Conqueror Gold Min. & Mill. Co. v. Ashton

• Decision Date: 04 March 1907
• Citation: 90 P. 1124,39 Colo. 133
• Parties: CONQUEROR GOLD MIN. & MILL. CO. v. ASHTON et al.
• Court: Colorado Supreme Court

90 P. 1124

39 Colo. 133

CONQUEROR GOLD MIN. & MILL. CO. v. ASHTON et al.

Supreme Court of Colorado

March 4, 1907

Rehearing Denied April 1, 1907.

Appeal from District Court, Clear Creek County; A. H. De France Judge.

Action by Even Ashton and another against the Conqueror Gold Mining & Milling Company. From a judgment for plaintiffs, defendant appeals. Reversed.

Morrison & De Soto and A. W. Gillette, for appellant.

J. J White, for appellees.

CASWELL J.

From a judgment in favor of Evan Ashton and John H. Atkinson appellees (plaintiffs below), the Conqueror Gold Mining & Milling Company (defendant below) appeals.

The complaint alleges in substance that in March, 1899, the defendant leased and let unto the plaintiffs certain territory west of the Conqueror's main tunnel belonging to said defendant, including the Patsey vein within such territory, and from the level of said tunnel upwards to the surface; that in pursuance of said lease, and with the full knowledge of defendant, plaintiffs began doing work, cleaning out an old crosscut, after which plaintiffs drove the same ahead for 75 feet to intersect and cut what is known as the 'Patsey lode,' and that the said lode was cut by such tunnel; that after the Patsey lode was cut, as aforesaid, the plaintiffs were notified by the agent of the defendant company that the defendant had concluded to work the ground itself, and agreed that, if the plaintiffs would abandon their rights to the ground, the defendant would pay plaintiffs all the money expended for work, labor, and material in cleaning out the crosscut and driving same to intersect the Patsey lode; that the plaintiffs have ground on the same lode as the Patsey, over and beyond the ground of the Patsey owned by the defendant, and for the purpose of avoiding trouble over and concerning said ground they agreed to accept the proposition, and that they did, on or about the 26th day of June, 1899, quit the ground of the Patsey lode, and turned over the possession to the defendant; that the defendant failed and refused to pay the sum of $740, as agreed to be paid for the possession of the premises. The answer specifically denies the allegations of the complaint, and further avers that all work done as described in the complaint was done by one Otto Schaffrath and the plaintiff Evan Ashton, while working on the defendant's ground under the authority of a written license, dated March 31, 1899, which license granted right of way only, and not a right to mine or take out ore. The answer further alleges that the plaintiffs requested the lease of the ground in controversy from the defendant company, which was refused. Replication of the plaintiffs admits the written license referred to in the answer, but denies that the work was done under and by virtue thereof, and alleges that they already had a lease upon defendant's ground at the time of the performance of the work for which defendant agreed to pay.

There are several assignments of error going to the admissibility of certain testimony introduced by the plaintiffs, and also to the instructions of the court, and refusal to give certain instructions requested by the defendant. The assignments of error principally discussed in the brief of appellant are the refusal to give defendant's instructions numbered 3, 4 and 7, and for the giving of instruction numbered 6 by the court, as follows: 'As a general rule, what the directors of a corporation know regarding the matters affecting its interests the company knows; and the knowledge of the directors may often be inferred from circumstances, and it is not always necessary to show direct proof.' In support of the allegation that the defendant corporation leased in March, 1899, all its territory west of the Conqueror main tunnel, plaintiffs introduced testimony that Mr. Woodrow, then manager of the company, made a verbal lease of such property, and that Mr. Wells who succeeded him as general manager, agreed to give them a lease upon a portion of the so-called Patsey vein, included in such territory. It is not shown, nor attempted to be shown, that either Mr. Woodrow or Mr. Wells was authorized by the directors of the company to lease any of the company's property. It does appear from the record and bill of exceptions that the board of directors was vested with the general management of the company's affairs, including the power to make contracts, and that the president should sign contracts when directed by the board. The power, then, to make such lease was lodged only in the board of directors, and the plaintiffs were bound to take notice of the extent of the authority of both Mr. Woodrow and Mr. Wells, who were claimed by them to be acting as agents of the company. Extension G. M. Co. v. Skinner, 28 Colo. 237, 239, 64 P. 198. This case clearly states the general rule. The board of directors, acting as such, refused to grant a lease upon the Patsey vein. The record does not disclose that the leasing of any of this property to plaintiffs was ever considered by the directors prior to the meeting at which such lease was refused. No lease upon the Patsey vein was repudiated, as argued by appe...