230 P. 1091 | Mont. | 1924
delivered the opinion of the court.
On April 5, 1923, the plaintiff, John Lee, and the defendant, Lee Gold Mining Company, entered into a contract with the individual defendants named in the complaint herein, who alone will be hereafter referred to as the defendants, containing the following recitals, agreements and covenants, which for convenience of reference are numbered from 1 to 12.
(1) That it is made between the Lee Gold Mining Company, a corporation having a capital stock of $500,000 divided into 50,000 shares of the value of $10 each, and John Lee as par
(2) That, if the second parties shall perform the covenants on their part, the first parties are> to convey and issue to them 24.500 shares of the capital stock of the Lee Gold Mining Company; and
(3) That the parties of the first part are desirous of obtaining financial assistance to operate their mining claims which are described.
(4) That John Lee agrees to clear up the titles of the Lee Gold Mining Company; and
(5) That John Lee, who now holds the deeds, is to have same assigned to and become the property of the Lee Gold Mining Company when second parties have subscribed or caused to be subscribed $10,000 of the capital stock of such corporation.
(6) Parties of the second part agree to sell stock and raise $2,000 in cash, if possible, by May 15-, 1923, which money and all other money raised on. the sale of stock shall be used for development of the mine and construction of concentrating plant and other necessary machinery.
(7) It is also understood and agreed, by all parties hereto, whenever parties of the second part have subscribed stock to the amount of $10,000 the 24,500 shares of capital stock shall be issued to the parties of the second part.
(8) “Parties of the second part hereby agree to raise all the money necessary for the development of the mine and construction of concentrator up to 100 tons daily capacity, with all necessary machinery and equipment required for the 24.500 shares of stock which they are to receive from the Lee Gold Mining Company.”
(9) “It is also agreed -that party of the first part will locate the additional claim necessary to be held by the company for the protection of the other claims.”
(10) “It is also agreed and understood by all the parties hereto the time for which to raise the money required for the
(11) “It is also agreed and understood that of the 25,500 shares of capital stock of the Lee Gold Mining Company, which shall be issued to John Lee in payment for the mining claims above mentioned, payment in stock is to be made as follows; Twenty thousand shares shall be issued tc John Lee at the time specified heretofore when the quitclaim deeds are turned over to the Lee Gold Mining Company; 5,500 shares of the capital stock of the Lee Gold Mining Company shall be held as treasury stock, but shall not he sold for any purpose whatever, and shall be held in the treasury of the company as ‘treasury stock’ until mining property is paying dividends, then, it is further agreed and understood, these 5,500 shares of stock shall become the property of John Lee.”
(12) “The above covenants and agreements depend entirely upon the development of the property. If the development proves satisfactory, then this contract shall be binding and in full force until both parties have fully performed their duties as set forth.”
On August 14, 1923, the plaintiff brought this action for the purpose of having this contract annulled for the reason, as stated in paragraph 9 of his complaint, that it is “so vague and indefinite that it does not set forth the purpose of the parties, and it cannot .be understood or ascertained therefrom with any reasonable degree of certainty what is meant or intended by said contract, and that such contract is lacking in mutuality, and is entirely void and of no force and effect.”
Although the complaint undertakes to set up numerous other grounds for equitable relief, they will be disregarded for the reason that they are not argued in appellant’s brief; coun
The prayer of the complaint is very comprehensive. Amongst other things it asks that the contract in suit be declared to be null and void; that it be adjudged that the title to the mining claims involved, standing upon the record in the name of the Lee Gold Mining Company, is held by it for the sole benefit of plaintiff; that defendants be enjoined from working on said claims or exercising any control over them or interfering with plaintiff’s operation or development thereof during the pendency of the suit or thereafter; and that plaintiff be decreed to be the sole owner of all of the stock of the Lee Gold Mining Company and the only person entitled to the custody of the books and records thereof.
Upon the filing of the complaint an order was issued, requiring the defendants to show cause why the plaintiff should not be granted the temporary injunctive relief asked for. On the return day of this order the defendants, except the defendant Kimball, appeared and filed a joint answer. Kimball answered separately. It is not necessary to set out the allegations of the answers; it being sufficient to state that they raised an issue upon all of the allegations of the complaint which tended to show that the plaintiff was entitled to equitable relief. A great amount of testimony was introduced at the hearing on this order to show cause, at the conclusion of which all of the parties stipulated that the ease might be considered as submitted for final determination upon the merits on the testimony so introduced. The court thereafter made findings of fact to the effect that on April 5, 1923, John Lee was the owner of all of the capital stock of the Lee Gold Mining Company, and on that day entered into the contract in suit; that the defendants sold stock, and raised $2,000 in cash before May 15, 1923, and caused stock' to the amount of $10,000 to be subscribed before May 15, 1923, and thereupon the plaintiff transferred and conveyed the mining claims in question to the company; that on
In reference to the testimony given at the hearing it is only necessary to say it was ample to sustain the findings of fact made by the court, and in addition thereto disclosed that down to the time of the hearing the defendants were diligently pursuing the-work of developing the mining claims in accordance with the terms of the contract.
It is seriously urged By appellant that the provisions of paragraph 12 of this contract render the entire agreement so vague, ambiguous and uncertain, and show that it is so indefinite as to time of performance and lacking in mutuality, as to render it void.
In the interpretation of this contract we must call to our aid certain elementary rules. The intention of the parties is to be pursued if possible. (Sec. 10520, Rev. Codes 1921.) This intention is to be gathered from the entire agree
With these elementary rules of interpretation in mind, we proceed to a consideration of paragraph 12 of this contract for a determination of what covenants and agreements thereof “depend entirely upon the development of the property,” and what is meant by the phrase “if the development proves satisfactory.”
Clearly, the covenants and agreements referred to are not those contained in paragraphs 4, 5, 6, 7, 9, and that portion of paragraph 11 which provides for the issuance and delivery of 20,000 shares of stock to plaintiff, and the retention of 5,500 shares for his sole benefit, since they are all clear, definite and to be performed without reference to the development of the property. So the reference can only be to paragraphs 8 and 10, which provide that the defendants, in consideration of 24,500 shares of stock, shall furnish money to develop the mine and the construction of a concentrator and furnishing the other machinery required, and to that part of paragraph 11 which provides that 5,500 shares of stock shall become the property of the plaintiff when “the property is paying dividends.”
Thus the only covenants left to depend upon the “development of the property” are the construction of the concentrator and furnishing the machinery, as provided in paragraphs
Counsel argues that the contract is void for indefiniteness, because it does not provide how much mining the defendants are obligated to do, of what the work will consist, or how long it will continue. While the contract is somewhat indefinite as to the amount of development work which the defendants are required to do thereunder, in view of the fact that they were diligently pursuing this work and had expended upwards of $12,000 in that behalf before the commencement of this suit, it is our opinion that the contract should not be declared void upon this contention of counsel.
Considering all of the provisions of this contract together in the light of its expressed purpose to furnish financial assistance for the development of plaintiff’s mining claims, it seems to us that the foregoing interpretation gives full effect to the intention of the parties at the time they contracted, and that their respective obligations as therein expressed are sufficiently definite and not lacking in mutuality.
Counsel for appellant also urges that the contract cannot be sustained, because it does not provide a specified time within which defendants should begin their operations and
Upon a review of the whole case we are of opinion that the judgment of the trial court in denying the plaintiff the relief prayed, was correct, and it is affirmed.
Affirmed.