Dettering v. Nordstrom

GILBERT, Circuit Judge, after stating the case as above, delivered the opinion of the court. It is earnestly insisted that the court erred in denying the motion of the appellant, made at the close of the appellee’s testimony, to dismiss the suit on the ground that 'the matter involved therein had been adjudicated in the action at law in which the appellee had waived his claim ■for damages. We find no merit in the contention. The appellee had brought the present suit for an accounting. [617] When the appellant answered, denying his title, he found it necessary to institute the .action at law to obtain an ad-, judication of his title. When that action came on for trial he chose to withdraw from the issues therein his demand for damages, preferring to litigate the same in the present suit which was then pending. Although the language of counsel for the appellee was that the latter then waived all damages against the appellant, it was not intended to 'be a waiver of the damages and was not so understood by the appellant. This is made clear by the fact that the appellant resisted the waiver of the damages, he evidently preferring to try the question of the damages in that action rather than in the suit in equity. The action of the appellee can reasonably be construed only as an election to try the question of his damages in the equitable suit wherein an accounting could be had. It was intended to be and was a voluntary withdrawal of that portion of his complaint «from consideration in that case. The appellant contends that he had the right to work the mine and was not a trespasser in so doing, and that in the absence of allegation and proof of ouster of the appellee the court erred in allowing the latter one-fourth of the gross amount taken from the mine. It is clear from the record that the trial court did not rule that the appellee was entitled to one-fourth of the gross output of the mine. The complaint did not so pray, nor did the court so adjudge. From the bill of exceptions it appears that the court said to the appellant’s counsel: “We will adopt the rule that you are accountable for the money value were the ground in place, with the ore in place, less the reasonable expenses of extracting the same.” The appellee had admitted in his complaint that the appellant should be allowed “the reasonable amount for working and securing said gold and gold dust.” The appellant had answered, admitting the extraction of $30,000 from the mine, but denying that the amount taken out was in excess of the expenses of mining, except in the sum of about $5,000. There was nothing in the pleadings nor in the ruling of the court to prevent the appellant from introducing proof of the reasonable expense of taking out the gold dust and obtaining credit therefor. His right to credit for such expenses was not affected by his inequi [618] table conduct in denying his co-tenant’s title, in violating his parol agreement with the appellee to carry on no mining on the property, in refusing to account, or. in making the false averment in his answer that the profits over and above expenses were but $5,000. The reason why the court allowed the appellee one-fourth of the gross output of the mine is found in the fact that the appellant offered no proof of -the reasonable expenses of extracting the gold dust. The only testimony he offered in that respect was that of witnesses to prove that the terms of the lease executed between Leonard and Reeves and the appellant were fair and reasonable and in accordance with the custom of the country at that time for claims of that character, including the payment of the sum of $2,000. Error is assigned to the exclusion of such testimony, but we think it was properly excluded. It was not competent to prove the reasonableness of the bargain made by the appellant with his lessees. Neither the existence of the lease nor its terms had been pleaded by the appellant. It is true that an answer in a suit for accounting-does not have the same scope as an answer in ordinary cases, and that under a bill for an accounting involving-mutual accounts, the defendant has nothing to plead in order to have the advantage of the items constituting his offsets and expenses directly connected with the matters alleged in the bill. Goldthwait v. Day, 149 Mass. 185, 21 N.E. 359; Wyatt v. Sweet, 48 Mich. 539, 12 N.W. 692, 13 N.W. 525; Armstrong v. Chemical National Bank (C. C.) 37 F. 466. The appellee demanded judgment for one-fourth of the gross amount taken from the mine less the expense of mining. The appellant, notwithstanding that he had set up no items of expense was entitled to prove the reasonable expenses of mining and thereby to reduce the amount payable to the appellee. The appellant relies upon' Fulmer’s Appeal, 128 Pa. 24, 18 A. 493, 15 Am.St. Rep. 662, in which it was held, in the case of a slate quarry uncovered and fully developed with machinery and appliances at hand, that the compensation to the plaintiff was to be measured by the fair market value of the slate, in place, which was the royalty or slate-leave for the privilege of removing and manufacturing the slate, in view of all the special circumstances. But the court said: “Where [619] the mineral land has never been developed and no mines or quarries have been opened, the fair market value of the mineral in place which would be the value of the privilege of removing it in view of all its special circumstances would represent the true measure of compensation to the owner.” The circumstances so alluded to in that case were the fact that the mine was in the region of numerous other slate quarries, that there was proof of a generally established rate of royalty for mining the same, and the slate itself had no fixed market value. The court in that case, however, expressly approved the doctrine of the case of Coleman’s Appeal, 62 Pa. 252, in which Mr. Justice Sharswood ruled that the value of iron ore to be accounted for was its value at the pit’s mouth after deducting the cost of mining, but distinguished that case from the case under consideration by raying that the whole tendency of the opinion in Coleman’s Appeal was to show that there was no substantial difference between thq value of the ore in place and its value at the pit’s mouth, except the mere cost of digging and removing it from the one place to the other, and that this, “added to the fact that there never had been any sales of ore-leave at the Cornwall banks, and no proof of the opinions of experts as to what such ore-leave was worth, impelled the adoption of the principle upon which the value of the ore-leave was determined.” Those remarks are applicable to the present case. There is no evidence in the record that there was any fixed royalty for mining placer claims in the region in which the mine in question was situated. The offer was to prove by experts that the lease was reasonable. It may be said to be of common knowledge that in Alaska no two placer mines contain the same amount of gold dust, and that it can never be certainly known what will be found beneath the surface of any claim. It may be true, in accordance with the offer of proof, that men could be found to undertake the development of placer claims in that general region upon such terms as the appellant made with his lessees; that is, upon allowing them the first $2,000 extracted from the mine and one-half of the gross amount thereafter fnkpn Such a venture necessarily is one in which the laymen take chances. If they fail to find gold in sufficient [620] quantity to pay for mining, they can abandon the lease. If they find a rich mine, they have the opportunity to make large profits. The appellee could not be bound by such a lease made by his co-tenant to another. The appellant had no right to waste the substance of the' mine. He had the right to operate the mine, but with it went the obligation to account for the output less the reasonable expenses of mining and to prove that expense the burden was upon him. Thatcher v. Hayes, 54 Mich. 184, 19 N.W. 946; Purdy v. Rutter, 3 W.Va. 262. It is urged that the court erred in excluding evidence offered by the appellant of expenses incurred by him in 1893 in surveying the claim and expenses incurred in litigation over the location of lines of the claim. These items might have been proper offsets, if they had been pleaded in the answer. In the absence of an answer setting up such items, the accounting was necessarily confined to the matter presented by the bill. The accounting which was prayed for was not a general accounting. It related only to the output of the mine and the expense incurred in mining. It could not, under the pleadings, extend to matters not connected therewith. Armstrong v. Chemical National Bank (C.C.) 37 F. 466; Purdy v. Rutter, 3 W.Va. 262. We find no error for which the decree should be reversed. It is accordingly affirmed.