Mauney v. Millar
| Decision Date | 22 April 1918 |
| Docket Number | 305 |
| Parties | MAUNEY v. MILLAR, TRUSTEE |
| Court | Arkansas Supreme Court |
Appeal from Pike Chancery Court; Jas. D. Shaver, Chancellor affirmed.
Decree affirmed.
W. C Rodgers, for appellants.
1. The plea of res judicata was not sustained. 117 Ark. 633; 22 Id. 572; 39 Id. 442; 40 Id. 545; 92 Id. 460; 106 Id. 310; 92 Id 460.
2. The terms of the lease were violated by appellees and they are liable. 102 Ark. 433; 50 Id. 562; 93 Id 269; 113 Id. 471-8; 110 Id. 335; Ib. 402, etc.
3. The lease should be canceled and appellants are entitled to the relief prayed. The chancellor erred in denying relief. 110 Ark. 335, 402, etc.; 113 Id. 478; 112 N.C. 677; 64 Ark. 240; 97 Id. 167; 114 Id. 419; 126 Id. 46; 104 Id. 19, 129; 109 Id. 465; 121 Id. 4; 101 Id. 573; 75 Id. 288; 105 Id. 592; 114 Id. 421; 22 Id. 258; 78 Id. 341; 38 Id. 178; 65 Id. 320; 99 Id. 197; 105 Id. 171; 3 Mon. 327; 3 B. Mon. 2. See also 56 N.Y.S. 770; 16 Ky. L. Rep. 158; 107 Va. 25; 133 U.S. 156; 64 N.Y.S. 153; 2 Bl. Com. 135; 2 Snyder on Mines, § 1226-7; 114 Ark. 419, 421; 112 N.C. 677. The conduct of appellees is a studied purpose to stifle the mine and industry and deprive appellants of any benefits from diligent development in good faith. Equity does not minister to inequity nor aid injustice. It should give adequate relief. 125 Ark. 34; 116 Id. 393.
Thos. C. McRae, W. V. Tompkins, D. L. McRae and C. H. Tompkins, for appellees.
1. The lease is binding and appellants have accepted benefits. There is no forfeiture clause in it and it has not been abandoned. 100 Ark. 568; 77 Id. 305; 41 Id. 532; 24 Cyc. 1349. Forfeitures are not favored. 59 Ark. 409; 78 Id. 202; 77 Id. 168; 98 Id. 168; 102 Id. 442.
2. The evidence does not sustain a breach or forfeiture of the lease. 1 Pom. Eq., § 459.
3. All alleged forfeitures are waived. The matters are now res adjudicata. 100 Ark. 565; 101 Id. 461; 57 Pa.St. 65. The decree is right.
OPINION
M. M. Mauney owned forty acres of land in Pike County, Arkansas, which contained a deposit of Kimberlite or diamond-bearing dirt, and sold thirty acres of it to parties who organized a corporation known as the Ozark Mining Company for the purpose of developing it. On April 3, 1912, Mauney entered into a contract with Howard A. Millar whereby he leased the remaining ten acres to Millar for a period of fifty years for the purpose of having the same developed and operated as a diamond mine. The ten acres covered by the lease was known as the "Mauney Diamond Mine." The written contract recited that Mauney desired to have the property developed and worked and that Millar was a practical mining engineer, with considerable experience in testing out deposits of Kimberlite, and was associated with business men of large means who would become interested in developing the mine. The undertaking was, on the part of the lessee, that he and his associates and assigns would "diligently and faithfully prosecute the work of development of said property as outlined herein in a scientific and practical manner and to begin operation within thirty days from April 10, 1912, by taking such preliminary steps towards the preparation of plans and purchase of machinery necessary to carry on the work in contemplation and to erect and install a modern washing and concentrating plant of African type within one year from April 10, 1912, and as much earlier as can reasonably be done and in good faith and with diligence to begin washing for diamonds within one year from said 10th day of April, 1912, and as much earlier as can reasonably be done, and to treat and wash for the recovery and extraction of diamonds and other precious stones a minimum of 10,000 loads of material from the first described tract of land known as the Mauney Diamond Mine "Property," during each and every year of this lease, and as much more as can reasonably be done."
