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Houghton v. Mammoth Arizona Gold Mining Co.

Supreme Court of Arizona

June 7, 1937

FRED B. HOUGHTON, JR., Appellant,
v.
MAMMOTH ARIZONA GOLD MINING COMPANY, a Corporation, and FRED BOSE, Sometimes Known as F. W. BOSE, Appellees

APPEAL from a judgment of the Superior Court of the County of Pinal. M. T. Phelps, Judge. Judgment affirmed.

Messrs. Fulbright & Reed, for Appellant.

Messrs. Knapp, Boyle & Thompson, for Appellee Mining Company.

OPINION

[50 Ariz. 45] ROSS, J.

The Mammoth Arizona Gold Mining Company brought suit on June 3, 1933, to compel defendant Fred Bose to convey to it all his right, title, and interest in the New Year and Gulch mining claims, situate in the Old Hat mining district, Pinal county, as per his contract of date April 21, 1930, with Fred B. Houghton, Jr., plaintiff's assignor. It was a suit to compel specific performance of a contract to sell mining claims.

Bose filed an answer contesting plaintiff's right to have conveyance on the ground of failure to make payments as called for by the contract. Later, while the suit was still pending and on or about April 23, 1934, he accepted from plaintiff the unpaid balance of the agreed purchase price and by quitclaim deed conveyed all his right, title, and interest in mines to the plaintiff, which, of course, very effectively disposed of the [50 Ariz. 46] latter's suit and admitted its right to specific performance as against Bose.

The controversy then became one between plaintiff and Houghton, who, under permission of the court first obtained, on September 6, 1935, as intervener, filed his third amended answer to plaintiff's complaint, wherein he, in substance, set out that the plaintiff for failure to make payments to Bose at the times and in the amounts stipulated, especially the sum of $13,250 on May 2, 1932, had forfeited its right to specific performance and that he, under the terms of his assignment to the plaintiff, had succeeded to or become subrogated to such right. He prays that the deed from Bose to the plaintiff be declared null and void; that the option contract of April 21, 1930, with modifications and extensions, be declared in full force and effect; and that Bose be directed to execute to him a deed conveying title to mines and place the same in escrow subject to such contract, its modifications and extensions, and for other equitable relief. Thus it is that the intervener now is the one asking that Bose be required to perform with him the contract of April 21, 1930, and its modifications and extensions, and that the deed he had given to the plaintiff under said contract be declared null and void. Bose failed to answer intervener's pleading, but the plaintiff filed a reply which put in issue its allegations. Under the issues, the court required the intervener Houghton to assume the burden of proof and thereupon he submitted his evidence and rested. The plaintiff then moved for judgment and the motion being granted, the intervener appeals.

The intervener, in support of his case, introduced in evidence the option contract from Bose to him of April 21, 1930, granting to him the exclusive right and option to purchase the mining claims, "to continue so

Page 958

long as" he performs the considerations and covenants [50 Ariz. 47] therein, that is, pay to him or to his credit in a named bank the sum of $17,850, as follows: $50 per month until June 2, 1931; $1,000 June 2, 1930; $1,000 December 2, 1930; and the sum of $15,250 June 2, 1931.

This contract gives to intervener or his assigns the exclusive right to the use, occupancy, and possession of said mining property; the right to erect and maintain machinery and improvements thereon for mining purposes and the right to remove the same in case of forfeiture or termination of the option; provides for three-eighths of 12 1/2 per cent. of the net smelter returns of any ores, minerals, etc., shipped and disposed of, to be applied on purchase price; provides for the annual assessment work to be done by intervener or his assigns, and for failure to make payments on purchase price as provided, or to do assessment work, or to pay over smelter returns, etc., the option to at once become null and void and all moneys paid by intervener or his assigns to be and remain the property of Bose as liquidated damages.

Intervener also introduced an agreement between himself and Bose, dated December 5, 1930, changing the dates of payments as follows: $1,000 on June 2, 1931, instead of $15,250 due on that date; $1,000 on December 2, 1931; and the balance of $13,250 on June 2, 1932.

He also introduced in evidence his assignment to plaintiff of his option contract of April 21st as modified, such instrument bearing date December 29, 1930, wherein intervener, for the sum of $1 and 300,000 shares of the plaintiff's fully paid and nonassessable capital stock and other good and sufficient consideration, assigned all his right in the option to purchase mining claims to plaintiff "to continue so long as the said party of the second part (plaintiff) shall perform the considerations and covenants hereinafter set forth." This instrument sets out the dates of the [50 Ariz. 48] monthly and other payments under the option contract and recites that "whereas, time is an essence of this agreement," the plaintiff shall make payments to the credit of Bose thirty days in advance of due dates under option contract so that the last payment of $13,250 will become due on May 2, 1932, instead of June 2, 1932, and for failure to make payments in the amounts and on the dates set forth, the assignment shall at once become null and void and any and all money theretofore paid shall belong to Bose as liquidated damages with no liability on the intervener. It also provides that,

"In the event of the annulment of this assignment, the said party of the second part, and his assigns, shall forthwith quit and surrender unto the said party of the first part, the ...


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