Leon v. Barnsdall Zinc Co.

• Decision Date: 01 July 1925
• Docket Number: 24734
• Parties: MOSES LEON and MILTON LEON v. BARNSDALL ZINC COMPANY, Appellant
• Court: Missouri Supreme Court

274 S.W. 699

309 Mo. 276

MOSES LEON and MILTON LEON v. BARNSDALL ZINC COMPANY, Appellant

No. 24734

Supreme Court of Missouri

July 1, 1925

Transferred from Springfield Court of Appeals.

Reversed and remanded (with directions).

A W. Thurman and Paul G. Koontz for appellant.

(1) The plaintiffs claimed that they had worked continuously as provided therein and had discovered ore bodies within a year. The landowners had consented and knew of the working conditions thereafter; having given such consent and being in default the forfeiture was not binding. Forfeitures are not favored and the law looks with disfavor upon one who is induced or assented to conditions of which he complains. Weaver Mining Co. v. Guthrie, 189 Mo.App. 108; Consumers Gas Co. v. Ink, 71 N.E. 477. (2) The court erred in refusing to sustain the defendant's demurrer at the close of the plaintiff's evidence and at the close of all the evidence. There was no allegation in the plaintiffs' petition of any damage. The right to rescind was provided by contract. Parties have the right by mutual agreement to rescind either by the contract itself, or by subsequent contract. Black on Rescission, secs. 512, 521 517, 528, 535; Hutchinson v. Jones, 79 Mo. 496. A contract may provide that it shall come to an end at the option of one or either of the parties. Boor v. Kimball, 46 Ill.App. 327; Morse v. Brummel, 36 Neb. 766; 9 Cyc. 600. The assent of both parties to rescind is sometimes expressed in the original contract as holding an option to rescind is given to one or both of the parties. 6 R. C. L. secs. 305, 922; Williamson v. Hill, 154 Mass. 117, 13 L. R. A. 690; Crescent Mfg. Co. v. Nelson Mfg. Co., 100 Mo. 325. The contract further provided that in the event of surrender then respondents should hold and keep all payments as liquidated damages. The parties by the contract fixed their damages which were the payments received at the time. The parties measured their own damages. The respondents were bound by the agreement to accept the payments as their damages. May v. Crawford, 150 Mo. 504; Wise v. United States, 249 U.S. 358, 63 L.Ed. 647. (3) The court erred in giving plaintiff's Instruction 1. The contract providing for the payment of $ 6000 was conditional. The defendant was not to be liable on giving notice and reassignment. The obligation of the contract was at an end on the giving of the notice and the surrender of the assignment. The plaintiff alleged that the defendant failed to pay the obligation which was at an end. In the prayer of the plaintiff's petition the plaintiff alleged that the defendants failed and refused to comply with the contract as therein stated and caused and permitted the forfeiture of the rights of the plaintiffs under the Greer contract to the plaintiff's damage in the sum of $ 6000. The petition did not allege any damage or any special damage. The petition proceeded on the theory that the plaintiffs were entitled to recover the $ 6,000. The plaintiff declares on a contract that had been rescinded and no special damages were pleaded. The character of the action is to be determined from the averment of the petition, and it is sometimes difficult to say whether the pleader has declared on express contract or has merely pleaded one as a matter of inducement and sought relief for tort. Mossup v. Casualty Co., 137 Mo.App. 399; 21 Ency. Pl. & Pr. 913; Fisher v. Gobel, 40 Mo. 475; Fontaine v. Schulenberg, 109 Mo. 55; Bear Cat Mining Co. v. Chemical Co., 247 F. 286; Sedgwick on Damages (9 Ed.) secs. 205, 620; Warren v. Stoddort, 105 U.S. 224, 26 L.Ed. 1117.

McReynolds & Blair and John H. Flanigan for respondents.

