85 Mich. 605 | Mich. | 1891
Complainants, residents of Milwaukee, Wis., are owners of certain mining lands in Gogebic county, in the State of Michigan, of which defendant is the lessee. The lease is recorded, and complainants are in possession, and file this bill to quiet title, and enjoin the defendant company, organized under the laws of Wisconsin, and whose officers reside in Milwaukee, from interfering with complainants’ possession.
The complainants, on September 28, 1883, executed and delivered to N. D. Moore and S. S. Vaughn a lease for 30 years of certain lahds, by the terms of which the lessees were to mine ore on said land, and were to pay to the lessors on all ore mined 50 cents per gross ton. On or before the first Monday of each month the lessees were to furnish to the lessors a sworn statement of the quantity of ore removed from said premises during the preceding month, and were to pay the royalty on the ore so shipped at the Union National Bank of Oshkosh, Wis. This provision was afterwards modified by changing the time for making reports and for payment from the first Monday to the third Monday in each month.
The lessees above named entered upon the said lands, and began operations, and continued the samp until Feb
The consideration paid by defendant for the transfer of said lease was in the neighborhood of 8200,000, and one witness testified that he transferred 33,000 of the 40,000 shares of stock for 85 per share, or 8165,000, receiving 883,000 in cash, and 500 shares of other stock. Several witnesses called by defendant fix the value of the plant and leasehold interest at the time that the complainants obtained possession at from 8100,000 to 8200,000.
The complainants claim that, upon demand made, possession of the premises was surrendered to them; that they have been in the quiet and peaceable possession up to the time of filing their bill, in December, 1887; that on information and belief the defendant has been, and is now, in great financial embarrassment, and is virtually insolvent; that they fear the re-entry of said premises by defendant; that there has been a forfeiture of defendant's rights under said lease; that the lease is null and void; and they pray that it may be so declared, that the lease may be canceled of record, and defendant restrained from interfering with complainants' possession, or with their operations on said premises, and from commencing proceedings at law to recover possession of said premises.
Defendant files an answer in the natui’e of a cross-bill, and denies its insolvency, or that it at any time voluntarily surrendered or delivered up possession of said premises to complainants, and it denies that complain
The lease contained the following printed provisions:
“ The said parties of the second part may erect buildings, put in engines and machinery, build roads, and do such other things on said premises as may be necessary or proper to carry on such mining; but all such engines, machinery, buildings, and other improvements shall form part of the realty when put up or erected: Provided, on the termination of this lease the parties of the second part, by paying up all arrearages which may become due,*614 owing, or payable to said parties of the first part, their executors, administrators, or assigns, on this lease, within thirty days after such termination of this lease, may remove such buildings, engines, and machinery, but not otherwise.”
“But no timber shall be cut on any of said premises for the use of the officers, servants, or any employés of said parties of the second part, either for fuel or otherwise.”
“Provided always, and these presents are upon this express condition, that if it shall so happen that the royalty or rent above reserved and agreed to be paid be behind or unpaid at the time or on the days above mentioned for the payment thereof, or in case said taxes or assessments are not paid in due and timely season, or in case of the non-performance of any of the covenants made by the said parties of the second part at any of the times mentioned for the performance thereof, then and from thenceforth it shall and may be lawful for the said parties of the first part, their heirs, executors, administrators, or assigns, into the said demised premises, or any part thereof, in the name of the whole, to re-enter, using such reasonable force as may be necessary, and the same to have again, retain, repossess, and enjoy, and the said parties of the second part, their heirs, executors, administrators, or assigns, and all other tenants or occupiers of the said premises hereby demised, or any part thereof, thereout or. therefrom utterly .to expel, put out, and remove, and, after such re-entry made, this lease shall wholly cease and determine, and thereby become null and void as it respects the covenants to be performed by the said parties of the first part.”
It appears that on the 5th day of November the following notice was served upon H. S. Benjamin, the secretary of the defendant company at Milwaukee, by George M. Wakefield, one of the complainants:
“ To the Sunday Lake Mining Company:
“You will take notice, that default having been made in the payment of royalty or rent, and also in furnishing reports of iron ore mined, as provided by the terms of the lease under which you hold the west half of the*615 south-west quarter of section number ten (10), in township number forty-seven (47) north, of range number forty-five (45) west, in the State of Michigan, of Avhich we are the owners in fee, and you, the tenant under us, are hereby required to surrender to us the immediate possession of said described premises, or proceedings will be instituted according to the statute in such case made and provided.
“Yours,
“E. S. Corliss.
“Richard Guenther.
“George M. Wakefield.
“ Edavard Asoherman,
“By Arthur P. Asoherman.”
