Appeal from the Circuit Court of the United States for the Northern District of California.

Suit in equity by the Rosario Mining & Milling Company against C. W. Clark and others. Decree for complainant, and defendant Clark appeals.

The appellee was the complainant in this suit, the defendants being the appellant, Clark, who was the principal defendant, Frank L. Sizer, the theretofore confidential mining expert of Clark, and William Falconer, as the administrator of the estate of Edward B. Whitmore, deceased, who, during the times in question, was Clark’s private secretary and confidential agent. The suit was for the specific performance of a written contract made May 1, 1902, between, tlio appellee, named therein as the party of the first part, and Clark, Whitmore, and Sizer, named therein as parties of the second part, concerning certain mining property known as the “Rosario Mine.” situated in the state of Chihuahua, Mexico, specifically described in the bill. The respective parties had previously entered into two other contracts respecting the same property, which are referred to in the contract of May 1, 1902, as follows:

“Whereas, on December 12, 1900, the parties hereto entered into a contract whereby the second parties were given an option to purchase said properties for $800,000, and bound themselves to do certain development work upon said property, and the treatment of the ores thereof, including stipulations binding the second parties to repair and improve said property and appurtenances, in the way of building and machinery thereof, and, in case of the failure of the second party to exercise their option and buy the property, then all such improvements and machinery and appliances as the second party should put upon the property should become the property of the first party without cost or expense; and, whereas, on the 12th day of August, 1901, said contract was extended so as to continue said option until May 1, 1902, and the second parties again bound themselves to continue the possession and .development,of-¡said mine,, and a proper, (treatment of the ores thereof until May 1, 1002; and, whereas, in each of said contracts said second parties bound themselves to examine the. titles .to said mining property and other property above described; and, whereas, said second parties by said contracts bound themselves:to' make reports and maps of said property, ito be furnished to the first party, and showing the extent-of the working upon and value of the said property and its ores, treatment, and tests thereof; and, whereas, the said second parties' have, after examination- of said property and the titles thereto, 'notified the first party that the second party is satisfied that the titles to said property are in the first party; and, whereas, the second party has notified said first party that they will not exercise their said options to buy said property a,t the price of $800,000 but have offered to the first party to buy the said property at the price of ($400,000) four hundred thousand dollars cash (American gold); and, whereas, the first part(y) has refused to accept said offer; and, whereas, said option of the second parties to purchase said properties has expired, and the first party has 'become and is entitled to the possession of said property, together with all of the improvements, repairs, machinery, materials, tools, equipments, and betterments placed thereon by the second party, excepting current supplies of wood, groceries, chemicals, and unused hardware supplies, and entitled to the maps -and complete report upon said property provided for in said contracts, which- map and reports have not been furnished to the first party; and, whereas, it is the desire of each of the parties to further develop said property by the development work hereinafter stipulated, to the end of more certainly determining the value of said property, so that the first party may be able to sell the same to the best advantage to any purchaser which it may find, and, in the event of a sale at a figure above $600,000 to other parties, that the first party will out of such proceeds compensate the second parties in part for the expenditures they have made in development of said property as herein provided; and, whereas, in order to carry out this arrangement and purpose, and to afford the second parties an opportunity to buy said property at the price of $600,000 in the event of a failure of the first parties to make a sale of said property during the life of this contract at more than $600,000, and to afford, the second parties a preference right to buy said property at the price of $600,000 as herein stipulated; and, whereas, it is necessary to keep said property open and the 'operating plant in operation; and, whereas, the second parties, as a consideration in part for tfiis option contract, are desirous of keeping open said offer to buy said property at the price of $400,000, subject to the right of the first party to accept the offer at any time during the life of this contract:

“Now, therefore, it is hereby mutually agreed between the parties hereto as follows:

