Smith v. Beebe

• Decision Date: 26 June 1918
• Citation: 174 P. 608,31 Idaho 469
• Parties: G. A. SMITH, GRACE M. HALL, and ELSIE HALL WILSON, Respondents, v. J. D. BEEBE, WATSON BEEBE and COLONIAL MINING AND MILLING COMPANY, a Corporation, Appellants
• Court: Idaho Supreme Court

174 P. 608

31 Idaho 469

G. A. SMITH, GRACE M. HALL, and ELSIE HALL WILSON, Respondents, v. J. D. BEEBE, WATSON BEEBE and COLONIAL MINING AND MILLING COMPANY, a Corporation, Appellants

Supreme Court of Idaho

June 26, 1918

MINING CLAIMS-OPTIONS-CONTRACTS-TIME-CONSTRUCTION.

1. A contract to convey mining claims which binds the holder thereof neither to make the specified payments nor to do or perform any of the acts stipulated therein to be performed by him except during the life of the contract, and which expressly gives him the option either to comply with its terms or to forfeit the "option" is an option contract; and the holder is not a vendee but merely the owner of an option.

2. The expiration of such an option contract by a failure of the holder thereof to comply with its terms does not render the contract void, but thereupon the owner may not only repossess himself of the property, but may also enforce any rights he has acquired under the contract, nor is he, under such circumstances, required to rescind in order to recover the property.

3. In agreements for the sale of mining property time is of the essence.

APPEAL from the District Court of the First Judicial District, for Shoshone County. Hon. William W. Woods, Judge.

Action to recover possession of certain mining claims and to have an option decreed to be not a cloud upon the title thereto. Judgment for plaintiffs affirmed.

Judgment affirmed. Costs awarded to respondents.

Chas E. Miller and S. S. Gundlach, for Appellants.

Generally in contracts for the sale of land, unless expressed, time is not of the essence. (Brown v. Guarantee Trust etc Co., 128 U.S. 403, 9 S.Ct. 127, 32 L.Ed. 468; Goldsmith v. Guild, 10 Allen (Mass.), 239; Green v. Covillaud, 10 Cal. 317, 10 Am. Dec. 725; Waterman v. Banks, 144 U.S. 394, 12 S.Ct. 646, 36 L.Ed. 479; Young v. Daniels, 2 Iowa 126, 63 Am. Dec. 477; Derrett v. Bowman, 61 Md. 526; Beck & Pauli Lith. Co. v. Colorado Milling & E. Co., 52 F. 700, 3 C. C. A. 248; Tayloe v. Sandiford, 7 Wheat. (U.S.) 13, 5 L.Ed. 384.)

Where one party to a contract has received and retained the benefits of the substantial partial performance of an agreement by the other party, who has failed completely to fulfill all his covenants, the first party cannot retain the benefits and repudiate the burdens of the contract, but he is bound to perform his part of the agreement and his remedy for the breach is limited to compensation and damages. (Kauffman v. Raeder, 108 F. 171, 47 C. C. A. 278, 54 L. R. A. 247; Chance v. Clay County Commrs., 5 Blackf. (Ind.) 441, 35 Am. Dec. 131; Stevens v. Cushing, 1 N.H. 17, 8 Am. Dec. 27; Young v. Stevens, 48 N.H. 133, 2 Am. Rep. 202, 97 Am. Dec. 592; Patterson's Appeal, 48 Pa. 342; Fay v. Oliver, 20 Vt. 118, 49 Am. Dec. 764.)

James A. Wayne and C. W. Beale, for Respondents.

The lease did not create the relation of vendor and vendee, and such relation could only exist after the lessees had exercised their option to purchase. (24 Cyc. 1023; Settle v. Winters, 2 Idaho 215, 10 P. 216; Steel v. Argentine Min. Co., 4 Idaho 505, 95 Am. St. 144, 42 P. 585; Block v. Murray, 12 Mont. 545, 31 P. 550; Donaldson v. Thousand Springs Power Co., 29 Idaho 735, 162 P. 334; Tilton v. Sterling Coal & Coke Co., 28 Utah 173, 107 Am. St. 689, 77 P. 758; Sweezy v. Jones, 65 Iowa 272, 21 N.W. 603.)

"Where the character of the property is such that it is liable to sudden fluctuation of value, time is of the essence of the contract. This rule is especially applicable to mining property." (Settle v. Winters, supra; Durant v. Comegys, 3 Idaho 204, 28 P. 425; Castelberry v. Hay, 8 Idaho 670, 70 P. 1055; Waterman v. Banks, 144 U.S. 394, 12 S.Ct. 646, 36 L.Ed. 479; Granville Lbr. Co. v. Atkinson, 234 F. 424; Staniford v. Thompson, 135 F. 991, 68 C. C. A. 425; Gaines v. Chew, 167 F. 630.)