H. S. Benjamin, the secretary of the defendant company, upon Avhom the notice A?as served, says:
“ Mr. Wakefield came in, and said to me, he had some notices that he wanted to serve; that I need not feel concerned about them; that he wanted to serve them so-that nothing could come in ahead of them; that he Avould let me knoAv before immediate action was taken. I said that I did not want to have any summary service dealt out, that I didn’t have any warning of. He said there would be nothing of that kind done; that the notices were served simply to protect themselves, and before any action was taken he would let me hear from them.”
Benjamin Weil says:
“I called on Mr. Wakefield at his home on the evening of November 18. He said he didn’t intend to injure anybody, and all he wanted was the royalty, and to see the labor claims paid; and I said, ‘ I will raise the money and pay it;’ and I arranged for an interview the next morning, at his office, for the purpose of arranging for the payment of the royalties. I called the next morning at 9 o’clock at his office. He said that there was no desire to injure the stockholders, or take any undue-, advantage of them; that he wanted his royalties paid,, and, if that Avas accomplished, it would be all right, bub that it Avas then too late to negotiate; that he could not do anything until he heard from Mr. Eink.”
H. D. Smith says:
*616 “I called at Wakefield’s office on Friday, November 18, to talk over the situation of Sunday Lake property. Mr. Bates came in. After some talk Wakefield said he had no claims except royalty; that when that was paid he had nothing more to do. Mr. Bates asked him how soon it must be paid. Wakefield said he had served notice on the 5th, and that he would take possession three days after the decision of the justice, if it was not paid before. Mr. Bates said he would see that it was paid at once.” ' .
Francis A. Bates says:
“On Friday, November 18, I called at Mr. Wakefield’s office. I told Mr. Wakefield that I had heard some rumors about his commencing suit against the mine for royalty. He told me he had done so, and that Mr. Fink was up there (Wakefield) at that time. I told him I knew nothing about legal matters in this connection, and asked him if he could tell me what it was necessary to do. He said, in the first place, that he wanted his royalty, but that judgment could not be given until the following Tuesday, and that, if the royalty was paid on Monday, it would be all right. He said' that that was all he had against the property; that he wanted to get his royalty paid, and that was all the claim he had. He said there were other claims due the men that ought to be paid up. I told him we were making every effort to pay them, and had made a contract with Mr. Smith for ore, and arranged to push the mine, and had arranged to pay promptly from that time on. He said he wanted the royalty paid, and that was the only claim he made.”
H. M. Wakefield, one of the complainants, denies the statements made by Benjamin, Weil, Smith, and Bates, but says:
“I think I remarked that the law allowed them seven days after service of the notice to pay the royalties. I understood that Mr. Smith and Mr. Pecans held some of the defendant’s stock as collateral; and at my request Mr. Fink, on November 13, sent a dispatch to Mr. Smith, asking him if he would protect the property, and pay the royalties; and, when I found that Smith would not pay, I determined to take possession.”
“Bates asked me what form we had got to go through to take possession of the property, and I told him what had been told me by Mr. Ordway, and ■ what Mr. Fink had told me Messrs. Ball & Hanscom had told him, namely, that a notice must be served, and, if not paid within seven days, we could take possession if we could get it peacefully; if not, suit would have to be brought in the county where the mine was located. He asked me that question over as many as two or three times, till I became a little perplexed about it, and I said to him: ‘You had better counsel your own attorneys. I don't propose to run both sides of this case.' He then says: ‘Mr. "Wakefield, if you had been paid your royalties, you would have been satisfied?' ‘Yes, sir,' I says, ‘if we had been paid’ our royalties, this suit would not have been commenced."'
He states that he served notice upon Benjamin, and said to him that—
“I had come to demand my‘royalties for the last time, and to serve papers on him; that we should take possession if they were not paid."
Nothing was done under the notice until November 18, when Fink, representing complainants, appeared before a justice, made complaint for the recovery of possession, and a summons was issued and placed in the hands of a deputy-sheriff. McVichie, the superintendent, was at the mine. On the 19th, Fink, his attorney, and Sullivan, the deputy-sheriff, go to the locality of the mine, and meet McVichie. Sullivan serves the summons upon him, and what follows is told by Fink.
