Pacific Mill & Mining Co. v. Leete

• Decision Date: 15 May 1899
• Docket Number: 500.
• Citation: 94 F. 968
• Parties: PACIFIC MILL & MINING CO. v. LEETE.
• Court: U.S. Court of Appeals — Ninth Circuit

94 F. 968

PACIFIC MILL & MINING CO. v. LEETE.

No. 500.

United States Court of Appeals, Ninth Circuit.

May 15, 1899

This was an action brought in the district court of Nevada for Washoe county by B. F. Leete against the Pacific Mill &amp Mining Company, a California corporation, to recover the sum of $3,200 received by the mining company from the United States. The complaint alleged that this money was received for the use and benefit of the plaintiff. The mining company admitted the collection of $3,200 from the government, but denied that any part of it was received to or for the use or benefit of Leete, or that any portion of it was due to him. The case was transferred to the circuit court of the United States for the district of Nevada, and there decided in favor of the plaintiff (88 F. 957). The defendant (Pacific Mill &amp Mining Company) has brought the case here upon a writ of error. The action is based upon negotiations between the respective parties in connection with the sale and purchase of 1,280 acres of land in Churchill county, Nev., and the personal property and improvements thereon, known as the 'Eagle Salt Works.'

The statement of facts in this case, as contained in the opinion delivered by his honor, Judge Hawley, in the court below, is conceded by the plaintiff in error to be full and correct and is the following:

'In 1877 the plaintiff and C. H. Van Gorder, having previously acquired the possessory right to the land in question, applied through the proper land office for a patent thereto from the United States, and paid to the proper officers the sum of $3,200 for said land. Thereafter, in January, 1878, the property in the meantime having been placed in the possession of a receiver, the plaintiff conveyed his undivided one-half interest therein to W. N. Leete. The deed contained this reservation: 'But it is not intended hereby to convey or transfer any interest which party of the first part has or may have to any moneys or accounts in the hands of such receiver, as receiver.' On the same day W. N. Leete conveyed the property to the defendant herein with the same reservation. In March 1880, the defendant acquired, by deed, the interest in the property of the estate of C. H. Van Gorder, deceased. The application for a patent to the land was canceled by the land department in 1890. In the fall of 1894 negotiations were commenced between the parties hereto with reference to the plaintiff purchasing the property. All of the negotiations were by correspondence. The first was a letter from plaintiff to John W. Mackay, the president of the defendant corporation. D. B. Lyman was at the time of the correspondence the superintendent and managing agent of the defendant in the state of Nevada. In February, 1895, plaintiff addressed a letter to Mr. Lyman, saying: 'In December my son * * * wrote me that you wished to sell your Eagle Salt Works for cash; also that you wished to engage salt for your own mills. Kindly please state your price.' On the same day Mr. Lyman sent a reply, stating: 'Whilst I am not prepared to give you a positive answer, as the matter must be submitted to Mr. Mackay for his approval, I think you can purchase the property, with all salt on hand, etc., and all personal property at the works for $6,000, we reserving the right and you guarantying to furnish us with salt for our use f.o.b. cars at works for $4 per ton. We could not agree to take any stated number of tons, as our present consumption amounts to very little but we do want reserved rights for mill salt at the stated price. We have on hand mill salt, 803 tons; table, 96; stock, 46 tons.' On February 21, 1895, the plaintiff wrote to Mr. Lyman, stating that he did not consider the property a desirable investment at the price of $6,000, but said: 'If we can agree on a price, I will buy.' On February 23d Mr. Lyman answered: 'I would suggest that you write me, or address Mr. Mackay through me, stating the price you are willing to give for the Eagle Salt Works property. I will forward your paper to him and await his decision. I have advised Messrs. Mackay and Flood to sell the property for $6,000, knowing the money paid the government for the land can be recovered, and assuming that the Eagle Salt Works property, with its supplies, salt on hand, et cetera, is worth at least $3,000.' On February 26th the plaintiff wrote to Mr. Lyman as follows: 'Replying to yours of the twenty-first as to the value of the Eagle Salt Works property depending on the recovery of the purchase money from the government, who recovers from the government must deed to the government and abandon all claim to the land, and surrender the receiver's receipt. It is not likely that any person desirous of claiming and holding title to the land would solemnly file and record an abandonment; besides, when I deeded to W. N. Leete, I reserved all moneys of account. If I ever owned one-half of that money, I own it now. As you suggest, I will address Mr. Mackay through you.' On March 28th plaintiff wrote to Mr. Mackay, reciting the substance of the former letters between himself and Lyman, and then made the following offer: 'For a bargain and sale deed and possession of your Eagle Salt Works property, as it stands, I will give you in gold coin $3,500; also, at my expense, and charge, furnish and load, to your order, at any time within five years, without charge to you, f.o.b. cars in car-load lots, in bulk, at Eagle Salt Works, nine hundred and forty-five tons of mining salt, of like quality to that now on hand. This agreement to bind myself, heirs, and assigns. You put deed in escrow, Bank of Nevada, and I will meet it with $3,500, and agreement to load as above. You put me in possession of the property.' This letter was sent to Mr. Lyman, and plaintiff received a reply stating that he had forwarded the letter 'to Mr. Mackay, or make known to him by wire of the contents of your letter. When I know whether they accept or decline your offer, I will advise you further in the matter.' On April 4th Mr. Lyman addressed the following letter to the plaintiff: 'Your letter to Mr. Mackay, dated 28th of March, has been received, and its contents have been fully noted and considered. Your proposition is fully understood and satisfactory, with the exception of one point, which is open to doubt, and liable to be construed in more than one way, viz. the matter of your furnishing salt to us after sale of the property. I will condense the terms of the proposition, as we understand them, in this way: In consideration of the sum of $3,500 gold coin we will give you a bargain and sale deed of the land as described in the deed from Mr. W. N. Leete to the Pacific Mill & Mining Company, together with all the improvements thereon, including all the salt and other personal property of whatever character upon and connected with the Eagle Salt Works. There is now, by estimate, eight hundred and seventy-five tons of salt on the premises, more or less; provided that you will furnish and load at your own expense and charge, to the order of the Pacific Mill & Mining Company, or the Comstock Mill & Mining Company, in car-load lots in bulk at Eagle Salt Works, mill salt of like quality of that now on hand from time to time not to exceed eight hundred and seventy-five tons in all, within five years from date, at four dollars per ton. We do not obligate ourselves to order or to take any stated quantity of such salt. If these terms are satisfactory to you, please let me know, and immediate steps will be taken to have the deed and agreement made out, and to complete the transaction.' On April 5th, Mr. Leete addressed a letter to Mr.

