Hunt v. Patchin

• Decision Date: 08 June 1888
• Citation: 35 F. 816
• Parties: HUNT v. PATCHIN.
• Court: U.S. District Court — District of Nevada

35 F. 816

HUNT v. PATCHIN.

United States Circuit Court, D. Nevada.

June 8, 1888

J. D Torreyson and A. B. Hunt, for complainant. Trenmore Coffin and George S. Sawyer, for respondent.

Before SAWYER, Circuit Judge.

SAWYER J.

This is a bill in equity to establish a trust in three mining claims in favor of complainant, and to compel a conveyance to him of the undivided fifty-one sixtieths parts. For some years prior, and down to, January 1, 1883, the complainant, the defendant, and one James were owners as tenants in common of three silver mining claims in eastern Nevada, of which complainant held thirty-one sixtieths, James twenty sixtieths and defendant nine sixtieths. These proportions were fixed by a mutual interchange of conveyances. The interest of James whatever it is, has become vested in complainant, making his interest now, if he has any, fifty-one sixtieths, and that of defendant, nine sixtieths. During the year 1882 the parties found it inconvenient to raise money enough to pay the taxes and do the amount of work on the claims required by the statute to prevent a forfeiture, so as to render them liable to relocation. On this account, towards the close of the year 1882, there was considerable correspondence between complainant, living in San Francisco and defendant, living in eastern Nevada, as to the best course to pursue; and the letters are in evidence. It is manifest from this correspondence, and the testimony of the parties, that it was thought best, and this was acquiesced in by all, that the money should not be invested in keeping up the old claims by performing the required labor, but instead that, at midnight of January 1, 1883, or immediately thereafter, the defendant should regard the old title as forfeited, and relocate the mines under new names, for the benefit of the then owners. There had been considerable litigation on the title of the old claims, and as no work had been done by anybody during the preceding year, it may have been thought that this relocation or forfeited claims would give a clear title. However that may be, it is perfectly clear from the correspondence and testimony that this proceeding was determined upon, and it is apparent also, that it was understood that the mines should be relocated in the name of defendant alone, but for the benefit of all; for in response to a letter from defendant asking advice how he should proceed, complainant gave the necessary advice, and prepared and forwarded a form of notice for a location in the name of defendant alone, with his name appended as locator. This particular notice so prepared was not in fact used, but other notices, similar in substance, were prepared and put up, with the name of defendant alone as locator. It is clear to my mind that complainant understood and had a right to understand from the action of defendant, that the location was to be made for the benefit of all the owners. If defendant did not so intend he acted in bad faith, for complainant could not from his correspondence and action under the circumstances have understood the matter otherwise. Besides, complainant sent to defendant something over $80 for payment of the taxes of 1882, which was retained, as late as February after the relocation, which he would not have been likely to do, if he had not supposed the relocation had been made for the benefit of all. And the retention of the money confirmed that idea. The complainant resided in San Francisco, nearly a thousand miles away from the mines, while the defendant resided at the mines in eastern Nevada and had, theretofore, been the managing man there. The haste manifested in making the location soon after midnight, arose from the fact that other parties were supposed to stand ready to relocate, immediately after the expiration of the year 1882. I am entirely satisfied that these claims were relocated under the new names at the time for the benefit of all the original owners, or else, they were located in bad faith by defendant, after giving his associates, by his conduct, the right to believe, and when they did believe, that the location was for the benefit of all. Under this state of facts I am clearly of the opinion that a trust arises in favor of complainant under the operation of law. Defendant, before, and up to the relocation, was managing the mines on behalf of himself and his co-owners, constantly consulting with them. He was in a position of trust in this particular, and bound to protect their interests. It was his duty not to permit a forfeiture for the purpose of relocating and acquiring the whole for himself without their knowledge and consent. By conferring with them and arranging to forfeit, and relocate for the benefit of all, he misled them, and violated the confidence reposed in him, if he relocated clandestinely for the benefit of himself alone. By his act and this breach of faith he threw his associates off their guard, and prevented them from taking other means to protect their interests.

The Civil Code of California embodies the rule as it before existed, under the common law in equity jurisprudence, and as it now exists in Nevada, without a code, in the following language:

'One who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful acts, is, unless he had some other and better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it. ' Civil Code, Sec. 2224.

Here was fraud, for the complainant, who resided nearly a thousand miles away, was induced, by defendant's action, to believe that the claims would be forfeited and relocated for the benefit of all, and by these means the defendant in violation of his faith relocated, or he claims to have done so, for...