
Also section agreement an have been intended “When the terms of it, that sense is different different sense prevail against party supposed either in which he the other it, provisions understood when different constructions of a equally are is proper, otherwise to be taken which is most ’’ party provision favorable to the whose favor the was made. section 13-720 provides: Also which strongly against
“Words to he taken most whom. In cases of uncertainty rules, preceding language not removed interpreted strongly against contract should be most party uncertainty promisor who caused the to exist. The presumed party; except to be such in a between a contract public body, such, private party, officer or and a in which presumed it is uncertainty private all was caused ’’ party. 93-401-16, And provides: section “In the construction of a statute the intention legis- lature, and construction of the instrument intention parties, pursued possible; is to be if general and when a particular provision are inconsistent, is para- the latter mount to the former. a particular So intent will control a *14 general one that is inconsistent with it.” foregoing statutory
With the interpretation rules and of rules, mind, such this court in say we cannot the that savings exception clause, or concerning tungsten the market profitable mining, and Paragraph contained in VIII of the any way repugnant contract is in royalty to minimum the provisions. In matter clause this the District in Court was error.
Respondents argue
length
at considerable
in their brief that
position
prior
of the
in the lease of
because
the minimum
monthly royalty payments,,
requirement
that
the
of
royalties
permitted
stand. This
of
must be
to
rule
“rela-
of
applicable
not
in
positions”
tive
would
such a situation as
merely
this where the second clause
amounts to a modifica-
first,
proviso
tion,
thereon,
of
or a
of limitation
as we
the
226
interpret
Mealey Kanealy,
it.
v.
Iowa
hereafter
N.W.
The next of the re- case that even there were no if re- the pugnancy previously, the as between clauses discussed spondents suspension providing insist the clause for payments price tung- operative, became the never because of throughout market sten remained constant the and the life of It is prior lease the two actions. the commencement of price penal- tungsten, clear from the record that of without impurities, price per $63 ties for remained a fixed unit. holdings statutory rules Now, previously set out with the Paragraph mind, repeat provision of this court let us VIII which one of the defenses of defendants constitutes provided their failure the minimum as against ‘‘* * * That all sub- provision is as follows: contract. ject, however, express condition that termination of Lessors, may given not Agreement Lease and may by them be- Agreement be terminated Lease said any part on the the Lessees perform failure to cause prevent tungsten market such event conditions are profitable on a commercial preclude mining ore facilities mar- provided all usual basis, after has the Lessee understanding it, and market treat the raw material ket or monthly royalties being all behalf in this work, on conditions, except assessment other covenants ad- suspended during sicch Lessee shall be part immediately upon improve- condition, but verse market point market conditions economic ment of feasi- operations, required per- the Lessee to be bility *15 Em- heretofore set forth.” and conditions all covenants form phasis supplied. meaning appellants
What is the insist of this clause? The .just it means that it means more than market that conditions any condition; is, a profitable operation commercial under that upon any proof profit that of a failure to make a that condi- unimportant. tions the other market would become On hand, respondents’ position is as long in essence that so in same, market condition as it did this case remained government supported price per unit, $63 under the at that change proof there must have been some of a in the market profitableness operation. condition which affected of the It record, change up is clear from the that there until was no after involved, latter here that time the market tp changed per briefs, $63 $55 condition unit. From the present per $13 we are told that the market but unit. is reading provision We think a foregoing quoted fair VIII, Paragraph in other provisions view of the lease, it upon indicates that was market conditions which the depended, is, clause a simple profitable “es venture cape” “exception” usually appears mining clause con quote (2d) 1015, tracts and as referred to in the from A.L.R. supra, contemplated change existing but rather that it market condition at the contract was entered into. It time connection, should be remembered this contracting party, an Lessee, ample period prop had time to test the erty property agreeing and did test before monthly That provision Paragraph schedule. this conditions, VIII a change therein, related to market strengthened suspended the use of the words “shall be dur ing any upon market immediately adverse condition but improvement market This language conditions.” must change have referred to some in the market conditions from the time contract was entered into. Otherwise the use of the “improvement” “adverse” and words would have no meaning. In it connection, should be noted that provision lease is silent existing price. as to the then market It was known *16 record, that the market parties, appears from the
all the the a government in at the time of lease was price existence congressional the terms act and price under of a supported In expiration quota. time the or the addi- might at the of act end price by govern- was the tion to the fact that the established upper ment, tungsten limit as to the amount of there was also an purchased. market that would be Therefore the con- trioxide lease, government the ditions, both was known to market conditions. supported quoted provisions of Para-
