
    190 F. 440
    BELSEA et al. v. TINDALL et al.
    No. 1,849.
    Circuit Court of Appeals, Ninth Circuit.
    Sept. 5, 1911.
    
      Stevens, Roth & Dignan, Campbell, Metson, Drew, Oat-man & Mackenzie, and E. H. Ryan, for plaintiffs in error.
    James Wickersham, for defendants in error.
    Before GILBERT, ROSS, and MORROW, Circuit Judges.
   MORROW, Circuit Judge

(after stating the facts as above).

The question in the court below was whether the defendants had worked the claim in accordance with the terms of the lease. The lease provided certain specific directions for working the claim, and the question was whether these directions had been followed by the lessees. The lease required that the lessees should “work the claim mine fashion, starting and lower line working the same with a straight face, at least one hundred feet wide, or more if required, to get all pay dirt as low as two cents per pan.” To make these instructibns more certain and definite the lease stated them. “In other words,” that is to say, the lessees were required “to good and economical mining so far as to take out the greatest amount of mineral with due regard to the development and preservation of the same as a workable mine.”

Whether the defendants worked the mine in accordance with these directions the evidence was conflicting. It was therefore a question of fact for the jury to determine upon the weight of evidence under appropriate instructions by the court. The errors assigned relate to these instructions. The court instructed the jury fully as to the issues involved in the case as set forth in the plaintiffs1 complaint, the defendants’ answer, and plaintiffs’ reply, and in an orderly way gave the usual instruction that the burden of proof was upon the plaintiffs, and that it was incumbent upon them to establish all the material allegations of their complaint by the weight or preponderance of the evidence. The jury were instructed that, unless they found and believed from all the evidence in the case that the plaintiffs had sustained the material allegations of their complaint by the weight or preponderance of the evidence, it could not find in plaintiffs’ favor, and the verdict should be for the defendants; and if the jury should find and believe from the evidence that the evidence did not preponderate in favor of either of the parties, but was equally balanced, then it should find for the defendants.

It is objected to this instruction that it leaves out of consideration entirely the question.of estoppel, affirmatively pleaded by the defendants, and upon which defendants relied, and the burden of proof of which was upon the defendants. The objection cannot be sustained for the reason that in the instruction complained of the court was referring to the evidence required to sustain plaintiffs’ complaint. When the court reached an appropriate place in its instructions iri referring to the defendants’ affirmative defense, the court gave the required instruction, and gave it in a way so as to avoid confusion and mistake as to its proper relation to the issue involved. The court in this part of its instruction again referred to the fact that the burden of proof in the case as in all civil cases was upon the plaintiffs; that the plaintiffs must establish all the material allegations of their complaint by a fair preponderance of the evidence. “But,” said the court, “when that is once done to your satisfaction, in order for the defendants to overcome the right of the plaintiffs to prevail by reason of any affirmative defensive matter set up in their answer, it then becomes necessary for the defendants to prove such affirmative matters by the weight or preponderance of the evidence.” To this instruction there was no objection, as, indeed, there could be none. It is a clear statement of the rule relating to evidence given in support of an affirmative defense, and its omission from that part of the instruction relating to the plaintiffs’ case as set forth in their complaint was not error. “In examining the charge for the purpose of ascertaining its correctness in point of law, the whole scope and bearing of it must be taken together. It is wholly inadmissible to take up single and detached passages, and to decide upon them, without attending to the context, or without incorporating such qualifications and explanations as naturally flow from the language of other parts of the charge. In short, we are to construe the whole, as it must have been understood, both by the court and the jury, at the time when it was delivered.” Magniac v. Thomson, 7 Pet. 348, 389, 8 L.Ed. 709; Evanston v. Gunn, 90 U.S. 660, 666, 668, 25 L.Ed. 306.

The court instructed the jury that the defendants were held by law to a substantial compliance with all the terms and conditions of the lease, and, if the jury found by a preponderance of the evidence that it failed to comply substantially with any of the terms of the lease, plaintiffs would be entitled to recover the possession of the premises in controversy. To'this instruction there was appended this qualification: “Unless you further find that the plaintiffs have estopped themselves from claiming the possession of said premises by their own acts, as you will be hereafter instructed.”

It is objected to this last part of the instruction, as well as to the instructions relating to estoppel thereafter given, that there was no evidence sufficient in law on which to base an instruction on the subject of estoppel, and which would give the jury the right to pass upon that issue in favor of the defendants. This objection is urged against all the instructions referring to the defense of estoppel as set up by the defendants. It is not based upon the objection that the law was incorrectly stated, but that the evidence was not sufficient to create an estoppel. If there was any evidence tending to establish the defense of estoppel, the question was for the jury. If there was no evidence in support of that defense, the objection should have been made by requesting the court to so instruct the jury and directing a finding on that issue in favor of the plaintiffs. This the court was not requested to do.

Was there any evidence tending to establish the defense of estoppel, and, if there was such evidence, did it relate to the first cause of action or to the second cause of action, or to both ? The court instructed the jury that the defense of estoppel could not overcome the effect of the bringing or the maintenance of the suit by the plaintiffs; that is to say, if the jury found by a preponderance of the evidence that the defendants had violated the terms of their said lease prior to the 19th day of February, 1908, and prior to the service of the written notice of forfeiture upon them, That no conduct of the plaintiffs or their agents subsequent to the service of the summons could in any event estop the plaintiffs from bringing an action and recovering the possession of the premises for such a breach, and no act or word of the plaintiffs after the service of the summons in the case could estop them from proving the breach occurring, if the jury found from a preponderance of the evidence that such did occur, prior to the commencement of the action and service of summons upon them. In other words, the defense of estoppel to be effective against acts of forfeiture alleged in the complaint must be supported by evidence of conduct on the part of the plaintiffs or their agents occurring prior to the notice of forfeiture and the service of summons in the case.

It is admitted by the plaintiffs that this instruction was correct as applied to any alleged acts of defendants occurring subsequent to the commencement of the action, but it is contended that the defendants did not allege or attempt to prove estoppel by acts prior to the commencement of the action. Conceding this to be the fact, it follows that the evidence tending to establish the defense of estoppel was limited to the second cause of action, wherein there was a claim for damages in the sum of $24,000 for continuing acts in violation of the terms of the lease after notice of forfeiture and after the commencement of the action. What was this evidence? The lease was entered into on July 6, 1906, and immediately thereafter the lessees entered into the possession of the property. On February 19, 1908, the complainants notified the defendants that the forfeiture of the lease was claimed, and on February 24, 1908, the original suit in ejectment was filed in this case. But nothing appears to have been done under this original complaint. On May 1, 1908, defendants cleaned up from the workings of the claim gold dust amounting in value to $69,136, and thereupon defendants paid to the plaintiffs the 40 per cent, royalty to which they were entitled under the lease, namely $27,554, the defendants retaining the remaining 60 per cent., amounting to $41,582. In October, 1908, defendants cleaned up from the workings of the claim gold dust amounting in value to $24,019.20, and thereupon paid plaintiffs the 40 per cent, to which they were entitled, amounting to the sum of $9,607.68, the defendants retaining the balance. On May 22, 1909, defendants cleaned up gold dust amounting in value to $39,-445, and thereupon paid to the plaintiffs the 40 per cent, due them under the lease, amounting to the sum of $15,776.-20, the defendants retaining the remainder. The total production of the claim by the defendants from May 1, 1908, to May 22, 1909, amounted to $132,620.20, and of this amount the plaintiffs were paid the sum of $43,040.08. The several amounts making the latter total sum the plaintiffs received without protest of any kind and without any complaint that the defendants were not working the mine in accordance with the terms of the lease. During all this time — that is to say, during all the time subsequent to the bringing of the action of ejectment on February 24, 1908 — the defendants prosecuted the work of sinking shafts, running tunnels up and down and across the deposit, and removing and hoisting gravel from the underground drifts to the surface where it was placed in dumps for washing at the proper season. During this time the evidence tends to show that either personally or by an agent the plaintiffs continued to inspect the work in the mine as it progressed; that from time to time they took samples of gravel from such parts of the mine as they wished without objection or interference on the part of the defendants; that the plaintiffs washed this gravel for the purpose of determining its value and whether the production of the mine as worked by the defendants was satisfactory or not. This procedure was maintained for more than a year, and the plaintiffs continued at each clean-up to receive the exact measure of royalty provided in the lease, and to receipt therefor without demanding more and without claiming that more was due.

During the winter of 1908-09 the defendants at considerable expense mined and hoisted and piled upon the surface two large dumps of gravel, and had washed a portion of it. The plaintiffs had been present, watching the progress of the work without protest or objection, but, notwithstanding this evidence of acquiescence, the plaintiffs on May 20, 1909, interposed by writ of injunction and stopped the work, demanding the defendants to desist from further mining operations upon said claim, and from sluicing and washing the 'dumps of gravel on said claim, and from separating the gold therefrom. There was evidence tending to show that the estimated value of the gravel remaining in these two dumps at the time the work was stopped by the injunction was $50,000.' It is charged by the defendants that the purpose of the injunction was to deprive the defendants of their share of the product of what remained of these two dumps of gravel. We think this evidence tended to establish the defense of estoppel, and that it was proper to go to the jury in support of that defense upon the second cause of action. As said in Dickerson v. Colgrove, 100 U.S. 578, 580, 25 L.Ed. 618: “The estoppel here relied upon is known as an equitable estoppel or estoppel in pais. The law upon the subject is well settled. The vital principle is that he who by his language or conduct leads another to do what he would not otherwise have done shall not subject such person to loss or injury by disappointing the expectations upon which he acted.”