(1) There was a contract of sale by the Leons and of purchase on the part of defendant, followed by a breach of contract by the vendee, authorizing a recovery of damages on account of said breach. Vendor and Purchaser, 39 Cyc. 1992, sec. B; Norris v. Lechtworth, 140 Mo.App. 19; Pritchard v. Mulhall, 103 N.W. 774; Wasson v. Palmer, 22 N.W. 773; Hogan v. Kyle, 35 P. 399. (2) The judgment of the court for six thousand dollars was a correct application of this rule. The testimony shows that the lease had been forfeited on account of the conduct of the defendant. The theory of the plaintiff is that the forfeited lease had no value and having no value, the difference between that amount and the contract price was six thousand dollars, which constituted the measure of damages. (3) The contract was completed between the parties except for the payment of the remaining six thousand dollars of purchase price. Two payments were past due at the time the suit was instituted. "Where a party bound by an executory contract repudiates his obligation before the time of performance, the promisee has according to the great weight of authorities the option to treat the contract as ended so far as further performance is concerned, and to maintain action at once for damages incurred by such anticipatory breach." 12 C. J. 651; Regal v. Gallager, 188 S.W. 151; Puckett v. Natl. Annuity Co., 134 Mo.App. 501; Central Trust Co. v. Auditorium Assn., 240 U.S. 581; Roehm v. Horst, 178 U.S. 1; Gilman v. Lamson Co., 234 F. 507; Stoner-McCray System Co. v. Oil Co., 156 N.W. 683. (4) Respondent's cause of action was based upon the contract of November 18th by terms of which the defendant purchased plaintiff's contract for a lease. Respondent's theory in the lower court was that it was a suit for the purchase price. The court tried it on the theory that it was a suit for damages for breach of contract and made a finding accordingly. It is immaterial which theory is adopted in this court, for the reason that under the facts and the law the result must be identical. Krepp v. Railroad, 99 Mo.App. 95.

OPINION

Ragland, P. J.

This appeal comes here on certification by the Springfield Court of Appeals. The action in form is one for damages for breach of contract. The subject-matter of the contract declared upon was the assignment and transfer of a certain contract for a mining lease theretofore entered into between the plaintiffs, Leons, and Laura Greer, et al., the owners of 400 acres of land in Cherokee County, Kansas. The material portions of the latter contract, which will be herein referred to as the Greer contract, were as follows: "That the first parties (Laura Greer et al.) do hereby give and grant to second parties (the Leons) the right for twelve months from the date hereof, to go upon the following described premises (the land above referred to) . . . and to search and prospect for and mine said land for zine and lead ores and other minerals thereon during said period upon and subject to the following conditions:

"Said second parties shall begin drilling on said land and have a drill thereon in operation within sixty days from the date of this contract, and shall carry on prospecting, by drilling, and work continuously during the life of this contract. It is further agreed that if parties of the second part shall perform all the conditions of this contract in good faith and shall at any time develop lead and zinc ores upon said premises in sufficient quantities to make the mining and marketing thereof profitable, then the parties of the first part will properly execute and deliver to parties of the second part a mining lease upon the above described premises, for a period of ten years from this date, at a royalty of ten per cent of the gross price received for all lead ores and ten per cent of the gross price received for all the zinc ores mined from said land . . .

"This contract and any lease provided for herein shall not be assigned by the parties of the second part except in writing, stating fully the conditions and terms of such assignment, and immediately after making such assignment or subletting the parties of the second part shall furnish parties of the first part a copy of such assignment or sublease. . . .

"The right to prospect said land under this contract shall continue to parties of the second part as long as they shall carry out each and every condition herein, not to exceed a period of twelve months from the date hereof, and any failure on the part of the parties of the second part to carry out any and all conditions of this contract, in good faith, shall immediately terminate same, and parties of the first part may take possession of said property without notice to quit, demand of possession or any legal proceedings whatever."

The contract in suit was entered into on the 18th day of November, 1919. The portions relevant to this controversy are as follows:

"That the parties of the first part (the Leons) for and in consideration of the sum of two thousand dollars in cash receipt of which is hereby acknowledged, and in consideration of the additional sum of six thousand dollars to be paid as hereinafter provided by the party of the second part (the Barnsdall Zinc Company), the parties of the first part do hereby grant, bargain, sell and assign all of their rights title and interest in and to said contract for a mining lease (the Greer contract) upon the said four-hundred-acre tract, and the lease to be granted thereunder . . . That the deferred payments of $ 6,000, the party of the second part agrees to pay, except in event of surrender as hereinafter provided, as follows: One thousand dollars on January 17, 1920; one thousand dollars on February 17, 1920; one thousand dollars on March 17, 1920; one thousand dollars on April 17, 1920; one thousand dollars on May 17, 1920; one thousand dollars on June 17, 1920. . . . It is expressly understood and agreed that the party of the second part will comply with and perform the obligations of said contract relating to drilling and prospecting thereon, and will push the same with due diligence and will...