Now, considering previously the and, if exception clause we find VIII as an graph a as to whether it means ambiguous and uncertain clause rather a failure to make in market conditions or change it by this court make established we believe the rules profit, language used duty meaning exact our to determine The trial court heard parties. to the conduct looking testimony offered. Lease, been set Briefly has heretofore analyzing the em- might termed contracts full, in the instrument two out The first the contractual rela- braced one instrument. August instru- tions on the 30th of when the commenced executed; might contract never signed ment the second was it operative at all but did become operative have become acceptance part Burwell, of it on virtue of a written party. second $4,000 provided first contract for days date, provided
Lessors fifteen after also within same, in- entry investigate upon the claims work, and cluding sampling, excavation, underground other necessary engineering geological work “including work thereof properties and to conduct work develop * * * diligence prevented manner with due unless continuous beyond of God which the Lessee weather or acts inclement major Emphasis supplied. clause, This no control.” has not in the first contract and diligence being- due found second. $10,000 expend contract, first Burwell was to
Under was done exploration and after the work preliminary in such instru- months after the day April seven on the 1st executed, release required was to either was Lessee ment Agreement by writ- Lease and the Lessors from the record give Lessors of election written notice ten notice or to There- Agreement. the terms of the Lease and proceed under terms, carry and fulfill cov- after, was out the Lessee *17 Agreement as follows: the Lease and enants conditions of I; Paragraph in (1) Pay royalty stockpiled as shown ores gross 5 the millhead with- (2) Pay royalty percent of of deductions; out 1952, minimum 1952 December
(3) Pay April between an month, royalty to be considered royalty $2,000 per of milling- Lessors on future royalty to be credited advance royalties due; found January 1953, lease after
(4) Pay during life of the III; $3,500 Paragraph month as in per at State of Lessors (5) payments to credit Provision Montana; Company, Dillon, and Trust Bank upon adverse suspension payments of (6) Provision for dis- previously as profitable operations conditions in market cussed; and Agree- is the essence of the
(7) That time of 'Lease ment. contract, part first did the.
The Lessees did do the phase. testing finally entered into the second exploring, depository the mini- pay to the promptly At time it did that Paragraph Beginning III. royalties provided in Janu- mum royalties $3,500 minimum of ary 1, 1952, paid Lessees 1. It including September de- up month to and promptly each September 1, payment. After the October faulted on royalty payments make however, the Lessees continued 410 up is March Lessors, Fleming, that until
one bought time, Company Fleming’s interest for at which $50,000. $35,000 This continued sum either Fleming and minimum under the contract very Fleming’s much interest, indicates subsequent purchase still in agreement the lease effect Company that the considered property. property was a valuable and also that ap- factor, is hard but nevertheless Another which to assess record, Com- Engineering Minerals from the pears in tungsten properties developed two other pany found question. Those property area of the leased immediate tungsten as to the valuable properties two were much more Company testified president The trioxide content. two profit on the other million dollars were made as several 1953, significantly development began early This properties. long before the termination not too mill, origin- had been under this contract. payments 1,000 tons, was increased tons to ally planned for to' handle and it was properties, from the other testified to that the ores In running capacity mill full and 1955. was assume, words, Company it fair to seems did other properties under leased consideration. need the ores from price tungsten for the tri- government supported had It its process. and more valuable ores oxide *18 complete there of this had been a examin- During all time cuts, tunnels, by open shafts, bulldozing the of lands ation assays, acceptance of the Lease surface, sampling and notice had the minimum terms been protest about without during time, and all of the time writing, served filing suits, Company continued hold up to the work same. of the land and possession noted, life of the was for ten too, is that contract It provision September 1, 1951. There is no in the years mining leases, the Lessee that Lease, such as is often found machinery. its away, the Lease and move walk surrender can monthly minimum This factor too would tend to indicate that the for the Lessors to enter moving were the consideration being contract, only protection into with the for the Lessee prevent pro- change in the market conditions which would operations. might It that after the first fitable said in lieu exploration property the merits of the determine a min- provisions requiring the usual as to continued work of ing property leased, monthly royalty was which provided “escape” previously set forth. with the clause as Company produced
The evidence to show its defense unprofitable operations, leaves much to be desired say Company figures, being the least. The source of the records, degree continuity should some and ac have shown curacy, repeated changes figures In this but were involved. connection, findings we have examined the of the District Court findings believe, as to No. 19 and without the aid of the but Burwell, just letter of shows it an on its face to be estimate, figures However, that this is cannot be sustained. important, ease, pro as we view the because the defense of change operations upon fitable must be based in the market provided Paragraph conditions as VIII. We find then that failed that “escape” defendant to show “exception clause,” Paragraph Lease, contained in VIII of the became applicable.
