Hardinge v. Empire Zinc Co.

148 P. 306 | Ariz. | 1915

CUNNINGHAM, J.

The appellant assigns as error the order granting the motion excluding the testimony conditionally admitted under an avowal of plaintiff; in rejecting other evidence offered; in directing the jury’s verdict; and in refusing a new trial.

The action is one in its nature the statutory action to quiet and establish title in the plaintiff to an undivided one-twentieth interest of, in and to the San Xavier group of mines in the possession of the defendant, held by an unbroken chain of record title from the sovereign of the soil.

The title asserted by the plaintiff is claimed to be equitable in its nature, and arose from a certain transaction concluded between August R. Meyer and Bernard D. Rowe upon the one part and plaintiff on the other part, and was reduced to writing, executed and delivered on the thirty-first day of October, 1899. In support of his title plaintiff introduced the said paper writing, hereinafter referred to as “the contract of October 31, 1899.” He also offered certain letters, minute entries of corporation records, and other oral and documentary testimony tending to show that his claim of title to said undivided share, specified in said contract, was recognized by the party holding the paper title, or that the subsequent purchaser had notice and full knowledge of plaintiff’s claim before purchasing such property.

At the time the contract of October 31, 1899, was made, the Meyer-Clarke-Rowe Mines Company, a Missouri corporation, held, as was termed by the witnesses, “an option on an option” and lease standing in the names of L. H. Manning and Brewster Cameron, and an option to purchase the Ruby claim from L. H. Manning. The option and lease upon which the Meyer-Clarke-Rowe Mines Company held an option ran from the San Xavier Mining Company, the owner of the mines, except the Ruby, to Manning and Cameron dated January 10, 1899, and assigned to Meyer-Clarke-Rowe Mines Company. The contract from Manning and Cameron to Meyer-Clarke-Rowe Mines Company bore date of January 3, 1899, and purported to assign the Manning and Cameron contracts and lease to the Meyer-Clarke-Rowe Mines Company. The Meyer-Clarke-Rowe Mines Company was thereby and in that manner connected with the title to the mines when the contract of October 31, 1899, was made with plaintiff. The duties required of the Meyer-Clarke-Rowe Mines Company, by its contracts and options, before its right to a conveyance of title matured, do not clearly appear from the record, but the parties concede, or do not controvert the fact, that the Meyer-Clarke-Rowe Mines Company did, after the date of October 31, 1899, the date of the contract with Hardinge, perform those required duties and received conveyances of the titles to all the mines in question, and that such conveyances' were received under the terms of and pursuant to the said optional contracts. It was stipulated on the trial that the Meyer-Clarke-Rowe Mines Company conveyed the mines by warranty deed to the Arizona-Parral Mining Company, a corporation organized in 1909, and that corporation conveyed the mines by warranty deed to the defendant Empire Zinc Company, on November 22, 1912, for a consideration of $175,000, cash paid. All of said deeds of conveyances were duly of récord.

The contract of October 31, ■ 1899, under which plaintiff claims to have derived his equitable title, was executed by August R. Meyer and Bernard D. Rowe. It does not purport to have been signed by the Meyer-Clarke-Rowe Mines Company acting in its corporate capacity; but appellant contends that Meyer and Rowe were the controlling stockholders of said corporation and officers of the corporation; that the contract was a result of a conference held by all of the stockholders and all of the officers,of the corporation, and was in fact the contract of the corporation and so regarded by all the parties, stockholders and officers. The view we have taken of the record justifies us in conceding, for the purposes of this-opinion, that such effect may be given the evidence in the-record — -that is, that the contract of October 31, 1899, signed by August R. Meyer and Bernard D. Rowe, was in fact the contract of Meyer-Clarke-Rowe Mines Company, and not the contract of Meyer and Rowe whose names appear signed thereto — that in signing the instrument they were signing it as agents, and inadvertently signed their individual names, instead of signing the name of their principal, the corporation. If the contract of October 31, 1899, be not considered the contract of the corporation, but the contract of Meyer and Rowe, whose names are signed to it, then, of course, plaintiff acquired no interest in the title to the property involved through such contract. The record "here raises the questions involved upon a motion to exclude the evidence because it is incompetent, as well as irrelevant and immaterial; and, as to its competency and sufficiency to establish a fact for which the evidence is offered, the appellant is entitled to the benefit of every inference favorable to its competency that may be legally drawn from the evidence excluded. For this reason we will treat the said contract as the contract of the corporation, for all purposes of this opinion.

