Bates v. Wilson

• Decision Date: 20 January 1890
• Citation: 24 P. 99,14 Colo. 140
• Parties: BATES et al. v. WILSON et al.
• Court: Colorado Supreme Court

24 P. 99

14 Colo. 140

BATES et al. v. WILSON et al.

Supreme Court of Colorado

January 20, 1890

Commissioners' decision. Appeal from district court, El Paso county.

L. C. Rockwell, for appellants.

Hugh Butler, for appellees.

PATTISON C.

The judgment appealed from in this case was rendered June 26 1886. It was found by the court that 'the equity of this case is not with the said plaintiffs, but is with the said defendants.' There was no other finding. The decree dismissing the bill, was predicated upon this finding alone. To determine the appeal, therefore, a review of all the evidence is necessary. The trial having been had entirely upon depositions, it is the duty of the court, not only to sift and weight the testimony, but to consider the whole case, not only upon the law, but upon the facts as well. Jackson v. Allen, 4 Colo. 263; Miller v. Taylor, 6 Colo. 41; Sieber v. Frink, 7 Colo. 148, 2 P. 901; Bank v. Newton, 22 P 444, (not yet officially reported.)

There is a conflict of evidence upon all, or nearly all, the issues in the case. A discussion of the testimony in detail is impracticable. The entire record, however, has been rigidly examined, and the conclusions reached are the result of careful investigation and analysis. The evidence tends to show that prior to November 1, 1884, George R. Gwynn and James Moynahan claimed to be the owners of eight certain lode mining claims, situate in the county of Park, which had been theretofore the property of the Great West Mining Company. The interest of Gwynn was an undivided two-thirds, and that of Moynahan an undivided one-third. They derived their title from sheriff's deeds, issued to them as purchasers at execution sales, upon judgments recovered against the Great West Mining Company. No part of the property had been patented. The validity of the title was doubted, on account of the irregularities in the judgments. The property was subject to a trust-deed, which had been made by the Great West Mining Company in April, 1882, to secure the payment of a promissory note give to one Duncan McBride, for the sum of $3,000, with interest at the rate of 1 1/2 per cent. per month. Two thousand dollars had been paid upon the note. The mining company was insolvent, and could make no further payment. Prior to the month of October, 1884, this note and trust-deed had been placed in the hands of George C. Bates, one of the original plaintiffs in this case, for collection. Gwynn, through Bates, as the attorney for McBride, had agreed to purchase the note, and had employed him to institute suit in the federal court to foreclose the trust-deed. The purpose of the foreclosure was to perfect the title to the property. In October, Gwynn decided to sell the property. He claimed to represent his own interest, and also that of Moynahan. He authorized Bates to negotiate a sale. The price and terms do not appear to have been definitely settled when the authority was given. Gwynn proposed to sell the entire property, and any interest which he had acquired in the McBride trust-deed and note by his arrangement with Bates. Pursuant to this authority, Bates, prior to November 1, 1884, brought the property to the attention of the defendants Alfred H. and Randall W. Wilson. They were engaged in business as grocers, in this city. They became interested, and during November, Alfred H. Wilson went to Park county to examine the property. After the examination, they decided to take the property, if it could be purchased at a reasonable price. Before the purchase was made, negotiations were had between Bates and the defendants, for the purpose of making some arrangement or agreement under which Bates might also acquire some interest in the property. These negotiations resulted in a parol contract, by the terms of which Bates undertook to negotiate the purchase of the property upon the best terms possible. He also undertook to prosecute the suit brought to foreclose the McBride trust-deed to final judgment, at his own expense. He further agreed to pay the amount of the judgment, and to purchase the property for the benefit of the parties at the sale to be had under the decree. He also agreed to apply for and obtain patents to the entire property, at his own expense. He also undertook to render such legal services as might be required in the defense of the title, and to protect the interests of the parties. The Wilsons agreed that they would advance the money to pay for the property. It was further mutually agreed that, if the purchase should be made pursuant to the agreement, the title should be taken in the name of the defendants Alfred H. and Randall W. Wilson, to be held by them for the joint interest and benefit of the three; that from the proceeds of the property the amount advanced by the defendants to purchase the property should first be paid; the amount paid by Bates to perfect the title under the decree of foreclosure was next to be paid; the expenses incurred by him in obtaining the patents and reasonable compensation for legal services should then be allowed; and thereafter the property should be worked for the joint interest and benefit of the three parties. After this arrangement was made, Bates transferred to his wife, Mary Barker Bates, one-half of the interest which he expected to acquire. The negotiations for the property with Gwynn were had pursuant to this agreement. A contract for the purchase of his interest was made on or about the 5th day of December, 1884. Prior to that time, Moynahan had denied Gwynn's authority to represent him, and negotiations were had with him independently. By the terms of the contract with Gwynn, the parties agreed to pay the sum of $6,194 for his interest in the property, and his right to purchase the McBride trust-deed; $2,000 of this sum was paid in cash, and the balance was to be paid 45 days thereafter. Gwynn thereupon executed a deed, conveying his interest in the property, which was placed in escrow in the First National Bank of Denver, to be delivered to Alfred H. Wilson and Randall W. Wilson upon the payment of the sum of $4,194, the balance of the purchase price. The interest of Moynahan was purchased on December 6, 1884, for the sum of $2,000. Five hundred dollars of this sum was to be paid on December 16, 1884; $1,000 on January 16, 1885; and the balance of $500 on February 3, 1885. Moynahan duly executed a deed to his interest upon December 6, 1884, which deed was placed in escrow in the Colorado National Bank, and there remained until the several sums mentioned were paid, when it was delivered to Alfred H. and Randall W. Wilson. At the time this purchase was made the property was in the possession of a lessee. The lease was to expire at noon on December 8th. Gwynn agreed to deliver possession of the property to the Wilsons immediately upon the expiration of the lease, and entered into a contract with them to work the mines until they could take charge of the business themselves. By the terms of this agreement he was to receive $5 per day for his services, and to account for the entire proceeds of the property. By these transactions, the Wilsons acquired the legal title to the premises in question, and became entitled to the possession of the property on December 8, 1884.

