Frank v. Bauer

• Decision Date: 14 December 1903
• Citation: 75 P. 930,19 Colo.App. 445
• Parties: FRANK v. BAUER et al. [*]
• Court: Colorado Court of Appeals

75 P. 930

19 Colo.App. 445

FRANK v. BAUER et al. ^[*]

Court of Appeals of Colorado

December 14, 1903

Appeal from Montezuma County Court.

Action by George Bauer and others against Joseph Frank. From a judgment in favor of plaintiffs, defendant appeals. Affirmed.

John W. Helbig, for appellant.

S.W Carpenter and C.M. Kendall, for appellees.

GUNTER J.

Appellees (plaintiffs below) executed a deed; grantee, appellant consideration, $60,000; subject-matter, mining property--and deposited the same with one of appellees, a banker, upon terms stated in a writing signed by appellant and appellees of which the following is a copy:

"Mancos, Colo., Aug. 9th, 1899.

"To Mr. George Bauer, Banker, Mancos, Colorado: You will please hold this envelope and enclosed deed of Sundown mine in escrow under the following conditions:

"If Joseph Frank pays into your hands the sum of $1,000.00 this 9th day of August, 1899, and the further sum of $6,500.00 on or before the 20th of August, 1899, and the further sum of $7,500.00 on or before November 9th, 1899, and the further sum of $45,000.00 on or before May 9th, 1900, then you will deliver this envelope and enclosed deed to Joseph Frank, or his agent, and if the said Joseph Frank, or his agent, fails to pay the above-mentioned sums at the time above given, or fails to make any one of said payments as stipulated, then you are instructed to return said deed to the signers thereof at their request. It is further agreed that all improvements, tools and so forth in or outside of mine, excepting heavy machinery, are to be forfeited together with all moneys paid, should Joseph Frank fail to make payments as above stipulated. It is also agreed that thirty-five per cent. royalty on mint or smelter returns of all ores removed are to be paid owners, and a statement given by Joseph Frank of all work and expenditure at the end of every month, said thirty-five per cent. royalty is to be applied on purchase price of the mine. We agree to the above conditions."

Thereunder appellant took possession of the mine and operated it for a time. He made the payments maturing August 9th and 20th, aggregating $7,500. Ore removed from the mine was shipped to the smelter and returns made September 18th and 30th, and October 4th, 7th, 9th, and 14th, the aggregate of which was $7,296.99; that is, the value of the ore, less treatment charges, as shown by the smelter statements, was $7,296.99. The smelter paid from this sum charges for hauling the ore from the mine to the railroad, and also freight and switching charges. The aggregate of the hauling, freight, and switching charges so paid amounted to $1,607.21, and the difference between this sum and the above aggregate of $7,296.99, to wit, $5,689.78, was paid by the smelting company to the shipper of the ore, appellant. Thirty-five per cent. of $5,689.78 is $1,991.42. Thirty-five per cent. of $7,296.99 is $2,553.94.

October 14th appellant, by his manager, wrote:

"October 14th, 1899.

"To George Bauer, Banker and holder of escrow papers on the Sundown mine--Dear Sir: I herewith make you statement of all ores shipped from the Sundown mine during the month of September and enclose you a check for (35) thirty-five per cent. on the smelter returns, as per escrow conditions agreed upon.

Gross Pounds. Net Pounds. Total Value.

.................... ................ $7,296 99

35 per cent. royalty ................ $2,553 94

"[Signed]

Joseph Frank,

"By J.B. Page."

Under the head "Gross Pounds," in this letter, are given in detail the shipments of ore covered by the smelter statements, commencing with September 18th and ending with October 14th. Appellant states by the letter that he incloses a check for 35 per cent. "on the smelter returns as per escrow conditions," and fixes the smelter returns on this ore at $7,296.99, which, as stated, is the return from the ore, less smelter charges, and not the return from the ore, less smelter charges, and the charges for hauling freight, and switching. He incloses a check for $2,553.94, as 35 per cent. on $7,296.99. On the escrow agent directing attention to this remittance as being $100 short of 35 per cent. on the smelter returns, as shown by the letter, the agent of appellant, October 31st, paid the $100. The parties here construed the meaning of the words "smelter returns," and acted on such construction. They construed them not as meaning the value of the ore less treatment charges, and charges of hauling, freighting, and switching (that is, $5,689.78), but as the value of the ore less only the treatment charges (that is, $7,296.99); and appellant paid, not $1,991.42 (that is, 35 per cent. on $5,689.98), but $2,553.94 (that is, 35 per cent. on $7,296.99). The materiality of this construction will appear as we progress. This payment of $2,553.94 was applied on the installment of the purchase price ($7,500) falling due November 9th. Appellant defaulted in the payment of the remainder of this installment. November 10th appellees demanded the return to them of the deed from the escrow agent, and this was made. They also requested payment of royalty for the remainder of the ore mined and shipped to the smelter prior to that date. Nine smelter returns, other than those contained in above statements, were made from ore shipped October 11th, 13th, 18th, 23d, 26th, 30th, and 31st, November 8th, and November 22d. The aggregate value of this ore at the smelter, less smelter charges, was $3,599.38. Thirty-five per cent. of this amount is $1,259.78. The aggregate amount paid by the smelting company upon this ore for hauling to the railroad, freight on the railroad, and switching charges was $1,160.99, which charges were paid by the smelting company from the value of the ore, less treatment charges, and the difference, to wit, $2,438.39, transmitted to the shipper, appellant. Thirty-five per cent. of this sum is $853.44. November 10th a demand was made upon appellant for payment of 35 per cent. royalty upon the eight smelter returns enumerated between October 11th and November 8th, and such 35 per cent. was based upon the value of the ore at the smelter, less smelter charges. Payment was refused, for what reason does not appear. Suit was instituted December 26, 1899, to recover 35 per cent. royalty upon the nine smelter returns, commencing with October 11th and ending with November 22d, all of the ore for which had been shipped prior to November 8th. Appellant answered, denying the allegations of the complaint which presented the foregoing matters, and set up certain matters upon which he asked affirmative relief. The replication put in issue the affirmative matter of the answer. March 17th appellant filed his motion for a continuance, in order that his deposition might be taken, as he would be absent at the time of the trial. The motion was supported by affidavit disclosing testimony that would be given by the witness if permitted to testify. March 20th the court entered an ordered granting the continuance until March 27th, but setting the case for trial on that date "on plaintiffs' admitting that the evidence stated in the defendant's attorney's affidavit filed in support of said motion for continuance would be given by him (the said defendant), and that it be considered as actually given by him upon said trial." Trial was had March 27, 1900; appellees appearing in person and by attorney,...