The rights which Hardinge received were transferred and assigned to him by the following paragraph of the contract of October 31, 1899, viz.:

“And in consideration of above transfer of said twenty (20) shares, said Meyer and Rowe do hereby transfer and assign to said H. W. Hardinge an undivided one-twentieth (l-20th) interest (subject, however, to the control, handling and disposal by said Meyer and Rowe of such contracts as in their judgment shall seem best for all concerned), in two certain contracts, one between Brewster Cameron and L. IT. Manning and said Meyer-Clarke-Rowe Mines Company, dated January 3rd, 1899, and the other a certain lease from the San Xavier Mining Company, of Boston, Massachusetts, to said Manning and Cameron, and by them assigned to said Meyer-Clarke-Rowe Mines Company, dated January 10th, 1899, and should said Meyer-Clarke-Rowe Mines Company elect under above contract of January 3rd, 1899, and under said lease of January 10th, 1899, to complete the payments to said Cameron and Manning, and to the said San Xavier Mining Company, as in said contrants provided, said Hardinge shall be entitled, without further payment by him of any sum, to an undivided one-twentieth (l-20th) interest in all the rights that the Meyer-Clarke-Rowe Mines Company may hereafter acquire in the mining properties in said two-contracts described, and as provided by the terms of said two contracts, together with an option with L. H. Manning on the Ruby claim.”

The provision may be said to be obscure or ambiguous in the particular of the clause: ■“ (Subject, however, to the control, handling and disposal by said Meyer and Rowe of such contracts as in their judgment shall seem best for all concerned).”

Whether said limiting clause refers to the then existing interest of Meyer-Clarke-Rowe Mines Company in the contracts in their executory condition, alone, or whether the limiting clause was intended to refer to the interest then existing in such contracts as long as they remained executory, and also to the interest of Meyer-Clarke-Rowe Mines Company, after the said contracts were executed by performance, and the titles to the mines became vested in Meyer-Clarke-Rowe Mines Company pursuant to the terms of the contracts. If the limiting clause had reference to the interest as it then existed, and prevented Hardinge from exercising any control over, and from handling, and from disposing of, the one-twentieth interest transferred and assigned to him by the instrument, then when the subsequent condition arose — when the Meyer-Clarke-Rowe Mines Company completed the payments pursuant to the contracts, and received the titles to the mines — the limiting clause had nothing upon which to operate and became meaningless. The limiting clause and all reference to the interest affected thereby could be eliminated from the provision without in the least affecting its meaning. So eliminating such provision, after the Meyer-Clarke-Rowe Mines Company acquired the conveyance of title to the mines pursuant to the said contracts, the provision would read as follows:

“And in consideration of above transfer of said twenty (20) shares, said Meyer-Clarke-Rowe Mines Company does hereby transfer and assign to said H. W. Hardinge an undivided one-twentieth interest in all rights that it has acquired in the mining properties described in the two certain contracts [describing them] pursuant to such contracts, together with an option with L. R. Manning on the Ruby claim. ’ ’

So interpreted, the instalment would have the legal effect of conveying an undivided one-twentieth interest in all the rights the Meyer-Clarke-Rowe Mines Company owned in the mining properties acquired by it pursuant to the said contracts. On the other hand, if the limiting clause was intended to have reference: First, to the existing rights in the contracts, as long as the contracts were executory, and, second, when they were executed and through their execution other rights were acquired, then, to have reference to such after-acquired rights — it follows that when the Meyer-Clarke-Rowe Mines Company did acquire the titles to the mines, by completing the payments, the provision should and must be interpreted to mean as if reading as follows,:

“And in consideration of above transfer of said twenty (20) shares, said Meyer-Clarke-Rowe Mines Company does hereby transfer and assign to said H. W. Hardinge an undir vided one-twentieth (l/20th) interest (subject, however, to the control, handling and disposal by said Meyer-Clarke-Rowe Mines Company of such interest as in its judgment shall seem best for all concerned) in all the rights that it acquired in the mining properties pursuant to two certain contracts [describing them], together with an option with L. H. Manning on the Ruby claim.”

