Jones v. Patrick

• Decision Date: 05 September 1905
• Docket Number: 788.
• Parties: JONES v. PATRICK et al.
• Court: U.S. District Court — District of Nevada

140 F. 403

JONES v. PATRICK et al.

No. 788.

United States Circuit Court, D. Nevada.

September 5, 1905

This is a suit in equity for the specific performance of an oral agreement or contract in relation to certain mines, mining claims, and locations situate in Goldfield mining district Nev., and for a decree adjudging that defendants hold an undivided one-half of the one-fourth portion of the property described in the bill of complaint; that a conveyance therein mentioned, made by Lucien L. Patrick to the Nevada Mining &amp Exploration Company, be canceled; that the one-fourth interest in said property be partitioned off, by commissioners appointed for that purpose, between complainant and defendant Patrick; that said Patrick be required to make execute, and deliver to complainant a good and sufficient deed of one-eighth of said property; and that an accounting be had between the parties, and the partnership existing between them be wound up, etc. In order to understand more clearly the nature of the alleged oral agreement between the parties, a brief synopsis of some of the averments in relation thereto will be given:

It is alleged that prior to the month of October, 1903, the defendant L. L. Patrick had entered into an agreement, lease and option bond for the purchase from the owners of the mines, mining claims, and locations described in said complaint; that about the 18th day of October, 1903, the said agreement, lease, and option bond was in full force and effect; that on or about that day the complainant and defendant Patrick entered into an agreement to mutually devote their time and attention to obtaining a person or persons who would purchase said properties at a price greater than and in excess of the amount specified in the lease; that it was further agreed between the parties that the said Patrick would remain in the vicinity of said mines and attend to the carrying out of said mutual agreement, if the said complainant would proceed to San Francisco and seek for parties who would provide the necessary money to make the first payment under said agreement to the owners of said locations, as provided therein, and make further payment thereunder; and it was then and there further understood and mutually agreed that the said complainant and the said defendant would divide mutually any moneys or profits made by them, or either of them, through selling said properties to a person or persons at a higher value or excess price than the purchase price specified in said agreement, and that they would divide any interest in said properties, or any of them, that could be obtained by the said parties, or either of them, by getting a person or persons to advance the purchase price specified in said bond, and giving an interest in said properties, or any of them, to the said Patrick or the said complainant, or both of them; that in accordance with the terms of said agreement between said parties the complainant did on or about the month of October, 1903, go to San Francisco at his own expense, and did secure persons able and willing to make said payments and to purchase said mines and mining claims; that subsequently, and within the life of said agreement, purchasers were obtained who did buy the said property, and that the said complainant performed and fulfilled each and every covenant and agreement on his part to be performed and fulfilled in accordance with the terms of said agreement; that the said Patrick sold under bond the said mining property, and that good and sufficient deeds and conveyances were executed by him and his predecessors in interest under said bond to the said purchasers; that said Patrick secured and obtained in his own name, and as a profit in effecting the sale of said property, a one-fourth interest therein, and did sell one-half of said one-fourth interest for a large sum of money, to wit, about $7,500; that complainant has at divers times and places requested and demanded the said Patrick to keep the terms of said agreement and to pay to complainant one-half of all the property obtained by the said Patrick as and for a profit in effecting the sale of said property, and that said defendant Patrick has failed, neglected, and refused, and now does fail, neglect, and refuse, to comply with the terms of said agreement. It is further alleged that the defendant Patrick, for the purpose of defrauding the said complainant of his share of said property, has organized a corporation known as the 'Nevada Mining & Exploration Company,' solely for the purpose of taking over said other one-half of said one-fourth of said property, and the profits so as aforesaid obtained by defendant Patrick, and for the purpose of concealing the said property obtained as and for a commission and profit by said defendant Patrick; that in accordance with said fraud Patrick caused himself to be elected president, and his wife (defendant herein) to be elected vice president, of the corporation; that in pursuance of said fraud defendant Patrick gave to his wife a certain portion of the property and profits obtained by him as and for a commission for a sale of said property under said agreement.

To this complaint the defendants interposed a plea in bar in substantially the following terms: That said mining claims are valid quartz mining claims; that said defendant Patrick, together with his co-owners, are the owners of said claims, and have title to the same against every one other than the United States government; that the said property owned by Patrick was, prior to the 1st day of October, 1903, and ever since has been, real estate, and treated as such under the laws of the state of Nevada; that said alleged agreement, if the same was entered into, which these defendants do not admit, was verbal, and was never reduced to writing, nor was any memorandum thereof made in writing or signed by defendant Patrick, or by any of the said defendants; and in this connection, sections 2694 and 2696 Cutting's Compiled Laws of Nevada are fully set forth in the plea; and defendants plead the several matters contained therein in bar to the plaintiff's said demand in said bill. Defendants, for answer to the allegation of fraud and collusion and confederation set up in the bill of complaint in aid of this plea, and for that purpose solely, answering, deny that the defendant Patrick conveyed his interest in said mining claims to said defendant corporation without consideration, or for the purpose beyond his reach in any suit that he might institute, and they deny that said acts pertaining to said conveyance were wrongful or fraudulent, and, on the contrary, aver that said conveyance to said corporation was made for a valuable consideration; and they plead the statute in bar to complainant's bill, and pray the judgment of this court whether they should be compelled to make any or further answer to the said bill, and to be dismissed, with their costs.

Haven & Haven, for complainant.

Key Pittman, for defendants.

HAWLEY District Judge (after stating the facts).

It must, at the outset, be admitted that several of the questions involved herein are exceedingly close, and require, as they have received, a careful consideration of the rules upon the subject at issue, under the facts stated in the pleadings. The arguments of the respective counsel, and briefs filed by them, show commendable zeal and careful search in the citations of authorities having any bearing upon the case. The matter of law involved herein has been ably presented by both sides, and the court has been thereby materially aided in a determination of the principles it considers applicable to the facts. In this connection, however, it is proper to state that the court does not deem it necessary to specially review the numerous authorities that have been cited by counsel, and will, in the main, content itself by enunciating the principles that are deemed to be controlling in arriving at the results to be reached.

The statutes of Nevada, pleaded by defendants, read as follows:

'Sec. 2694. No estate, or interest in lands, other than for leases for a term not exceeding one year, nor any trust or power over or concerning lands, or in any manner relating thereto, shall hereafter be created, granted, assigned, surrendered, or declared, unless by act or operation of law, or by deed or conveyance, in writing, subscribed by the party creating, granting, assigning, surrendering, or declaring the same, or by his lawful agent thereunto authorized in writing.'

'Sec. 2696. Every contract for the leasing for a longer period than one year, or for the sale of any lands, or any interest in lands, shall be void, unless the contract, or some note or memorandum thereof, expressing the consideration, be in writing, and be subscribed by the party by whom the lease or sale is to be made.'

Does the agreement set forth in the bill come within the prohibition of the terms of these provisions of the statute? This question opens up a wide field for investigation, and presents many legal points for consideration. Contracts, and agreements in relation thereto, are as various 'as the whirling changes of the kaleidoscope,' and courts are compelled to keep constantly in mind the particular facts of each case, in order to determine from the authorities the legal principles applicable thereto. It will be admitted that if the agreement between complainant and Patrick can be properly construed as a contract for the sale of real property, or of an interest therein, it would necessarily fall within the prohibition of the statute. Dunphy v. Ryan, 116 U.S. 491, 495, 6 Sup.Ct. 486, 29 L.Ed. 703.

The real question to be determined is whether or not the agreement, as alleged in the complaint, does clearly create grant,...