Wakefield v. Sunday Lake Min. Co.

• Decision Date: 08 May 1891
• Citation: 49 N.W. 135,85 Mich. 605
• Court: Michigan Supreme Court
• Parties: WAKEFIELD et al. v. SUNDAY LAKE MIN. CO.

49 N.W. 135

85 Mich. 605

WAKEFIELD et al. v. SUNDAY LAKE MIN. CO.

Supreme Court of Michigan

May 8, 1891

Appeal from circuit court, Gogebic county, in chancery; SHERMAN B DABOLL, Judge.

CHAMPLIN C.J., and GRANT, J., dissenting.

C. F. Button and Turner &amp Timlin , (Russell C. Ostrander of counsel,) for appellant.

Howell & Riley, Van Dyke & Van Dyke, and Dan H. Ball, for appellees.

MCGRATH, J.

Complainants residents of Milwaukee, Wis., are owners of certain mining lands in Gogebic county, in the state of Michigan, of which defendant is the lessee. The lease is recorded, and complainants are in possession, and file this bill to quiet title, and enjoin the defendant company, organized under the laws of Wisconsin, and whose officers reside if Milwaukee, from interfering with complainants' possession. The complainants, on September 28, 1883, executed and delivered to N. D. Moore and S. S. Vaughn a lease for 30 years of certain lands, by the terms of which the lessees were to mine ore on said land, and were to pay to the lessors on all ore mined 50 cents per gross ton. On or before the first Monday of each month the lessees were to furnish to lessors a sworn statement of the quantity of ore removed from said premises during the preceding month, and were to pay the royalty on the ore so shipped at the Union National Bank of Oshkosh, Wis. This provision was afterwards modified, changing the time for making reports and for payment from the first Monday to the third Monday in each month. The lessees above named entered upon the said lands, and began operations, and continued the same until February, 1887, when the lessees aforesaid, with the consent of complainants, assigned all their interest in said lease to the defendant company, and the defendant continued operating said mine until some time in November of that year, making their reports, and paying the royalties provided for by said lease, until September, when they failed to report the amount of ore shipped in August, or to pay the royalty upon the same. They failed also to report the ore shipped in September, or to pay the royalty for the same. The consideration paid by defendant for the transfer of said lease was in the neighborhood of $200,000, and one witness testified that he transferred 33,000 of the 40,000 shares of stock for $5 per share, or $165,000, receiving $83,000 in cash, and 500 shares of other stock. Several witnesses called by defendant fix the value of the plant and leasehold interest at the time that the complainant obtained possession at from $100,000 to $200,000. The complainants claim that upon demand made possession of the premises was surrendered to them; that they have been in the quiet and peaceable possession up to the time of filing their bill, in December, 1887; that on information and belief the defendant has been, and is now, in great financial embarrassment, and is virtually insolvent; that they fear the re-entry of said premises by defendant; that there has been a forfeiture of defendant's rights under said lease; that the lease is null and void, and they pray that it may be so declared; that the lease may be canceled of record, and defendant restrained from interfering with complainant's possession, or with their operations on said premises, and from commencing proceedings at law to recover possession of said premises. Defendant files an answer in the nature of a cross-bill, and denies its insolvency, or that it at any time voluntarily surrendered or delivered up possession of said premises to complainants, and it denies that complainants peaceably and quietly entered into possession. It admits that in the month of August, 1887, 4,352 gross tons [49 N.W. 136] and 1,530 pounds of ore was mined and shipped by it, and in the month Of september 3,823 gross tons and 70 pounds of ore was mined and shipped, and that these amounts were not reported as provided in said lease; that on the third Monday in September, 1887, there became due to complainants, as royalties or rent under the lease, $2,176.34, and on the third Monday of October there became due the further sum of $1,917.50; that up to the 19th day of November the defendant had not paid these amounts, or any part thereof; that from the third Monday of September, 1887, until the 18th day of November, defendant made constant and unremitting efforts to pay said sum, but by reason of a temporary embarrassment, from which it was then suffering, it was unable to do so until November 19, 1887, on which day this defendant paid to said complainants, at the place specified in said lease, to-wit, at the Union National Bank of Oshkosh, Wis., for royalties due under said lease, the sum of $5,000, by depositing the same in said bank to the order of said complainants, and the same yet remains at said bank, subject to the order of said complainants. It asks to be relieved from the forfeiture, if any be found, to be restored to possession, and for an accounting. The lease contained the following printed provisions: "The said parties of the second part may erect buildings, put in engines and machinery, build roads, and do such other things on said premises as may be necessary or proper to carry on such mining; but all such engines, machinery, buildings, and other improvements shall form part of the realty when put up or erected: provided, on the termination of this lease the parties of the second part, by paying up all arrearages which may become due, owing, or payable to said parties of the first part, their executors and administrators or assigns, on this lease, within thirty days after such termination of this lease, remove such buildings, engines, and machinery, but not otherwise. But no timber shall be cut on any of said premises for the use of the officers, servants, or employes of said party of the second part, either for fuel or otherwise: provided always, and these presents are upon this express condition, that if it shall so happen that the royalty or rent above reserved and agreed to be paid be behind or unpaid at the time or on the days above mentioned for the payment thereof, or in case said taxes or assessments are not paid in due and timely season, or in case of non-performance of any of the covenants made by the said parties of the second part at any of the times mentioned for the performance thereof, then and from thenceforth it shall and may be lawful for the said parties of the first part, their heirs, executors, administrators, or assigns, unto the said demised premises, or any part thereof, in the name of the whole, to re-enter, using such reasonable force as may be necessary, and the same to have again, retain, repossess, and enjoy, and the said parties of the second part, their heirs, executors, administrators, or assigns, and all other tenants or occupiers of the said premises hereby demised, or any part thereof, thereout, or therefrom utterly to expel, put out, and remove, and, after such re-entry made, this lease shall wholly cease and determine, and thereby become null and void as it respects the covenants to be performed by the said parties of the first part."

