Big Six Development Co. v. Mitchell

RINER, District Judge. This was a bill in equity brought by S. Duffield Mitchell, a citizen of the state of Pennsylvania, against the Big Six Development Company, a corporation organized under the laws of the state of Missouri, to cancel a lease as a cloud upon plaintiff’s title to certain lands, to establish his right of possession therein, and to enjoin the lessee from mining ore in the leased premises. The lease was dated May 31, 1898, and, by its terms, was to run 10 years from date. It provided that the parties of the second part should commence the work of sinking shafts within 10 days after the date of the lease— “and shall keep and have on said tract of land, sufficient pumps and machinery to drain the same of water, so as to permit efficient mining thereof, and shall properly operate the same, and shall increase the capacity thereof from time to time as same becomes necessary.” “The said parties of the second part, their successors and assigns, shall mine said land in a good, thorough and workmanlike manner, shall keep all shafts and drifts well and securely timbered and supported, and shall not remove such timbers and supports so as to endanger the ground or to permit the same to cave or fall in. Mining shall be carried on in good faith continuously, and shall not be suspended at any time except on written permission of the party , of the first part. “All lead and zinc ores shall be cleaned and prepared for market on said land, and no rough or crush stuff shall be removed therefrom to be cleaned, nor shall minerals or crush stuff from other land be brought or cleaned on said land without the written permission of the said party of the first part.” “The said parties of the second part, their successors and assigns, shall keep in a book a correct account of all lead and zinc ores mined, the kinds and weights thereof, to whom sold, and the price received therefor, which book shall be open to the inspection of the party of the first part at all reasonable times.” “The said parties of the second part, their successors and assigns, shall pay to the party of the first part, at the Bank of Joplin, Missouri, on Monday of each and every week, as rent and royalty, twelve (12) per cent, of the market value of all ores mined and sold during the preceding week, and shall furnish at the time of said payment a written statement of all ores sold, to whom sold, and the price received therefor.” — 281 — “The parties of the second part, their successors and assigns, shall have the right to erect all necessary buildings and machinery on said land for the purpose of mining and draining, crushing and cleaning ores thereon, and to remove the same at the expiration or forfeiture of this lease, except timbering and other materials necessary to support the ground, which timbering and improvements immediately on their being placed in the ground shall become the property of the party of the first part. All uses of the ground not inconsistent with thorough and proper mining, as herein required, are hereby reserved to the party of the first part.” “Any failure at any time on the part of the parties of the second part, their successors and assigns to comply with and perform in good faith the requirements of this lease shall end and determine the same, and said party of the first part, his heirs and assigns may declare an ouster and forfeiture of said lease and may re-enter and hold said demised premises without recourse to law in as full and complete a manner as if this lease had never been made. “Nor shall the failure of the party of the first part, his heirs or assigns, to enter upon and take possession of said premises on account of the failure of the parties of the second part to keep and perform the conditions and agreements herein contained, be construed to be a waiver of the rights of the party of the first part to declare an ouster and re-enter and forfeit said demised premises for any other and subsequent breach of the requirements of this lease.” The bill alleges that the plaintiff was the owner in fee simple and in possession of a tract of land situate in Jasper county, Mo., and described as the north half of the northeast quarter, and the southeast quarter of the northeast quarter, of section 4, township 27, range 32, containing 120 acres, more or less; that on the 31st of May, 1898, plaintiff executed and delivered a mining lease upon the southeast quarter of the northeast quarter of section 4, containing 40 acres, the same being a part of the 120 acres above described; that, by deed of assignment duly executed and acknowledged by the parties of the second part to the lease, they conveyed all of their interest and title therein to defendant; that defendant