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Hanlon vs.

Haussermann and Beam

Facts: This action was originally instituted by R. Y. Hanlon to compel the defendants, John W. Haussermann and A. W. Beam, to account for a share of the profits gained by them in rehabilitating the plant of the Benguet Consolidated Mining Company and in particular to compel them to surrender to the plaintiff 50,000 shares of the stock of said company, with dividends paid thereon.

It was initially agreed by Hanlon, Haussermann, Beam and Sellner that P75,000.00 was needed to rehabilitate the mine; P50,000.00 would come from Hanlon by securing and obtaining subscriptions for the companys stocks, P25,000.00 would come from Haussermann and Beam. They were to receive compensation in the form of shares of stock for the services rendered in the flotation of this proposition. The funds were needed on a certain date. It was also stated in the contract that Haussermann and Beam would be discharged if Sellner could not provide the amount due from him within the time frame stipulated.

Hanlon was unable to raise the P75,000.00, so that Haussermann and Beam made arrangements to finance the rehabilitation of the mine. Because of this new arrangement, the company became profitable that it was able to pay dividends. Because of this, the value of the companys stocks appreciated.

Held: Hanlon is not entitled to an accounting for his share in the profits of the company; Haussermann and Beam are absolved.

Under the equitable doctrine, if the contracting parties have treated time as of the essence of the contract, the delinquency will not be excused and specific performance will not be granted; but on the other hand, if it appears that time has not been made of the essence of the contract, equity will relieve from the delinquency and specific performance may be granted, due compensation being made for the damage caused by the delay.

Time is of the essence of the contract for the sale of an option on mining property, or a contract for the sale thereof, even though there is no express stipulation to that effect. The same idea is clearly applicable to a contract like that now under consideration which provides for the rehabilitation of a mining plant with funds to be supplied by the contractor within a limited period.