Vanadium Corp. v. Fidelity & Deposit Co.

159 F.2d 105 (1947)

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Nature of the Case

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Facts

Two mining leases were made in 1939 and 1940 on lands involving the Navajo Reservation in Arizona. The lands produced vanadium, a critical war material. Redington assigned to P his interest in the two leases on June 3, 1942, for $13,000 and in the event the assignment was not approved by the Secretary of Interior, the monies were to be returned to P. Redington was to provide a bond for the return of the money and did so by assigning his interests in the leases whereby the principal and surety bound themselves to return all amounts paid to Redington under protection of the bond. The other two owners of the leases were unwilling to go along with P's plans, and P was aware of this problem, and after closing with P they reopened negotiations with them either for purchase or for joint operations. On June 7, 1942, Wade, one of the three lessees, acting for the owners made a deal with the Metals Reserve Corporation for the entire output of the ore. P lost interest, and it was established that he refused to cooperate with Wade and Curran, the other lessees that P withdrew its request for approval from the Secretary of Interior, and it prevented reconsideration. Redington was notified that the Secretary would not approve the transfer. P demanded return of the money from the surety. D won the verdict and P appealed.