Morgan v. Hidden Splendor Mining Co.

155 F. Supp. 257, 1957 U.S. Dist. LEXIS 2921
CourtDistrict Court, D. Utah
DecidedOctober 8, 1957
DocketNo. C-56-57
StatusPublished
Cited by4 cases

This text of 155 F. Supp. 257 (Morgan v. Hidden Splendor Mining Co.) is published on Counsel Stack Legal Research, covering District Court, D. Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morgan v. Hidden Splendor Mining Co., 155 F. Supp. 257, 1957 U.S. Dist. LEXIS 2921 (D. Utah 1957).

Opinion

CHRISTENSON, District Judge.

Plaintiffs, owners of certain mining claims, alleged in their complaint that pursuant to lease obligations assumed by the defendant as assignee and a “Memorandum of Understanding and Agreement” between the plaintiffs and defendant, the defendant agreed to perform not less than $150,000 of exploration and development work prior to February 1, 1956; that defendant failed to do so and that on February 21, 1957, defendant was served by registered mail with a notice of the breach of said covenant, giving defendant twenty days from the receipt of said notice to cure and correct said breach and default, pursuant to the terms of the lease, and that the defendant failed and refused thereafter to perform the work, and failed and refused to quit the premises covered by the lease and to deliver the possession thereof to the plaintiff, contrary to the agreements between the parties and to the laws of the State of Utah with respect to unlawful detainer. Plaintiffs prayed judgment for the forfeiture of the lease and for the [259]*259restitution of the premises; for damages occasioned by defendant’s unlawful detainer in the sum of $50,000, trebled; for damages by reason of defendant’s failure to perform the work in the sum of $150,000; and for general relief, interest and costs.

It has been made to appear without dispute that the forfeiture provision contained in the lease reads as follows:

“7. It is finally agreed that upon violation by lessee of any of the covenants in the foregoing lease, the term of this lease shall, at the option of the lessors, expire, and the same and said mining claims shall become forfeited to lessors, and lessors, or their agent, may thereupon enter upon said mining claims and dispossess all persons occupying the same, or, at the option of lessors, lessee and all persons found in occupation thereof, may be proceeded against as guilty of unlawful detainer, provided, however, that if said lease is forfeited upon the election of lessors by reason of the failure of lessee to perform the covenants thereof, lessors shall give lessee at least twenty (20) days notice in writing, by registered mail, sent to lessee at his address; notifying him of such failure to perform and setting out in said notice the substantial facts as to any such default or breach, and upon failure or refusal by lessee to cure and correct such default within twenty (20) days from the receipt of such notice, lessee shall surrender and deliver up the possession of all of said mining claims, and his rights under this lease shall thereupon cease and determine.”

On defendant’s motion to dismiss plaintiffs’ action for non-joinder, it was shown that there were parties indispensable for a forfeiture of the lease who had not been joined, and that the joinder of such parties, who were citizens of the same state as the plaintiff, Milton F. Morgan, would destroy the diversity of citizenship requisite to the jurisdiction of this Court. An order of dismissal on that ground, however, was thereafter vacated, and leave was granted to the plaintiffs to withdraw their claim and prayer for forfeiture of the lease and for restitution of the premises, on the theory that the Court had jurisdiction over the claim for damages against the defendant already named. Defendant unsuccessfully contended then, and it strenuously urges now, in support of its pending motion to dismiss the amended complaint that by the “notice of forfeiture”, plaintiffs made an irrevocable election between the inconsistent remedies of forfeiture on the one hand and the recovery of damages for failure to do the contracted development work on the other, and that, therefore, it cannot maintain the present action for damages.

That an election to take advantage of one of two alternative and inconsistent remedies may bar reliance upon the other cannot be gainsaid. The authorities cited by defendant are convincing on this general proposition. Some of the cases most strongly relied upon by it are readily distinguishable. Barquin v. Hall Oil Co., 28 Wyo. 164, 201 P. 352, 202 P. 1107 (rescission by mutual consent), and Taylor v. Robertson Petroleum Co., 156 Kan. 822, 137 P.2d 150 (legal action on theory that title was in plaintiff as an election). Fee & Liddon Co. v. Porter, 144 Kan. 108, 58 P.2d 55, is nearly in point, as it involves claimed election by notice. For reasons hereinafter mentioned, it is not believed to represent such an application as would be made of the doctrine of election of remedies by the Utah court, and ignores factors which in reason would dictate a contrary view. The defendant’s argument is persuasive in the abstract that if plaintiffs were allowed to recover both the possession of the property through forfeiture and damages for nonperformance of the exploration work, they would have their money with which [260]*260to do the exploration work, and the possession of the property also; and that the defendant, on the other hand, would have paid for the contracted exploration work and would also have lost the property.

The defendant’s contention presents a dilemma at least as perplexing as the one suggested as being inherent in plaintiffs’ position. If mere notice of an intention to forfeit the lease irrevocably barred other relief, the defendant may hold the property, at least temporarily, by reason of the absence here of parties essential to permit a determination of the right to its possession. Thereafter, in a court having cognizance of a possessory action it may successfully assert its right to possession because of insufficiency of the evidence to establish forfeiture or because the “notice of forfeiture” may have been equivocal, or by reason of some equity which might impel its non-recognition. Nonetheless, under defendant’s theory there would have been worked an absolute election as a matter of law, confirmed by the adjudicated denial of damages by this Court without trial. Thus, the defendant might retain the property and enjoy its fruits without performing the development work it agreed to perform, with the plea of res judicata available to it as protection against a future claim for damages.

The defendant’s position as stated in its brief “ * * * is simply that plaintiffs cannot forfeit the lease for failure to do $150,000 worth of exploration work and thereafter, and in addition thereto, recover the $150,000.” It seems pertinent to examine a little further the assumption that recovery of money damages would be in addition to forfeiture, particularly in view of defendant’s further statement that “defendant has not stated that it would be willing to have plaintiffs repossess the claims nor had defendant yet voluntarily surrendered them.”

It is believed that the terms of the forfeiture provisions in the lease and the “notice of forfeiture” themselves hold, the answer to the problem. We need not pause to consider distinctions between the doctrines of “election of remedies” in legal proceedings and “choice of substantive rights” in reliance upon contractual provisions, the latter of which seems more relevant here. 18 Am.Jur. 129-131, Election of Remedies, §6. Nor need we treat as controlling some indications found in the books that the commencement of a legal proceeding is a prerequisite to the application of the former doctrine. Howard v. J. P. Paulson Co., 41 Utah 490, 127 P. 284; Del Vecchio v. Savelli, 10 Cal.App. 79, 101 P. 32.

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Related

Betancourt v. Wilson
409 F. Supp. 598 (D. Puerto Rico, 1975)
Irwin v. Marvel Petroleum Corporation
365 P.2d 221 (Montana Supreme Court, 1961)
Morgan v. Hidden Splendor Mining Co.
169 F. Supp. 854 (D. Utah, 1959)

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Bluebook (online)
155 F. Supp. 257, 1957 U.S. Dist. LEXIS 2921, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morgan-v-hidden-splendor-mining-co-utd-1957.