Barber v. Grand Summitt Min. Co., Inc.

• Decision Date: 01 November 1941
• Docket Number: 28493.
• Parties: BARBER et al. v. GRAND SUMMITT MINING CO., Inc., et al.
• Court: Washington Supreme Court

118 P.2d 773

11 Wn.2d 114

BARBER et al. v. GRAND SUMMITT MINING CO., Inc., et al.

No. 28493.

Supreme Court of Washington

November 1, 1941

Department 2.

Action for breach of contract by F. C. Barber and another against Grand Summitt Mining Company, Inc., and others. From an order dismissing action against five defendants, plaintiffs appeal.

Affirmed.

BLAKE J., dissenting.

Appeal from Superior Court, Okanogan County; William C. Brown Judge.

Clinton & Southard, of Ephrata, for appellant.

H. A Davis, of Okanogan, for respondent.

BEALS Justice.

F. C Barber and L. S. Eastman, as joint plaintiffs, instituted this action against Grand Summitt Mining Company, Inc., and Winefred McMillan, Walter P. Tracey and others, as defendants, setting forth in their amended complaint two causes of action, demanding upon the first cause of action $35,000, and upon the second $1,000, each by way of damages for breach of contract.

In the first cause of action, plaintiffs alleged that September 30, 1938, they entered into an agreement with Grand Summitt Mining Company, Inc., hereinafter referred to as the company, whereby the company leased to them, for a period of five years, a group of mining claims in Okanogan county, Washington, one or more of which were held under patent from the United States, and others under location notices. Plaintiffs, as lessees, were to pay to the company as royalty ten per cent of the value of all ore removed from the claims, the sum of $750 to be paid forthwith as advance royalties. Thereafter, by written contract dated October 31, 1938, plaintiffs and the company, as parties of the second and first part, respectively, together with certain other persons as parties of the third part, entered into a written contract which may be referred to as the supplemental agreement. The third parties to this agreement were lien claimants who had filed liens against the mining claims for labor performed or materials furnished to the company. Both the lease and the supplemental agreement were attached to plaintiffs' complaint as exhibits A and B, respectively. These contracts will be hereinafter referred to by their designation as exhibits. Exhibit B contained the following provisions:

'And Whereas, it is understood and agreed that the said second parties will deposit in the First National Bank of Okanogan, Washington, the sum of $750.00 on or Before November 1, 1938, according to the escrow agreement placed in said bank by said party of the first part and said parties of the second part, which sum of $750.00 shall be retained by said bank until a decree quieting the title in said first party to all of the above described premises, subject only to the liens of the third parties, Federal and general taxes.

'Now, therefore, in consideration of the sum of One Dollar and other valuable considerations it is hereby agreed by all the parties hereto that on the deposit of said decree quieting the title in said first party, that out of said $750.00 so deposited, the Federal and general taxes against said premises shall first be paid and the remainder shall be distributed pro rata among said lien holders in proportion to the amounts of their respective claims.

'It is further stipulated and agreed that whatever payments of royalty or monthly rental payments are made by said second parties on this said lease from said first party dated the 30th day of September, 1938, for the above described premises, that said payments and rentals shall also be distributed to said lien holders after the payment of all said taxes, pro rata according to the amounts of their respective claims. That in consideration of such payment or payments, the said liens shall be subrogated to and made inferior and second to said lease from said first party to said second parties now in escrow in said First National Bank of Okanogan, Washington, and said third parties hereby agree not to issue execution or order of sale to sell the peaceful and quiet possession of said parties of the second part under said lease.'

The escrow agreement referred to in the foregoing quotation from exhibit B was not made a part of the complaint, and does not appear in the record.

Plaintiffs alleged that November 30, 1938, they deposited the sum of $750 in the designated bank, and that they performed all the conditions which by exhibit B they had agreed to perform. They then alleged that it was '* * * specifically understood and agreed by and between the plaintiffs and defendants that the defendants would promptly proceed to bring a suit to quiet title to the patented summitt lode mining claim set forth and described in said mining lease, and the only reason or object in entering into said supplemental agreement marked exhibit 'B' was that the plaintiffs would deposit the $750 in the First National Bank of Okanogan, Washington upon condition and for the purpose of having the said Grand Summitt Valley Mining Company, Inc., quiet title to said summitt lode mining claim, patented, as set forth in the lease, and as set forth in said exhibit B.' (Italics ours.)

