Albert v. Joralemon, 16222.

• Decision Date: 19 October 1959
• Docket Number: No. 16222.,16222.
• Citation: 271 F.2d 236
• Parties: H. Greenway ALBERT and Maja Greenway Albert, Appellants, v. Ira B. JORALEMON, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

271 F.2d 236 (1959)

H. Greenway ALBERT and Maja Greenway Albert, Appellants, v. Ira B. JORALEMON, Appellee.

No. 16222.

United States Court of Appeals Ninth Circuit.

October 19, 1959.

Gatewood & Greenway, Charles C. Gatewood, McCarty, Chandler & Udall, James L. Richmond, Tucson, Ariz., for appellants.

Boyle, Bilby, Thompson & Shoenhair, Wilbert E. Dolph, Tucson, Ariz., for appellee.

Before STEPHENS, BAZELON and HAMLIN, Circuit Judges.

HAMLIN, Circuit Judge.

On or about September 21, 1956, H. Greenway Albert and Maja Greenway Albert, husband and wife, appellants and lessors, leased to Ira B. Joralemon, appellee and lessee, certain mining claims in Arizona. The lease required the lessee to make monthly payments of $1,000 and to make additional quarterly payments of $7,000, beginning with the quarterly payment due November 8, 1956. The lease also contained clauses giving the lessee the right to terminate under certain conditions.

A dispute arose between the lessor, Albert, and the lessee as to whether the lessee had in fact terminated the lease in the manner provided therefor in the lease, and the lessee brought an action in the United States District Court for the District of Arizona for a declaration of the parties' rights under the lease. Appellants are citizens of Arizona and the appellee is a citizen of California. Jurisdiction of the District Court is derived from diversity of citizenship, 28 U.S.C.A. § 1332.

The lease, which was not recorded, contained two paragraphs which referred to the right of termination. They were as follows:

"3. * * * the lessee may at any time after payment of the first quarterly payment of Seven Thousand Dollars as hereinafter set forth, surrender this lease by giving notice in writing thereof to the lessors, accompanied by an executed and acknowledged quitclaim deed extinguishing all rights of the lessee hereunder and relinquishing to the lessors the demised properties. Upon delivery of such notice and deed and the relinquishment of all the demised properties, all rights and obligations of the parties hereto not then accrued shall cease and terminate. * * *

"13. * * * It shall be further agreed that said lease may be terminated at any time by the Lessee as to all or any portion thereof by giving the Lessors written notice of such intention, and that upon termination or surrender the Lessee will, upon the request of the Lessors, execute and record in the appropriate public office a formal release and discharge evidencing such termination, provided that payments hereunder shall continue as provided hereunder until the lease shall have been terminated as to all of the demised properties."

It appears that under paragraph 3, the lease may be terminated by (1) notice in writing of the surrender of the lease, (2) payment of the first quarterly rental payment, (3) delivery of a quitclaim deed, and (4) relinquishment of the premises; while under paragraph 13, only a notice of intention to terminate is required with the additional requirement that lessee will "upon the request of Lessors" execute and record "a formal release and discharge evidencing such termination. * * *"

There appears to be little dispute in the evidence as to what transpired. The parties to the lease had known each other for almost 50 years. On November 5, 1956, the lessee wrote a letter to the lessor, the pertinent portions of which were as follows:

"As we have found no ore in five drillholes, on your Cornelia group of claims, I am reluctantly forced to surrender the lease and option to me on the 39 claims in the Ajo mining district that was signed by you and Mrs. Albert on September 21, 1956. The $7,000 payment due on November 8, 1956, will be paid when due, and the quitclaim deed specified in Paragraph 3 of the contract will be sent to you as soon as practicable.

"While we found a little lean disseminated copper bearing porphyry in one hole, our drilling proved that in most of the area either deep conglomerate or barren pre-Cambrian micaceous quartzite underlie 100 to 200 feet of alluvium. There is not room for a valuable ore body between these two barren formations.

"I am sorry we did not have better luck in the exploration."

Immediately thereafter the lessee moved off the property as the lessor knew he intended to do.