December 8, 1884, Gwynn took possession of the property as the representative of the defendants. The mines were then very productive. Gwynn violated his contract in every particular. He began to work the property, but failed to account for the proceeds, and failed to keep the Wilsons advised of his operations. Early in January, 1885, Bates went east, and did not return until about the 1st of March. The balance of the purchase price was due to Gwynn on or about the 14th of January, 1885. Before that day arrived the Wilsons, believing that Gwynn, in violation of his contract, had taken from the property more than sufficient money to pay this balance, and in order to get time to investigate, obtained from Gwynn an extension of the time to March 3, 1885. The balance due to Moynahan was paid in accordance with the terms of the agreement with him. Bates being absent, nothing was done by the Wilsons to protect their rights as against Gwynn until his return. In the interval, Gwynn actually realized from the property, more than $20,000. When Bates returned, he determined to commence suit against Gwynn at once to recover this money. As a first step, however, it was thought necessary to obtain the deed, which was still in the First National Bank in escrow. A bill was filed in the district court of Arapahoe county, and an injunction obtained restraining Gwynn from working the property, and also enjoining the First National Bank from paying over to Gwynn the amount of money which was then deposited, for the purpose of obtaining possession of the deed. Gwynn appeared, and answered the complaint, setting up as defenses that, by the failure of the Wilsons to pay the purchase price in accordance with the terms of the contract, they had forfeited their interest in the property, and that the subsequent payment to the bank was not a good payment, because the bank was enjoined from paying the money over to him. This suit was settled by the practical surrender to Gwynn of all that he claimed. Defendants insist that Bates was guilty of a violation of his agreement to defend the title to the property, and protect the interest of the Wilsons, because the compromise was made upon the unjust terms demanded by Gwynn. It is clear, however, from the evidence, that the Wilsons settled with full knowledge of their rights, believing that it would be best to obtain possession of the mine upon any terms, rather than enter into protracted litigation. By the settlement, they received one-third of the net proceeds which...