Having found that the defense failed as showing an ad- condition, verse market next we consider whether there awas termination of the Lease effected the notices of the Les- days sors unless the default were sixty corrected within dispossessed the Lessees would be and in effect the lease termin- ated. noted, Paragraph
It should here be VIII provides for arbitration between the “exception as to the clause” longer condition. Arbitration is an issue cause, no but concerning the existence of the clause arbitration and the sub- sequent highly persuasive actions of the Lessees are as
412
whether or not there a waiver the notices termination was parties. both But, first, us a for diminution of the we have before motion rules. record under our The motion to include answer con- complaint the amended in No. which answer .Cause in full an admission that was still force tains Lease effect. re- complaint the amended did not
The amended answer to previ- admission, up new the but rather set an alternative as specifications appellants’ ques- error and ously set out justifica- a The alternative the form of tions submitted. was pay royalty. tion for the failure response termination Lessees’ to the notice of was The defaulted, paid royalty they had had not but effect because of market conditions. hereby grant the motion for diminution and
We will con- a sider the conduct as to whether there was Peters, 241, 249, McDonald 128 Mont. 272 Pac. See v. waiver. held complaint where court the admission of a (2d) proper amendment evidence was prior to into show contra- dictory positions. appellant appearing cites us to annotation
The 557. we not concerned with unilateral action A.L.R. Here are by landlord Lessor. Rather we are concerned with a situation Lessees, parties, Lessors as- where, by actions, their both of termination. notice We could sented to withdrawal principles estoppel. or the same results on either of waiver reach given, gave Lessees an the notice was excuse After monthly pay for the justification failure to right to royalty. Lessees asserted their continue under The asserted, later agreement. The Lessees the written terms of agreement. The right arbitrate under the abandoned bought to one Lessor and then Lessees continued to thereby a tenant in common. record out, becoming him compromise lower attempted the Lessees reveals provisions of under the same monthly payments *20 then) the (and actions, until lawsuit even In all this contract. their actions. governing parties treated the lease contract notices the termination parties assented to a waiver of Both thus estopped assert it. and will now be The trial court matter discussion.
But one further needs $5,928.25 for stock judgment awarded in the amount provisions reading A of the lease the lease. piling pursuant unless clearly that it was the intent of indicates royalties minimum stockpiling exceeded milling holding, our monthly they not be due. Under royalties, would royalties. monthly royalties both other exceeded trial sustain the in the record to We do not find evidence mean- stockpiled and unmilled within ore was court modify judgment reasons we ing of the lease. For these affirm $5,928.25 and as modified by eliminating sum of appeal. his own costs on judgment, party each MR. JUSTICE HARRISON and MR. JUSTICE CHIEF concur. ANGSTMAN concurring. specially
MR. ADAIR JUSTICE amply sustains my opinion, In the evidence submitted reason I would rendered, for which judgment as trial court’s entirety. However, the other since judgment in its affirm such judgment rendered agreed that the court are members $5,928.25 in the sum of be reduced in the trial court should affirmed, judgment subtracted, that and, sum such with appeal. disposition I concur concurring. MR. JUSTICE BOTTOMLY specially concurring opinion agree I concur Hugh Adair. Justice