On or about November 6, 1956, the lessee through his agent mailed to the lessor a check for $1,000, representing the regular monthly rental payment, and a check for $3,932.15, representing the first quarterly rental payment of $7,000 less amounts claimed by plaintiff to be deductible under the agreement as legal expense incident to clearing title to the demised premises.¹

On or about November 16, 1956, lessor phoned lessee requesting copies of the logs of the five drill holes drilled by lessee. These were promptly sent by lessee. In the same conversation, lessor stated that he believed he had been underpaid on the quarterly rental, and was told by lessee "that was a legal matter to decide how much of the expenses of clearing title from the Uranium Corporation could be deducted, and that I couldn't pass on that."

On the same day, following this telephone conversation, lessee wrote a letter to lessor which contained the following:

"Following our telephone talk of this morning, I am sending you herewith the logs of our five drillholes. * * *

"* * * This means that there is only a narrow belt of monzonite or similar intrusive. This intrusive is so slightly mineralized that I can see no chance that it contains workable ore in this area.

"I am sorry that we did not succeed in finding ore. We tried hard. Maybe some other theory will be more successful."

On or about November 21, 1956, lessor's attorney sent lessee's attorney a letter discussing the payment that had been made by lessee but objecting to the deduction of $4,000 for the settlement of the quiet title suit and objecting to the apportionment of the expenses, contending that a lesser amount should be charged to lessor. No objection was made in this letter as to the failure to receive a quitclaim deed.

In a letter of January 4, 1957, there was forwarded from lessee to lessor an additional check in the sum of $1,286.52, the statement being made in the letter, "This check is in addition to our payment dated November 6, 1956, * * * in the amount of $3,932.15, and covers an error made in computation."

A day or two after the November 5 letter, lessee sent a copy of this letter to an agent of his, and requested that this agent take care of sending the quitclaim deed. Due to an oversight of this agent of lessee, no quitclaim deed was ever sent. However, at no time up until April, 1957, was there any demand made by lessor or his attorneys upon lessee or his attorneys for such a quitclaim deed. Subsequent to the letter of November 5, 1956, there was no mention made of a quitclaim deed by one party to the other until April, 1957.

In this regard, the evidence showed that lessor in talking to his own attorney in November, 1956, told him that he "didn't want to demand a quitclaim deed."

At the trial of the case, the lessor gave the following answers on cross-examination:

"Q. Mr. Albert, did you at any time, either personally or through agent or attorney, state expressly or indicate in any way to Mr. Joralemon or any of his agents, prior to Mr. Conner\'s letter dated April 16th of 1957, which is Exhibit 7 in evidence, did you ever before that time ever make any such indication that you took the position that this lease and option could not be terminated except after all payments had been made on that quarterly payment and after a quitclaim deed had been executed and delivered to you? A. * * * No.

"Q. Prior to that time did you or anybody on your behalf ever request or demand a release or quitclaim deed on this property? A. No."

On April 16, 1957, more than five months after receipt of lessee's "notice of termination" of November 5, 1956, Mr. Conner, the lessor's attorney, wrote to lessee that lessor was taking the position that the lease was still in full force and effect, and made demand for five monthly payments of $1,000 (December, 1956, through April, 1957) and the quarterly payment of $7,000 claimed to be due on February 8, 1957. The contention was made for the first time that the letter of November 5th did not comply with the provisions of Paragraph 3 of the agreement as no quitclaim deed had been delivered to the lessor.

On May 31, 1957, lessee mailed lessor a quitclaim deed provided for in Paragraph 3 of the lease and on the same day filed this action, seeking a declaration of the parties' rights under the lease, and, pursuant to a term of the lease, deposited $23,000 in escrow in a bank in Tucson pending determination of the rights of the parties.

The District Court found that it was the intention of the parties that lessee could not terminate the lease before, nor until, he had made the first quarterly payment and executed and delivered the quitclaim deed called for by Paragraph 3 of the lease. However, the Court further found that on receipt of lessee's letter of November 5, 1956, the lessor knew the lessee was attempting to, and claiming the right to, terminate the lease without first making the payment and delivering the deed, that the lessor acquiesced in the termination of the lease, and that about November 16, 1956 (the date of the telephone conversation and lessee's second letter to lessor), lessor recognized that lessee's interest in the property was ended.

We think the District Court's conclusion that the lessor waived the provisions of Paragraph 3, and that the findings on which his conclusion was based, are consistent with the evidence and in accord with law.²

Waiver is generally defined as "an intentional relinquishment of a known right." Williston on Contracts (Rev.Ed. 1936) § 678. Whatever the imperfections of this definition, Williston, supra, § 678 et seq., it has been accorded general acceptance in Arizona....