“I stated to him that I had come out to demand possession of the mines. I pulled put the lease, and read it to him; and McVichie said he didn’t see how he could prevent me from taking possession. McVichie said that the men had not been paid, and I said that I would see them paid. He said that he had guaranteed certain claims, and I agreed to see them paid. ‘Then we walked*618 up to the .office, and he invited me to dinner with him. When I got to the office, I told the captain that I had peaceable possession of these two properties, and asked him if he wanted to continue superintending them on our account, and he assented, and then, in the presence of McYichie, I placed Sullivan, the deputy-sheriff, in charge. While we were talking, a telephone message came, and McYichie answered it, and turned around to me, and said: ‘If there is anything yet to be done, you had better do it right away, as there is going to be trouble/ "
McYichie was in defendant's employ at a salary of 82,000 per year.' He had been at Milwaukee between the 10th and 15th of November. He had had, while there, an interview with Mr. Wakefield. On November 17 he wrote the following letter to Wakefield:
“George M. Wakefield,
“Milwaukee, Wis.
“Dear Sir: I have been notified to-day that unless the labor claims were settled before the 22d I would have trouble. The merchants in Wakefield that went on the bonds to appeal the suits for labor claims say they have been grossly deceived by Mr. Bates in the security he gave them for going on the bonds. The security was money due the mines from Dalliba, Hussey & Co., for ore sales, which he represented to be 813,000. Mr. Murray, of the Bank of Wakefield, who was appointed trustee to look after the security, has inquired into the matter, and finds that there is no such amount due or likely to be until more ore is shipped.
“D. McYichie.
“P. S. You will please keep this information quiet, and act as you think best."
It appears that his employment by complainants was at an advanced salary. McYichie, however, called for complainants, gives his version of the matter:
“He (Fink) demanded possession of me, and I asked him on what grounds, and he read the lease to me, and I answered him that I didn't see how I could keep him from taking possession on those grounds. He said to Mr. Murray, who was cashier of the bank, and who was pres*619 ent: fWe don't want to beat anybody. If the stockholders will come up and pay the royalties and the labor debt, and guarantee to go on with the work, they can have their property.' * * * I. was put out of the office on the 29th, — myself and my book-keeper. * * * On the morning of the 29th, myself and Mr. Heath went out to the mine, — we were boarding in town at this time, — and after going around the mine a little while, I went.up to the office. I walked into the office, and was asked by Mr. Ellsworth whom I represented there, and I said the Sunday Lake Mining Company, or Moore, Benjamin & Co., — I am not sure as to which; and he said we couldn't stay there; and I answered him that I guessed we could; and I took off my coat and sat at the desk; and I presume we were there half an hour. The sheriff asked me to get out, and I said, fNo,' and then he finally put Mr. Heath out, and then Mr. Byrnes came over, and one took hold of each arm, and I went out. There was no struggle or anything. * * * That occurred the day after Thanksgiving, I think. * * * As I told you in my evidence before when you asked me who I considered I was working for, I. told you I supposed the whole thing would be settled satisfactorily; and it didn't occur to me for one moment that the Sunday Lake Mining Company was going to lose the property * * * IVlien Mr. Eink demanded this possession of me, we made those terms that I have specified. * * * As near as I can remember, upon his demanding possession, and reading the lease to me, my answer was that under those circumstances I couldn't see how I could resist; and I said more than that, but I am not sure of it. I think I said that I didn't want to do- anything that was wrong in the matter. He said that it was not their purpose to beat anybody; that if those fellows would come up with the money, and pay the labor debt, and the royalties, and guarantee to go on with the work, they would have their mine."
B. Weil says:
“I saw Mr. Eink on the 20th. He stated that there was no intention of doing anybody any injury; that all they wanted was to see that the royalties were paid, and that the laboring men received what was coming to them. He gave me to understand that neither the stockholders, bondholders, nor any one else interested would suffer if*620 the royalties were paid and the laboring men satisfied. I talked with M. M. Riley, a lawyer employed by Mr. Fink, and he said if everything was paid up there would be no trouble. I first learned that they intended holding the property, and insist upon a forfeiture, when Turner showed me Riley’s telegram (November 27th). * * * I asked Fink what he was doing there. He said, ‘I am here in possession of the mine.’ I says, ‘ In possession of the mine? What do you mean?’ He says, ‘Why I am here in possession of the property.’ I says, ‘Do you mean to say you are going to hold the property?’ He says: ‘No, if you fix up the royalties, and pay the laboring' men what is due them. That is all we want, and you can have the property any time after that has been paid. .That is all we are here for, — is to see that no damage is done to the property.’”
It was understood between Mr. Ellsworth and Mr. Morgan that both the parties should remain in possession of the premises. Turner says:
“ Both parties were there claiming possession, — Riley and Ellsworth for complainants. Finally Riley said: ‘I will tell ’you what we will do. There shall be no move made by either side, and neither shall disturb the other, without giving 12 hours’ notice.’ I said that was satisfactory to me. On Sunday night, after I got to bed, I got the following telegram from Riley: ‘Fink will take possession of Sunday Lake to-morrow morning at 8.