The limiting clause as written qualifies the right of Hardinge to control, handle or dispose of the interest transferred and assigned to him by the contract. Does it also qualify and limit Hardinge’s right to control, handle and dispose of the interest transferred and assigned to him through and by the completion of the payments under the contracts of option and lease? What was the intention of the parties in that respect? What was the construction placed upon the contract by the parties? Was that construction in favor of the right of Hardinge to handle, control and dispose of his interest, or against that right? August R. Meyer’s letter of April 17, 1900, introduced by plaintiff under the statement, “I think it tends to show the intention of the parties in that contract that is in evidence, ’ ’ bears on this question as stated by plaintiff. After stating the causes and circumstances leading up to the making of the contract substantially as recited in the contract, he states:

“Instead of that you have been given a 5% unassessable interest, and therefore the whole matter is closed. . . . The situation now is that Mr. Rowe and I have purchased your interest in the Meyer-Clarke-Rowe Mines Company. . . . We have given you, in order to show the utmost fairness, 5% unassessable interest in the San Xavier. Should we succeed in disposing of the San Xavier property, your interest will of course be considered, and in accordance mth our contract we shall sell your interest as our own, at the same rate that we sell our own.”

This is an express construction of the contract by Mr. Meyer about five months after the contract was signed. His eonstruetion was that Hardinge’s interest could he sold by Meyer and Eowe, and Hardinge had no right to control the sale. Under date of November 21,1900, Mr. Hardinge wrote a letter addressed to B. D. Eowe, secretary of the Meyer-Clarke-Eowe Mines Company, stating:

“While Mr. Meyer was in Denver last week he mentioned that he thought you had written to me in relation to the San Xavier, that you were contemplating a sale, or transfer of the property. I informed him that according to the terms of the agreement I did not apparently have control of my interest, a fact he apparently did not understand, or 1 will say had forgotten. ...”

This letter was offered by the defendant and received in connection with the cross-examination of the plaintiff. We refer to it in this connection only as a means of arriving at a true construction of the contract, as a construction placed upon the contract by the plaintiff. We thereby have both parties to the contract of October 31, 1899, construing it to mean that such interest as said contract conveyed to Hardinge the right to control, handle and dispose of it was withheld, and retained by the Meyer-Clarke-Eowe Mines Company or Meyer and Eowe.

The above evidence is not all the evidence in the record indicating the same construction was at all times given the contract by the parties. Until shortly before the defendant Empire Zinc Company acquired the property the plaintiff placed no other construction upon it. In view of such fact, and the purpose for which the contract was made, and the circumstances surrounding the making of the contract, and the words of the contract, all considered, we have no hesitancy in expressing the opinion that it was the purpose and intention of the parties, by the contract, to secure to plaintiff one-twentieth interest in the property asset, and they had no intention of conveying to him any interest in the title to the asset, the mines. The evident purpose was to withhold from Hardinge the right to control and dispose of the one-twentieth interest in the assets of the corporation, transferred and assigned to him, and that it was at no time the purpose or intention of the parties to give to the contract the effect of a conveyance of title to the property described. The contract which, on the one hand, “transfers and assigns” an estate in property, and on the other hand withholds from the transferee or assignee all right of control over the property, and all right of disposal of the property, is lacking in the elements of a sale or transfer of title, and vests no rights of ownership of title in the transferee, for the reason one who has no right to control, handle or dispose of a thing cannot be considered its owner, for the essential attributes of ownership of property, real and personal, are the rights in the owner to control; handle and dispose of the thing owned. Converse v. Kellogg, 7 Barb. (N. Y.) 590; Hill v. Cumberland Valley Mut. Protection Co., 59 Pa. (9 P. F. Smith) 474.

The contract so construed and interpreted is no evidence of ownership of the title in the plaintiff, whatever rights it otherwise conveyed to him. Therefore, in this action to quiet title, that contract is no evidence of title in the plaintiff.

The rule is that plaintiff must succeed only on the strength of his own title, and not on the weakness of the title of his adversary. 32 Cyc. 1329. It is sufficient prima facie if complainant makes out a title apparently good as against defendant. 32 Cyc. 1372. Plaintiff did neither. He offered no evidence of paramount title in himself, but on the other hand, the title of the defendant was conceded to consist of a regular chain of title from the sovereign of the soil to the defendant.

The questions of notice to the purchaser are not involved. If defendant had actual notice of the contract of October 31, 1899, that notice only bound the defendant to take notice of the legal effect of the contract, and that effect was as above stated. Its terms did not affect the title to the mines.

The eourt committed no error in rejecting the evidence because of its ineompetency and insufficiency to show title in plaintiff. Likewise the court correctly directed the jury to find for the defendant, because there was no evidence before them upon which a verdict for the plaintiff could be based. The judgment following the verdict was proper. To discuss the other questions raised would serve no useful purpose.

The judgment is affirmed.

ROSS, C. J., and FRANKLIN, J., concur.