Great West Min. Co. v. Woodmas of Alston Min. Co.

Mr. Justice Hayt

delivered the opinion of the court.

The facts in this case, as they appeared previous to the last trial, are sufficiently set forth in the former opinions filed herein, and will not be again repeated. See 12 Colo. 46. The judgment of the district court of El Paso county in favor of appellees was then reversed, and the case remanded to that court, leaving counsel and the court below to pursue such course in relation to additional parties and further proceedings as they should he advised. Thereafter, by consent of parties, a change of venue was taken to the district court of Arapahoe county, and a new trial had. Upon this trial a large amount of additional evidence was introduced, upon which evidence, considered with that previously taken, the court below found the issues for the defendants, and dismissed the bill.'

To review this action of the court the case is brought here by appeal. In the district court the judge presiding at the trial, Hon. O. B. Liddell, filed a written opinion, with a copy of which we have been favored by counsel. In it the learned judge reviews the case at length, in connection with the authorities, and arrives at the conclusion that the appellant had been guilty of such unreasonable delay in asserting its rights that it ought not to be heard now.

An examination of the new evidence introduced discloses that it was largely directed to the question of laches. Upon the case as made upon the former appeal, this court was of the opinion that laches sufficient to defeat a recovery did not appear. Mr. Justice Gerry, delivering the opinion of the court, then said, in reference to Purmort, and the ‘ service of process upon him, that he “concealed, or neglected to inform the company of the fact of such service.”

And again, upon rehearing, it was said: “The appellant was not informed of the false return, or of the unauthorized appearances of Gwynn, in time to proceed by motion to correct the same in the court where the attachment suits were pending, and had no notice of the sale of its real property until the time for redemption had expired, but, as soon as it did obtain information of the fraud perpetrated upon it, it was diligent in employing counsel and commencing this suit; and, as this suit was brought within less than three years from the time of the perpetration of the fraud complained of, and within less than eighteen months from the time of the execution of the sheriff’s deeds, and promptly upon the discovery of the fraud that had been practiced upon it, we think the appellant was chargeable with no such laches as should bar it from maintaining this action.”

The additional evidence occupies over two hundred pages of the type-written transcript, and was deemed sufficient by the trial judge, after giving due weight to the evidence taken upon the first trial, and also to the former opinions of this court, to radically change the result then announced. With this new evidence the case is now before the court in a different aspect from that in which it appeared upon the first appeal. It is now shown that A. W. Kellogg was not only general agent of the appellant company, but that he had the entire management of the corporate business. The then secretary of the company, Mr. A. S. Whitaker, who has at all times been active in prosecuting this action, swears in reference to the Great West enterprise: “ It was a pet scheme of Mr. Kellogg, and he attended to everything.” Again he refers to Kellogg as “having the supreme management.”

The nature and scope of Mr. Kellogg’s authority in the premises becomes important, in view of the fact that he, in the interest of the Great West Company, arranged for the institution of the Perkins suit in advance of Moynahan, who was threatening suit, in order that the working of the mine should not be interfered with. It appears that, in accordance with an arrangement previously entered into between Kellogg and the workmen at the mine, upon ascertaining from Moynahan, at Denver, that he was about to institute suit, Kellogg, by telegraph, directed the Perkins suit to be brought. These telegrams, two in number, were directed to Prank D. Howe, who describes himself as Kellogg’s “closest friend.” The originals were not produced upon the trial; but, their loss having been shown, Mr. Howe testified as to their contents as follows: “The first telegram — the body of the message — was, ‘Have Grogan commence suit in Perkins’ name.’ Then — there was a cipher used for Moynahan’s name — ‘Moynahan means to make us trouble.’ 'Then there was something followed, in the way of ‘ See Purmort,’or something of that kind.” Again: “I was a little mystified by the expression ‘ Grogan,’ and I telegraphed Mr. Kellogg: ‘Does Grogan mean Gwynn, and also the amount due the men? ’ ” To this telegram the witness testifies that he received an immediate answer, in substance as follows: “Tes, at once; followed with the amounts due the men.” The witness further testifies that the Gwynn referred to was George E. Gwynn, .an attorney resident at Alma.

