Chain O'Mines, Inc. v. Williamson

• Court: Colorado Supreme Court
• Writing for the Court: KNOUS, Justice.
• Citation: Chain O'Mines, Inc. v. Williamson, 101 Colo. 231, 72 P.2d 265 (Colo. 1937)
• Decision Date: 27 September 1937
• Docket Number: 14010.
• Parties: CHAIN O'MINES, Inc., et al. v. WILLIAMSON et al.

72 P.2d 265

101 Colo. 231

CHAIN O'MINES, Inc., et al. v. WILLIAMSON et al.

No. 14010.

Supreme Court of Colorado

September 27, 1937

In Department.

Error to District Court Gilpin County; Samuel W. Johnson, Judge.

Action by Harry M. Williamson against Chain O'Mines Incorporated, and others, wherein the Vanadium Steel Corporation and others became parties. To review the judgment, named defendant and others bring error.

Affirmed.

Herbert M. Munroe, of Denver, for plaintiffs in error Chain O'Mines, Inc., and others.

LeRoy J. Williams, of Central City, for plaintiffs in error Wm. O Ziege and another.

Harry W. Robinson, of Denver, pro se.

Milton E. Blake and Milton J. Blake, both of Denver, for defendant in error Harry M. Williamson.

Pershing Nye, Bosworth & Dick, Lewis A. Dick, and Samuel S. Sherman Jr., all of Denver, for defendants in error Vanadium Steel Corp. and others.

KNOUS Justice.

On May 29, 1930, the plaintiff in error Chain O'Mines, Incorporated, at that time the owner of a considerable number of mining claims, entered into an agreement with the defendant in error Harry M. Williamson, whereby the Chain O'Mines leased several claims in Gilpin county to Williamson for a term commencing May 29, 1930, and ending February 26, 1935, with the option to him to purchase said property at any time during the term of the lease for $10,000. The royalties theretofore paid, upon the exercise of the option, were to apply on the purchase price. The agreement was recorded on September 18, 1931. Subsequently a large number of creditors of the Chain O'Mines, Incorporated, including all of the defendants in error except Williamson and West, as trustee, obtained judgments against the Chain O'Mines and recorded transcripts thereof in Gilpin county. The property covered by the lease and option, together with other property of the Chain O'Mines, was levied upon under executions and judgments in favor of the California Hidden Treasure Mines Company, Vanadium Steel Corporation, the Babcock & Wilcox Tube Company, and E. I. Du Pont de Nemours & Co., and on October 20, 1934, the properties were sold pursuant to these executions and livies and purchased by the defendant in error I. A. West, as trustee. Sheriff's deed issued on April 23, 1935. On February 20, 1935, within the term of lease and during the pendency of the redemption period under the execution sale, Harry M. Williamson elected to exercise his option and gave notice in writing to that effect and on the following day deposited with the clerk of the district court of Gilpin county the unpaid portion of the purchase price, amounting to $6,900, as a tender and instituted this proceeding in the nature of an action for specific performance of the option contract and to quiet title to the property, which proceeding, however, in effect had for its purpose a determination of the respective rights of the Chain O'Mines and the judgment creditor parties to the balance of the purchase price.

The trial court ordered the defendant in error I. A. West, as trustee, to convey the optioned property to Williamson and directed the payment of the unpaid portion of the purchase price in the hands of the clerk of the court to said I. A. West, as trustee.

Distinct and separate questions, relating to the diverse interests of two groups of plaintiffs in error are raised by the assignments here. The first group, Chain O'Mines Incorporated (a Nevada corporation), and Chain O'Mines, Incorporated (a Colorado corporation), and Herbert M. Munroe as trustee, under a deed of trust dated June 15, 1932, given by Chain O'Mines, Incorporated, to secure the payment of certain bonds, contend that, by virtue of the contract and subsequent exercise of the option to purchase, the mining property described therein was converted into personalty as of the date of the contract, and that the levies of the executions on the real property and its subsequent sale and conveyance thereunder were subject to this lease and option and were defeated upon its exercise, and that the purchase price, not having been subjected to the executions, remains the property of the vendor, Chain O'Mines, Incorporated. This contention is based upon the fundamental equity principle that equity regards that as done which ought to be done. The fiction of equitable conversion was originally applied in early English jurisprudence in controversies between the personal representatives and the heirs or devisees of a deceased person as to whether certain property of the decedent should be treated as realty or personalty in its devolution. Where the involved instrument sufficiently expressed an intention by a testator or grantor that his real estate be turned into personal property or his personal property be turned into real, courts of equity, without reference to the then physical status of the property, treated the intention of the testator or grantor as controlling. As the doctrine was primarily conceived and carried into effect by the earlier decisions here and in England, it was very generally held that the conversion took place in wills from the date of the death of the testator, and in other instruments inter vivos as of the date of their execution. In so far as these cases dealt with contracts for the sale of land, the contracts involved, with few exceptions, were unconditional agreements for the purchase and sale as distinguished from option agreements giving the right to...