Daigle v. Maddocks

WICKERSHAM, District Judge.

This suit was begun on February 25, 1905, and its principal object is to prevent the defendant, Maddocks, from mining the lower quarter of No. 6, side claim, first tier, right limit, Cleary creek, under a lay agreement to do so with J. C. Kellum, and dated September 1, 1904. Plaintiff denies the right of Kellum to make the lay with Maddocks, and claims to be the owner of the ground, subject only to an option given by him to Kellum to purchase it upon the payment to him of the sum of $4,375 on or before June 30, 1905. Was the plaintiff the owner of the ground on February 25, 1905, when this suit was instituted?

In the consideration of a cause of this kind the court will look at the whole transaction, and will construe the effect of one part by the light of other parts. So, considering the transaction between Daigle ■ and Kellum, it is my judgment that on January 11, 1905, upon the making of the mortgages and the settlement with Fleming, Kellum became the equitable owner of the lower quarter of the claim in question; their arrangement amounted in equity, and between' themselves, to no more than a mortgage upon Kellum’s property to secure (1) *391Daigle’s debt to the bank of $1,000, and (2) Kellum’s debt to Fleming of $4,375.

To the suggestion that both these mortgages pledged the security of the whole of the mining claim, and not Kellum’s quarter alone, it is answered: (1) That both mortgages are subsequent and subject to Daigle’s prior contract to sell the upper three-fourths of the claim to Crutcher, Gates, and Nelson for $50,000; (2) that the Kellum quarter is ample security for both mortgages; and (3) that neither of the mortgagees is complaining of the insufficiency of his security.

Whatever may have been the legal status of the Kellum-Maddocks lay at the time it was made, or at any time prior to January 10, 1905, it is my judgment that on February 25, 1905, when this suit was instituted, Daigle had parted with the equitable title to the lower quarter of the claim to Kellum, and was not then entitled to the relief prayed for in his complaint in this action, that Kellum was, and is now, the equitable owner, and that the arrangement of the mortgages and option is only a mortgage upon Kellum’s property to secure the payment of the sum of $5,000 to Fleming. The prayer of the complaint will be denied, and findings and judgment may be prepared accordingly.