91 P. 92 | Idaho | 1907
ON REHEARING.
This ease was presented at the October, 1906, term, and decided in favor'of the plaintiff. A rehearing was granted and the former decision reversed, as appears from the following opinion:
This action was commenced by the Olympia Mining Company, a corporation, as plaintiff, against Abner G. Kerns, William J. Hall and the Federal Mining and Smelting Company, a corporation, as defendants, for the purpose of having the plaintiff corporation declared the equitable owner of an undivided three-fourths interest in the Olympia, Portland, Seattle, Alice, Olympia Fraction, Pacific, Darling, Diamond Fraction, and an undivided one-fourth interest in the Pose and Lincoln lode mining claims, all situated along
This action is based upon the following contract or agreement, to wit:
“This agreement made and entered into on this 28th day of May, 1901, by and between Clarence Cunningham, party of the first part, and A. G. Kerns, party of the second part, all of the city of Wallace, county of Shoshone, State of Idaho, witnesseth:
“Whereas the estate of Edward T. Elom, deceased, is the owner of an undivided 5/8ths of the ‘Olympia,’ ‘Seattle,’ ‘Portland,’ ‘Olympia Fraction,’ and ‘Alice’; and an undivided % of the ‘Darling,’ ‘Pacific,’ ‘Rose,’ ‘Lincoln,’ and ‘Diamond Fraction’ lode mining claims situated in the Placer Center and Lelande Mining Districts, in the county of Shoshone, State of Idaho, lying between the Mammoth and Sixteen to One mines, and south of the Custer mine; and the party of the second part is the owner of the other portion of the said mining claims except the Rose and Lincoln; and,
“Whereas, the party of the second part as such co-owner has petitioned the probate court for an order of sale of the interest of the estate of said deceased in said mining claims, and said petition is to be heard on the 3d day of June, 1901, and it is anticipated that an order for the sale of said property will be made; and,
“Whereas, it is the desire of the parties hereto to purchase the interests of said estate in said properties if the same can be bought for a reasonable sum and upon reasonable terms,*520 for the purpose of consolidating all of the interests therein and forming a mining corporation to prospect, develop and work said mining claims; and,
“Whereas, the party of the first part is about to leave the state of Idaho, expecting to be absent for a period of two months more or less, and the sale of said premises may occur during said period,
“It is therefore mutually agreed that the party of the second part shall offer to purchase and purchase the interest of the estate of said decedent in said mining claims, if the same can be purchased for the appraised value of said premises, or any less sum; and that the party of the first part will assume and be responsible for the bid and purchase of the party of the second part, and furnish the necessary money to make such purchase at the time when called for by the party of the second part.
“And in consideration of the premises and the services to be so rendered by the party of the second part, it is further mutually agreed that said party of the second part shall be entitled to one-tenth of all of said mining claims, in which he at present has no ownership.
“And it is further mutually agreed that upon the formation of the corporation hereinbefore referred to, which corporation is to be formed as soon as practicable after making said purchase, the party of the second part shall have and be entitled to one-tenth of the stock of said corporation, which stock shall be fully paid up, and non-assessable until after all of the other nine-tenths of the stock have paid ten cents per share to said corporation for the development of said mining claims.
“And as a further consideration the party of the first part hereby agrees to do and perform on each of said mining claims the assessment work required for the year 1901, free of expense to the party of the second part.
“And as a further stipulation the party of the second part agrees to convey to the party of the first part or his assigns, all his right, title and interest in said mining claims for the sum of five thousand dollars to be paid upon completion of*521 the purchase of the interest of said estate in the premises or sooner.
“Witness our hands and seals this 28th day of May, 1901.
“CLARENCE CUNNINGHAM.
“A. G. KERNS.” '
It is alleged in the complaint that pursuant to said agreement the defendant Kerns did prosecute a proceeding in the probate court asking, for a sale of the interest of Edward T. Elom, deceased, in and to said mining claims, and procured an order from said court on the third day of June, 1901, directing the sale thereof; that thereafter, on the twentieth day of July, said Kerns did purchase at public sale the said interest for the sum of $2,500, of which $500 was paid in cash and the remaining portion, $2,000, was secured by mortgage upon said mining interests due and payable within one year from the date thereof, and that said sale was confirmed thereafter by said court; that thereafter, pursuant to said agreement, Clarence Cunningham, the first party to said agreement, representing himself and his associates, did expend approximately the sum of $25,000 in developing and working the said claims, and they did pay the said Kerns $4,100 on account of the payment of the $5,000 due said Kerns under said agreement, together with one-tenth of all of said mining claims upon the formation of the corporation referred to in said contract, which interest was represented by one hundred thousand shares of the capital stock of plaintiff, which stock was to be fully paid up and nonassessable until after the other nine-tenths of the stock had paid ten cents per share to said corporation for the development of said mining claims, which was the consideration paid for the interests held by Kerns in said mining claims and for services to be rendered by him in securing patents therefor; that the sum of $500, the first payment on the purchase price of said Elom’s interest, was paid to said Kerns by the said Cunningham and his associates; that after the confirmation of said sale the administratrix of the estate of the said Elom, deceased, executed and delivered a deed to said mining interests belonging to the estate of the said Elom, to said Kerns, grantee, and that said Kerns made
“I, A. G. Kerns of the city of Wallace, county of Shoshone, State of Idaho, do hereby declare and acknowledge that I hold the legal title to the following interests in certain mining claims in trust for the use and benefit of a corporation to be hereafter formed and to be named the Olympia Mining Company, provided Clarence Cunningham of the city of Wallace, in the county of Shoshone, State of Idaho, or the said corporation, shall comply with the provisions of an agreement in writing dated the 28th day of May, 1901, between the said Clarence Cunningham and the said A. G. Kerns.
“The said mining premises being particularly described as follows, to wit: The ‘Olympia’ lode mining claim; The ‘Portland’ lode mining claim; The ‘Seattle’ lode mining claim; The ‘Alice’ lode mining claim; The ‘Olympia Fraction’ lode mining claim; The ‘Darling’ lode mining claim; The ‘Pacific’ lode mining claim; The ‘Diamond Fraction’ lode mining claim; One-half of the ‘Rose’ lode mining claim; One-half of the ‘Lincoln’ lode mining claim; All situated on the divide between Canyon Creek and the East Fork of Nine Mile Creek, in Placer Center and Lelande Mining District, County of Shoshone, State of Idaho.
“Dated this 17th day of August, 1901.
“Witness my hand and seal.
“(Seal) A. G. KERNS.”
Many of the formal allegations of the complaint were admitted by -the answer, and denials of other allegations put in issue many of its material allegations, and for a separate and second defense the defendant Kerns sets up the transaction which occurred between him and Cunningham in detail, and sets up the violation of said contract by Cunningham, in that he failed to make the payment required by said contract and perform the work required to be performed by him upon said claims, and in the formation of the corporation under the laws of the state of Washington instead of under thé laws of the state of Idaho; that he was required to spend large sums of money in protecting his own interests in said mining claims during the years 1903, 1904 and 1905, because of the failure of the said Cunningham to keep his part of said agreement; that by reason of such negligence and laches by said Cunningham and his breach of said agreement he im
The defendant Hall and the Federal Mining and Smelting Company answered, denying many of the allegations of the complaint, and as an affirmative defense, among other allegations, alleged that they had advanced the defendant Kerns. $3,300, which sum was devoted and used in redeeming said mining property from said foreclosure sale and paying the necessary expenses for obtaining patents thereto; that thereafter said Kerns executed a deed to said Hall, but really for the use and benefit of said mining company, being an undivided one-fourth interest in and to said mining claims, and that said Hall held said one-fourth interest for the use and benefit of said mining company, and now holds the same for that purpose; that at the time he executed said deed said Kerns entered into an agreement with said Hall for the purchase of the remaining three-fourths interest in said mining claims; that said contract of purchase was entered into for and on behalf of said mining company; that said contracts were made with said Kerns without any knowledge, information or belief of any right, title or claim on the part of the plaintiff corporation in and to said mining claims or any of them. It is further alleged that the money so advanced by Hall was used to perfect the title to said mining claims, and that in case it is' adjudged that the plaintiff is the owner of said premises, that said defendants in equity ought to be reimbursed for said advances with interest thereon, and prays for relief in accordance with the denials and averments of their answer.
