Millar v. Mauney

• Decision Date: 08 March 1920
• Docket Number: 225
• Parties: MILLAR v. MAUNEY
• Court: Arkansas Supreme Court

219 S.W. 1028

142 Ark. 486

MILLAR v. MAUNEY

No. 225

Supreme Court of Arkansas

March 8, 1920

Appeal from Pike Chancery Court; James D. Shaver, Chancellor reversed.

Decree reversed, and cause remanded.

McRae & Tompkins, for appellants; Fordyce, Holliday & White (of St Louis, Mo.), of counsel.

1. Even according to Mauney's construction of the lease, there was no actual breach. The chancellor found no actual breach. Since the lessors failed to avail themselves of their right to value the diamonds, they can not be heard to complain of lessee's failure to do so.

2. The action of lessees in praying the chancellor for a construction of contract for future operations thereunder is not a breach and affords no grounds of forfeiture. 63 W.Va 502; 61 S.W. 338; 80 Id. 941; 90 Tex. 143; 142 S.W 967; 100 Ark. 561.

3. Even admitted inability to perform the contract within the time specified does not afford ground for rescission prior to the date fixed for complete performance. 21 F. 107; 117 U.S. 49; 29 F. 984; 90 Tex. 139; 37 S.W. 598; 16 Q. B. Div. 460; 55 L. J. Q. B. (A. S.) 162; 166 Ala. 295; Benjamin on Sales, par. 424.

4. If there had been a breach of the terms of royalty, it would afford no ground for cancellation of the contract by a court of equity. Equity will not interfere unless it is certain that plaintiff has not a plain, adequate and complete remedy at law. 147 F. 931; 100 Id. 561; 26 Id. 309; 134 Id. 15. It is a prerequisite for cancellation of a contract that defendant be placed in statu quo. 1 Black on Rescission and Cancellation, § 197; 131 S.W. 1061; 76 F. 624; 15 Ark. 286; 25 Id. 196; 53 Id. 16; 30 L. R. A. 44. Here it is impossible for defendant to be placed in statu quo.

5. Equity abhors forfeitures and is reluctant to enforce them even where expressly provided for. 59 Ark. 405; 25 Id. 285; 42 Id. 330; 129 Pa. 81; 95 Ark. 567; 98 Id. 328; 51 Mich. 482; 44 Minn. 312; 97 Ind. 247. This is especially true of leases. 100 Ark. 561; 41 Id. 532.

6. War is an accident excusing performance of a time contract and relieves against forfeiture. 25 Ark. 138; 26 Id. 240.

7. Plaintiff does not come into equity with clean hands. Nonperformance will be excused where performance is prevented by the conduct of the other party. 7 Ark. 123; 102 Id. 152; 85 Id. 596; 100 C. C. A. 263; 176 F. 701.

8. The supplemental agreement relieves the lessees of any breach for nonperformance. 26 Ark. 240. The intention of the parties must be given effect to. 13 C. J. 521; 2 Page on Contracts, § 1104; 24 Ark. 415; 106 Id. 400; 107 La. 445.

9. The lessees are entitled to the affirmative relief prayed in the cross-bill. Where equity takes jurisdiction for one purpose, it should retain to adjudicate all the rights of the parties. 92 Ark. 15; 99 Id. 438; 105 Id. 558; 48 Id. 286; 75 Id. 52; 111 Id. 329; 77 Id. 510; 113 Id. 100. The court will place itself in the position of the parties who made the contract and carry out the objects sought to be accomplished. 2 Page on Cont., p. 1745, § 1123; 143 U.S. 596; 95 Id. 23; 115 Ala. 258; 61 Mich. 327; 155 Mo. 643; 61 Neb. 861; 68 N.H. 216; 23 Fla. 368; 133 Ill. 234; 108 F. 171; 54 L. R. A. 247. The lease should be construed so that the shaft may be started off the leased property if necessary. 18 R. C. L. 1191; 17 Eng. Rul. Cas. 766. The whole case should be construed so as to allow the successful completion of the project to the financial gain of all the parties. 2 Page on Cont., p. 174, § 1121; 127 F. 418; 126 Mo. 104.

10. Wilder was a necessary party. 39 Ark. 182-188; 4 Crawf. Dig., p. 3891, § 22.

W. C. Rodgers, for appellee.

1. Not having claimed that the lease should be so construed so that the shaft could be started off the leased property if necessary, appellants can not ask the court to change the contract they executed and make another for them. 79 Ark. 460; 61 Id. 315; 82 Id. 11; 76 Id. 582; 108 Id. 536; 122 Id. 542; 134 Id. 413; 90 Id. 93; 124 Id. 313; 102 Id. 580; 83 Id. 314; 72 Id. 490. The law of this case is settled on former appeal. 134 Ark. 15. Antecedent propositions, correspondence, writings, etc., are all merged into the written contract. 104 Ark. 488; 102 Id. 333; 129 Id. 358; 112 Id. 5; 108 Id. 507.

