Dooley v. Burlington Gold Mining Co.

• Decision Date: 20 March 1909
• Docket Number: Civil 1039
• Citation: 100 P. 797,12 Ariz. 332
• Parties: H. L. DOOLEY, Plaintiff and Appellant, v. THE BURLINGTON GOLD MINING COMPANY, a Corporation, Defendant and Appellee
• Court: Arizona Supreme Court

100 P. 797

12 Ariz. 332

H. L. DOOLEY, Plaintiff and Appellant, v. THE BURLINGTON GOLD MINING COMPANY, a Corporation, Defendant and Appellee

Civil No. 1039

Supreme Court of Arizona

March 20, 1909

APPEAL from a judgment of the District Court of the Fourth Judicial District, in and for the County of Yavapai. Richard E. Sloan Judge. Affirmed.

The facts are stated in the opinion.

Leroy Anderson, for Appellant.

The general rule is that a rescission of a contract is an equity proceeding, but the distinction between rescission at law and rescission in equity is clear, and depends entirely upon the facts alleged. There is no distinction in Arizona between a proceeding at law and in equity so far as the form and mode of proceeding is concerned. "Under our statutes parties to a civil suit, unless otherwise provided, are entitled to a trial by jury, and their verdict is not in any sense advisory -- the judgment of the court must follow it, or the judge must set it aside as erroneous and order a new trial." Rees v. Rhodes, 3 Ariz. 235, 73 P. 446.

Statute of limitation does not commence to run in an action for rescission of a contract induced by fraud, until the discovery of the facts constituting the fraud. It is the discovery of facts and not the mere suspicion that fraud has been committed. Marbourg v. McCormick, 23 Kan. 38; Boyd v. Blankman, 29 Cal. 20, 87 Am. Dec. 146; Bailey v. Glover, 88 U.S. 342, 22 L.Ed. 636; Traer v. Clews, 115 U.S. 537, 6 S.Ct. 155, 29 L.Ed. 467.

J. J Hawkins, and Norris & Ross, for Appellee.

Appellant by stipulation in open court based upon a proper consideration, waived a jury trial, and is now precluded from complaining of the lower court's failure to consider itself bound by the general verdict. "A party who voluntarily chooses or acquiesces in some other tribunal or method of determining a controversy cannot afterward object that it should have been tried by a jury, but must be held to have waived his right to that mode of trial." 24 Cyc 160; Garrity v. Hamburger Co. (Ill.), 28 N.E. 743.

Appellant did not particularly rely upon the false representations alleged, and this suit was filed more than one year after his discovery of the alleged fraud, and the finding of the court is correct in its conclusions. Appellant must be denied relief because of ratification, laches and estoppel. German Nat. Bank v. Nagel (Ky.), 82 S.W. 433; Tuck v. Downing, 76 Ill. 71, 7 Morr. Min. Rep. 83; Crocker v. Manley, 164 Ill. 282, 56 Am. St. Rep. 196, 45 N.E. 577, 18 Morr. Min. Rep. 485; Eldridge v. Young American etc. Mining Co., 27 Wash. 297, 67 P. 703.

OPINION

CAMPBELL, J.

-- The amended complaint in this action alleges that the appellee, defendant below, by its duly authorized agent, one H. A. Suttle, who was a director and its general manager, also its secretary and treasurer, made to plaintiff certain false representations to induce him to purchase from it 10,000 shares of its capital stock. The representations were: That the defendant company owned and was developing and operating certain mining claims in Yavapai county, Arizona; that there were many hundreds of tons of very high-grade ore in sight in the mines; that the company had paid as a purchase price for the mines the sum of $35,000; that since the purchase of the mining claims the company had sold a large amount of its capital stock and put the entire proceeds thereof into the development of the mines; that it had not authorized to be paid, or paid, any commission for the sale of any of its stock, nor was any commission to be paid upon the sale of stock to plaintiff; that the major portion of its capital stock had been sold at not less than forty cents per share, and a large amount thereof for sixty cents per share; that it had then in its treasury money to the amount of $15,000; that it had no treasury stock or capital stock in its treasury, except the amount that it was then offering for sale to plaintiff; that it had contracted for a ten-stamp mill, with full equipments necessary for its operation upon the mines; that arrangements had been made for its erection and placing in position; and that the mill was to be paid for with money then in its treasury and from the money to be obtained by the sale of stock to plaintiff. All of these representations are alleged to have been false and known to the company and to Suttle, its agent, to have been false at the time they were made, and that plaintiff relied upon said representations and was thereby induced to purchase, and did purchase, 10,000 shares of stock at sixty cents per share, and did, in the month of June, 1903, pay to Suttle, as agent of defendant, and for and on its behalf, the sum of $6,000. It is further alleged: That plaintiff never learned that the representations were untrue until on or about the 1st of May, 1905, and that since that time he has been ready and willing to return the stock to the defendant, and tenders the same to defendant; that at the time of its purchase the stock was worthless, and has ever since remained worthless; and that by reason of the premises plaintiff has been damaged in the sum of $6,000. The complaint prays for judgment against the defendant for the sum of $6,000, and for interest on the said $6,000 from the first day of June, 1903, at six per cent per annum, and that the contract of purchase be set aside and rescinded. The original complaint in the action was filed on May 29, 1905.

The defendant, by its answer, pleaded that the cause of action stated in the amended complaint was barred by the statute of limitation, for the reason that it did not accrue within one year next prior to the filing of the complaint, and further pleaded: That more than one year prior to the filing of the complaint the plaintiff visited and fully examined the defendant's mining properties, and then and there discovered, or might have discovered, with the exercise of ordinary diligence, the truth as to the extent to which the mining properties were developed; that the plaintiff discovered, or with the exercise of reasonable diligence might have discovered, the truth as to the other representations set forth in his complaint, at a time prior to one year before the bringing of the action. It further denied specifically that the representations alleged in the complaint were made, or that the plaintiff relied upon any such representations, and alleged that prior to his purchase of stock the plaintiff examined the mining properties and relied entirely upon the result of his inspection and examination of the mines.

The case was tried before a jury, and a general verdict finding the issues in favor of the plaintiff was rendered June 12, 1906. On ...