Slide Spur Gold Mines v. Seymour

This was a suit by Ellen R. Seymour and William G. Pell against the Slide & Spur Gold Mines, Limited, an English corporation, to enforce a vendor's lien. The circuit court rendered a decree for plaintiffs. 42 Fed. 633. Defendant appealed.

The facts in this case are as follows:

In and prior to the month of October, 1886, the plaintiffs below, Ellen R. Seymour and William G. Pell, were the owners of certain mining property in the Gold Hill mining district, Boulder county, Colo., known as the 'Slide and Spur Lodes.' There had been some negotiations with one John Haldeman, with the view to a sale of this property; and on October 19, 1886, the plaintiffs, by their agents, made the following proposition to him:

'Dear Sir: I agree that in case you cannot raise the required sum within the specified time in your contract, dated about the 9th day of October, between W. F. Bruff, acting under our authority, and yourself, to change the conditions as follows, viz: To sell you the Slide mine for $750,000; 25(M) thousand dollars to be paid one week after the receipt in London of Foster's report, this to be the first payment on the property; the balance of the purchase price, $725,000, to be paid within two months from the date of the payment of $25 M; one 1/2 in cash and one-half in fully-paid common shares of the company to be formed. In case the second and last payment is not made when due, the agreement cancels itself, and the $25 M is forfeited. No ore to be taken from the mine after first payment. I further agree to give you a call at par for two months from date of issue upon the shares received as part payment for the property.

'[Signed] J. F. Seymour.

'A. B. Davis.'

Thereafter, said Haldeman, in accordance with the understanding at the time of giving this option, went to England, and secured the organization, under the laws of Great Britain, of the defendant corporation. The purpose for which this corporation was organized was, as expressly stated, to purchase and develop the Slide and Spurmines, though the articles of incorporation gave authority for the purchase and development of other properties. So far, however, as appears from the testimony in this case, it was simply an organization on paper, with a view of acquiring title to, and subsequently working, these mines.

The provision in its charter as to capital stock was as follows: 'The capital of the company is 400,000 pounds, divided into four hundred thousand shares of 1 pound each, the whole or any portion of which, and any future capital of the company, may be issued as full or partly paid shares, and at a discount or premium, and with the benefit of any preference or priority in the distribution of assets or payment of dividends, and with power, also, to increase or decrease such capital stock, and to issue any part or parts of the increased or decreased capital as consolidated stock, or any shares, at such times, in such manner, and on such terms as the company shall determine.'

The organization of this corporation was completed on the 24th of May, 1887. On August 18, 1887, Haldeman having theretofore made partial payments to the plaintiffs, an agreement was entered into between himself and J. Fenton Seymour, as their agent, which agreement was as follows:

'Memorandum of agreement made this 18th day of August, 1887, between John Haldeman, of 38 Old Jewry, in the city of London, and J. Fenton Seymour, of Denver, Colorado, in the United States of America, acting for himself and partners, the owners of the Slide and Spur gold mines, situate in Boulder county, Colorado, United States of America:

'The said John Haldeman agrees to pay forthwith the sum of ten thousand pounds sterling in addition to twelve thousand five hundred pounds already paid on account of the purchase money of the said mines, such sum of ten thousand pounds to be paid through Messrs. Wells, Fargo & Co. (who now hold the deeds of the said property in escrow), and to be held by them, and paid over to the said J. Fenton Seymour, upon the titles of the said mines being registered in the name of the 'Slide and Spur Gold Mines, Limited,' free from all charges and incumbrances; and the said J. Fenton Seymour hereby undertakes and agrees to register the titles as above upon the said ten thousand pounds being deposited with Messrs. Wells, Fargo & Co.

'The said J. Fenton Seymour hereby undertakes and agrees to have the Slide mine worked to its full capacity, and, after the due and legal registration of the title to the said company, he further agrees that the returns from the said mine shall be cabled weekly to the said company, in the form of cables sent herewith; it being understood and agreed that the money value of the first weekly returns so cabled shall not be less than the sum of two hundred pounds sterling, and that each successive weekly return shall show a moderate increase over that sum.

'The said J. Fenton Seymour hereby undertakes and agrees to take the control of the management of the said property until the payments hereinafter mentioned are completed, and it is understood and agreed that he shall retain such control until the said payments are completed. The said John Haldeman agrees that three hundred and seventy-five thousand shares of one pound each in the above company shall be transferred to Mr. Clarence Preston Elder, as trustee, and deposited with Messrs. Wells, Fargo & Co., in London, to the intent that the said shares shall be held as security for the due performance of the following conditions, viz.:

'1st. The payment of ten thousand pounds, in addition to the above-mentioned twenty-two thousand (J. F. S.) five hundred pounds, within three days (J. F. S.) after the receipt of the third successive weekly return from the mine, as hereinbefore mentioned; and,

'2nd. The balance of forty-five thousand pounds at the expiration of ten days after the receipt of eight successive weekly returns of the nature and value above specified. Upon the completion of the above-mentioned payments the said J. Fenton Seymour hereby undertakes and agrees to release the above-mentioned three hundred and seventy-five thousand shares, less seventy-seven thousand five hundred, to which he is entitled, and also less the number of shares sold with the consent and under the supervision of the aforesaid Clarence Preston Elder, acting for the said J. Fenton Seymour.

'In case the weekly returns cabled from the mine shall from any cause fall below the sum of two hundred pounds sterling per week, then, in that case, such returns shall not count, but the time for paying the second ten thousand pounds and the balance of forty-five thousand pounds shall be extended pro rata; but should the successive weekly returns amount to two hundred pounds sterling per week (J. F. S.), with a moderate increase weekly, as hereinbefore mentioned, and the said John Haldeman shall make default in the payment of the balance of forty-five thousand pounds, then, in that case, the said J. Fenton Seymour shall have the right to forfeit the amounts already paid, and to claim the above-mentioned three hundred and seventy-five thousand shares.

'As witness the hands of the said parties the day and date first above written.

'[Signed] J. Fenton Seymour.

'Jno. Haldeman.'

Subsequently, there were some further payments. On October 5, 1888, the larger portion of the purchase money still remaining unpaid, the plaintiffs, through their agent, J. Fenton Seymour, made to the company this proposition: