Shoni Uranium Corp. v. Federal-Radorock Gas Hills Partners

407 P.2d 710, 1965 Wyo. LEXIS 168
CourtWyoming Supreme Court
DecidedNovember 18, 1965
Docket3425
StatusPublished
Cited by7 cases

This text of 407 P.2d 710 (Shoni Uranium Corp. v. Federal-Radorock Gas Hills Partners) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shoni Uranium Corp. v. Federal-Radorock Gas Hills Partners, 407 P.2d 710, 1965 Wyo. LEXIS 168 (Wyo. 1965).

Opinions

Mr. Chief Justice PARKER

delivered the opinion of the court.

In this court’s earlier decision, Vitro Minerals Corporation v. Shoni Uranium Corporation, Wyo., 386 P.2d 938, equity was invoked in resolving the case, and the trial court was instructed to take proper steps to see that the views expressed in the opinion were effectuated and to that end retain jurisdiction for such period as might be deemed necessary. Prior to the time the original decision was issued in this court, Vitro transferred to Federal-Radorock Gas Hills Partners, which has been made and now is without objection the sole defendant occupying the position of and succeeding to the rights of Vitro. Although certain rights of Shoni were conveyed to Western Nuclear, Inc., Western has reconveyed to Shoni and Shoni is now the sole plaintiff party in interest, subject to any obligations or rights accruing during the period of ownership by Western Nuclear.

In the original action, Shoni’s position was that: there had been a determination of a commercial ore body; advance royalty payments were due; and, further, Vitro had failed for a period of six consecutive months to carry on operations and, therefore, its agreement with Shoni should be terminated and plaintiff restored to the leased claims and properties in question. This court held there had been no determination of a commercial ore body and that although Vitro had failed to carry on operations it was equitable that, under the circumstances present, there be no termination but Shoni should receive the minimum royalty payments for the six-month period. However, in so invoking the principle of equity, we noted our intention that equity having acquired jurisdiction for one purpose would retain jurisdiction to the final adjustment of all difficulties between the parties arising out of the action presented.

Following the mandate of this court on January 14, 1964, concerning the original decision, the parties applied to the trial court for an amended judgment to conform to the court’s opinion, and on April 13 the [712]*712trial court entered an Amended Judgment, stating it would “retain jurisdiction of this action for a period of sixty days * * * for the purpose of seeing that the views expressed by the Supreme Court * * * are effectuated” and providing, inter alia, that: plaintiff if it wished might allege by appropriate pleadings that defendant was not exercising due diligence in the conduct of operations; if plaintiff made such allegations, the defendant should answer; and the court would conduct a full hearing with respect to the matter for the purpose of determining whether or not defendant was conducting operations with due diligence. Plaintiff subsequently filed a petition for relief, alleging that defendant had not exercised due diligence in the conduct of operations on the mining claims, and that plaintiff was informed and believed defendant had not explored the open sides of the Blackstone 6 and 7 ore body in order to determine whether or not it was “commercial” and that the shallow drilling which had been engaged in was not diligence.

There were interrogatories and answers and each party also gave notice for and took depositions, which were made a part of the record. Defendant answered the plaintiff’s petition for relief by general denial, stating that plaintiff had alleged breach of agreement, had repudiated and attempted to terminate the agreement and .accomplish a forfeiture of the claims, and liad constituted a continuous threat to and ■cloud upon Federal’s interest in and right to possession of the claims, rendering such interest in and right to uncertain; and defendant filed motion for summary judgment with supporting affidavits. Plaintiff filed Notice for Cross-Motion for Summary Judgment, and the court entered summary judgment for defendant and provided that “this action be and the same is hereby terminated and concluded on the merits * * *_» From this summary judgment, plaintiff appealed.

A resolution of the present controversy must take into consideration the developments in the original case, Vitro Minerals Corporation v. Shoni Uranium Corporation,' supra, and the ideas therein expressed, one of which is of special significance: We there pointed out that despite the testimony of lessee’s own geologist and engineer, showing the discovery of rich uranium ore on Blackstone 6 and 7, there had not yet been a “discovery of a commercial ore body,” which determination depends' upon various factors, including extent of deposit as yet undelineated by exploration. It should be noted also that we held lessor’s charged failure of lessee for more than six ■ months to carry on the operations in the agreement had been excused by an attempted cancellation through notice and suit, thereby creating an uncertainty as to lessee’s obligation to proceed.

It will be recalled that Adamson, Vitro’s geologist, testified as to the discovery on Blackstone 6 and 7, “Considered on the basis of present reserve, it is com- • parable to many of the better ore bodies in Wyoming and has a potential of being one of the best in respect to contained pounds of uranium.” “In the event that additional ore reserves are considered necessary to prove the economics of this deposit, many ■ drill sites could be selected that could expand reserve appreciably. Location of additional holes of this nature is readily seen upon examination of the mineralization map. It is recommended that if these holes are drilled that they be drilled on 100 foot centers stepping out from the known ore body.” Vitro Minerals Corporation v. Shoni Uranium Corporation, supra, 386 P.2d at 941. There was no contradiction of this evidence showing a rich discovery and the desirability of exploration concerning it. In the present controversy, Ellerman, Federal’s project manager, confirmed the existence of the mineralized area as reported by Adamson. Accordingly, the prin-. ciple announced in Union Sulphur Co. v. Texas Gulf Sulphur Co., Tex.Civ.App., 42 S.W.2d 182, 185-186; 58 C.J.S. Mines and Minerals § 183, p. 390, became applicable: “It is a well-settled general rule that leases of this character import an implied cove[713]*713■nant to reasonably develop the mineral re- ■ sources of the demised premises. Upon the discovery * * * there was an implied obligation on the part of the lessee to do whatever was reasonably necessary under the circumstances (1) to ascertain zvhether the deposit existed in commercial quantities; and (2) thereafter to reasonably develop the lease * * * both as regards exploration and production.” (Emphasis ■supplied.) Thus, in the instant case, an es- ■ sential adjunct to any showing of due dili- ■ gence would be reasonable steps in ascer- . taming the “commercial” nature of the known ore body.

Our initial concern must be with the procedure which ensued after the decision here. It is well settled that the court was justified in invoking equitable principles in deciding the cause. St. Louis Union Trust Co. v. Galloway Coal Co., N.D.Ala., 193 F. 106 (affirmed, 5 Cir., 201 F. 1022); Annotation, 60 A.L.R. 901, 925; and that equity once having been invoked, the court is entitled to retain jurisdiction until the relief has been accorded, Vargas v. Superior Court of Apache County, 60 Ariz. 395, 138 P.2d 287; Yarnell v. Hillsborough Packing Co., 5 Cir., 70 F.2d 435

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Shoni Uranium Corp. v. Federal-Radorock Gas Hills Partners
407 P.2d 710 (Wyoming Supreme Court, 1965)

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Bluebook (online)
407 P.2d 710, 1965 Wyo. LEXIS 168, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shoni-uranium-corp-v-federal-radorock-gas-hills-partners-wyo-1965.