That an attachment was to be issued in such suit is admitted, but it is claimed by the appellants that it was understood that such attachment would only be levied upon the personal property, while the witnesses for appellee testify that no such understanding was had. We attach little importance to this conflict, however; it now ■clearly appearing that the proceedings, set on foot by Kellogg, acting for the company, actually resulted in the attachment and sale of its real property. The appellants’ claim that such proceedings were carried to a greater extent than anticipated by it cannot have much weight in a court of equity as against the rights of bona fide purchasers deriving title through the sale made under the judgment rendered in such action. The evidence now also strongly tends to show that the three principal officers of the plaintiff company — Kellogg, Pomeroy and Whitaker — had notice as early as 18S3 that its real estate had been attached and sold in the Purmort and Moynahan suits. That Kellogg had such notice is shown beyond dispute; and here it may be said that it is a significant fact that plaintiff failed to call Kellogg as a witness in its behalf, although he was present, sitting by, at the trial. Kellogg’s bias in favor of plaintiff is shown by his letters introduced in evidence. He was certainly well informed in reference to these matters; and his silence, under the circumstances, tends to create the belief that his knowledge was not of such a character as would benefit the plaintiff.

Upon the former appeal it was not shown that the company had notice of the sale of its real estate in time to avail itself of the statutory right of redemption. It is now apparent, however, that it had such notice in ample time. It is in evidence that the company was trying to raise money with which to redeem before the time for redemption should expire. Appellant not only failed to redeem, but allowed the years 1884 and 1885 to pass without making any effort to do the annual assessment work upon any of these claims, although such work was required by the mining laws under which they were claiming the property. Prom the time the sheriff’s deeds were executed and delivered, in 1884, until this suit was commenced, in 18S6, they permitted these defendants and their grantors to remain in the undisputed possession of the property without protest, permitting them to develop the same under the belief that they had acquired a good title thereto. No fraud is imputed to the defendants. By the silence of plaintiffs they were lulled into purchasing and making expenditures upon this property that they otherwise might not have made, although it is true they ultimately made a profit as the result of the hazard incurred.

. Under these circumstances, we are to determine whether the court erred in dismissing the bill on account of the laches of the plaintiff. It is a familiar principle that' courts of equity will only grant relief in cases in which the application therefor is made promptly and without unreasonable delay, whatever may be the merits of the controversy. The necessity for the application of this rule to cases in which the subject-matter of the litigation is the right to unpatented mining property, the only value of which arises from the precious metals contained therein, is apparent. The value of such properties is always uncertain, and usually purely speculative. This case furnishes an illustration of the uncertainty of such values. At the time the attachments were levied the properties were considered of little or no value. The ore extracted would not pay the expenses of taking it out. In fact the suits were instituted for labor performed and supplies furnished in working the mine; the indebtedness arising on account of the necessary expenses exceeding the amounts realized from the sale of all ores extracted. Afterwards, by the labor and expenditure of these defendants and their grantors, the property was shown to be of great value; the ore extracted yielding a large net profit to those in possession and working the same. Although the original proceedings were irregular, should this plaintiff, after years of delay, be now allowed to reap the benefit of the expenditure and hazard incurred by others, and which plaintiff was unwilling or unable to take, becomes a pertinent inquiry in this connection. Upon this question the authorities are certainly with the defendants. Thus, in Peebles v. Reading, 8 Serg. & R. 493, it is said:

“ Laches and neglect ought forever to be discouraged. There is in chancery always a limitation. Nothing will bring a court of equity into action but a pure equity, and a reasonable diligence. The strongest equity may be forfeited by laches, or abandoned by acquiescence.”

In Sullivan v. Railroad Co. 94 U. S. 811, the following is quoted with approval, and credited to Smith v. Clay, 2 Amb. 645: “ Nothing can call forth this court into activity but conscience, good faith and reasonable dili.gence. Where these are wanting the court is passive, and does nothing. ; Laches and neglect are always discountenanced; and, therefore, from the beginning of this jurisdiction, there was always a limitation to suits in this court.”

