Brown & Pounds v. South Joplin Lead & Zinc Mining Co.

• Decision Date: 30 November 1910
• Citation: 132 S.W. 693,231 Mo. 166
• Parties: BROWN & POUNDS, Appellant, v. SOUTH JOPLIN LEAD & ZINC MINING COMPANY
• Court: Missouri Supreme Court

132 S.W. 693

231 Mo. 166

BROWN & POUNDS, Appellant, v. SOUTH JOPLIN LEAD & ZINC MINING COMPANY

Supreme Court of Missouri, First Division

November 30, 1910

Appeal from Jasper Circuit Court. -- Hon. Howard Gray, Judge.

Affirmed.

J. W McAntire for appellant.

(1) The points surrounding this case hinge upon the declaration of law as given by the court, which is as follows: "The court declares the law to be that if prior to entering into the new contract dated February 18, 1901, changing the terms of said lease and reducing the royalty, the plaintiffs, or their superintendent, Strickler, had knowledge of the falsity of the alleged misrepresentations made by Pain, then plaintiffs waived the fraud and cannot recover." The contract of February 18, 1901, was a proposition made by the defendant to the plaintiffs after plaintiffs' mill had burned down and before they had sunk the shaft to the full depth, that until February 18, 1901, plaintiffs made no ore whatever, and also shows that after February 18, 1901, they sunk the shaft to a depth of one hundred and eighty-three feet and in running the drift northward, then it was that they ascertained the total falsity of Pain's statements. There was in fact no reduction of royalty, but simply a change of the application of the royalty. So the honorable court was in error when he gave the declaration of law above referred to.

(2) Ratification prevents subsequent rescission, but on principle it should not waive the right of action for damages; and some authorities so hold on the ground that the action for deceit necessarily presumes that the contract is affirmed. Page on Contracts, section 139; Wilson v. Nichols, 72 Conn 173; Andrew v. Jackson, 168 Mass. 266; Jarrett v. Morton, 44 Mo. 275; Parker v. Marquis, 64 Mo. 38; Finley v. Bryson, 84 Mo. 669; Nauman v Oberle, 90 Mo. 666; Campbell v. Huff, 129 Mo. 324; Lomax v. Railroad, 106 Mo.App. 554; Shumabarger v. Shelton, 41 Mo.App. 155; Norman v. Harrington, 118 Mich. 623; Lennox v. Fuller, 39 Mich. 269; McIntire v. Beuell, 132 N.Y. 192; McLain v. Parker, 229 Mo. 68. We recognize the doctrine laid down in the case of Schmidt v. Mesmer, 116 Cal. 267, but claim that it is not applicable to the facts in this case. (3) The plaintiffs when they accepted the proposition made by defendant, must have done so with the intention of abandoning and relinquishing their right to sue for damages, in order to constitute a waiver of that right. Fulkerson v. Lynn, 64 Mo.App. 649; Saving & Loan Assn. v. Trust Co., 73 Mo.App. 161; West v. Clapp, 127 Mass. 372. To make out a case of a waiver of a legal right there must be a fair, unequivocal and decisive act of the party showing such a purpose or acts amounting to an estoppel on his part. How can it be said that the mere fact that plaintiff agreed to build a new mill on the ground and purchase defendant's tools and machinery and spend money to obtain enough ore to pay $ 1000 out of royalty, was either an intentional relinquishment of their right or an estoppel, when all expenses were paid by plaintiffs and nothing by defendant. Bank v. Maxwell, 126 Cal. 360. (4) The plaintiffs, not having fully executed the contract, even though they subsequently performed the same with knowledge of the fraud, acquired subsequent to the making and previous to the performance, will not be barred from their remedy for the recovery of damages. Parker v. Marquise, 64 Mo. 38; Nauman v. Oberle, 90 Mo. 666; Campbell v. Huff, 129 Mo. 324. The mere fact that plaintiffs accepted defendant's proposition as shown on the records, that is, the contract referred to by the court as the new agreement of February 18, 1901, was not a waiver of plaintiffs' right of action for damages for misrepresentation and fraud. Cottrill v. Krum, 100 Mo. 397. The statements offered in evidence and found by the court to exist, that is, the alleged false and fraudulent representations made by Pain as to the ground north of the new shaft and the proximity of the old drift in said new shaft, were found by the court to be false and in such case we are entitled to recover damages. Kendrick v. Ryus, 225 Mo. 150; Tooker v. Alston, 159 F. 599; Farquhar v. Farquhar, 80 N.E. 654. The plaintiffs by accepting the proposition of February 18, 1901, did not waive their right to recover damages as decided by the court, and declaration of law given by him on behalf of defendant was error. McLain v. Parker, 229 Mo. 68; Parker v. Marquise, 64 Mo. 38; Nauman v. Oberle, 90 Mo. 666; Gilchrist v. Mannering, 54 Mich. 210; Hayman v. Neal, 43 Minn. 315; Pryor v. Foster, 1 N.Y.S. 774; New York Land Imp. Co. v. Chapman, 118 N.Y. 288; Mallory v. Leach, 35 Vt. 156; Sell v. Logging Co., 88 Wis. 581; Brown v. Morrill, 105 N.Y.S. 191; Whitney v. Allaire, 1 N.Y. 305; Shagun v. Mfg. Co., 162 F. 225.

