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Opinion of the Court.

mine fashion, in manner necessary to good and economical mining, so as to take out the greatest amount of ore possible, with due regard to the development and preservation of the same as a workable mine, and to the special covenants hereinafter reserved.

“To well and sufficiently timber said mine at all points, where proper in accordance with good mining, and to repair all old timbering wherever it may become necessary.

“To keep at all times the drifts, shafts, tunnels and other workings thoroughly drained and clear of loose rock and rubbish, unless prevented by extraordinary mining casualty.

“To deliver to said lessors as royalty ten per cent of the net smelter returns of all ore extracted from said premises, running to and including twenty dollars ($20) per ton, and on all ores running over twenty dollars ($20) per ton, twenty-five per cent of the net smelter returns.

“To deliver to the said lessors the said premises, with the appurtenances and all improvements, in good order and condition, with all drifts, shafts, tunnels and other passages thoroughly clear of loose rock and rubbish, and drained, and the mine ready for immediate continued work, (accidents not arising from negligence alone excluded,) without demand or further notice, on said 29th day of July, A.D. 1887, at noon, or at any time previous, upon demand for forfeiture.

“And, finally, that upon the violation of any covenant or covenants hereinbefore reserved, the term of this lease shall, at the option of the lessors, expire, and the same, with said premises, with the appurtenances, shall become forfeited to said lessors, and said lessors, or their agent, may, thereupon, after demand of possession in writing, enter upon said premises and dispossess all persons occupying the same, with or without process of law, or, at the option of said lessors, the said tenant and all persons found in occupation may be proceeded against as guilty of unlawful detainer.

“And the said lessors expressly reserve to themselves the property and right of property in all minerals to be extracted from said premises during the term of this lease.

“Each and every clause and covenant of this agreement of

Opinion of the Court.

lease shall extend to the heirs, executors, administrators and lawful assigns of all parties hereto.

“In witness whereof the said parties have hereunto set their hands and seals.

ROBERT ESSER. [Seal.] “DAVID K. HILL. [Seal.] “GEORGE A. JENKS. [Seal.]”

The obligation of Hill was assigned by Edward R. Sumner to Mary J. Sumner, the present plaintiff in error who brought this action. Two issues were raised by the pleadings in the case. The first of these was that there was a failure on the part of Hill to prosecute with due diligence his obligation to develop the mine, whereby the sum of ten thousand dollars less the sums credited on the contract became due. The second was, that by making the lease, the complainant had, within the meaning of the fifth clause of the contract, disposed of the mining property so as to become immediately liable for the residue of said ten thousand dollars. The court by instructing the jury that the execution of this lease by Hill caused the remainder of the ten thousand dollars to become due and payable, rendered it unnecessary for the jury to consider the first proposition, and if the court was right in that instruction, the verdict of the jury in favor of the plaintiff necessarily followed. We shall therefore consider the soundness of this instruction.

The definition of the words “dispose of” or “sell,” in this article, must be considered with reference to the remainder of the contract, to ascertain its meaning. Obviously the word "dispose” must have some meaning in the contract, and is not synonymous with the word "sell.” It would be useless, if such were its construction. It must mean something more or something less than the word “sell.” In the circumstances of this case, it would seem to mean something more. The references of counsel in their briefs to decided cases attempting to define that word are of course of very little avail, as in each instance it must be taken in connection with the circumstances in which it is used. In the language of this court in the case of Phelps v. Harris, 101 U. S. 370, 380, “the expres

Opinion of the Court.

sion to dispose of’ is very broad, and signifies more than ‘to sell.” Selling is but one mode of disposing of property.”

Looking, then, to the purposes which Edward R. Sumner had in view in the use of this clause, by which the sale or disposal of one-eighth of the property rendered the ten thousand dollars due, less the credits that should have been entered upon it at that time, it is obvious that it was expected that Hill would continue to make efforts to develop the mine and put it in profitable working condition, until all parties were ready to abandon it as a useless experiment, or until the ten thousand dollars which Hill had agreed to pay Edward R. Sumner had been exhausted by payments of contribution on account of the one-eighth interest remaining in Edward H. Sumner. Any contract made by Hill, which would put it out of his power to perform this obligation, was the thing to be guarded against, and the only guard which the contract provided was that he should not make such disposal of even one-eighth of the property. If he chose to dispose of one-eighth or of the whole of it by selling it outright, or by leasing it for two or five or ten years, he had the right to do it. In such event, however, he became liable to Sumner for so much of the ten thousand dollars as had not been exhausted by paying the contributions properly assessable against the one-eighth of Edward H. Sumner. This option he exercised by making the lease to Jenks. If the results of that lease have been as profitable as Hill might have supposed it would be, he could well afford to pay the remainder of the ten thousand dollars. If they have not, it was a losing venture, which he voluntarily entered upon.

