J. R. Simplot Co. v. Chambers, 8811

• Citation: 82 Idaho 104,350 P.2d 211
• Decision Date: 03 March 1960
• Docket Number: No. 8811,8811
• Parties: J. R. SIMPLOT COMPANY, a corporation, Plaintiff-Respondent, v. Arthur E. CHAMBERS, Freda M. Chambers, and Fluorspar Mines, Inc., a corporation, Defendants-Appellants. Arthur E. CHAMBERS and Freda M. Chambers, husband and wife, Cross-Complainants-Appellants, v. J. R. SIMPLOT COMPANY, a corporation, and Fluorspar Mines, Inc., a corporation, Cross-Defendants-Respondents.
• Court: Idaho Supreme Court

Page 211

350 P.2d 211

82 Idaho 104

J. R. SIMPLOT COMPANY, a corporation, Plaintiff-Respondent, v. Arthur E. CHAMBERS, Freda M. Chambers, and Fluorspar Mines, Inc., a corporation, Defendants-Appellants.

Arthur E. CHAMBERS and Freda M. Chambers, husband and wife, Cross-Complainants-Appellants, v. J. R. SIMPLOT COMPANY, a corporation, and Fluorspar Mines, Inc., a corporation, Cross-Defendants-Respondents.

No. 8811.

Supreme Court of Idaho.

March 3, 1960.

Rehearing Denied March 28, 1960.

C. Walker Lyon, Salmon, Marcus & Evans, Boise, for appellants.

Lloyd Haight, Richards, Haga & Eberle, Boise, for respondent.

KNUDSON, Justice.

Appellants were owners of 71 unpatented mining claims located in Lemhi County, Idaho. Appellants, under date of October 31, 1949, entered into an agreement (hereinafter referred to as original agreement) with J. R. Simplot Company (hereinafter referred to as Simplot) under the terms of which appellants agreed to sell to Simplot, subject to certain terms and conditions, said mining claims with appurtenances, together with certain machinery and equipment situate thereon. The specified consideration, $800,000 was made payable in installments of $1,000 upon execution of the agreement and the remainder to be payable out of royalties. The royalties were not payable unless there were certain net profits and there was a specific prohibition against mining unless the profits were in certain amounts. No interest was payable upon the unpaid balance of the sale price. Said agreement provided, among other things, that Simplot as purchaser agreed to maintain insurance against loss by fire and comprehensive casualties upon the personal property belonging to appellants and referred to in the agreement. Under its provisions Simplot agreed to forthwith commence and proceed with reasonable diligence to obtain patents relative to the mining claims referred to therein.

On May 18, 1950, Simplot assigned the said agreement to respondent Fluorspar Mines, Inc. (hereinafter referred to as Fluorspar). The assignment was recorded in the office of the county recorder of Lemhi County and appellants duly notified thereof.

Under date of March 1, 1952, Simplot and Fluorspar entered into an agreement referred to as 'operating agreement' under the terms of which Simplot was given possession of the mining claims, machinery and equipment and among other things was authorized to explore, develop and mine the ore thereof. Said operating agreement provided that all machinery, equipment and structures, etc. purchased and used by Simplot in mining or milling operations should remain the property of Simplot subject to the option right of Fluorspar to purchase such property, upon termination of the agreement, at the depreciated book value as shown by the records of Simplot. Under the operating agreement Simplot agreed to insure against loss by fire and other hazards the building, structures, equipment and machinery located on said mining claims in such amount as Simplot may determine and in the event of any loss the proceeds of such insurance were to be paid to Simplot to the extent of its investment in the destroyed property and the balance was to be applied on any personal property of appellants which was damaged or destroyed as provided in section 10 of the original agreement.

Pursuant to said provision in the operating agreement Simplot procured and maintained insurance against loss by fire in the amount of $100,000, which comprised $13,000 on buildings and $87,000 on equipment. Copies of such policies were delivered to appellants.

On April 19, 1953, fire destroyed and damaged property which had been constructed and purchased by Simplot and also some of the property described in the original agreement. The insurance companies involved paid by checks made payable to both appellants and respondents the maximum payable under the policies amounting to $100,000. Under stipulation by the parties the checks were cashed and the proceeds deposited with the clerk of the trial court pending final determination of the rights of the respective parties thereto.

