Jackson Iron Co. v. Negaunee Concentrating Co.

• Decision Date: 08 January 1895
• Docket Number: 125.
• Citation: 65 F. 298
• Parties: JACKSON IRON CO. v. NEGAUNEE CONCENTRATING CO.
• Court: U.S. Court of Appeals — Sixth Circuit

65 F. 298

JACKSON IRON CO. v. NEGAUNEE CONCENTRATING CO.

No. 125.

United States Court of Appeals, Sixth Circuit.

January 8, 1895

The action below was begun in the circuit court for the county of Marquette, Mich., and was duly removed to the court below on the ground of diverse citizenship. The controversy in this case arose out of two contracts. The first was made on the 14th day of November, 1881, between the Jackson Iron Company a corporation organized and existing under the laws of the state of Michigan, and the Union Ore Concentrator Company, a joint-stock association organized under the laws of the state of New York. By the terms of said contract, the Jackson Iron Company agreed to sell to the Union Ore Concentrator Company and the latter agreed to buy from the former, its entire stock piles of refuse low grade ores then accumulated and thereafter to accumulate at its mines in the state of Michigan, which should contain not less than 25 per cent. of concentrated ore, to be used in the works of the vendee company, its assignees or licensees; the price of the finished concentrated product to be, to wit, 45 cents per ton of such concentrated product of all hard or specular ores worked from the Jackson mine, and 35 cents per ton of such concentrated product of all hematite or soft ores worked from the south side mine, payable in cash on the 15th of each month for all ores removed or worked the previous month, the title to such ores to remain in the vendor until payment should be made. The said sale and purchase was to include all the above-described refuse product of said mines already accumulated and thereafter to be accumulated during the 16 years next succeeding September 1, 1882, which should contain 25 per cent. or more per ton of concentrated ore, and the Union Ore Concentrator Company was given the right to commence operations on said refuse piles before September 1 1882, if it should be in readiness therefor. The ores were to be handled so as not to inconvenience the operations of the Jackson Iron Company and subject to its approval; and the latter agreed to give the vendee all reasonable facilities for sorting, concentrating, and loading the said ore. The vendee company agreed that all the ore now in stock piles and sold under the contract should be removed within 16 years from the date named, and, should it fail in any one year from the last-mentioned date to remove as much as 10,000 tons, or to pay to the Jackson Iron Company the sum of $2,500 annually, payable in equal monthly installments on the purchase price, then said contract, at the option of the Jackson Iron Company, might terminate. But said provision for monthly instead of annual payments was to be regulated in such manner as not to destroy the spirit of the contract, and no default was to be taken without a request for payment, and neglect or refusal to comply therewith. It was further mutually agreed that, in case the Union Ore Concentrator Company should pay during any one year in the aggregate the sum of $2,500, without having removed sufficient ore to amount to that sum, the surplus should be credited on future deliveries. The Jackson Iron Company also agreed to sell to the Union Ore Concentrator Company, and the latter agreed to buy, any and all of the same class of ores described that could not be profitably shipped or sold for smelting, and all that the vendor company, its successors or assigns, might mine in said mines during the 16 years described, at the same prices, and on the same conditions as before stated. It was further provided that nothing in the contract should be construed to operate to oblige the Jackson Iron Company to deliver or mine any specific amount of ores, or to prevent it from removing the ores, or any part thereof, to any other point or points which might be reasonably convenient for the Union Ore Concentrator Company, should the safety of the mine or mines or the convenience of the vendor company require it nor was it to be obliged to raise from its mine or mines and deliver to the vendee company any of said refuse ores that it might wish to leave in said mines or use for other purposes than for sale or smelting. And, as the vendee company proposed not only to concentrate ores from said refuse low grade ores, but also to mine ores of the same class on the same premises, the vendor company granted to it the right to do so within certain reasonable limits for its production. And therefore the vendee company was to be allowed to blast down and mine mixed ores of the quality described for concentrating from any suitable place on its said property, but not in any way to interfere with the operations of the vendor company; the latter to be the sole judge of the convenience and expediency of granting such leave to mine ores. The ores thus mined were to be considered the same as if they belonged to the stock piles of refuse low grade ores, and the vendee company was to pay therefor in the same manner before provided for ores to be taken from said piles. When the vendee company, in its process of excavating and removing the inferior class of ores should open or expose ores suitable for shipment or smelting, the vendor company was to be notified, and all operations at that point were to cease as soon as directed by the vendor company. In case the vendor company considered the process for removing ores to be dangerous or damaging to its property, the vendee company was to cease such operations on receiving written notice from the vendor. Should the vendee company desire to use steam power for its concentrating operations suitable for mills and machinery for carrying on operations under the contract, lands were to be leased by the vendor company to the Union Company or assigns at a nominal rent of one dollar per annum. The Jackson Iron Company agreed that the vendee company might assign said contract or any share thereof, or interest in or under the same, to the Marquette Concentrating Company, or to such other corporations, companies, or associations as it might see fit, but solely for mining and concentrating ore as herein provided. Subsequent to the making of said contract of November 14, 1881, the Union Ore Concentrator Company, on the 7th of January, 1882, entered into a contract with the Negaunee Concentrating Company, a corporation organized under the laws of Michigan, whereby the first-named company sold to the defendant in this case certain rights under the first-named contract to take, separate, refine, and sell out of and from the hard or specular ores mentioned and described in the first contract, either by mining the same under said contract, or out of and from the refuse or waste piles therein mentioned, so much of said ores sufficient at all times to supply and keep in full operation all mills and machinery which should be erected by the defendant company for the purpose of refining and separating said ore, provided that the same should never exceed 1,000 tons per day of refined or separated ore, and that the defendant company should have no right to mine, take, or use of said ores any more than would be sufficient to keep its mills and machinery to be erected in full operation, nor more, under any circumstances, than sufficient to produce and yield 1,000 tons of separate or refined ore; and the Union Ore Concentrator Company further sold to the defendant company the full and ample right and authority to use all patents and patented machinery now owned by the said vendor company which should be needful or required by the defendant company for the purpose of refining or separating said ores, not to exceed the quantity it can separate or refine, nor to exceed 1,000 tons per day of refined or separated ore. And the Negaunee Concentrating Company agreed to pay to the vendor company for the rights and privileges conveyed in said contract the sum of $225,000 in and by the issuing and delivery of that amount at par value of certificates of its capital stock, and further agreed to pay to said vendor company, or, at its own election, to the Jackson Iron Company, 45 cents per ton for each and every ton of concentrated ore made, refined, separated, or produced by it; payable in cash on the 15th of each month for all such product of the previous month. All the acts and doings of the vendee company under said contract were to be in strict compliance with all the terms of said written agreement of November 14, 1881, with the Jackson Iron Company. The vendee company was not to be guilty of any violation of said agreement nor suffer or permit, so far as it or its operations were concerned, any default therein or violation thereof; and it agreed to perform the same on its part so far as it or its operations should make it necessary or proper...