It should be noted that while plaintiffs first alleged that the defendants would promptly proceed to quiet title to the designated mining claim, in the latter portion of the quotation it is alleged that the company, which, of course, was the owner of the claim, should quiet its title thereto.

Plaintiffs then alleged that pursuant to exhibits A and B, they entered into possession of the mining claims, undertook to develop the same, and expended $3500 in connection with their mining operations; that during the development of the mining claims they discovered valuable ores which would produce a net return of $10,000 over and above the expenses of mining, smelting, etc.; and that they secured certain persons to consider entering into an agreement to operate the mining claims, which would have produced, for plaintiffs' benefit, $20,000 by way of profits. Plaintiffs then alleged that because no suit to quiet title to the mining claim was instituted by defendants, or either of them, the persons whom plaintiffs had interested in the property refused to invest therein, to plaintiffs' damage in the sum of $20,000.

Plaintiffs then alleged that the defendant lien claimants, by exhibit B, agreed not to issue execution against the mining claims, or ask for any order of sale thereof, and '* * * that plaintiffs are informed and believe that on February 24, 1940, in further violation of the said agreement by said defendants, the said lienholders caused an execution to issue and an execution sale to be made of said premises, and which said premises were sold by said lienholders, defendants on said date to W. H. Patterson, attorney for said lienholder-creditors for the sum of $4103.35.'

Plaintiffs then alleged: 'That the plaintiffs are informed and believe that in view of the said violations of their agreements by defendants as hereinBefore set forth that the defendants have failed and refused to prosecute any suit to quiet title, and have attempted to take possession of said mining premises wrongfully and unlawfully and oust the plaintiffs therefrom to plaintiffs further damage in the sum of $5,000.'

Finally, in their first cause of action, plaintiffs alleged that October 18, 1939, they served upon defendant company a written demand that it proceed with the suit to quiet title to the patented mining claim; that defendant company refused to bring any such suit; and that February 3, 1940, the company surved upon plaintiffs a written notice of cancellation of the mining lease.

By way of a second cause of action, plaintiffs alleged that at the time exhibits A and B were entered into, defendants had no merchantable title to the patented 'Summitt Lode Mining Claim,' being one of the group of claims referred to in exhibit A; that for this reason exhibit A did not vest plaintiffs with sufficient title under exhibit A; and that defendants failed to bring any suit to quiet title to the patented claim referred to. Plaintiffs then alleged, on information and belief, that defendants never intended to prosecute any action to quiet title, as provided in exhibit B; that for the reasons alleged, the payment of $750 which plaintiffs made, and the further payment of $250 which they made on account of royalties, were without consideration, to plaintiffs' damage in the sum of $1,000; wherefore plaintiffs demanded judgment as above stated.

Defendant J. C. McMillan and four other of the defendants, all of whom were members of the group of lien claimants, appeared in the action and demurred to plaintiffs' second amended complaint, upon the ground that neither of the two causes of action there impleaded alleged sufficient facts to constitute a cause of action against the demurring defendants, and upon the further ground that several causes of action were improperly joined. After argument, the court sustained this demurrer, allowing plaintiffs ten days within which to further plead. Plaintiffs having elected to stand upon their second amended complaint, the trial court, by order dated April 30, 1941, dismissed the action, with prejudice, as to the five demurring defendants. From this order of dismissal, plaintiffs have appealed.

Error is assigned upon the ruling of the trial court sustaining respondents' general demurrer to appellants' first cause of action; upon the sustaining of respondents' general demurrer to the second cause of action; and upon the dismissal of the action as to the five respondents named.

From appellants' assignments of error, it may be assumed that the trial court sustained respondents' demurrers upon the ground that neither of appellants' causes of action stated sufficient facts to constitute a cause of...