Respondent Simplot brought this action to quiet title to the insurance money. Appellants answered contending that they were entitled to all the insurance money and cross-complained against respondents for damages as follows:

(1) $35,000 for failure to apply for or obtain patents to the mining claims.

(2) $1,500 for careless and unminerlike underground work.

(3) $26,555 for failure to insure.

(4) $9,500 for failure to dispose of debris.

(5) $4,540.31 for failure to pay royalties.

By its judgment the trial court awarded $74,320 of the insurance money to respondent Simplot and $25,680 thereof to appellants; awarded appellants $7,578 damages against respondent Fluorspar for its failure to provide insurance in compliance with the original agreement; awarded appellants $2,500 damages against both respondents for destruction of 'callow cells'.

Appellants have appealed from said judgment.

The assignments of error which present the principal issues upon appeal are concerned with the validity and effect of the assignment of the original agreement by Simplot to Fluorspar and also appellants' contention that Simplot is estopped from claiming the insurance money as against appellants.

In considering the validity of the assignment dated May 18, 1950, executed by Simplot to Fluorspar it is necessary to examine the original agreement and particularly section 31 thereof which provides:

'Section 31. It is agreed that this Agreement may be assigned and transferred by the Purchaser to any corporation, the voting control of which is at that time held by either the Purchaser or J. R. Simplot or Simplot Investment Company; and following such assignment and notice thereof to the Vendors, the entire and exclusive obligation to perform the terms and provisions of this Agreement incumbent upon the Purchaser to be kept and performed, shall devolve upon such assignee, and the Purchaser, as assignor, shall then be relieved and released of any liability or obligation hereunder, and the assignee shall be deemed referred to wherever in this Agreement the word 'Purchaser' is used. It is further agreed that this Agreement may be so assigned by the Purchaser after alleged default or after service of notice of default to it without such assignment being considered or treated as in any manner jeopardizing the rights of the Vendors as creditors and in such event or events, the Purchaser shall thereby be released and relieved of any further obligation hereunder and shall not be liable in any action by the Vendors to recover the unpaid balance of the purchase price under the provisions of Section 24 hereof. The foregoing provision for stock voting control of the assignee corporation shall not be interpreted to require that it remain in or be permanently retained by J. R. Simplot or J. R. Simplot Company or by Simplot Investment Company.'

It will be noted that said section 31 specifies the only qualification of the assignee to be a controlled corporation. It is not contended that the voting control of Fluorspar was not held by Simplot at the time of the assignment. Appellants contend that a logical construction of said section 31 would be to require Simplot to set up a responsible corporate organization as assignee to operate the property under the agreement. The exact asset status of Fluorspar is not disclosed by the record, however it is not claimed that Simplot made any representations regarding the financial responsibility of said assignee. Under the terms of the original agreement the only limitations upon Simplot's right to assign are that the assignee must be a corporation, the voting control of which is held by Simplot, or J. R. Simplot, or Simplot Investment Company and that notice of such assignment be given appellants. To construe said section 31 as restricting the right to assign to a corporation which may be by appellants considered 'reasonable' would necessitate the insertion of words and the making by the Court of a new contract. This we cannot do. Courts cannot make for the parties better agreements than they themselves have been satisfied to make, and by a process of interpretation relieve one of the parties from the terms which he voluntarily consented to; nor can courts interpret an agreement to mean something the contract does not itself contain. 12 Am.Jur. 749; Nuquist v. Bauscher, 71 Idaho, 89, 227 P.2d 83; Durant v. Snyder, 65 Idaho 678, 151 P.2d 776; Ohms v. Church of the Nazarene, 64 Idaho 262, 130 P.2d 679; Weed v. Idaho Copper Co., 51 Idaho 737, 747, 10 P.2d 613.

Appellants have neither alleged nor offered evidence tending to prove any over-reaching by Simplot at the time of or before the execution of the original agreement. Appellants admit that they received notice of the assignment to Fluorspar yet they did not challenge its validity until after the fire which occurred almost three...