Continental Divide Mining Inv. Co. v. Bliley

• Citation: 46 P. 633, 23 Colo. 160
• Case Date: October 19, 1896
• Court: Supreme Court of Colorado

46 P. 633

23 Colo. 160

CONTINENTAL DIVIDE MINING INV. CO. v. BLILEY.

Supreme Court of Colorado

October 19, 1896

Appeal from district court, Pitkin county.

Action by Alexander Bliley against the Continental Divide Mining Investment Company. Judgment for plaintiff, and defendant appeals. Affirmed.

This action was instituted by appellee, Alexander Bliley, against the Continental Divide Mining Investment Company, for an accounting of a mining partnership between appellant appellee, and others in a lease and option to purchase certain mining property in Roaring Fork mining district Pitkin county, Colo. In the winter of 1887 and 1888 one B Clark Wheeler was in possession of the Bushwhacker and Alpine lode-mining claims, under a lease from the then owners of the property. This lease, by its terms, was to expire on the 10th day of September, 1887; but before the appellee acquired any rights in it it was amended so as to run for six months after the discovery of pay ore in the property. Some time in 1888 the Continental Divide Mining Investment Company, the present appellant, was organized as a corporation by Mr. Wheeler, who was at all times hereinafter mentioned its president and general manager. In March, 1888, Mr. Wheeler conveyed to this corporation the lease in question, and all his right, title and interest in the properties covered by the lease. Thereafter, and on the 28th day of April, 1888, appellant conveyed to appellee a one-fiftieth interest in the Alpine and Bushwhacker mining claims, and a one thirty-second interest in other properties. This transaction was witnessed by the following written instrument, which was duly recorded: 'This assignment of interest in bond and lease made this 28th day of April, A. D. 1888, between the Continental Divide Mining Investment Company, of the first part, and Alex. Bliley, of the second part, witnesseth: That the said party of the first part, for and in consideration of the sum of seven hundred dollars, to it paid by the said party of the second part, the receipt whereof is hereby acknowledged, has sold and assigned to said party of the second part an undivided one thirty-second interest in a certain lease and bond on the Iowa, Joplin, and Cascade claims, made April 8th, 1887, by John Harkins et al. to Vincent Johnson, and an undivided one-fiftieth interest in a certain lease and bond on the Alpine and Bushwhacker lode-mining claims, made $05R, 1887, by W. E. Stone et al. to B. Clark Whecler. Signed, sealed, and delivered on the day first above written.' The appellant, with appellee and other parties, continued work under the lease until the 20th day of August, 1889, when pay ore was discovered in the property. Ore to the value of $40,000 was taken out and marketed between the date of discovery and the first of the succeeding month of April. In December, 1889, when the lease, by its terms, had several months yet to run, the appellant, together with all other parties interested in the lease, except appellee, surrendered up said lease for cancellation; and on the same day the owners of the property made a new lease for the term of six months to the Continental Divide Mining Investment Company alone. This company continued to extract ore from the property until the month of April following, when the Bushwhacker Mining Company was organized by Mr. Wheeler and others, to which company appellant conveyed the lease, leasehold, and all other interests held by it in the Bushwhacker and Alpine claims. The Bushwhacker Mining Company was capitalized at 2,000,000 shares of the par value of one dollar per share. 1,690,000 shares of this stock were named in the instrument as the consideration for the conveyance from the Continental Divide Mining Investment Company, as aforesaid. Of this amount, 1,090,000 shares were given to the other parties, or used as treasury stock, leaving a balance of 600,000 shares to the grantor. It appears that appellee paid his share of all expenses incurred in the operation of the properties under the lease, until some time in the month of June, 1889; but from June until August 20th--the date when pay ore was discovered--appellee was in default. Upon these facts the court found that a partnership existed between the parties, and ordered an accounting. The referee appointed to take the account found that the amount of cash received from sales of ore and sales of the property balanced the disbusements made by appellant under the lease and the amount paid as the purchase price under the various bonds and options. The referee further found that the Bushwhacker stock received by appellant was the profits of the partnership. This amounted to 600,000 shares, of which one-fiftieth, or 12,000 shares, was found to be the property of appellee. No demand having been made for this stock prior to the institution of this suit, the commencement of the action was treated by the district court as such a demand, and the conversion of the stock fixed as of April, 1891. Upon evidence adduced, the referee found the market value of the stock at 35 cents per share. He further found that appellee had expended $105, which amount he was entitled to recover. On these findings final judgment was rendered for the sum of $4,305. To reverse this judgment the cause is brought here by appellee.

William O'Brien, for appellant.

Downing, Stinson & McNair, for appellee.

HAYT C.J. ...