Opinion
Rehearing Denied Dec. 1, 1944.
Hearing Granted Jan. 4, 1945.
Appeal from Superior Court, Los Angeles County; Frank C. Collier, Judge.
Action by Granville Moore against Thomas A. Wood and another for declaratory relief as to rights of the parties under an agreement. From a portion of the judgment, defendants appeal.
Reversed.
COUNSEL
Michael F. Shannon and Thomas A. Wood, both of Los Angeles, for appellants.
Cruickshank, Brooke, Dunlap & Ross, of Pasadena, for respondent.
OPINION
DRAPEAU, Justice pro tem.
Defendants, as owners of a gold mining property near Acton in Los Angeles County, made a written agreement with plaintiff for its operation and development. In addition to the mine, there was a mill near by, and machinery, fixtures and equipment included in the agreement. The plaintiff went into immediate possession.
Thereafter the plaintiff filed a complaint for declaratory relief as to the rights of the parties; several days were consumed in taking testimony, following which findings were made and judgment entered.
Appeal is taken from only one of the questions determined by the trial court, i. e.: That so long as all gold mining is prohibited by federal authority, the expense of taking care of the property shall be borne by the parties to the contract, 51% by the plaintiff and 49% by the defendants.
In order to understand the issues involved, it is necessary to epitomize the terms of the contract:
(1) (a) That the plaintiff will "enter into and upon the above described real property, taking possession thereof together with the above described personal property, and commence the mining operation * * *." (b) "will thereafter continuously operate said property and develop the same," and (c) "and will place said mine on production within a period of twelve (12) months from the date hereof, provided that delays are not incurred by reason of strikes, lockouts, governmental regulations or any other causes beyond the control of the party of the second part."
(2, 3, 4) Provisions relative to carrying on the work in a miner-like manner, use of machinery and supplies, payments out of the net profits; and payments to defendants out of profits.
(5) A provision that, at any time the plaintiff may elect, the defendants’ ownership in the mining property shall be conveyed to a California corporation, and stock issued therein, 49% thereof to the defendants and 51% thereof to the plaintiff.
(6) A provision permitting the plaintiff to cease operations at any time, whereupon the defendants may operate the mine and repay the plaintiff a portion of the money theretofore expended by him, or may liquidate the property and pay to plaintiff a portion of the liquidation returns.
(7, 8, 9, 10) Payment of $5,000 by plaintiff to defendants as further consideration for the agreement; warranties of title, covenants to protect a lease as to part of the property comprising lessor’s ownership; a recital that the plaintiff had inspected the property and took it in the condition then disclosed to him; and an escrow provision to carry out certain of the terms of the agreement.
None of the foregoing clauses need be particularly considered, except subdivisions (1), (5) and (6).
By these clauses, the plaintiff was to take possession of the property, commence and continue mining operations, and place the mine on production within a year, subject, however, to the extension clause. As part of the consideration on his part, plaintiff paid defendants $5,000. As part of the consideration on their part, defendants covenanted to convey all of their interest in the property to a corporation, the stock of which would be issued 49% to them and 51% to plaintiff. And, in the event plaintiff desired to cease operations, defendants would resume possession of the property, and would pay to plaintiff out of profits derived from its operation or liquidation a part of plaintiff’s investment while he was in possession.
The trial court adjudged that the plaintiff need not further develop the mine, or put it upon production, until the federal ban against gold mining was lifted. There is no appeal as to this part of the judgment.
Then the court found and adjudged that until gold mining was again permitted by federal authority, expenses of maintenance, such as insurance, services of watchmen, power bills, taxes, and other expenses necessary to safely keep and protect the property, real and personal, from theft or injury, should be borne by the plaintiff 51% and by the defendants 49%. For brevity, these expenses may be referred to as standby charge.
This portion of the judgment was perhaps based upon a misconception of the effect of clause 5 of the agreement. In accordance with this clause, the trial court decreed that the interests of the defendants in the gold mining property be conveyed to a California corporation and stock issued therein in the proportions mentioned. From this portion of the judgment there is likewise no appeal. Respondent now suggests that he and defendants thereby became co-tenants, and as such it was proper to require each to pay the standby expenses in the proportions referred to.
But, notwithstanding the extension of time for the performance of plaintiff’s covenants to continuously operate and develop the mine, and to put it upon production within a year, and the conveyance to the corporation, the plaintiff is still in possession of the property. Therefore, it is the duty of the plaintiff to pay the standby expenses, and no part thereof may be allocated to either the corporation or the defendants. The contract may not be so construed as to require the defendants to assume expenditures solely within the control and discretion of the plaintiff. If the plaintiff at any time desires to relieve himself of that burden, he may relinquish possession of the property under the provisions of subdivision 6 of the agreement.
Plaintiff’s right of possession to the property here in question is unimpeachably one which he can maintain in the courts against trespassers or hostile private claimants, the defendants, or the corporation. Silver Lake, etc., Co. v. Los Angeles, 176 Cal. 96, 167 P. 697; Miller v. Chrisman, 140 Cal. 440, 73 P. 1083, 74 P. 444, 98 Am.St.Rep. 63; Weed v. Snook, 144 Cal. 439, 77 P. 1023. And, as possessory owner of the property, so long as he retains that possession, the plaintiff is entitled to its products and accessions. Not being able to work the mine, there will be no products, but, if the property increases in value during the time the plaintiff is entitled to its possession, the plaintiff alone is entitled to that increase. 21 Cal.Jur. 649.
Citation of authority relative to the duty of appellate courts in the interpretation of contracts, the effect of extrinsic evidence, and other related matters may be found in the majority and minority opinions in Re Estate of Rule, 25 Cal.2d 1, 152 P.2d 1003.
That portion of the judgment from which the appeal in the above-entitled cause is taken is reversed.
YORK, P. J., and WHITE, J., concur.