Upon the issues thus made the cause was tried to the court without a jury and a great deal of evidence was taken on the trial. Judgment was entered in favor of the plaintiff, from which judgment this appeal was taken. As this action is based upon the contract and declaration of trust hereinbefore set forth, we will first consider the duties assumed by Clarence Cunningham in the execution of said contract. However, before taking that up in detail, we will state some of the facts
It is contended, in limine, by counsel for respondent that, as some of the questions raised on the rehearing were not raised on the original hearing, they cannot now be considered. In reply to this we say that the rehearing was granted generally, and upon no specified points or questions, and therefore any questions that could have been properly raised on the original hearing could be .presented on the rehearing. But,
Counsel for appellant first contend that the judgment and decree of the lower court does not provide a specified time in which respondent shall pay to appellant the sum of $900, the balance due on the purchase price, and turn over to him one hundred thousand shares of stock, and that it does not provide that respondent shall proceed to work, prospect and develop their property in dispute until the proceeds of the nine hundred thousand shares of stock at ten cents per share shall have been expended. On an examination of the judgment, we find that it provides in part as follows:
“It is further ordered, adjudged and decreed that the defendant Abner G. Kerns, upon delivery to him by the plaintiff of the $900 due under the contract herein, with legal interest, from the time the same became due until May-, 1905, and upon the delivery to said Kerns of one hundred thousand (100,000) shares of the capital stock of said plaintiff corporation paid up to the amount of 10 cents per share, do forthwith execute and deliver to the plaintiff Olympia Mining Company a good and sufficient deed conveying to said plaintiff an undivided three-fourths interest in and to the said above-described mining claims; that in the event of his failure to execute and deliver such conveyance within thirty days after the entry of this decree, then and in that event Stanley P. Fairweather, Esqr., clerk of this court, and in case of his death or inability to act, then his successor in office is hereby appointed as a commissioner of this court, and as such commissioner is hereby ordered»and directed in the name of the defendant to execute and deliver to the plaintiff a deed conveying to it the said three-fourths interest in said mining claims above described, and it is further ordered and adjudged that said deed of said commissioner, when executed and delivered, shall have the same force and effect as though executed by the defendant.”
We held in the former opinion that under the provisions of said contract, Cunningham had obligated himself to organize the corporation referred to in said contract, and that the organization of the respondent corporation was a sufficient compliance with said provisions. The provision of said contract in that regard is as follows: “Whereas it is the desire of the parties hereto to purchase the interest of said estate in said properties, if the same can be bought for a reasonable sum and upon reasonable terms, for the purpose of consolidating all of the interests therein and forming a mining corporation to prospect, develop and work said mining claims.”
Under the provisions of that clause of the contract, it was the desire of the “parties” thereto to form a corporation, and the clear inference therefrom is that the “parties” were to form a corporation and the “parties” were Kerns and Cunningham. Now it appears from the record that Kerns was not consulted in any manner in the formation of the foreign corporation, the Olympia Mining Company; that said corporation was organized under the laws of the state of Washington, and it is earnestly contended by counsel for respondent, Kearns, that the organization of such corporation is not in compliance with said terms of the contract. It appears from the record that Kerns insisted that
Under the provisions of this agreement Kerns was entitled to the same voice as Cunningham in the organization of the corporation. It is true that it would take more than two persons to organize a corporation under the laws of this state, or, for that matter, under the laws of Washington; still, had the corporation been organized in compliance with the provisions of this agreement, Kerns would have been entitled to a voice in the selection of the other directors and incorporators, and he would also have been entitled to a voice in determining where the corporation should be organized, whether it should be a domestic or foreign corporation. Again, after the organization of the corporation, under the cumulative method of voting stock at stockholders’ meetings (Const., art. 11, sec. 4), Kerns might have been able to name at least one director, and would by this method have been enabled to have a continuing voice in the business and affairs of the corporation. While it is true the contract does not provide in terms that the corporation to be organized should be- a domestic corporation, at the same time the appellant had reserved to himself by the terms of the contract as much power and authority and an equal voice with the other party
It is next urged that the judgment does not bind or obligate the plaintiff to the defendant Kerns or to any of the defendants to perform its contract with Kerns or to pay the $3,300 and interest to the Federal Mining Company, and that the evidence shows that the defendant Kerns could not maintain an action in Idaho against the plaintiff for the specific performance of the contract. Counsel for respondent declares this proposition to be absurd, for the reason that respondent has an agent in Idaho authorized to accept service of process, and has mining property in this state in which it has invested over $21,000, and that ought to be ample to make such judgment collectible. Counsel thus concedes that for a complete settlement of this matter, it will require further litigation, and that this judgment does not settle all of the rights of the parties in the Subject matter of this litigation. It is certainly cold satisfaction to the appellant to be informed that he may proceed and get judgment for the am mint, of money due him and a decree for the delivery of
The judgment entered in this case does not conform to the provisions and requirements of the contract entered into between the appellant and Cunningham, and we have concluded that it should be reversed and a new trial granted. We are not in a position to direct a judgment in this case. It has now been more than a year since the case was tried in the lower court, and while it has been suggested, and even shown by affidavit, that no attempt has been made on the part of this respondent to comply with the terms of the decree, still the matter is not presented here in such a marner as to justify us in ordering a judgment thereon. The conduct,of the respective parties since the entry of this decree with reference thereto and also touching the subject matter, and under the contracts which were the basis of this action, will be