Spencer, Grayston & Spencer and Meredith & Harwood for respondent.

(1) The plaintiffs, after a full knowledge of the alleged misrepresentations on which this action is based, having entered into a new contract with the defendant by which they were given further time for building the mill and a reduction of the royalty, and otherwise changing in their favor the terms of the lease, thereby confirmed and ratified the then existing lease, and such act on the part of the plaintiffs was in law a waiver of their right of action on account of the alleged fraud. 14 Am. and Eng. Ency. Law (2 Ed.), 171; Harms v. Woolf, 114 Mo.App. 387; Simon v. Shoe Co., 105 F. 580; Negly v. Lindsay, 67 Pa. St. 217; Peoples v. Stephens, 71 N.Y. 527; Bigelow on Fraud, 184; Love v. Oldham, 22 Ind. 51; Nounnan v. Land Co., 81 Cal. 1; Schmidt v. Messer, 116 Cal. 267; St. John v. Hendrickson, 81 Ind. 350; Cooley on Torts, 505; Doherty v. Bell, 55 Ind. 205; Hatcher v. Hatcher, 139 Mo. 626; Taylor v. Short, 107 Mo. 394; Louis v. Land Co., 124 Mo. 687; Burnham v. Smith, 82 Mo.App. 49; Roark v. Trust Co., 130 Mo.App. 401; Kingman v. Stoddard, 85 F. 740; Hayward v. Bank, 96 U.S. 618; Richardson v. Lowe, 149 F. 625; Shagun v. Mfg. Co., 162 F. 209; Pomeroy's Equity Jurisprudence, sec. 897. (2) In the former trial of this case by the Supreme Court, reported in Brown v. South Joplin Lead & Zinc Mining Co., 194 Mo. 681, the court reviewed the evidence and decided as a matter of law that if the facts disclosed upon the retrial of the case were the same as indicated in the record before the court on the first appeal, the plaintiffs could not recover and the trial court should so direct the jury. The burden is upon the plaintiffs on the second appeal by them, to show affirmatively that the evidence on the second trial of the case was substantially different from that before the Supreme Court on the first appeal, otherwise the matter is res adjudicata on the second appeal, and the Supreme Court on the second appeal by the plaintiffs, where judgment has been rendered against the plaintiffs and in favor of the defendant by the trial court, will affirm the judgment of the trial court on the ground that the judgment is for the right party, regardless of any possible error on the part of the trial court in giving an instruction. Stern v. Foltz, 152 Mo. 559; Lower v. Coal Co., 126 S.W. 987; State v. Buck, 130 Mo. 480; O'Donnell v. Patton, 117 Mo. 13.

OPINION

GRAVES, J.

This is the second appearance of this cause in this court. When first here it appears that the plaintiffs had obtained a verdict for something over fourteen thousand dollars, which verdict the trial court set aside for reasons assigned, and the plaintiffs appealed. [Brown v. Lead & Zinc Mining Co., 194 Mo. 681, 92 S.W. 699.] Upon that appeal, Fox, J., by opinion eliminated much of plaintiff's case. The action is one for fraud and deceit in the execution of a certain mining lease, the pleadings being fully analyzed in the former opinion. When the case was remanded by this court the defendant amended its answer, and pleaded that after the execution of the lease pleaded and after plaintiff knew of the facts, they entered into a new and subsequent contract, by which the original lease was ratified and modified, and that by so entering into the new agreement plaintiffs waived and lost all the rights to sue for and recover any damages by reason of the alleged fraud and deceit. The trial court found that such subsequent contract had been made and that by reason thereof plaintiffs were precluded from recovering. In this regard the case is different from that of the former appeal, otherwise it remains very largely the same. For a fuller statement the former opinion, 194 Mo. 681, should be read with this. We shall take the question of this subsequent contract and its effect first, and then if necessary discuss other questions.

I. The case was tried before the court, and upon motion of the defendant certain finding of facts were made. This was done by the defendant presenting a number of findings of fact and asking the court to give or refuse the same as is done with instructions. Instructions were also presented for the action of the court. The court among other findings of fact gave and made the following two, which are important upon the issue now under discussion:

"The court sitting as a jury finds the following facts: That the only ground of recovery on which plaintiffs offered any evidence was the alleged false and fraudulent representations made by Henry B. Pain as to the new shaft on lot 9 being on solid ground and as to the proximity and direction of the old drifts in reference to said new shaft.

"The court sitting as a jury finds the following facts: That on February 18, 1901, plaintiffs entered into a new contract in writing with defendant company for a valid consideration reducing its amount of the royalty and making other changes in the lease, and at that time plaintiffs...