Leete v. Pacific Mill & Mining Co.

• Decision Date: 05 July 1898
• Docket Number: 651.
• Citation: 88 F. 957
• Parties: LEETE v. PACIFIC MILL & MINING CO.
• Court: U.S. District Court — District of Nevada

88 F. 957

LEETE v. PACIFIC MILL & MINING CO.

No. 651.

United States Circuit Court, D. Nevada.

July 5, 1898

The facts elicited at the trial are substantially as follows: In 1877 the plaintiff and C. H. Van Gorder, having previously acquired the possessory right to the land in question applied, through the proper land office, for a patent thereto from the United States, and paid to the proper officers the sum of $3,200 for said land. Thereafter, in January, 1878,-- the property in the meantime having been placed in the possession of a receiver,-- the plaintiff conveyed his undivided one-half interest therein to W. N. Leete. The deed contained this reservation: 'But it is not intended hereby to convey or transfer any interest which party of the first part has or may have to any moneys or accounts in the hands of such receiver, as receiver. ' On the same day W N. Leete conveyed the property to the defendant herein, with the same reservation. In March, 1880, the defendant acquired by deed, the interest in the property of the estate of C. H Van Gorder, deceased. The application for a patent to the land was canceled by the land department in 1890. In the fall of 1894 negotiations were commenced between the parties hereto with reference to the plaintiff purchasing the property. All of the negotiations were by correspondence. The first was a letter from plaintiff to John W. Mackay, the president of the defendant corporation. D. B. Lyman was at the time of the correspondence the superintendent and managing agent of defendant in the state of Nevada. In February, 1895, plaintiff addressed a letter to Mr. Lyman saying: 'In December my son * * * wrote me that you wished to sell your Eagle Salt Works property for cash; also, that you wished to engage sale for your own mills. Kindly please state your price. ' On the same day Mr. Lyman sent a reply stating: 'Whilst I am not prepared to give you a positive answer, as the matter must be submitted to Mr. Mackay for his approval, I think you can purchase the property, with all salt on hand, etc., and all personal property at the works, for $6,000; we reserving the right, and you guarantying to furnish us with salt for our own use, f.o.b. cars at works, for $4 per ton. We could not agree to take any stated number of tons, as our present consumption amounts to very little, but we do want reserved rights for mill salt at the stated price. We have on hand: Mill salt, 803 tons; table, 96; stock, 46 tons. ' On February 21, 1895, the plaintiff wrote to Mr. Lyman, stating that he did not consider the property a desirable investment at the price of $6,000, but said: 'If we can agree on a price, I will buy. ' On February 23d Mr. Lyman answered: 'I would suggest that you write me, or address Mr. Mackay through me, stating the price you are willing to give for the Eagle Salt Works property. I will forward your paper to him, and await his decision. I have advised Messrs. Mackay and Flood to sell the property for $6,000; knowing the money paid the government for the land can be recovered, and assuming that the Eagle Salt Works property, with its supplies, salt on hand, etc., is worth at least $3,000. ' On February 26th the plaintiff wrote to Mr. Lyman as follows: 'Replying to yours of the 21st, as to the value of the Eagle Salt Works property depending on the recovery of the purchase money from the government, who recovers from the government must deed to the government, and abandon all claim to the land, and surrender the receiver's receipt. It is not likely that any person desirous of claiming and holding title to land would solemnly file and record an abandonment. Besides, when I deeded to W. N. Leete I reserved all moneys of account. If I ever owned one-half of that money, I own it now. As you suggest, I will address Mr. Mackay through you. ' On March 28th plaintiff wrote to Mr. Mackay, reciting the substance of the former letters between himself and Lyman, and then made the following offer: 'For a bargain and sale deed and possession of your Eagle Salt Works property, as it stands, I will give you, in gold coin, $3,500; also, at my expense and charge, furnish and load to your order at any time within five years, without charge to you, f.o.b. cars, in car-load lots, in bulk, at Eagle Salt Works, 945 tons of mining salt, of like quality to that now on hand. This agreement to bind myself, heirs, and assigns. You put deed in escrow, Bank of Nevada, and I will meet it with $3,500, and agreement to load as above. You put me in possession of the property. ' This letter was sent to Mr. Lyman, and plaintiff received a reply stating that he had forwarded the letter 'to Mr. J. L. Flood, S.F., and he will then forward the letter to Mr. Mackay, or make known to him by wire the contents of your letter. When I know whether they accept or decline your offer, I will advise you further in the matter. ' On April 4th Mr. Lyman addressed the following letter to the plaintiff: 'Your letter to Mr. Mackay, dated 28th of March, has been received, and its contents have been fully noted and considered. Your proposition is fully understood and satisfactory, with the exception of one point, which is open to doubt, and liable to be construed in more than one way, viz. the matter of your furnishing salt to us after sale of the property. I will condense the terms of the proposition as we understand them, in this way: In consideration of the sum of $3,500, gold coin, we will give you a bargain and sale deed of the land as described in the deed from Mr. W. N. Leete to the Pacific Mill & Mining Company, together with all the improvements thereon, including all the salt and other personal property of whatsoever character upon and connected with the Eagle Salt Works (there is now, by estimate, 875 tons of salt on the premises, more or less): provided, that you will furnish and load, at your own expense and charge, to the order of the Pacific Mill & Mining Company, or the Comstock Mill & Mining Company, in car-load lots, in bulk, at Eagle Salt Works, mill salt of like quality of that now on hand, from time to time, not to exceed 875 tons in all, within five years from date, at four dollars per ton. We do not obligate ourselves to order or to take any stated quantity of such salt. If these terms are satisfactory to your, please let me know, and immediately steps will be taken to have the deed and agreement made out, and to complete the transaction. ' On April 5th, Mr. Leete addressed a letter to Mr. Lyman, accepting his offer, in words as follows: 'Replying to yours of the 4th inst., the terms as stated in your letter are entirely satisfactory, and accepted by me. I am ready. As soon as you have your deed and agreement ready, advise me, and I will come up and complete the transaction. ' This ended the negotiations between the parties as to the sale. The deed from the corporation to Leete was executed April 9th, in pursuance of a resolution of the board of directors. It recites a consideration of $3,500, which was paid, and the further consideration as to the delivery of the salt as specified in the letter of Mr. Lyman. The deed is a quitclaim, instead of a bargain and sale, deed, but in all other respects it complies in terms with the result of the negotiations above expressed.