We are of the opinion that in doing this, he disposed of the property within the meaning of the clause under consideration, and instantly became liable for that part of the ten thousand dollars which he had not paid by advances on account of the interest of Edward H. Sumner. As this view of the case was in accordance with instructions of the presiding judge, and is conclusive of it, the judgment of the Circuit Court is

Affirmed.

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No. 47. Argued October 31, 1889. – Decided November 11, 1889.

In an action in the nature of an action on the case to recover from the

defendant damages which the plaintiff has suffered by reason of the purchase of stock in a corporation which he was induced to purchase on the faith of false and fraudulent representations made to him by the defendant, the measure of damages is the loss which the plaintiff sustained by reason of those representations — such as the money which he paid out and interest, and all outlays legitimately attributable to the defendant's fraudulent conduct; but it does not include the expected fruits of an

unrealized speculation. In applying the general rule that “the damage to be recovered must always

be the natural and proximate consequence of the act complained of” those results are to be considered proximate which the wrong-doer, from his position, must have contemplated as the probable consequence of his fraud or breach of contract.

The court in its opinion, stated the case as follows:

Richard J. Bolles filed his petition against Lewis W. Smith on the twenty-first day of February, 1884, in the Circuit Court of the United States for the Northern District of Ohio, to recover damages for alleged fraudulent representations in the sale of shares of mining stock, in place of which an amended petition was substituted on the second day of March, 1886, by leave of court. The amended petition set up five causes of action: First. That in the fall of 1879 defendant and one Joseph W. Haskins entered into a fraudulent combination to form an incorporated mining company based upon alleged mining property in the Territory of Arizona, and for the alleged 'purpose of mining silver ore therefrom and milling the same for market; that the title to the property was claimed to be in Haskins; that Haskins and others organized said corporation under the laws of New York, by the name of “The Irene Mill and Mining Company,” with a capital of two mil

Statement of the Case.

lions of dollars, divided into one hundred thousand shares of twenty dollars each; that Haskins took the whole of the stock and paid for the same by transferring to the company the alleged mining property, and apparently for the sum of two millions of dollars; that Haskins and defendant then represented that sixty thousand shares of said stock were issued to or paid for by Haskins, and were deposited with the treasurer of the company, to be sold to subscribers and purchasers, and the proceeds to be applied to the construction of a stamp mill to be connected with the supposed mining property, and for the purpose of further sinking the shaft and tunnel then in progress; that the defendant had in connection with Haskins some interest in the stock, the extent of which was then and is still unknown to plaintiff ; that plaintiff was wholly ignorant of the value of the stock and of the mining property on which it was supposed to be based, never having dealt in such stock or property; that in the month of February, 1880, the defendant applied to him to buy and subscribe for some of the stock, stating that he was interested in it, and that before acquiring an interest he had learned from Haskins the enormous value of the property, and to satisfy himself had gone to Arizona and thoroughly examined it; that he then represented to plaintiff a variety of facts as existing in respect to the mine, making it of great value, which representations are set forth in detail; and that having known the defendant for several years, and believing him to be a truthful and honest man, and without knowledge or suspicion that said representations were untrue, but believing and relying on the same, the plaintiff had, at the request of the defendant, in the month of February, 1880, agreed to buy of the defendant four thousand shares of the stock, at $1.50 per share, which contract was completed in the month of March, 1880, by the payment in full of the purchase price, to wit, six thousand dollars, to one H. J. Davis, who claimed to act as treasurer of the company, and from whom plaintiff received certificates for the stock. Plaintiff then alleged that said representations were each and all false and fraudulent, specifically denying the truth of each of them, and averring that “said stock and mining property

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