To the same effect is Kirk v. Hamilton, 102 U.S. 68, 26 L.Ed. 79.

It is next assigned as error that the court instructed the jury that the lease had been extended for the period of one year from and after the 1st day of September, 1909, and that the defendants had until that time within which to take out any pillars left behind and any bulkheads and pay dirt as low as two cents to the pan left on the limits of the claim already worked, providing the jury should find from the evidence that the defendants had at all times in good faith intended to work out such ground so left and separate the gold from the earth and gravel therein under the terms of the lease. An exception was taken to this instruction on the ground that it did not state that the extension was given prior to the commencement of the action and during the year 1907, and for that reason was misleading and had a tendency to prove an acquiescence after the commencement of the action. There does not appear to have been any controversy as to the time when this extension was made. In the course of the trial and in the presence of the jury it was admitted by counsel for the plaintiffs that the lease was extended for one year in the summer of 1907. With sqch an admission before the jury and without controversy as to its accuracy, we do not think the instruction of the court was misleading, particularly in view of the positive instruction of the court that, if the jury found by a preponderance of the evidence that the defendants had in any manner substantially violated the terms of their lease before the commencement of the action, their verdict must be for the plaintiffs for the possession of the claim, and that no conduct of the plaintiffs or their agents subsequent to the service of the summons on the defendants in the cause could in any event estop the plaintiffs from maintaining the action and recovering the possession of the premises for •such a breach. This instruction, which appears to have been more favorable to the plaintiffs than they were entitled to have given to the jury, precluded any possibility of the jury being misled as to the fact or its tendency to prove an acquiescence on the part of the plaintiffs after the commencement of the action.

The remainder of the instruction is assigned as error, for the reason it is contended that the contract of lease did not authorize the leaving of any pay dirt behind with the intention of removing the same later, but did provide that all of the pay dirt as low as two cents to the pan should be removed as the same was worked from the lower end of the premises. The question for the jury to determine was whether the claim had been worked by the defendants in mine fashion. In the detail of working the claim it was required that the work should start at the lower line, working the same with a straight face at least 100 feet wide or more if required to get all pay dirt as low as two cents per pan. All this was again expressed by the lease. “In other words,” that is to say, the defendants were required by the lease “to good and economical mining so as to take out the greatest amount of mineral, with due regard to the development and preservation of the same as a workable mine.” If, then, the leaving of pay dirt behind by the defendants to be afterwards removed by them was required under the conditions of working the claim mine-fashion, and of working it economically so as to take out the greatest amount of mineral with due regard to the development and preservation of the same as a workable mine, the defendants had not violated the terms of the lease, but, on the contrary, they had strictly observed its terms. There was evidence introduced tending to show that the leaving of a bulkhead between blocks 1 and 2 for the purpose of keeping out the waters of Ester creek was working the claim mine-fashion, and that the leaving of pillars of unworked gravel to support the overhead earth as the work progressed was working the claim mine-fashion, providing these pillars were removed before the defendants left the claim; and there was evidence of the same character concerning the gravel on the side limits. There was also evidence tending to show that pay dirt was dirt that would pay the defendants to remove. With this evidence before the jury the question as to whether the defendants intended to remove the dirt left behind in the progress of working the-mine was merely incidental to the main and controlling question whether they were working the claim mine-fashion and economically so as to take out the greatest amount of mineral with due regard to the development and preservation of the same as a workable mine. If the defendants were prosecuting the work in accordance with the terms of the lease with respect to these requirements, then the intention of the defendants to remove all the pay dirt during the term of the lease was as much in accordance with its terms as any other part of the work.

The court instructed the jury, in substance, that “pay dirt,” referred to in the lease, was such a stratum of gold-bearing earth and gravel that the defendants using the approved methods in the vicinity of the mine could remove at a profit over and above the necessary expense of extracting the same; that is to say, “pay dirt” as low as two cents per pan did not mean all dirt in the mine averaging two cents to the pan, but all dirt which it would pay to mine as low as two cents per pan through the employment of minerlike methods. It was objected to this instruction that what was “pay dirt” was a question of fact for the jury, and not a question of law for the court. In this connection the court had instructed the jury that the phrase, “pay dirt as low as two cents per pan,” should be considered in connection with the circumstances and conditions surrounding the working of the mine and the physical conditions of the ground, both above and below the surface. After a careful examination of the testimony, we think this instruction was correct as a construction of the terms of the lease in the light of all the surrounding circumstances and conditions pertaining to the working of the claim.

The remaining objections to the instructions of the court have'been substantially covered by the discussion of the objections to which specific reference has been made.

Finding no reversible error in the record, the judgment of the lower court is affirmed.  