White Stat Min. Co. v. Hultberg

• Decision Date: 17 April 1906
• Citation: 220 Ill. 578,77 N.E. 327
• Parties: WHITE STAT MIN. CO. v. HULTBERG et al.
• Court: Illinois Supreme Court

220 Ill. 578

77 N.E. 327

WHITE STAT MIN. CO.

v.HULTBERG et al.

Supreme Court of Illinois.

April 17, 1906.

Appeal from Circuit Court, Cook County; F. A. Smith, Judge.

Bill by the White Star Mining Company against Nels O. Hultberg and others. From a decree of dismissal, plaintiff appeals. Affirmed.

Cartwright, C. J., and Hand, J., dissenting.

Healy & Caylor, for appellant and for appellee Johnson.

Olaf E. Ray, for appellee Anderson.

Winston, Payne & Strawn and Harris F. Williams, for appellees Hultberg and Swedish Evangelical Mission Covenant.

WILKIN, J.

This is a direct appeal from an order of the circuit court of Cook county dismissing the bill of appellant to set aside an award of arbitrators theretofore rendered between it and certain of the appellees, and decreeing the performance of the same award on the prior bill of Nels O. Hultberg.

The following facts appear from the pleadings and evidence in the record: The Swedish Evangelical Mission Covenant of America was organized as a corporation not for pecuniary profit, under the laws of the state of Illinois, in 1885. The purposes of its organization were to carry on Christian mission work in the United States and foreign countries, spread the gospel and promote a Christian association and religious life between the church congregations and members thereof, and to do general Christian, charitable, and educational work. In 1887 it placed one Alex Edward Carlson in charge of a missionary station at Unalaklik, in Alaska, which had been turned over to it by the Swedish Evangelical Mission Covenant of Sweden, and in 1893 it established an additional station at Chinik, in that territory, and placed in charge of it Nels O. Hultberg, one of the appellees. In the summer of 1897 Peter H. Anderson, another one of the appellees, arrived at Chinik, where he had been sent by the Covenant at its expense to perform the duties of a missionary teacher. He had previously been educated by the Covenant at one of its colleges, partly at his own expense and partly at the expense of the Covenant. At the time of this assignment he was wholly without other means than clothing and personal effects, all of which had been furnished him by the Covenant for the purpose of fitting him out for his journey and his work at said missionary station. From the time of his arrival at Chinik until August 31, 1898, when Hultberg, with his wife, started on a trip to the United States and Sweden, he (Anderson) and Hultberg co-operated together in carrying on the work of the Covenant, Hultberg being in general charge and Anderson doing the work of a teacher. Neither of these men received any salary for his work, but the Covenant supplied them with provisions of the value of about $1,700 per year for themselves and about $300 worth for the native Eskimos, and in addition they received certain profits which were derived from reindeer kept at the station. During the summer of 1898 Hultberg made a number of prospecting trips in various directions from Chinik in search of gold, and he and Anderson located claims in their individual names on Melsing and Ophir creeks, one in the name of each on each of said creeks. Another expedition was made in July, 1898, to Anvil creek, in the Cape Nome mining and recording district, on which no claims were taken or located, but arrangements were made for future explorations, and in September of that year 13 claims were staked out by them in the names of various parties, one of which, known as ‘No. 9 Above,’ being taken in the names of Gabriel and Constantine, two Eskimo boys, who were then under 21 years of age and had been connected with the Covenant station for a number of years prior to that time. It was and is claimed on behalf of the Covenant that said No. 9 Above was located and taken in the names of the boys Gabriel and Constantine for it. Upon the return of this expedition to Chinik a question arose as to whether the claim had been established according to law and as to the right of the Eskimo boys to hold the same, and in order to remedy that possible defect another expedition was sent out the following October, and claim No. 9 Above, the boundaries of which where different from those of the first location, was taken in the name of a man by the name of Price. It was taken in his name, however, merely for the purpose of enabling Anderson to obtain title to it in his own name for the supposed benefit of the Covenant, and Price subsequently conveyed the claim to Anderson for a stated consideration of $20, which amount, it is claimed, was never paid. Early in 1899 Anderson went upon the property and commenced the work of preparing for mining gold. In June of that year Hultberg returned to Alaska from his visit to the United States and Sweden, and shortly afterwards, as he testified, Anderson informed him, in substance, that claim No. 9 had been staked and located for the Covenant and that it belonged to the Covenant. The evidence also tends to show that Anderson made the same admission to other parties, and that the claim continued to be held in that way until it became manifest that it was very rich in gold, when Anderson asserted its exclusive ownership in himself, individually. From this claim and other interests Anderson has amassed a fortune amounting to about $440,000, all of which he has appropriated to his own exclusive use, except some $95,000 which he gave to the Covenant, $500 to the Eskimo boys Gabriel and Constantine, and $15,000 paid to settle certain litigation in which the Covenant was involved. It was claimed by appellees that at the time said property was taken possessionof Anderson was in the employ of the Covenant; that the claim was staked out for the benefit of the Covenant, and that he used the supplies which were furnished him by the Covenant for the purpose of stocking the various expeditions which went out to establish those claims. When Anderson began to use the property as his own, a controversy arose between him and the Covenant as to its ownership, and on February 7, 1901, Anderson wrote a letter to the committee of the Covenant in which he agreed to donate $25,000 to the Covenant school, $4,000 to the Covenant for students of theology and $25,000 to found a hospital in Lake View, Cook county, this state, provided the Covenant should not bring suit against him to regain claim No. 9. On August 16, 1901, the president and secretary to the Covenant executed, in their names and on behalf of the Covenant and under its seal, a release, which purported, in consideration of the sum of $1 paid by Anderson to the Covenant, to release and discharge him from all possible liabilities on claim No. 9, and subsequently the donations above mentioned were paid to the Covenant and used by it in its work. The execution of this release was reported to the executive committee of the Covenant subsequently to its next general conference, and the acceptance of the donations was by it approved.

