75 P. 882 | Or. | 1904
delivered the opinion.
This is an action to recover the possession of 20 tons of gold-bearing ore. The rights of the parties depend in most part upon the proper interpretation of a certain agreement entered into November 14, 1901, between the plaintiff, James Hall, on the one part, and G. W. Johnson and H. H. McCarthy, on the other, whereby the former gave to the latter an option to purchase certain premises, specifically described, with the privilege, under designated conditions, of prospecting and mining thereon. The defendant claims
Among other things, the trial court instructed the jury that, in determining the value of the ore, they should not deduct the cost of mining, but should consider the charges for sacking, hauling, freighting, and smelting, which amounts should be deducted from the gross value of the ore at the place where taken, and that the remainder would be the measure of recovery, in case the property could not be found. An exception was saved to this instruction, and the error assigned in pursuance thereof presents the only question that need be considered. The same question was raised by an attempt to show the cost of mining the ore and taking it from the mine, which was not permitted.
It was manifestly, within the expectation of the parties that such a quality of ore would be discovered and taken from the mine as would afford a ready source of profit, and it was intended that the licensees should have the benefit of this to aid them in their purchase. Their labor and outlay would be required to produce it, and, should such expenditures not be deducted from the gross receipts, it is plain that the net profits or proceeds would be lai’ger; but if, on the other hand, they should be deducted, the net profits would be less. In either event, however, the licensor would be fully protected, and that whether the purchase was completed or not. So, if the labor and outlay were not deducted, the larger would be the amount to apply on the purchase price, and the smaller the final payment to be made to complete the purchase; but, if they were to be deducted, the reverse would be true, and the amount of the forfeiture would be less or greater accordingly as they should or should not be deducted. Forfeiture is not favored in equity, and the law is not so callous and indurated as to require it unless it is exacted by clear and indubitable intendment. As we have seen, the licensor has stipulated for the doing of a large amount of work upon the premises to insure practical development and exploration of the mine, and has protected himself against depletion thereof. In view of this, can it now be said that it was the intendment of the parties that the licensees should contribute more to the benefit of the licensor, as would probably be the case if their labor and means were in no sense to become a factor in determining the net proceeds of the milling ore?
It is so here. The parties, presumably contracting in view of the law upon the subject, intended to provide against damage to the mine by way of depriving it of its milling ore, and at the same time to protect the licensees against the loss of their labor and expense in mining and producing the ore, which, as we have seen, consists in the labor and expense of digging the ore from the vein and bringing it to the surface. This would mark the damage to the mine owner, or the net profits, were the ore sold at the tunnel’s mouth. If, however, it is to be shipped and reduced, and the gold and other precious metals extracted, then the expense of sacking, freighting, and milling should likewise be deducted from the gross sum produced, and the balance would indicate the net profits or net proceeds ; the two expressions being synonymous, we may say, in the light in which the latter is employed in the agreement under consideration.
Nor do we think the form of action has any particular bearing upon the subject. During the continuation in force of the contract, the interest of the plaintiff in the ' ore was special, and he could only demand its possession for the purpose of selling the same and retaining the net
It follows that the trial court erred in the refusal to admit the testimony offered for the purpose of showing the cost of mining the ore from the ledge, and in instructing the jury that they should not deduct such cost from the gross proceeds in arriving at the net proceeds of the milling ore. In view of these considerations, the judgment of the the trial court will be reversed, and the cause remanded for such further proceedings as may seem proper, not inconsistent with this opinion. Reversed.