Lyman, accepting his offer in words as follows: 'Replying to yours of the 4th instant, the terms as stated in your letter are entirely satisfactory and accepted by me. I am ready. As soon as you have your deed and agreement ready, advise me, and I will come up and complete the transaction.' This ended the negotiations between the parties as to the sale. The deed from the corporation to Leete was executed April 9th, in pursuance of a resolution of the board of directors. It recites a consideration of $3,500, which was paid, and the further consideration as to the delivery of the salt as specified in the letter of Mr. Lyman. The deed is a quitclaim, instead of a bargain and sale deed; but in all other respects it complies with the result of the negotiations above expressed.

#*hc970

'The plaintiff offered evidence to show what action had been taken by him to recover the money from the government that had been paid into the land office upon the application for a patent and what steps were taken by the corporation, and the transactions and correspondence between the parties in that regard. The defendant admitted that it had applied to the government for the sum of $320 and had received the money; that plaintiff had demanded the money from it, and payment had been refused; but interposed objections to all this class of testimony upon the grounds that it was irrelevant and immaterial, unless some new consideration was shown; the contention on the part of defendant being that the rights of the parties were fixed by the correspondence with reference to the sale. The plaintiff admitted that there was no new consideration, but contended that the subsequent transactions corroborated and made clear the fact that the parties dealt with each other on the basis that the money in the United States treasury was an element of consideration in the sale of the Eagle Salt Works to the plaintiff by the defendant. The court declined to pass upon the admissibility of this evidence, but admitted it subject to the objections, which would be considered and disposed of in the determination of the case. Mr. Leete...