Big Six Development Co. v. Mitchell

• Decision Date: 22 April 1905
• Docket Number: 2,095.
• Citation: 138 F. 279
• Parties: BIG SIX DEVELOPMENT CO. v. MITCHELL.
• Court: U.S. Court of Appeals — Eighth Circuit

138 F. 279

BIG SIX DEVELOPMENT CO. v. MITCHELL.

No. 2,095.

United States Court of Appeals, Eighth Circuit.

April 22, 1905

John W McAntire and John W. Halliburton (Heywood Scott, Samuel McReynolds, and Frank Hagerman, on the brief), for appellant.

Thomas Dolan and S.D. Mitchell, for appellee.

Before SANBORN and HOOK, Circuit Judges, and RINER, District Judge.

RINER District Judge.

This was a bill in equity brought by S. Duffield Mitchell, a citizen of the state of Pennsylvania, against the Big Six Development Company, a corporation organized under the laws of the state of Missouri, to cancel a lease as a cloud upon plaintiff's title to certain lands, to establish his right of possession therein, and to enjoin the lessee from mining ore in the leased premises. The lease was dated May 31, 1898, and, by its terms, was to run 10 years from date. It provided that the parties of the second part should commence the work of sinking shafts within 10 days after the date of the lease-- 'and shall keep and have on said tract of land, sufficient pumps and machinery to drain the same of water, so as to permit efficient mining thereof, and shall properly operate the same, and shall increase the capacity thereof from time to time as same becomes necessary.'

'The said parties of the second part, their successors and assigns, shall mine said land in a good, thorough and workmanlike manner, shall keep all shafts and drifts well and securely timbered and supported, and shall not remove such timbers and supports so as to endanger the ground or to permit the same to cave or fall in. Mining shall be carried on in good faith continuously, and shall not be suspended at any time except on written permission of the party of the first part.

'All lead and zinc ores shall be cleaned and prepared for market on said land, and no rough or crush stuff shall be removed therefrom to be cleaned, nor shall minerals or crush stuff from other land be brought or cleaned on said land without the written permission of the said party of the first part.'

'The said parties of the second part, their successors and assigns, shall keep in a book a correct amount of all lead and zinc ores mined, the kinds and weights thereof, to whom sold, and the price received therefor, which book shall be open to the inspection of the party of the first part at all reasonable times.'

'The said parties of the second part, their successors and assigns, shall pay to the party of the first part, at the Bank of Joplin, Missouri, on Monday of each and every week as rent and royalty, twelve (12) per cent. of the market value of all ores mined and sold during the preceding week and shall furnish at the time of said payment a written statement of all ores sold, to whom sold, and the price received therefor.' 'The parties of the second part, their successors and assigns, shall have the right to erect all necessary buildings and machinery on said land for the purpose of mining and draining, crushing and cleaning ores thereon, and to remove the same at the expiration or forfeiture of this lease, except timbering and other materials necessary to support the ground, which timbering and improvements immediately on their being placed in the ground shall become the property of the party of the first part. All uses of the ground not inconsistent with thorough and proper mining, as herein required, are hereby reserved to the party of the first part.'

'Any failure at any time on the part of the parties of the second part, their successors and assigns to comply with and perform in good faith the requirements of this lease shall end and determine the same, and said party of the first part, his heirs and assigns may declare an ouster and forfeiture of said lease and may re-enter and hold said demised premises without recourse to law in as full and complete a manner as if this lease had never been made.

'Nor shall the failure of the party of the first part, his heirs or assigns, to enter upon the take possession of said premises on account of the failure of the parties of the second part to keep and perform the conditions and agreements herein contained, be construed to be a waiver of the rights of the party of the first part to declare an ouster and re-enter and forfeit said demised premises for any other and subsequent breach of the requirements of this lease.'