It appears that on the 5th day of November the following notice was served upon H. S. Benjamin, the secretary of the defendant company at Milwaukee, by George M. Wakefield, one of the complainants: "To the Sunday Lake Mining Company: You will take notice that, default having been made in the payment of royalty or rent, and also in furnishing reports of iron ore mined, as provided by the terms of the lease under which you hold the west half of the south-east quarter of section number ten, (10,) in township number forty-seven, (47,) range number forty-five (45) west, in the state of Michigan, of which we are owners in fee, and you, the tenant under us, are hereby required to surrender to us the immediate possession of said premises, or proceedings will be instituted according to the statute in such case made and provided. Yours, [Signed] E. S. CORLISS. RICHARD GUENTHER. GEORGE M. WAKEFIELD. EDWARD ASCHERMAN, by ARTHUR P. ASCHERMAN."

H. S Benjamin, the secretary of the defendant company, upon whom the notice was served, says: "Mr. Wakefield came in, and said to me, he had some notices that he wanted to serve; that I need not feel concerned about them; that he wanted to serve them so that nothing could come in ahead of them; that he would let me know before immediate action is taken. I said that I did not want to have any summary service dealt out, that I didn't have any warning of. He said there would be nothing of that kind done; that the notices were served simply to protect themselves, and before any action was taken he would let me hear from them." Benjamin Weil says: "I called on Mr. Wakefield at his home on the evening of November 18th. He said he didn't intend to injure anybody, and all he wanted was the royalty, and to see the labor claims paid; and I said, 'I will raise the money and pay it;' and I arranged for an interview the next morning, at his office, for the purpose of arranging for the payment of the royalties. I called the next morning at 9 o'clock at his office. He said that there was no desire to injure the stockholders, or take any undue advantage of them; that he wanted his royalties paid, and, if that was accomplished, it would be all right, but that it was then too late to negotiate; that he could not do anything until he heard from Mr. Fink." H. D. Smith says: "I called at Wakefield's office on Friday, November 18th, to talk over the situation of Sunday Lake property. Mr. Bates came in. After some talk Wakefield said he had no claims except royalty; that when that was paid he had nothing more to do. Mr. Bates asked him how soon it must be paid. Wakefield said he had served notice on the 5th, and...