Lee v. Lee Gold Mining Co.

• Decision Date: 01 December 1924
• Docket Number: 5531.
• Citation: 230 P. 1091,71 Mont. 592
• Parties: LEE v. LEE GOLD MINING CO. et al.
• Court: Montana Supreme Court

230 P. 1091

71 Mont. 592

LEE v. LEE GOLD MINING CO. et al.

No. 5531.

Supreme Court of Montana

December 1, 1924

Appeal from District Court, Fergus County; W. L. Ford, Judge.

Action by John Lee against the Lee Gold Mining Company and others. Judgment for defendants, and plaintiff appeals. Affirmed.

P. F Leonard, of Miles City, and Freeman, Thelen & Frary, of Great Falls, for appellant.

E. F Bunker and George Y. Patten, both of Bozeman, for respondents.

STARK J.

On April 5, 1923, the plaintiff, John Lee, and the defendant Lee Gold Mining Company entered into a contract with the individual defendants named in the complaint herein, who alone will be hereafter referred to as the defendants containing the following recitals, agreements, and covenants, which for convenience of reference are numbered from 1 to 12:

(1) That it is made between the Lee Gold Mining Company, a corporation having a capital stock of $500,000 divided into 50,000 shares of the value of $10 each, and John Lee as parties of the first part, and the defendants as parties of the second part; and

(2) That, if the second parties shall perform the covenants on their part, the first parties are to convey and issue to them 24,500 shares of the capital stock of the Lee Gold Mining Company; and

(3) That the parties of the first part are desirous of obtaining financial assistance to operate their mining claims which are described.

(4) That John Lee agrees to clear up the titles of the Lee Gold Mining Company; and

(5) That John Lee, who now holds the deeds, is to have same assigned to and become the property of the Lee Gold Mining Company when second parties have subscribed or caused to be subscribed $10,000 of the capital stock of such corporation.

(6) Parties of the second part agree to sell stock and raise $2,000 in cash, if possible, by May 15, 1923, which money and all other money raised on the sale of stock shall be used for development of the mine and construction of concentrating plant and other necessary machinery.

(7) It is also understood and agreed, by all parties hereto, whenever parties of the second part have subscribed stock to the amount of $10,000 the 24,500 shares of capital stock shall be issued to the parties of the second part.

(8) "Parties of the second part hereby agree to raise all the money necessary for the development of the mine and construction of concentrator up to 100 tons daily capacity, with all necessary machinery and equipment required for the 24,500 shares of stock which they are to receive from the Lee Gold Mining Company."

(9) "It is also agreed that party of the first part will locate the additional claim necessary to be held by the company for the protection of the other claims."

(10) "It is also agreed and understood by all the parties hereto the time for which to raise the money required for the construction of the concentrating plant, and such other machinery as may be necessary to operate is to be one year from the date whenever it is proven that the development of the mine and ore veins are sufficient in value and quantity to warrant the construction of said concentrator and other machinery required."

(11) "It is also agreed and understood that of the 25,500 shares of capital stock of the Lee Gold Mining Company, which shall be issued to John Lee in payment for the mining claims above mentioned, payment in stock is to be made as follows: Twenty thousand shares shall be issued to John Lee at the time specified heretofore when the quitclaim deeds are turned over to the Lee Gold Mining Company; 5,500 shares of the capital stock of the Lee Gold Mining Company shall be held as treasury stock, but shall not be sold for any purpose whatever, and shall be held in the treasury of the company as 'treasury stock' until mining property is paying dividends, then, it is further agreed and understood, these 5,500 shares of stock shall become the property of John Lee."

(12) "The above covenants and agreements depend entirely upon the development of the property. If the development proves satisfactory, then this contract shall be binding and in full force until both parties have fully performed their duties as set forth."

On August 14, 1923, the plaintiff brought this action for the purpose of having this contract annulled for the reason, as stated in paragraph 9 of his complaint, that it is "so vague and indefinite that it does not set forth the purpose of the parties, and it cannot be understood or ascertained therefrom with any reasonable degree of certainty what is meant or intended by said contract, and that such contract is lacking in mutuality, and is entirely void and of no force and effect."

Although the complaint undertakes to set up numerous other grounds for equitable relief, they will be disregarded for the reason that they are not argued in appellant's brief; counsel having stated that the main question involved in this suit is whether the above contract is valid.

The prayer of the complaint is very comprehensive. Amongst other things it asks that the contract in suit be declared to be null and void; that it be adjudged that the title to the mining claims involved, standing upon the record in the name of the Lee Gold Mining Company, is held by it for the sole benefit of plaintiff; that defendants be enjoined from working on said claims or exercising any control over them or interfering with plaintiff's operation or development thereof during the pendency of the suit or thereafter; and that plaintiff be decreed to be the sole owner of all of the stock of the Lee Gold Mining Company and the only person entitled to the custody of the books and records thereof.

Upon the filing of the complaint an order was issued, requiring the defendants to show cause why the plaintiff should not be granted the temporary injunctive relief asked for. On the return day of this order the defendants, except the defendant Kimball, appeared and filed a joint answer. Kimball answered separately. It is not necessary to set out the allegations of the answers; it being sufficient to state that they raised an issue upon all of the allegations of the complaint, which tended to show that the plaintiff was entitled to equitable relief. A great amount of testimony was introduced at the hearing on this order to show cause, at the conclusion of which all of the parties stipulated that the case might be considered as submitted for final determination upon the merits on the testimony so introduced. The court thereafter...