“(1) The second parties offer to the first party to buy from the first party said property, and to pay to the first party therefor the sum of ($400,000) four hundred thousand dollars, American gold, at -Ft. 'Worth, Tex., and to make said payment within thirty days after being notified of an acceptance by the first part(y). of said offer; provided, however, that if the said offer is accepted within the next four months the second party shall have until September 1, 1.902, to make such payment, the first party concurrently or as near as may be with such payment to cause to he transferred to the second parties the titles which the first party through its directors s or otherwise has in and to said, property; and the second parties agree to leave said offer open for one year from this date, subject, to the acceptance of the first party at any time during said year. Said titles having been examined by the second parties, it is agreed that the same are good and sufficient

“(2) The first party, reserving the right to sell said proiierty and contract with reference thereto to other parties, gives and grants to the second parties an option to buy said property at the end of the said year, to- wit, on May 1, 190$ (said option to be -then exercised or forfeited), at the price’ of $600,000 cash or its equivalent, American gold, provided the first party shall not have sooner sold said property, or made a bona fide contract to do so : and provided, further, that before making any offer to sell said property at $600,000 or less to other parties the first party shall give to the second parties a preference right.to buy the same at said price so offered to others, and to that end shall notify the second parties of such contemplated sale or offer, and ttie second party sliall promptly exercise its performance (preference) right npon being so notified and afforded an opportunity to do so. and shall have 30 days after electing to take the property in which to make the payment, for the property, whereupon concurrently or as near as may he the first party shall cause said property to be conveyed to the second parties. If the second parties, upon being so afforded an opportunity to exercise snob performance right to purchase, shall fail to do so, then such right shall cease.

“(3) The first party, reserving full rights to make any sale it may choose of said property during the year, agrees that if during the year up to May 1, 3 903, the first party shall sell said property or make a valid contract of sale thereof to other parties, resulting in a sale of the same at a price greater than 3000,000. it shall pay io the second parties $50,000 out of the excess of the purchase price above $000,000, except that if such excess docs not amount to S50,000. then such amount as the purchase price upon such sale shall exceed $000,01)6: provided that, if the purchase price upon such sale shall not exceed $050,000, the second parties shall have the preference right to take the property at the price of $000.000; provided, also, that in the event of a sale to other parties, partly on a credit, the payment of the $50,000, or the excess over $000,000, if less iban $50.000, if under this contract the second parties shall become entitled to it, shall he apportioned among the time payments of the purchase money upon such sale, in proportion as it shall bear to the whole; provided, however, that not less than one-half of the amount to which the second parties shall he entitled shall be paid out of the first cash payment.”

The contract in suit then provided for the right of free access to the mine by the first party thereto, and its appurtenances, including all books and records of its operation, and required the parties of the second part thereto to remain in possession of the property, and at their own expense to operate it until May 1, 1903, unless sooner sold, and, during the first 90 days from the date of the contract in suit, to perforin certain specified work in and about the mine, and during that period of 90 days to pay to the first party 20 per cent, of the gross bullion output from ihe mine, mill and cyanide, or other reduction plant, and to operate the mill to its full capacity, and then provided that:

“After the end of the 90 days or the completion of said work, if sooner-completed, the second parties shall, at the option of the first party, continue the operations of the mill and cyanide plant and to keep the mine unwatered and for the purpose of paying expenses shall have the bullion output of the said mill and cyanide plant, and if the output shall exceed such expenses then the excess shall lie paid to the first party as royalty, but no other royally shall be paid out of such output, hut the ore so worked during that time shall not he sorted or picked, nor the rich streaks taken out; provided that after said work so specified shall have been completed, and in any event after 90 days, the first party shall have the right at any time to take possession of said property, and all of the improvements, betterments, machinery, and appliances, tools, apparatus, buildings, and supplies of every kind useful in the operation of the property, and as to all such supplies as under either of said preceding contracts the first party is to pay for, upon said property being turned over to it, an inventory shall be made and the same to be paid for at their reasonable value, it being understood that in determining what supplies and materials are to be turned over to the first party without being paid for, and what of such supplies are to be paid for, said original contracts are to be looked to and to govern.”