In May, 1902, there was organized under the laws of the state of California a corporation known as the White Star Mining Company of California, with a capital stock of 500,000 shares, of which Anderson owned 499,997, and to this corporation he conveyed claim No. 9 Above on Anvil creek, together with claim No. 2 Above on Anvil creek, and certain other mining claims which he had in the meantime acquired in Alaska. In January, 1903, he transferred the stock of the White Star Mining Company of California to the appellee Claes W. Johnson for a stated consideration of $100,000, and at the same time entered into a written contract with Johnson to the effect that this $100,000, which was in payment of not only claim No. 9 Above but other mining interests, should be paid for out of the income of the mines after deducting the operating expenses, including $5,000 which was to be allowed to Johnson for his personal use and for managing expenses. This transfer also included the stock of Anderson in the White Star Mining Company. In May, 1903, Johnson organized under the laws of the state of Illinois the White Star Mining Company of Illinois, the appellant, with a capital stock of $25,000, and to this corporation Johnson caused the White Star Mining Company of California to convey claim No. 9 Above and other mining properties, and during the year 1903 the White Star Mining Company of Illinois operated claim No. 9 at a net profit of $75,000.

Notwithstanding the execution of the release to Anderson by the president and secretary of the Covenant, the question of the ownership of the mine No. 9 Above and the right of the Covenant to the proceeds of it still continued to be a matter of discussion among the members of the Covenant and its missionaries in Alaska, the claim being that said release was without authority of law and void. A number of conferences and discussions took place between the Covenant, Johnson and Anderson, which resulted in a transfer by the Covenant to Hultberg of all rights of the Covenant in the premises, and on June 17, 1903, a quitclaim deed was executed by it to Hultberg. On September 8, 1903, an assignment was also executed by the Covenant to Hultberg of its claim against Anderson, Johnson, and the White Star Mining Company on account of gold taken out of the mine prior to the conveyances. Hultberg made demands upon Johnson and the White Star Mining Company for possession of claim No. 9 Above and for an accounting for its proceeds, and on August 12, 1903, an agreement to submit all of said matters in controversy to arbitration was entered into as follows:

‘This agreement of special submission to arbitration, made and entered into this 12th day of August, A. D. 1903, at Nome, Alaska, by and between Nels O. Hultberg, of Campbell, California, acting for and on behalf of himself and as successor in title and representing the interest of the Swedish Evangelical Mission Covenant of America, Claes W. Johnson, of Chicago, Illinois, the White Star...