In the case of Attwood v. Small, 6 Clark & F. 356, the lord chancellor was of the opinion that relief should be refused in reference to mining property for the reason that a delay of six months had intervened between the time at which the complainants acquired knowledge of the alleged frauds, and the bringing of the {action.

In the case of Ernest v. Vivian, 33 Law J. ch. 517, upon the subject of laches, the vice-chancellor says: ‘ ‘ The subject-matter of this suit is the right to mines. Mining operations are of a particular character. They are an uncertain and speculative and hazardous adventure. * -x- * There is also a continual and increasing risk; for a mine profitable to-day may to-morrow become worthless. Similar observations have repeatedly been made by other judges. Now, if a person has a just right to mines of which he is not in possession, as against those who are in possession of and working them, and if he claims to be the rightful owner (the person in possession being aware of his rights or supposed rights), if such owner, not being prevented by fraud or concealment, stands by for a long period of time whilst those in possession are working the mines, this court will not lend him any assistance. * * * It is not equitable to allow him to wait till it is ascertained that the persons in possession have succeeded or may have been ruined, and if the subject result in profit, to ask to put that in his pocket; if in loss, to repudiate the loss. It is not necessary, even if possible, to prove whether he acted from premeditated design or carelessness.”

In the case of Pollard v. Clayton, 1 Kay & J. 480, relief was refused for the reason that complainant had delayed eleven months after suit might have been brought, and the court also refused to allow an amendment setting up excuses for such delay. The court says:

‘ ‘ Instead of that, the plaintiff waits eleven months, and then, at last, the bill is filed. I do not look out of the bill, as the case made has not done so; but it is enough for me to say that coal, like all other articles of constant use and constant sale, is a commodity fluctuating from day to day in its market price, and, during the interval which has elapsed, there may have been every possible variety of price, of rise or decline, and the parties are not now in the same position. * * * It is not equitable — and in this court, especially, it would be improper — to give relief of that description after such a period of delay as in this case has been allowed to occur between the time when the plaintiff was first in a position to file a bill, and the time when he took upon himself to file it. Having regard to the circumstances of delay alone, the court ought not to give relief after laches of this description.”

In Oil Co. v. Marbury, 91 U. S. 592, Mr. Justice Miller, speaking for the’ court, says: “The fluctuating character and value of this class of property is remarkably illustrated in the history of the production of mineral oil from wells. Property worth thousands to-day is worth nothing to-morrow; and that which would to-day sell for $1,000 as its fair value may, by the natural changes of a week, or the energy and courage of desperate enterprise, in the same time be made to yield that much every day. The injustice, therefore, is obvious, of permitting one holding the right to assert an ownership in such property to voluntarily await the event, and then decide, when the danger which is over has been at the risk of another, to come in and share the profit.

“While a much longer time might be allowed to assert this right in regard to real estate whose value is fixed, on which no outlay is made for improvement, and but little change in value, the class of property here considered, subject to the most rapid, frequent and violent fluctuations in value of anything known as property, requires prompt action in all who hold an option whether they will share its risks or stand clear of them.”

Further quotations from the authorities are unnecessary, but the following cases will be found in support of the views quoted: Hart v. Clarke, 19 Beav. 363; Jennings v. Broughton, 5 De Gex, M. & G. 139; Kinney v. Mining Co. 4 Sawy. 447; Williams v. Rhodes, 81 Ill. 588.

Under our statute, bills for relief on the ground of fraud must be filed within three years after the discovery by the aggrieved party of the facts constituting such fraud and not afterwards. We cannot, however, give this statute such a construction as will permit a party in all cases to stand idly by until the limitation of the statute has nearly run, and then claim that, by virtue of the statute, he is excused from all laches. The statute fixes a limitation beyond which the courts cannot extend the time, but within this limit the peculiar doctrine of courts of equity should prevail.

We shall not extend this opinion. If points have been discussed by counsel that have not been passed upon in some one or more of the opinions in this case, it must not be thought that for that reason they have been overlooked. A careful consideration of the whole case convinces the court that the judgment of the court below should be sustained.

Affirmed.