Burns v. Loftus , 32 Nev. 55 ( 1909 )

By the Court,

Talbot J.

(after stating the facts):

This action was brought to recover $10,000, claimed to be due as royalty or percentage on a sublease of mining ground. The appeal is from a judgment in favor of defendants, and from an order denying a motion for a new trial.

A number of legal principles, which are correct in the abstract, have been urged in behalf of the appellants, which do not fit the conditions shown by the record. Their theory of the facts of the case, which was not adopted by the district court, cannot be considered as affecting the result of the appeal. Under the practice so often stated that the testimony will not be reviewed when the verdict or findings are supported by any substantial evidence, we are limited to the facts found by the lower court. This means that, instead of applying the rule which usually makes a tenant or subtenant liable when he holds over after the expiration of the lease under which he went into possession, we must proceed upon the theory that Burns, while managing the lease and carrying on negotiations for himself and associates, was anxious to have defendants take a sublease upon one-half of the ground, and work it extensively, and that, in order to induce the defendants to take the sublease, he used his influence with the mining company to have the defendants allowed time after the expiration of the Burns lease, as they exacted, before they would take the sublease, which resulted in the execution of the lease by the mining company to the defendants for a period extending two months beyond the time allowed the defendants for working under the sublease.

Therefore the controlling question is whether under the facts found — and more particularly that plaintiffs, while holding a lease upon a piece of mining ground, gave a sublease to the defendants upon half of it for the time remaining on the original lease, less the last day, and that in contemplation of extensive work and placing machinery this sublease was taken by the defendants only on condition that they should have further time, which, by lease to them from the original lessor, was granted for sixty days beyond the period of the original lease, and that the lessor later extended this lease to the defendants sixty days, and still later extended the original lease to the plaintiffs sixty days; that the defendants paid the plaintiffs the royalties or percentages for the ores extracted during the sublease and the additional day until the expiration of the original lease — the plaintiffs can recover the percentages upon the returns of ore extracted by the defendants during the sixty days’ extension of the original lease to the plaintiffs, or are the defendants entitled to retain this percentage under the lease executed to them covering the period of the extension of plaintiffs’ lease? We feel constrained to consider the case on the hypothesis that the lease to the defendants was obtained with the knowledge and assistance of Burns, and as an inducement and consideration for the taking of the sublease by the defendants, and that his associates were charged with knowledge and bound by his action, and consequently that they surrendered any claim which otherwise they might have had to the ground after the expiration of their lease.

Bearing in mind, in connection with the other circumstances, that the sublease was subject to the conditions of the original lease to Burns, and that the lease to the defendants specified that it was subject to the terms of the Burns lease, which fixed and limited the plaintiffs’ tenure, as all concerned must have been aware, the rights of the parties to the east one-half of the ground vested in the defendants from the execution of the sublease for the remainder of the period of the Burns lease, less twenty-four hours, during which the plaintiffs would have been entitled to the possession, if demanded; but, as the possession was not demanded, in holding over by acquiescence for this twenty-four hours the defendants became liable for 10 per cent of the ores extracted during that time, under the same terms as provided in the sublease. If plaintiffs had demanded and received possession for the twenty-four hours, the defendants would have been entitled to demand and receive possession at the end of the twenty-fourth hour; but, as there was no surrender of the possession, after the expiration of twenty-four hours defendants became entitled to possession under their own lease, according to the agreement of the different parties at the time the sublease and lease to the defendants were made.

Although the Loftus lease provided it should run from the time of its execution until approximately two months beyond the determination of the Burns lease, being made subject to the latter, it could not take effect, so as to give the defendants any right of possession under it, until the expiration of the Burns lease on the 1st day of January, 1907, if the latter was not sooner forfeited, and no forfeiture is shown or claimed. As the Loftus or defendants’ lease, under the findings; was obtained by the consent, knowledge, and assistance of- Burns, and as an inducement for the defendants to take the sublease, and this sublease executed by the parties referred to the Burns lease, which stated that it expired on the 1st day of January, and as the defendants’ lease was both made and extended prior to the extension of the Burns lease, the extension of .the Burns lease, obtained when he was aware that the mining-company had previously given the lease or extra time to the defendants on the east half of the ground for the period covered by the extension of the Burns lease, only applied to, or affected that part of, the ground not covered by the Loftus lease previously executed, and the plaintiffs are estopped and precluded from claiming any right to the percentage of ores extracted during that part of the period of the Loftus lease which ran after the termination of the original Burns lease.

After the defendants had taken the sublease on condition that they have more time from the Combination Fraction Mining Company, which had been refused to the plaintiffs, and the plaintiffs knew, or were charged with knowledge of the fact, that defendants would not take the sublease, unless they could obtain more time from the company, plaintiffs could not, by later obtaining an extension of their lease, deprive the defendants of the benefits of their lease, which they had obtained as one of the conditions in the transaction by which the plaintiffs received $1,000 and 10 per cent royalties during the life of the Burns lease.

The appellants are correct in their contention and application of the rule that the written terms of the sublease cannot be varied by parol, except in so far as the testimony related to the consideration. The statement of witnesses that they considered the sublease, and the transaction in relation to it between the'parties, as a sale of the plaintiffs’ interest in the Burns lease was improperly admitted, for the sublease was governed by its terms, which could not be varied by parol in the absence of any allegation that it had been executed through mistake -or fraud, and in any event the testimony should relate to what was said and done, instead of to the conclusions of the witnesses, who were not testifying as experts; but the admission of this evidence was harmless error. All the written conditions of the sublease'appear to have-been fulfilled, including the payment of the consideration expressed of $1,000 cash and 10 per cent of the net values extracted.

The testimony that a further consideration or condition was exacted by the defendants in the requirement that additional time be given to them after the termination of the Burns lease was admissible to show a further and full consideration, which may generally 'be proven by parol, in addition to, or contradiction of, the consideration stated in the instrument. (Guidery v. Green, 95 Cal. 630, 30 Pac. 786.) This evidence was properly admitted to show that plaintiffs were aware, or were warned, at the time they secured the extension of their lease, that the defendants had already obtained a lease on the east one-half of the'ground for the time covered by the extension given later of plaintiff’s lease, under which extension they now base this action. This testimony was admissible to prove an estoppel, for if the defendants had not entered into any sublease or contract with the plaintiffs, or if the plaintiffs had held no leasehold or other interest in the premises, or if they had owned the mine in fee, but had assisted or induced, or with knowledge allowed without objection, the defendants to take their lease from the Combination Fraction Mining Company, and proceed with heavy expenditures and development work upon the ground, and .the company had been without any right or title to the claim, the plaintiffs would still be precluded from recovering.

There is stronger reason for holding that plaintiffs cannot prevail when the benefits they accepted and obtained through the transaction would not have been acquired, and the defendants would not have taken the sublease, nor paid the $1,000, nor royalties to the plaintiffs, if they had not been given the additional time under the lease to them. The ordinary rules of estoppel, applied to the facts as found by the district court, are a bar to a recovery by the plaintiffs. (Alexander v. Winters, 23 Nev. 475, 24 Nev. 146; Bishop v. Stewart, 13 Nev. 41; Sharon v. Minnock, 6 Nev. 377; Corser v. Paul, 41 N. H. 31, 77 Am. Dec. 753; 2 Wigmore on Evidence, 1056; 16 Cyc. 787, and cases cited.)

The judgment is affirmed.