subdivided the tract of land into mining lots, and subleased the same to miners and mining companies, who have been conducting mining operations thereon; that the defendant, by its mining rules and regulations, declared and posted according to law, imposed upon its several sublessees the duties and obligations imposed upon it by the lease with reference to sinking and driving shafts, timbering, supporting the surface of the land, preventing the surface from caving or falling in, pumping and draining water, cleaning and preparing for market all ores produced from the mine; that defendant performed none of these acts, nor did it own any machinery, pumps, or buildings located on the land; that the defendant kept an account of all lead and zinc ores mined, the kind and weight thereof, to whom the same was sold, and paid to the plaintiff the royalty due thereon, as provided by the terms of the lease. It is then alleged in the bill that: “Defendant corporation, its sublessees and licensees, have failed to comply with and perform the conditions and requirements of said lease, in this: That it and they have failed and refused to keep the deeper drifts in said land •drained of water, to permit efficient mining thereof, and have failed to mine said ground in a work-man-like manner;' and have removed and caused to be removed a pillar or pillars in said ground, which, in mining said ground, had been left to support the surface and prevent the same from caving or falling in, and have failed to properly timber and secure the drifts of said — 282 — ground from caving, and have failed to timber certain shafts securely and properly, by reason of which failure the ground has subsided, caved, and fallen in, to the great detriment and damage to said land. That by reason of its failure to comply with the requirements and conditions of said lease, the defendant has forfeited the same, and the said lease, by its terms, has ended and determined; and the plaintiff, electing to enforce said forfeiture as against defendant, on account of said failure to comply with the conditions and requirements of said lease, did on the 7th day of July, 1903, declare said lease forfeited, and made re-entry on said described land, declared an ouster of the defendants therefrom, and posted upon said land a notice of forfeiture, * * * and duly served same on defendant on said 7th day of July, 1903, by delivering a true copy thereof to J. W. Allen, president of defendant. That notwithstanding the re-entry by plaintiff on said land by the terms of said lease, at his election, to re-enter and oust defendant from said land for forfeiture of said lease by reason of failure to comply with its conditions and requirements, defendant, its officers and agents, refused to surrender said lease, and claim and assert rights thereunder adverse to plaintiff, and threaten to continue to claim and assert said rights to the said land of plaintiff, and threaten to continue to mine or cause said land to be mined, and to take-the ores, rock, and earth therefrom, to the irreparable damage of plaintiff.” It is then alleged that the defendant corporation was organized solely and only to take over and hold the title to the plaintiff’s lands that it has no other property or assets than the lease; that at the organization the defendant corporation received nothing but the lease as property, in full payment for its entire capital stock; that the defendant divides its royalty, earnings, or profits derived under said lease on plaintiff’s land among its stockholders, when received; that the defendant is insolvent; and that plaintiff’s remedy at law would be inadequate. The plaintiff then alleges that the lease creates a cloud upon his title to the land in controversy, and prays that the court may decree that the defendant has no interest in or title-to the lease; that the title of the plaintiff to the land in controversy is unaffected by the lease or any claim of the defendant; that the lease be declared to be no longer in force and effect in favor of the defendant, and that it may be canceled, annulled, and surrendered into the possession of the plaintiff; and that the defendant, its officers, servants, and agents, be enjoined from asserting any claim-under the lease, and from continuing in possession of the land in controversy. To this bill the defendant demurred, and the demurrer was overruled. It then filed an answer, the testimony was-taken, and the case came on for final hearing, resulting in a decree declaring the lease a cloud upon plaintiff’s title, establishing his-right of possession in the property, and enjoining the lessee from-mining ores in the leased premises. It was insisted by appellant that a court of equity had no jurisdiction, upon the pleadings