The last clause of the contract reads as follows:
"The lessees shall in no event cease work for a longer period than three months continuously unless a necessity therefor should arise by the act of God, or from contingencies beyond the control of the lessees or from physical or other conditions which are not the fault of the lessees and which could not reasonably be guarded against, but this clause of this lease shall not operate or be construed to release the lessees from washing and treating for diamonds as much as 10,000 loads of dirt every year, and as much more as can reasonably be done."
The contract further provided that the lessor should receive, as his share, one-fourth of the diamonds and other precious stones and minerals taken from the leased land, and that the lessee should receive the other three-fourths, and that the output should be reported every three months and divided according to the terms of the contract. It also provided that the lessee should fix the price of the diamonds extracted from the mines and that the lessor should have the privilege of taking over the whole of the output at that price or that the lessor might fix the price and the lessee have the privilege of taking over at that price, and the amount divided.
The lessee and his associates subsequently organized a corporation known as the Kimberlite Diamond Mining & Washing Company, and as signed the lease contract to that concern. Still later the lease was assigned by the corporation above named to the original lessee, Howard A. Millar, and Austin Q. Millar and W. V. Wilder as trustees. The lessee and his assigns proceeded with preparation to develop the mine and expended approximately $ 100,000 in constructing the washing plant, tram-roads and other equipments for operating the mine. The attempt of the Ozark Mining Company to develop the other land into a diamond mine proved a financial failure and the company went into bankruptcy. The lessee under the contract with Mauney purchased the Ozark property and carried on development operations in connection with the development of the Mauney mine. No improvements were constructed, however, on the Ozark property, but dirt from that property was carried to the washing plant which was constructed for the development of the Mauney mine. On April 11, 1913, Mauney instituted an action against the Kimberlite Diamond Mining & Washing Company as the holder of the lease contract to cancel the lease on the ground of fraud in procurement by the lessee, it being alleged that the lease was not entered into in good faith for the purpose of carrying it out, but that it was entered into with the fraudulent purpose of depreciating the value of the property so that the title in fee could be acquired and that the lessee had failed to comply with the contract. That case was instituted in the chancery court of Pike County, but was removed to the Federal court and upon final hearing a decree was rendered dismissing the complaint for want of equity. In April, 1914, Mauney instituted a second action against the lessee to recover possession of a lot of diamonds which had been mined from the land, and in the complaint alleged that the lease had been entered into by the lessee with the fraudulent intention of not complying with it, and that it was void from the beginning. That case was tried before a jury, and upon special interrogatories submitted, which the jury answered, there was a finding that the lessee had not entered into the contract with a fraudulent purpose and had not failed to comply with the terms of the lease. Judgment was entered in favor of the lessee, and that judgment was, on appeal, affirmed by this court. 117 Ark. 633.
M. M. Mauney died in the year 1915, and his wife, Bettie L. Mauney, who had joined in the lease contract, became the administratrix of the estate, and on May 11, 1915, she entered into a contract with the lessee for a division of the stock of diamonds then on hand. The contract provided for an assortment and classification of the diamonds and a division thereof according to the terms of the original contract. That contract was fully complied with and the administratrix received her intestate's share of the stock of diamonds and gave a written receipt therefor.
The present action was instituted by the administratrix and the children of M. M. Mauney in August, 1916, against the three trustees holding the lease contract as assignees. It was first brought as an action at law to recover possession of diamonds which had been taken out of the mine since the former settlement and division, but the complaint contained the same allegations as the complaints in the former actions concerning fraud in the procurement of the contract and the failure of the lessee and his assignees to perform the contract in good faith. It was...
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