Fish & Hunter Co. v. New England Homestake Co.

Decision Date29 March 1911
Citation27 S.D. 221,130 N.W. 841
PartiesFISH & HUNTER COMPANY et al., and Frank S. Peck, Plaintiffs and respondents, v. NEW ENGLAND HOMESTAKE COMPANY, Defendant, and Chris Godfrey, Defendant and appellant.
CourtSouth Dakota Supreme Court

Appeal from Circuit Court, Lawrence County, SD

Hon. William G. Rice, Judge

Reversed

Martin & Mason

Attorneys for appellant.

A. J. Plowman

Attorney for respondent.

Opinion filed March 29, 1911

WHITING, J.

This action was brought by the plaintiff Frank S. Peck and other plaintiffs against the New England Homestake Company and Chris Godfrey, seeking to foreclose certain miners' liens against the mining property described in the complaint. The cause was tried to the court without a jury. Findings and conclusions were filed in favor of the plaintiff Peck. A personal judgment was entered thereon against the defendant Chris Godfrey. The miner's lien, claimed by Peck, was denied. And motion for a new trial having been denied, the defendant Godfrey appealed to this court from such judgment and order denying a new trial.

The findings of fact herein are quite voluminous, and no useful purpose would be served by quoting the same in full. Certain of such findings have been excepted to by the appellant; but the evidence would fully sustain the following facts, which are among those found by the trial court: Several separate mining claims were involved in this action; said claims being originally taken or owned by different parties, and the defendant Godfrey being a part owner of some of the claims and sole owner of others. All of these claims had been conveyed to Godfrey for the purpose of obtaining patents and selling such property. In connection with these transfers, the several former owners had each entered into an agreement with Godfrey, on or about February 19, 1906, wherein it was agreed, among other things, that Godfrey should immediately proceed to obtain patents for said mining claims, and, when surveyor's receipts were issued therefor, that he should either pay the former owners $125 per acre for their claims or reconvey the property to the former owners; and it was further agreed that Godfrey should not be bound for the cost of patenting said land, except in event that the property should be purchased and patent expenses paid by one McHugh; and further that, if McHugh should fail to purchase, the patent expenses "will have to be borne proportionately by those interested in the property." On February 13, 1906, Godfrey had executed, acknowledged, and deposited in escrow a deed to said McHugh to all of such lands, such deed to be delivered upon the terms of a certain option agreement, a memorandum of which was indorsed on envelope containing deed. Under the agreement, which was in writing and bore date February 9, 1906, McHugh was within 30 days to furnish the money necessary to institute patent proceedings upon such property and "prosecute the said proceedings diligently to final entry, bearing the entire expense thereof, as a consideration for the granting of this option," and upon issue of receiver's receipt he was to pay Godfrey $250 per acre for said lands. McHugh afterwards transferred his right, title, and interest in said lands, under such agreements with defendant Godfrey, to the defendant New England Homestake Company, of which company McHugh was manager. Under this agreement between Godfrey and McHugh and the assignment by McHugh to the New England Homestake Company, said company went into the possession of the mining property and made improvements upon the same, which said improvements were finally received and accepted by the defendant Godfrey upon failure of McHugh and said company to comply with the terms of the escrow.

Plaintiff Peck was a surveyor, and, as such, he was employed by the defendant company, acting through one Russell, with the knowledge of Godfrey, to make the necessary surveys of these mining claims, which surveys were required to be filed in connection with the final proof upon such claims. The plaintiff Peck proceeded to and did complete such surveys, knowing at the time he was so employed to do such work that the defendant company was not the legal owner of said mining claim but simply had an equitable interest therein. The defendant company paid part of plaintiff's bill for such services, but $400 thereof remained unpaid, and thereafter the plaintiff demanded payment of defendant Godfrey, which payment Godfrey refused to make; this being the first notice to Godfrey that plaintiff claimed him to be in any manner liable for his services. Plaintiff refused to deliver up the field notes and plat of his survey without payment or promise of payment, and Godfrey then and there warned Peck that, if Peck should send in such notes and plat, he (Godfrey) would not be responsible for the same, and that Peck had better hold such field notes. Peck then, upon the same day, went to Russell, the attorney who had employed Peck for the defendant company and who was acting as attorney in the patenting of such land; and Russell explained to Peck the deal between McHugh and the defendant company, told him that until patent was completed McHugh could not get any money from the parties interested in the company, with which to go ahead, and that unless these survey notes and plats were sent in, the deal between Godfrey and McHugh and the company would not go through. Russell was the agent of one of the original owners of these claims, and he assured plaintiff that, so far as the share originally owned by such party was concerned, he (Russell) would see that plaintiff got his money and that he would use his influence to get Godfrey to pay his share. Russell then showed Peck the agreements which had been entered into between Godfrey and the former owners and assured plaintiff there would be no trouble about the pay, that they had agreed, among themselves, to meet this if McHugh failed. Upon receiving such information, plaintiff transmitted his notes to the Surveyor General. Application for patent was subsequently prepared and signed by Godfrey, and patent was subsequently delivered by the land officers to Mr. Russelk

The court further found that Russell was at all times the agent and attorney of defendant Godfrey, and, further, that defendant company, in all that it did toward the improving of said premises and securing patent thereon, was the agent of said Godfrey. To such findings the appellant excepted and strenuously urges that there was nothing in the record to sustain the same.

It is the contention of Peck that Godfrey was personally liable: First, owing to the fact that he (Peck) was employed by the agents of Godfrey; second, because of the contracts entered into between Godfrey and the other former owners of the claims; third, upon an implied contract because of his having made use, for his personal benefit, of such field notes.

Before considering these several contentions, we must first dispose of a question of practice raised by respondent. It appears that, upon the trial and after all the evidence was in, by leave of court granted, the plaintiff amended his complaint by adding thereto a so-called second cause of action, setting up a claim founded upon an implied contract; the defendant did not answer the same. Respondent now contends that such allegations as were contained in such amended complaint and had not been denied in the original answer must be taken as admitted. With this we cannot agree. This amendment was made after evidence was received, which evidence had been met by defendant. This being true, the allegations of such amended answer will be treated as denied. Any other rule would be inequitable. Respondent concedes in his brief that the cause was tried substantially as if on a general denial.

In so far as the court found an agency to exist between Godfrey and the defendant company, such as would in any way redound to the benefit of the plaintiff, we think the court was in error. It is true that, under the federal law, the patent had to be procured by and in the name of the defendant Godfrey, he being the record owner of the claims, and that whatsoever was done by other parties that might assist, or be necessary for the procurement of such patent, was necessarily reported and shown, in the final proof, as being done by and on behalf of said Godfrey; but it appears that, under the agreements existing, everything connected with procuring a patent was to be done by and at the expense of defendant company, and that plaintiff was employed by that company to make the survey for them, knowing that their interest was not that of owner but merely equitable. What was the situation and relation of the parties interested herein? Godfrey had agreed with the other former owners of this property to proceed at once to procure patents, and for that purpose they had placed in him the legal title to this property; he had entered into an option contract for sale of the premises as soon as final proof was made, which sale was in contemplation of...

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