2. This case was tried de novo by the chancellor and he is presumed to have disregarded all incompetent testimony. 97 Ark. 136; 99 Id. 224. The contract is the foundation of the action and is made part of the complaint. 29 Ark. 447; 33 Id. 725; 68 Id. 265; 91 Id. 403; 99 Id. 222; 104 Id. 462; 108 Id. 364; 132 Id. 545; 135 Id. 41.

Every material allegation not denied is taken as true. 73 Ark. 224; 91 Id. 37. Self-serving declarations are not competent testimony. 21 Ark. 356; 23 Id. 286; 34 Id. 486; 72 Id. 412; 123 Id. 272; 130 Id. 149; 130 Id. 326; 90 Id. 151; 74 Id. 443. The law does not require the doing of a vain or useless thing. 96 Ark. 379; 133 Id. 27; 104 Id. 129; 109 Id. 467; 114 Id. 364; 121 Id. 264; 136 Id. 44.

The objection to Mauney's wife's testimony and that of the husband of Mrs. Kempner, but the objections can not be sustained. 206 S.W. 326; 102 Id. 460. The decree is right and should be sustained, even if some of the reasons given are wrong. 49 Ark. 22; 73 Id. 422; 75 Id. 107; 79 Id. 602; 85 Id. 4; 12 Utah 104; 52 Miss. 227; 15 Wis. 50; 85 Ark. 129; 102 Id. 439; 127 Id. 158; 108 Id. 283; 123 Id. 535; 125 Id. 458; 113 Id. 384; 132 Id. 504.

The decree shows that the findings are sustained by the evidence. The plea of nonjoinder must be made by demurrer, and was not well taken. 48 Ark. 454; 43 Id. 230.

MCCULLOCH C. J. HUMPHREYS, J. dissenting. Mr. Justice HART concurs in this dissent.

OPINION

MCCULLOCH, C. J.

This is an action instituted by appellee in the chancery court of Pike County to cancel a lease executed by them to appellants of certain land for the purpose of testing the dirt for diamonds and for developing a diamond mine thereon. The ground set forth in the complaint for the cancellation of the contract is that appellants have ceased operations under the contract and have abandoned it. The action is a renewal of former litigation between the parties with reference to the same subject-matter, viz., the cancellation of the lease. In the last of the former suits between the parties the chancery court denied relief to appellees and on appeal this court affirmed the decree. Mauney v. Millar, 134 Ark. 15, 203 S.W. 10. The facts are set forth in detail in the former opinion and reference thereto is made for rehearsal of the facts contained in the present case. In the opinion we said: "The right of action in this case, if there is one, extends back no farther than the last of the adjudications thereof and must be tested solely by proof tending to show a breach of the contract since that time. After consideration of the testimony we have reached the conclusion that there is not a preponderance against the finding of the chancellor. The contract contains no express provision for forfeiture of the lease, and counsel for defendants invoke the established rule that a tenancy can not be terminated for breach of covenant by the lessee where there is no express provision for a forfeiture, and that a court of equity will not lend its aid to declare a forfeiture on account of a breach of the contract." * * * "There is another principle, however, equally well established that where one party to a contract has completely abandoned performance, a court of equity will give relief by canceling the contract, and that principle is applicable to a contract of this kind where the sole benefit is to result from continued performance, such as one to develop a mine to pay royalty or divide the proceeds."

In addition to the facts set forth in the former opinion, the following clauses of the contract should be set forth in order to completely understand the merits of the present controversy:

"Seventh. In the event the lessee, his associates and assigns, become fully convinced that diamonds or other valuable minerals do not exist in the said leased land in commercially paying quantities, and that further operations for this reason would not be warranted, then the said lessee and assigns may, at their option, surrender and cancel this lease without further obligation of lessee, his associates and assigns. And upon such cancellation by the lessee he, his associates and assigns, shall have the right to remove any and all buildings and equipment of whatever nature, placed on or in the properties leased hereunder, at the expense and cost of said lessee, his associates and assigns, within a reasonable time. It is further stipulated and agreed that the said lessee, his associates and assigns, shall pay all taxes lawfully accruing against the land hereby leased from time to time during the life and continuation of this lease, except the taxes for the year 1911."

"Eighth. 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."

There was a supplemental contract between the parties with reference to the same matter dated May 6, 1912, which was about a month after the execution of the original contract. The supplemental contract was not pertinent to the issues involved in the former case, but it is important to consider the same in the present case. It reads as follows (omitting caption and...