Blanck v. Pioneer Min. Co.

• Decision Date: 15 September 1916
• Docket Number: 13155.
• Citation: 159 P. 1077,93 Wash. 26
• Parties: BLANCK et al. v. PIONEER MINING CO. et al.
• Court: Washington Supreme Court

159 P. 1077

93 Wash. 26

BLANCK et al. v. PIONEER MINING CO. et al.

No. 13155.

Supreme Court of Washington

September 15, 1916

Department 1. Appeal from Superior Court, King County; King Dykeman Judge.

Action by E. L. Blanck and others against the Pioneer Mining Company and others. From a judgment for plaintiffs, defendants appeal. Affirmed.

Cornelius D. Murane, of Seattle, for appellants.

Lyons &amp Orton, of Seattle, for respondents.

ELLIS J.

Action in equity for an accounting. The following facts are undisputed: Prior to September 1, 1909, plaintiffs owned a leasehold interest in 'Bench claim No. 6 below Good Luck on the left limit of Anvil creek' in the Nome Mining district in Alaska, in the following proportions: C. A Vogel, one-eighth, E. L. Blanck, one-half, H. B. Ames, three-eighths. Their lease authorized them to extract the gold, paying to the owners of the claim a royalty of 32 1/2 per cent. of the gross output. On September 1, 1909, by written agreement, they sold their interests to defendant Lindeberg for a total consideration of $70,000, of which $55,625 was then paid in cash. The balance, $14,375, was to be paid to plaintiffs in proportion to their respective interests at times, in manner, and under conditions as follows:

'When the party of the second part shall have realized as net profits from the working of said claim the sum of $55,625 there shall be paid monthly thereafter, to the parties of the first part, one-half of the additional net profits derived from the working of said claim, until the parties of the first part shall have received the said additional sum of $14,375.

'The net profits hereinbefore mentioned shall be construed to mean the net profits of the entire claim including the Neussler one-fourth interest and shall be computed and calculated in the following manner: From the gross amount of the gold produced from said claim shall first be deducted the royalty to be paid to the owners, and the only further deduction to be made shall be the actual expense of the labor engaged in the of the men, and reasonable compensation for any of the men, and reasonable compensation for any teams used, also cost of board and lodging for men employed, cost of all fuel used, and a charge of twenty-five cents per miner's inch of eleven and one-half gallons for each twenty-four hours of water used in mining on said claim.'

Defendant was to have exclusive management and control of the mining operations, and agreed to keep a full, true, and correct account of the expenses incurred and of the gold produced, and to allow plaintiffs to inspect and take copies of such account, if desired, at any and all convenient times. Defendant Lindeberg was president and manager of defendant Pioneer Mining Company. He at once took possession of the claim and proceeded to extract the gold from it operating through that corporation. No question is raised as to his right to do so.

Preparatory to sluicing it was necessary to thaw the perpetually frozen gravel containing the gold. This could be done by either of two methods. One by introducing steam through steel pipes called points, in which case high-pressure water was unnecessary. both the thawing and hoisting to the sluice boxes being done by steam, the other by playing a stream of water on the gravel bank, in which case high-pressure water was essential and could be used both for thawing and raising the gravel to the sluice boxes by hydraulic elevators. The latter method eliminated the use of an engine, the expense of fuel for generating steam, and reduced the number of men necessary to perform the work. Prior to the sale plaintiffs had been operating by the former method, and defendants so continued till in 1910, when the Pioneer Mining Company acquired control of the Miocene Ditch Company, whose ditch was high enough to produce a pressure sufficient to make the hydraulic method practicable. Thereafter defendants employed the latter method. Through the Miocene ditch water could be delivered at the mine at a cost of about 50 cents per miner's inch. Defendants operated the mine during the latter part of 1909 and the full mining seasons of 1910, 1911, and 1912. These operations exhausted the claim. It is admitted that the total amount extracted by defendants was $269,838.86 in gold. Defendants in their accounts, in addition to unquestioned rightful deductions for royalties, low-pressure water and labor expenses, charged as expenses and deducted from this gross output $11,133.46 for material and supplies, and $60,296.33 for high-pressure water, charging 50 cents per miner's inch computed at 9 gallons to the inch. The latter item computed at 11 1/2 gallons to the inch would amount to $47,187.50, and, if computed at 25 cents an inch, would amount to $23,593.75. Disputed questions of fact will be considered in our discussion.

Defendants' statement reduced the net profits much below the $55,625 which, under the contract they were entitled to retain from the first net profits. Plaintiffs insist that in computing net profits, nothing should be deducted for materials and supplies, and for the water used only 25 cents for each miner's inch of 11 1/2 gallons. Such was the final issue. The trial court, adopting the latter view, found that the total net profits were $80,777.03. This would leave, after deducting the $55,625, the sum of $25,152.03, one-half of which under the contract plaintiffs would be entitled to in the proportion of their respective interests. The sum of $650 prior to suit had been paid to Blanck. The court accordingly entered judgment in favor of Blanck for $5,638, in favor of Ames for $4,716, and in favor of Vogel for $1,572, with interest on these sums. Defendants appeal.

Appellants contend that in the paragraph of the contract above quoted, defining net profits, the clause 'the only further deductions to be made shall be the actual expense of the labor engaged in the mining operations thereon, including the wages of the men,' etc., must be construed as including in the deductions the cost of all materials and supplies necessary to enable the men employed to perform their work because, as it is argued, the word 'including' is a term of enlargement and not a term of limitation, and necessarily implies that something is intended to be embraced in the permitted deductions beyond the general language which precedes it. But granting that the word 'including' is a term of enlargment, it is clear that it only performs that office by introducting the specific elements constituting the enlargement. It thus, and thus only, enlarges the otherwise more limited, preceding general language, 'the actual expenses of the labor engaged,' by making it embrace, not only 'the wages of the men and reasonable compensation for any teams used' (which the preceding general language alone would have embraced in any event), but 'also cost of board and lodging for men employed, cost of all fuel used, and a charge of twenty-five cents per miner's inch of eleven and one-half gallons for each twenty-four hours of water used in mining on said claim,' which the preceding general language otherwise would not have covered. The word 'including' introduces an enlarging definition of the preceding general words, 'actual cost of the labor,' thus of necessity excluding the idea of a further enlargement than that furnished by the enlarging clause so introduced. When read in its immediate context, as on all authority it must be read, the word 'including' is obviously used in the sense of its synonyms 'comprising; comprehending; embracing.' Neher v. McCook County, 11 S.D. 422, 78 N.W. 998; Hibberd v. Slack (C. C.) 84 F. 571; Brainard v. Darling, 132 Mass. 218; State v. Montello Salt Co., 34 Utah, 458, 98 P. 549. We find no warrant in the contract for including in the deductions from the gross out-put the cost of materials and supplies, such as shovels, picks, and lumber.

It is equally plain that under the contract appellants were not authorized to charge for any of the water more than 'twenty-five cents per miner's inch of eleven and one-half gallons for each...