“‘M. M. Riley.’”
A breach of condition is not denied, but the lease does not provide that in the event of a breach it shall become void. The failure to pay the royalties did not, therefore, ipso facto, work a forfeiture. Dare v. Boylston, 6 Fed. Rep. 493; White v. Lee, 5 Ban. & A. 572; Cheney v. Bonnell, 58 Ill. 268. In Palmer v. Ford, 70 Ill. 369, the statement that “unless the rents were paid he would have to declare a forfeiture,” was held to be insufficient as a declaration of forfeiture.
Under this lease the default established tbe right to re-enter, and the determination of the lease followed the
These assurances were equivalent to extensions of time, as against any other proceedings except those which defendant had been led to believe would be resorted to. The complainants had, in other words, given notice to defendant of their election to pursue a remedy under and by virtue of which defendant could not be ousted.until five days after judgment, and in connection therewith had given repeated assurances that defendant had all the time which the statute gave. The defendant was making strenuous efforts to relieve itself not only of this indebtedness, but of other demands. It had appealed to its stockholders, and had finally determined upon an issue of bonds for an amount sufficient to liquidate its entire indebtedness, and some of its creditors had already signi
A party cannot found a possession entitled to recognition by a court of equity upon an entry made by collusion with the servant of the actual occupant, nor can a possession necessary to support a bill to quiet title be predicated upon an entry secured by misrepresentation as to its purpose. In equity, the entry must not only be quiet and peaceable, but it must be honest, and not one secured by fraud, stealth, or misrepresentation. Equity will not fortify an advantage obtained by a trick. Farmer v. Hunter, 45 Mich. 337; Newton v. Doyle, 38 Id. 645; Watson v. Brewing Co., 61 Id. 595.
McVichie was the servant of defendant. He had had at least one interview with Wakefield. He had written at least one confidential letter to Wakefield. It nowhere
But it is claimed that defendant has violated the condition of the lease respecting the cutting of timber upon the lands in question. This, however, is not one of the acts or neglects for which a forfeiture may be declared, or a re-entry may be made, under the lease. The provisions regarding forfeiture will be strictly construed. The lease provides that—
“If it shall so happen that the royalty or rent above reserved and agreed to be paid be behind or unpaid at*624 the time or on the days above mentioned for the payment thereof, or in case said taxes or assessments are not paid in due and timely season, or in case of the non-performance of any of the covenants made by said parties of the second part at any of the times mentioned for the performance thereof,”—
Then a re-entry may be made. Mr. Wakefield, when asked regarding the cutting of timber, replied:
“I should expect that, if the tenant kept a lease, the life of the lease specifies twenty or twenty-five years, he would remove every stick of it, and a great deal more.”
The life of the lease is thirty years, and it was not strange that the parties were satisfied that this covenant should rest in contract alone, without the additional security of right of forfeiture.
Again, it is said that defendant is insolvent. To establish this claim it is shown that several suits had been commenced by attachment against defendant. But two of them, however, were commenced before complainants entered upon the mine property. One of these was upon a claim of $100, and the other for an injury received by one of the workmen in the mine. The assets of the company were principally in the plant and leasehold interest. Naturally, with complainants in possession, claiming that upon a forfeiture and re-entry the plant and leasehold interest were likewise forfeited and became their property, the defendant company would be regarded as insolvent. Statements sent out to stockholders are produced, in which it is set forth that their liabilities are in excess of their assets some $32,000; yet their liabilities are largely to their own stockholders, and only available assets are named. Complainants concede the plant and leasehold interest to be worth $50,000, and several witnesses produced by defendant give the value at from $100,000 to $200,000, and these assets are not included in the statement exhibited.
The defendant is therefore entitled to be restored to possession of said mine 'and mining plant at once, and the complainants must account to defendant for all property of the defendant, or connected with said mine, coming into their possession, or taken possession of "by them; and they must also account for all ore taken from said mine by them at the market value of the same when taken, less the royalty to which they were entitled under the lease.
The complainants will be entitled to offset the actual cost of operating said mine since they took possession,
The decree below is therefore reversed, with costs of both courts, as well those already incurred as those upon the accounting, to defendant, and the record will be remanded, a decree entered at once restoring defendant to possession, and further proceedings had in accordance with this opinion.
I am of the opinion that the decree appealed from should be affirmed, for the. reason that, after a careful reading of the whole record, I am satisfied from the testimony that the forfeiture and termination of the lease were complete, and the entry and taking exclusive possession by complainants were accomplished facts, and were justified.