McLaren Gold Mines Co. v. Morton

• Decision Date: 21 November 1950
• Docket Number: No. 8983,8983
• Parties: McLAREN GOLD MINES CO. v. MORTON et al.
• Court: Montana Supreme Court

Page 975

224 P.2d 975

124 Mont. 382

McLAREN GOLD MINES CO. v. MORTON et al.

No. 8983.

Supreme Court of Montana.

Nov. 21, 1950.

Rehearing Denied Dec. 12, 1950.

Ralph J. Anderson, Edmond G. Toomey, and Toomey, McFarland & Wagner all of Helena, for appellant.

Ed C. Jones, Earl C. Ammerman, Livingston, C. W. Jones, Hardin, for respondents.

ADAIR, Chief Justice.

This is a suit for specific performance resulting in decree for defendants and plaintiff appeals.

The suit is grounded on a contract reading:

'LEASE AND OPTION TO PURCHASE

'This agreement, made and entered into this 24th day of February, 1934, by and between Robert L. Morton, a single man, of Clarion, County of Wright, State of Iowa, hereinafter called Lessor; and Walter McLaren of Dayton, Montgomery County, Ohio, hereinafter called Lessee:

'Witnesseth that the said Lessor, for and in consideration of One Dollar ($1) to him in hand paid, the receipt of which is hereby acknowledged, and in consideration of the covenants and agreements hereinafter contained to be by said Lessee kept and performed, does hereby lease, let and demise unto the said Lessee the following described quartz mining premises, situated in the New World Mining District, County of Park, State of Montana, to-wit:

'That certain unpatented Lode Mining Claim named 'Melissa' situated in the aforesaid mining district, together with the appurtenances, water and water rights, timber and timber rights and all property of every kind and nature belonging thereto or connected therewith, with the right to mine, extract and remove ore and/or metals from the leased premises and to prospect for ore and/or minerals thereon and therein, on the terms and conditions hereinafter stated. And said Lessor covenants and agrees with the said Lessee that said Lessee shall have quiet and peaceable possession of said leased premises during the continuance of this Lease and Option to Purchase.

'To have and to hold the same unto said Lessee until the ground is worked out or until said Lessee shall voluntarily surrender the said leased premises and this agreement, unless sooner forfeited or determined through violation of any agreement or covenant hereinafter contained by the said Lessee made.

'The said Lessee, in consideration of said lease of said premises does hereby covenant to and with the said Lessor as follows:

'1. To enter upon and take possession of said premises and hold the same under this Lease and Option to Purchase.

'2. To work the same in a miner-like manner so as to take out the greatest amount of ore possible with the crew and equipment used for the work.

'3. To allow said Lessor or his authorized agent to inspect the premises and the work being done at any time which will not interfere with the work then being carried on.

'4. To pay to said Lessor a royalty of ten per cent (10%) of all net mill or smelter returns from ore shipped from said premises, all such royalty payments to be deducted from the hereinafter mentioned purchase price for said property.

'And in consideration of the acceptance of the foregoing lease and the expenditures to be made thereunder and the faithful keeping of the covenants thereof, the said Lessee shall have the right to purchase the said demised premises for the sum of Four Thousand Dollars ($4,000) payable as follows:

'Two thousand Dollars ($2000) on or before One Year after said Lessor fully clears title to said premises so that he can furnish good and sufficient title clear from all incumbrances or adverse claims and Two Thousand Dollars on or before One Year after said first payment of Two thousand Dollars becomes due, it is understood and agreed that any amounts of money paid as royalties hereunder shall be deducted from any payment to become due.

'It is understood and agreed by and between the parties hereto that in the event this Lease and Option to Purchase is forfeited or determined for any reason, said Lessee shall have the right to remove any and all machinery and equipment which he may have installed on said premises.

'In witness whereof, the parties hereto have hereunto set their hands and seals the day and year first hereinbefore written.

'Robert L. Morton

By Dan G. Ross

Attorney in fact.'

The above contract was acknowledge by Dan G. Ross, February 24, 1934, by Walter McLaren, March 3, 1934, and, on the latter date, filed for record and duly recorded in the office of the county clerk and recorder of Park county, Montana.

Immediately upon the execution of the above contract, the named lessee entered into possession of the demised property and commenced mining operations and work thereon and prior to 1935 a tunnel was dug on the described mining claim 4 feet in width, 5 1/2 feet in height and approximately 50 feet in length.