The plaintiff offered evidence to show what action had been taken by him to recover the money from the government that had been paid into the land office upon the application for a patent, and what steps were taken by the corporation, and the transactions and correspondence between the parties in that regard. The defendant admitted that it had applied to the government for the sum of $3,200, and had received the money; that plaintiff had demanded the money from it, and payment had been refused; but interposed objections to all this class of testimony, upon the grounds that it was irrelevant and immaterial unless some new consideration was shown; the contention on the part of defendant being that the rights of the parties were fixed by the correspondence with reference to the sale. The plaintiff admitted that there was no new consideration, but contended that the subsequent transactions corroborated and made clear the fact that the parties dealt with each other on the basis that the money in the United States treasury was an element of consideration in the sale of the Eagle Salt Works to the plaintiff by the defendant. The court declined to pass upon the admissibility of this evidence, but admitted it subject to the objections which would be considered and disposed of in the determination of the case.

Mr Leete employed Britton & Gray, at Washington, to collect this money from the government, and was informed by them that there was a law which prohibited the assignment of an account against the United States treasury, and that it would be necessary for him to proceed in the name of the corporation defendant, as the title to the property was in it at the time of the cancellation of the entry, in 1890, and requested him to get a power of attorney from the corporation authorizing them to act for it in obtaining the money for him. There was considerable correspondence and several interviews between the parties of this subject. The first was a letter from Mr. Leete to Mr. Lyman, dated July 31, 1895, as follows: 'I want to try and collect from the government the money I paid on application to enter the Eagle Salt Mine claim in February, 1877. To that end I have employed Britton & Gray, attorneys, who did my business in 1877. They advise me that, under the law and usages of the land department, it is desirable to have a power of attorney from the Pacific Mill & Mining Company, also, our joint application from them for repayment of the Van Gorder interest, as they held that...