and evidence, to grant the relief given by the court in this case. And at the argument it was said that this bill should not be maintained: (1) Because a bill for an injunction can only be maintained, where the title is disputed, after a trial at law, or after an action at law has been commenced; (2) because a cloud upon the title cannot be removed unless the complainant is in possession; and (3) bécause it seeks to enforce a forfeiture. The trespass here complained of, as disclosed by the record, is not an ordinary case of trespass upon lands, of temporary duration, — 283 — but, as we think the evidence shows, was a continuous trespass, which threatened to destroy the character of the property as a mine, and would render the plaintiff’s interest therein valueless. Threatened and continuous injuries to mines, quarries, timber growing upon lands, buildings located thereon, or other improvements of a permanent character, are enjoined, because, as has been said, such acts “alter the character of the property, and also tend to destroy it, and occasion irreparable loss and damage.” Courthope v. Mapplesden, 10 Ves. 290; Scully v. Rose, 61 Md. 408; Erhardt v. Boaro, 113 U. S. 537, 5 Sup. Ct. 565, 28 L. Ed. 1116; Jerome v. Ross, 7 Johns. Ch. 315, 11 Am. Dec. 484; Hammond v. Winchester, 82 Ala. 470, 2 South. 892; Snyder v. Hopkins, 31 Kan. 557, 3 Pac. 367. In such cases the threatened injuries are to the res, and diminish the value of the property itself, and an injunction will be granted to prevent the continuing waste or continuing trespass, although the plaintiff is not in possession, and although the legal title has not been settled or questioned by an action at law. Story’s Eq. Jur. § 860; Union Pac. R. Co. v. Kansas Elevator Co. (C. C.) 17 Fed. 200; Earl Cupper v. Baker, 17 Ves. 128; Iron Co. v. Reymert, 45 N. Y. 703; Snyder v. Hopkins, 31 Kan. 559, 3 Pac. 367; Lacustrine Fer. Co. v. L. G. & Fer. Co. et al., 82 N. Y. 486; Oolagha Co. v. McCaleb, 68 Fed. 87, 15 C. C. A. 270; High on Inj. 736; Alleghany Oil Co. v. Snyder, 106 Fed. 764, 45 C. C. A. 604; Peck v. Ayres & Lord Tie Co., 116 Fed. 273, 53 C. C. A. 551; Logan Nat’l Gas Co. v. Great So. Gas & Oil Co., 126 Fed. 623, 61 C. C. A. 359. If the only relief sought by the bill in this case was to remove the cloud upon plaintiff’s title, it may well be doubted whether the bill could be sustained. Orton v. Smith, 18 How. 263, 15 L. Ed. 393; Frost v. Spitley, 121 U. S. 552, 7 Sup. Ct. 1129, 30 L. Ed. 1010. But the bill goes further, and seeks to enjoin the defendant from committing waste and destroying the property as a mining property. In such a case jurisdiction in equity attaches, even where the plaintiff is not in possession. And having obtained jurisdiction for that purpose, the court may, for the purpose of preventng a multiplicity of suits, retain it for further relief, and may remove a cloud upon the title, quiet the title, and determine the right of possession. In the Elevator Case above cited, Mr. Justice Miller said: “When either party, lessor or lessee, claims that acts have been done which render the continuing of the relation no longer proper, such party can go into a court of equity, on general principles, and ask to have that lease set aside, canceled, and annulled. In that case the court of equity sits, holding the scales of justice evenly between the parties, and may say that it believes that such acts have been done by the lessee, for instance, as ought to determine the agreement. * * * And the court will declare the agreement at an end, and set aside and annulled, and will make such orders as seem proper and right.” We think, both upon reason and authority, that in a case such as this, where the injury is to the res (that is to say, where irreparable mischief is being done or threatened, going to the very substance of the estate), a court of equity has jurisdiction, not only for the purpose of restraining waste or threatened trespass, but, having acquired jurisdiction for that purpose, it may also proceed to settle — 284 — the question of title and to remove the cloud; and this was the view taken by the Circuit Court. While the bill in this case is not carefully drawn, yet we think sufficient is presented by the record to invoke the jurisdiction. It is also urged that the bill cannot be maintained because it is a bill to enforce a forfeiture, and equity never lends its aid to enforce a forfeiture or penalty. But as we understand it, the theory of the bill is not that, but is that the forfeiture was complete before the bill was filed, that the lease was dead, and that the defendant was threatening and was guilty of a continuous trespass. We think the bill may well be maintained upon this ground. Met. Land Co. v. Manning, 98 