July 6, 1934, Robert L. Morton as plaintiff commenced in the district court of Park county, Montana, an action to quiet title to the property described in the above contract but such action was pending and undetermined at the time of the trial of the instant suit and title to said premises has not been cleared.

April 10, 1935, Walter McLaren, the lessee, sold and, in writing, assigned to plaintiff, the McLaren Gold Mines Company, a Delaware corporation, all of his right, title and interest in the above contract. Such assignment was thereafter filed for record and duly recorded in the office of the county clerk and recorder of Park county, Montana.

Upon the execution of the assignment, the plaintiff entered into possession of the demised property and has since expended considerable sums of money and done much work in exploring, developing and mining the property, which includes work in engineering, geology, mapping, diamond drilling and the digging of shafts and tunnels.

In the year 1938, plaintiff commenced digging a second tunnel on the described claim and this work was continued during the years 1939 and 1940. At the time of the trial the tunnel was 1,220 feet in length, the first 550 feet thereof being on the demised mining claim for which tunnel two raises were excavated, the first being 220 feet and the second 400 feet from the portal of the tunnel. The first raise was 40 feet and the second 70 feet in height. Approximately 400 feet from the portal a 4 X 5 foot shaft was sunk in the floor of the second tunnel to a depth of 20 feet. Approximately 300 feet from the portal a crosscut was made extending 20 feet on either side of the tunnel. In prospecting for ore on the property, plaintiff drilled seven diamond drill holes varying from 30 feet to 225 feet in depth and did core drilling aggregating 753 1/2 feet. The costs of the crosscuts, raises and shaft were not available at the trial but exclusive of such outlays, the plaintiff expended approximately $13,000.00 for the work done by it on the described mining claim.

While mineral bearing rock was encountered, the exploration and development work produced no sufficiently high grade ores to be of commercial value.

The plaintiff and its predecessor in interest have been in the complete, undisputed and peaceable possession of the described mining claim continuously since February 24, 1934, during which time have done the required annual assessment work and otherwise fully complied with the several Acts of Congress suspending such work and have filed in the office of the county clerk and recorder of Park county, Montana, proper affidavits and notices of intention to continue to hold the claim.

The trial court found and the evidence clearly shows that by reason of the explorations made by plaintiff upon the demised mining claim to find ores of commercial value and the doing by it of the annual assessment work, plaintiff has performed all of the obligations imposed upon it by virtue of the contract.

After the assignment of the contract to plaintiff and while it was operating the property, Rebert L. Morton died intestate at his home in Clarion, Iowa, and thereafter his estate in Park county Montana, was administered by an administrator appointed by the district court of such county. During the course of such administration, A. Roy Morton, son and heir at law of Robert L. Morton, died testate and the defendant Grace Morton was duly appointed and qualified as executrix of the will of A. Roy Morton, deceased, and thereafter on December 3, 1946, by decree of the above district court, the property described in the lease and option to purchase was distributed to the defendant Grace Morton as executrix of the last will of A. Roy Morton, deceased. The executrix, sojourning in the state of Washington and being a nonresident of the state of Montana, appointed the defendant T. C. White as her attorney in fact, empowering him to institute or defend any and all legal proceedings and law suits in which she was interested or a party.

Following the demise of Robert L. Morton, plaintiff sought to exercise 'the right to purchase the demised premises for the sum of Four Thousand Dollars ($4,000)' as is expressly provided in the contract but the administrator declined to accept the consideration of $4,000 or to convey the demised property to plaintiff whereupon plaintiff filed in the probate proceeding pending in the district court of Park county, a petition for an order for the specific performance of the contract, which petition the court on August 13, 1946, ordered dismissed without prejudice but therein expressly granting plaintiff leave to commence this action.

Plaintiff expressly waived the requirement that title be quieted by the lessor.

The cause was tried to the court sitting without a jury.

On September 24, 1947, the trial court made and entered its findings of fact and conclusions of law. The findings are in plaintiff's favor but in its second conclusion of law the court concluded that a power of attorney executed October 3, 1933, by Robert L. Morton appointing Dan G. Ross as his attorney in fact 'does not confer authority upon the attorney in fact, Dan G. Ross to grant an...