Walters v. Davison

MUSSELL, J. This is an action to quiet title to mining claims in Inyo County and to collect money alleged to be due to plaintiff under the terms of a lease. It was stipulated at the trial by defendants (appellants here) that judgment be entered in favor of plaintiff quieting his title to the claims involved, and the only dispute here is as to the amount of the money judgment awarded to plaintiff.

The lease, dated October 8, 1951, is between plaintiff as lessor and defendants as lessees and is for a period of five years and as long thereafter as the lessees shall continue to mine and remove tungsten or other minerals from the premises in commercial quantities. The lessees agree therein to keep accounts of ore mined and sold and pay lessor a royalty of 10 per cent on the mineral or minerals in all ore sold, except that when the tungsten content of ore sold shall exceed 1 per cent, then lessees shall pay to lessor a royalty of 12 per cent on said tungsten. Royalties to be paid on the price received at the mill or stockpile. Lessees agree to pay lessor all Royalties due from sale of ore in any calendar month upon the 15th day of the month following. In the event the royalties realized by the lessor in any calendar month do not equal $150, then the lessees shall pay to the lessor an advance royalty equal to the difference between the amount actually realized and $150. All advance royalties so paid shall be deducted from royalties when and if paid in subsequent months. The lessees agreed to enter upon the claims and to work the same in a manner necessary to good and economical mining. The lessees have the right to cancel the lease “upon 30 days written notice to lessor and to move all portable property.” The lease further provides:

“In the event of the lessor taking exception to the manner in which above mentioned claims are operated, or to other alleged violations of this agreement, lessor may serve upon lessees by registered mail written notice addressed to lessees at said lessees’ designated place of business, setting forth said violations. If said allegations are found to be correct then the lessees shall correct the practices complained of within thirty (30) days from date of said notice, or this agreement shall be cancelled and claims returned to lessor with the [600]exception of portable property which shall be retained by lessees.”

Defendants took possession of the property under the lease and made the monthly payments to Walters of $150 per month- for each of the months beginning October, 1951, through May, 1952, paying a total of $1,200. No further payments • were made by defendants. In February, 1952, plaintiff wrote to them complaining about their failure to develop the property and again on June 3, 1952, wrote to them stating, among other things, that the lease would be terminated unless the assessment work was begun by June 9. Defendants completed the assessment work by June 30, 1952, and upon completion thereof gave orders to their workman to cease all further operations on the claim and to return the key to the claim site cabin to plaintiff. No notice was given to plaintiff by defendants that they intended to cancel the lease or that they were in fact abandoning the property. On July 5th the workman (Bronson) delivered the cabin key to Walters and told him that he (Bronson) had been instructed to discontinue all work on the claims. No further work was done on the property and no payments were thereafter made as provided in the lease.