The contract in suit next made certain provisions concerning the expenses of the work, and for certain settlements and proceedings. Its eighth, ninth, and tenth clauses are as follows:

“(8) In the event: of an accei>tanee by the first party of the offer of the sée-ond parties to buy said property at the price of $400,000, and a failure or refusal of the second parties to make good the offer to buy said property, then riie second parties shall be liable to the first party in damages in the stipulated sum of $100,000. The object of this clause of this contract, is to make the measure of damages certain, whereas, without such stipulation, by reason of the peculiar character of the property and situation and surroundings of the parties,- it would lie impossible to arrive at any just and correct measure of .damages by proof in a court of law; and in the event the first party shall not sell said property to other parties or contract to do so according to the. terms of this contract, and the second parties shall, under the provisions of this contract become, entitled to exercise their option to buy the said property at $000,-000c and shall elect to exercise said option and shall thereupon offer to purchase said property at said price, and the first party shall fail or refuse to comply with this contract to sell their said property at that price, then the first party shall be liable to the second parties in liquidated damages to the amount of $100,000. This shall not deprive the second parties of the right to waive damages and have specific performance of this contract.

“(9) Upon the termination of this contract, or at any time at which the first party shall elect to take possession of said property, the same shall be turned over to the first party, together with (1) all of the betterments, machinery, repairs, apparatus, supplies for all appliances and machinery and all parts thereof, tools, assay appliances, and all other appliances upon the property, free of any cost to the first party, and (2) also shall be turned over to the first party all of the supplies on hand in the way of wood, charcoal, lime, merchandise, groceries, feed, powder, caps and fuse, cyanide, chemicals, and all other supplies, the first party to pay for such supplies as are mentioned under this paragraph (3) their reasonable value. In determining what of said materials shall be paid for and what of the same shall 'be turned over without compensation, the original contracts shall govern.

“(10) It is further agreed by and between the parties hereto that this contract takes the place of and is a substitute for each of said original contracts, except in so far as they are referred to for the purpose of furnishing a basis of settlement and no matter of supplies, materials, maps and reports, etc.; but in the event the second parties fail to perform the obligations of this contract, then the obligations of the second parties and liability thereunder for all damages under the said original extension contracts shall exist in the same manner and to the same extent as if this contract had not been made, the full performance of this contract being a condition precedent to the second parties being relieved of any liability under said contracts.”

In its bill the complainant alleged the death of Whitmore, the appointment of Falconer as administrator of his estate, and that both Falconer and Sizer were residents of the state of Montana, and not amenable to the process of •the court below, and that after the expiration of one year from the date of the contract in suit it had tendered its deeds to Clark and Sizer, and to Falconer as the administrator of the estate of Whitmore, and that they had failed and refused to accept them, or to pay the $400,000 which it claimed to be due. The prayer of the bill was for specific performance and general relief.

Neither Sizer nor Falconer ever made any appearance, but Clark demurred to the bill generally and specifically; his general demurrer being on the ground that the complaint did not state a case entitling it to any" equitable relief, and also upon the ground thát “it appears by complainant’s own showing that it is not entitled to the relief prayed for in and by said bill.” The demurrer being overruled, Clark answered, in which answer he set up various facts which he alleged showed a conspiracy entered into by and between the officers and agents of the complainant and his confidential employes and co-contractors, Sizer and Whitmore, and that his assent to the contract was obtained by false representations made to him in pursuance of such conspiracy, that the title of the complainant to the property is so defective as to be unmerchanta-ble, and that the provisions in the contract were unconscionable, in that tbfey purported to hold him bound, while the complainant reserved the right to nullify the same at any time. The evidence in the case was taken wholly by deposition out of the hearing of the court.

On final hearing the appellant objected to the power of the court to make any decree in the absence of his codefendants. The court below held that the contract by its terms excluded the appellee from the right to its specific performance, notwithstanding which the court proceeded to award the complainant judgment for the $100,000 stipulated damages for breach of the contract.