Mo. App. 348, 71 S. W. 696. While the right of a lessor to determine, without recourse to the courts, a lease of real estate, as forfeited, and re-enter upon the premises, is limited to the most technical terms and conditions upon which the right is to be exercised, yet we think there can be no doubt but what the right exists in a case where the terms of a contract and the acts complained of justify such a course. He must, it is true, be able to point out specifically some clear act in violation of the terms of the lease, which will authorize the forfeiture. The Circuit Court found that the plaintiff had made a sufficient showing in this regard, and, from our examination of the record, we are not prepared to say that the conclusion reached was erroneous. It is also urged that after the notice of forfeiture, and on the 5th day of October, 1903, the plaintiff received and accepted the rents or royalties due under the lease, and that this act upon his part constituted a waiver of the forfeiture. The ground of forfeiture, as we understand the record, was the continued failure of the defendant to mine in a workmanlike manner, and to support the ground so that it would not cave, and the defendant’s violation of these covenants of the lease continued up to the time the temporary injunction was issued. We think the receipt of the rent or royalty was not a waiver of the forfeiture. A waiver rests upon an estoppel, and there was no estoppel here: (1) Because a continuing breach of the covenants of a lease is not waived by receipt of rent. Farewell v. Easton, 63 Mo. 446; Taylor’s Landlord & Tenant, 500. And (3) because the receipt of rent after the institution of a suit to recover the property is not a waiver. 18 Am. & Eng. Enc. of Law, 387; Cleve v. Mazzoni (Ky.) 45 S. W. 88. It is also insisted that the bill cannot be maintained because there was a complete remedy at law by an action for forcible entry and -detainer. Our examination of the record leads us to the conclusion that this contention cannot be sustained. Such an action would not have prevented the extraction of the ore and removal of the earth, so that continuous cavings would have occurred, during the time spent in the various courts in reviewing the trial for forcible entry and detainer by successive appeals until a final decision was reached. On the other hand, we think it is a case where there would be no adequate remedy at law, because the law, as stated by the Supreme Court, in regard to the jurisdiction in suits in equity of courts of the United States, in view of the statute which declares — 285 — that there shall be no remedy in equity where there is a plain, adequate, and complete remedy at law, is that the remedy at law must be as efficient to the ends of justice and its complete and prompt administration as the remedy in equity, and we think the record clearly shows in this case all of the injuries that could be inflicted upon the property might well be inflicted before such a proceeding could have effect. We have carefully examined the evidence set out in the record, and, while it is somewhat conflicting, we think it is entirely sufficient to sustain the findings of the Circuit Court. Applying the rule so well stated by Judge Sanborn, of this court, in the case of Manhattan Life Ins. Co. v. Wright, 126 Fed. 82, 61 C. C. A. 138, that “the legal presumption is that the finding and decree of a court of chancery are right, and they should not be disturbed or modified by an appellate court unless an obvious error has intervened in the application of the law, or some grave mistake has been made in the consideration of the facts,” we think it does not so clearly appear that the defendant was not violating the terms of the lease, in failing to properly support the surface of the ground and to properly conduct its mining operations, that the finding of the lower court should be reversed. The evidence, we think, not only permitted, but compelled, the conclusion reached by the Circuit Court, that the mining operations were carried on in disregard of the covenant in the lease that the land should be so supported that there would be no caving. Indeed, the evidence is strong that these mining operations were conducted in the most careless manner, and with a view to extracting the largest amount of ore with the least expense, in-utter disregard of plaintiff’s rights. In other words, if the defendant had been permitted to proceed with the work in the manner in-which it was being done at the time the injunction issued, it would necessarily have resulted in great injury, if not in a total destruction of the property as a mining property. Upon the whole record, the conclusion reached is that the decree-of the Circuit Court must be affirmed.