BUDGE, C. J. Morgan and Rice, JJ., concur.

OPINION

BUDGE, C. J.

On the 3d day of September, 1915, the respondents, being the owners of certain lode mining claims, entered into an agreement with the appellants, the material parts of which are as follows:

"WITNESSETH, that the parties of the first part for and in consideration of the sum of One Dollar ($ 1) lawful money of the United States, to them in hand paid, the receipt whereof is hereby acknowledged, and the further sum of Seventy Nine thousand, nine hundred ninety-nine ($ 79,999) dollars, to be paid in installments as hereinafter specified, do hereby covenant, promise and agree, by and with the parties of the second part, to grant, bargain, sell and by good and sufficient deed deliver to the parties of the second part" (here follows a description of the properties).

"It is understood and agreed that the deferred payments of said purchase price is to be paid as follows: Ten Thousand Dollars ($ 10,000) to be paid on or before six months after this date, or the 3rd day of March, 1916. Fifteen thousand ($ 15,000) dollars to be paid on or before eighteen (18) months after this date, or the 3rd day of March, 1917.

"Fifty four thousand nine hundred ninety nine dollars ($ 54,999) to be paid within two years after this date, or the 3rd day of September, 1917, and said payments shall be made by depositing the amount thereof in the First National Bank of Wallace, Idaho, to the credit of the parties of the first part.

"The parties of the first part hereby covenant and agree that they will make, execute and deposit in the First National Bank of Wallace, Idaho, a good and sufficient deed conveying said premises to the parties of the second part, for delivery to the parties of the second part upon the making of such payments.

"The parties of the second part shall have the right to enter into and upon said mining claims and to work and develop the same and to mine and extract therefrom and ship any ore so extracted, and sell the same, it being mutually agreed that fifty per cent (50%) of the net smelter returns from all such ores shall be paid to the parties of the first part and fifty per cent (50%) to the parties of the second part; and that the fifty per cent paid to the parties of the first part shall be credited upon the purchase price of eighty thousand dollars ($ 80,000) for the land or the above mineral claims. It is further agreed that the parties of the second part will keep at least four men at work upon said group of mining claims during the life of this contract; and that they will keep said premises free and clear of all encumbrances of every kind and description by reason of any work or improvement placed thereon by them. It is mutually agreed that if this option is not taken up by the parties of the second part, that all machinery and fixtures which may have been installed on the said mining claims by the party of the second part, shall remain and become a part of the premises and belong to the parties of the first part.

"The parties of the second part agree that if they should locate any claims or fractions adjoining the property herein described during the life of this option, that in the event they forfeit this option they will quitclaim the said mining claims to the parties of the first part, and the parties of the first part agree that in the event they should locate any adjoining claims during the life of this bond, that they will, upon the taking up of this option, convey such claims to the parties of the second part. The parties of the second part agree to furnish the necessary buildings, machinery, cars, rails, tools and supplies, in fact all materials used in mining; all such buildings, machinery, cars, rails, tools and supplies bought by the said second party and placed upon the said property shall become a fixture thereon and a part thereof. The party of the second part further agrees to furnish to the parties of the first part a blue print copy of each and every survey made in or on the Little Pittsburgh group during the life of this bond. The parties of the second part also agree to cause to be filed and recorded with the County Recorder of Shoshone County, proofs of labor as required by law showing that the annual assessments have been completed, during the life of this contract." (Italics ours.)

The respondents, in their complaint to recover possession of the mining claims described in the agreement alleged substantially: The making of the contract, the ownership of the mining claims, that appellants entered into the possession of the claims, the making of the deed and the depositing of same in escrow, the failure of appellants to make the payment of $ 10,000 due on the 3d day of March, 1916, or any other payments upon the property, the breach of the contract and forfeiture of the option to purchase, the demand for and the refusal to deliver possession by the appellants, and prayed that judgment be entered that the agreement, by reason of a violation of its terms, be declared void and of no effect, and that the same be canceled and be decreed not to be a cloud upon the title to the said lode mining claims; that they be awarded immediate possession of the mining claims described in the complaint, and that their right and title thereto be quieted against the appellants and all persons claiming under or through them. To this complaint a general demurrer was filed by appellants which was overruled. Thereupon appellants filed their answer admitting the ownership of respondents in the lode mining claims, that the contract...