Oliphant v. Woodburg Coal & Mining Co.
| Decision Date | 23 April 1884 |
| Citation | 19 N.W. 212,63 Iowa 332 |
| Parties | OLIPHANT v. THE WOODBURN COAL AND MINING COMPANY |
| Court | Iowa Supreme Court |
Appeal from Clark Circuit Court.
THE plaintiff avers that the defendant is a corporation incorporated under the laws of Iowa; that he is the owner of twenty-six shares of stock in the corporation; that the defendant has been guilty of bad management, by reason of which the stock has become depreciated in value, and he has thereby sustained damages. He also avers that he entered into a written contract with the defendant, whereby defendant was to pay him a certain sum of money; that the money called for by the contract has become payable, but remains unpaid. To aid himself in enforcing his alleged claims, he sued out an attachment and levied upon the defendant's property.
The defendant for answer denied the alleged bad management admitted the execution of the contract, but denied that anything had become due under the same. By way of counter claim, it averred that the attachment was wrongfully sued out, and prayed judgment for damages. There was a trial to a jury, and verdict and judgment were rendered for the defendant for twenty-five dollars. The plaintiff appeals.
AFFIRMED.
John Chaney, B. H. Mitchell and Temple & Tallmann, for appellant.
Stuart Bros., for appellee.
The proper consideration of the questions presented requires a more detailed statement of the facts out of which the controversy has grown. The defendant is a corporation organized for the purpose of mining for coal. In April, 1880, the defendant, having taken a lease of certain land in Clarke county, supposed to contain coal, entered into a written contract with the plaintiff, whereby it employed him to drill a prospect hole at a certain place, and at a certain agreed price per foot. The work was to be prosecuted until coal should be discovered or the plaintiff should be stopped by the company. Under the contract the plaintiff drilled to the depth of about four hundred and twenty feet but did not discover coal. Whether he was stopped by the company or not the parties do not appear to have been agreed. There was evidence that the plaintiff reported to the company that he had got a piece of iron, a knuckle, in the drill hole, and could go no further. The plaintiff had not been paid the full contract price, and there appears to have been a disagreement as to the amount to which he was entitled under the circumstances. He avers in his petition that "there was some trouble or difference in regard to a settlement." It appears, however, that a settlement was finally reached. The company paid the plaintiff fifty dollars in money, gave him twenty-six shares of stock in the company, and the balance of his claim, stated to be $ 308, was to be paid in money when the company should succeed in sinking a shaft on their leased lands and in finding and developing a paying vein of coal. This settlement was reduced to writing, and the writing constitutes the contract sued upon. It is not averred by the plaintiff that the company has succeeded in finding and developing a paying vein of coal, but it is averred that the company has failed and refused to sink a shaft, that the failure to sink a shaft has caused the stock to depreciate in value, and that by reason of the failure the sum of $ 308, provided for in the contract, has become payable.
In regard to the operations of the company, we may say that it appears that it commenced at one time to sink a shaft, but abandoned or suspended the work, because it estimated that it would cost from $ 15,000 to $ 20,000 to sink a shaft, and it had not the means to do it, and judged that it would not be able to obtain the requisite means without some evidence of the existence of coal; that for the purpose of obtaining such evidence it proceeded to drill another prospect hole, and was engaged in drilling it when this action was brought. The contract was executed in March, 1881, and the action was brought after the lapse of about fourteen months.
I. We will proceed, first, to inquire relative to the rule of law applicable to the maturity of the plaintiff's claim under the contract. We have seen that it was made payable upon the finding and developing of a paying vein of coal, and that no coal has been found. The plaintiff contends, however, that an implied obligation arose on the part of the defendant to make reasonable efforts, in view of all the circumstances, and that, if the company had not made such efforts, the claim had become payable, and that it was his right to have the question submitted to the jury as to whether the company had made such efforts. In accordance with this view, he asked an instruction in these words:
"If you find that the defendant did not, within a reasonable time after the execution of the contract, make reasonable efforts to fulfill the terms thereof, this would constitute a breach of said contract on the part of the defendant, and the plaintiff would be entitled to recover the amount which would become due upon the completion of the contract, if the same had been fully completed."
The court refused to so instruct, and gave an instruction as follows:
"Before the plaintiff can recover, he must show that the defendant acted in bad faith with him, with intent to defeat his realization of future compensation under the contract, or that in its acts it committed such abuse of a fair and reasonable discretion in the performance of its duties assumed in view of its contract, that it did produce the result complained of; and further, that, in the exercise of a fair and reasonable discretion, the plaintiff would have realized the compensation agreed upon under the contract." The ruling of the court in refusing the instruction first set out, and in giving the second, is assigned as error.
The plaintiff's complaint is that the company had not, at the end of fourteen months from the time it entered into a contract with him, sunk a shaft to any great depth, and was still merely prospecting by drilling prospect holes; that under the contract the company was bound to sink a shaft within a reasonable time, or make reasonable efforts to do so,...
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