The bill alleges that the plaintiff was the owner in fee simple and in possession of a tract of land situate in Jasper county, Mo., and described as the north half of the northeast quarter, and the southeast quarter of the northeast quarter, of section 4, township 27, range 32, containing 120 acres, more or less; that on the 31st of May, 1898, plaintiff executed and delivered a mining lease upon the southeast quarter of the northeast quarter of section 4, containing 40 acres, the same being a part of the 120 acres above described; that, by deed of assignment duly executed and acknowledged by the parties of the second part to the lease, they conveyed all of their interest and title therein to defendant; that defendant subdivided the tract of land into mining lots, and subleased the same to miners and mining companies, who have been conducting mining operations thereon; that the defendant, by its mining rules and regulations, declared and posted according to law, imposed upon its several sublessees the duties and obligations imposed upon it by the lease with reference to sinking and driving shafts, timbering, supporting the surface of the land, preventing the surface from caving or falling in, pumping and draining water, cleaning and preparing for market all ores produced from the mine; that defendant performed none of these acts, nor did it own any machinery, pumps, or buildings located on the land; that the defendant kept an account of all lead and zinc ores mined, the kind and weight thereof, to whom the same was sold, and paid to the plaintiff the royalty due thereon, as provided by the terms of the lease. It is then alleged in the bill that:

'Defendant corporation, its sublessees and licensees, have failed to comply with and perform the conditions and requirements of said lease, in this: That it and they have failed and refused to keep the deeper drifts in said land drained of water, to permit efficient mining thereof, and have failed to mine said ground in a work-man-like manner; and have removed and caused to be removed a pillar or pillars in said ground, which, in mining said ground, had been left to support the surface and prevent the same from caving or falling in, and have failed to properly timber and secure the drifts of said ground from caving, and have failed to timber certain shafts securely and properly, by reason of which failure the ground has subsided, caved, and fallen in, to the great detriment and damage to said land. That by reason of its failure to comply with the requirements and conditions of said lease, the defendant has forfeited the same, and the said lease, by its terms, has ended and determined; and the plaintiff, electing to enforce said forfeiture as against defendant, on account of said failure to comply with the conditions and requirements of said lease, did on the 7th day of July, 1903, declare said lease forfeited, and made re-entry on said described land, declared an ouster of the defendants therefrom, and posted upon said land a notice of forfeiture, * * * and duly served same on defendant on said 7th day of July, 1903, by delivering a true copy thereof to J. W. Allen, president of defendant. That notwithstanding the re-entry by plaintiff on said land by the terms of said lease, at his election, to re-enter and oust defendant from said land for forfeiture of said lease by reason of failure to comply with its conditions and requirements, defendant, its officers and agents, refused to surrender said lease, and claim and assert rights thereunder adverse to plaintiff, and threaten to continue to claim and assert said rights to the said land of plaintiff, and threaten to continue to mine or cause said land to be mined, and to take the ores, rock, and earth therefrom, to the irreparable damage of plaintiff.'

It is then alleged that the defendant corporation was organized solely and only to take over and hold the title to the plaintiff's lands; that it has no other property or assets than the lease; that at the organization the defendant corporation received nothing but the lease as property, in full payment for its entire capital stock; that the defendant divides its royalty, earnings, or profits derived under said lease on plaintiff's land among its stockholders, when received; that the defendant is insolvent; and that plaintiff's remedy at law would be inadequate. The plaintiff then alleges that the lease creates a cloud upon his title to the land in controversy, and prays that the court may decree that the defendant has no interest in or title to the lease, that the title of the plaintiff to the land in controversy is unaffected by the lease or any claim of the defendant; that the lease be declared to be no longer in force and effect in favor of the defendant, and that it may be canceled, annulled, and surrendered into the possession of the plaintiff; and that the defendant, its officers, servants, and agents, be enjoined from asserting any claim under the lease, and from continuing in possession of the land in controversy. To this bill the defendant demurred, and the demurrer was overruled. It then filed an answer, the testimony was taken, and the case came on for final hearing, resulting in a decree declaring the lease a cloud upon plaintiff's title, establishing his right of possession in the property, and enjoining the lessee from mining ores in the leased premises.

It was insisted by...