Lipscomb v. Nichols

• Decision Date: 01 December 1882
• Citation: 6 Colo. 290
• Parties: LIPSCOMB ET AL. v. NICHOLS ET AL.
• Court: Colorado Supreme Court

6 Colo. 290

LIPSCOMB ET AL. v. NICHOLS ET AL.

Supreme Court of Colorado

December, 1882

Appeal from District Court of Gunnison County.

THE case is stated in the opinion.

Messrs BROWNE and PUTNAM, for appellants.

STONE J.

The complaint sets out that the plaintiffs in 1880 were prospecting for coal upon certain of the public lands described, and had expended labor and money thereon, and in preparing to secure title thereto; that afterwards they entered into a verbal contract with defendant Nichols whereby it was agreed that said plaintiffs and Nichols should develop the said coal land, and procure title to the same for their joint benefit; that each should be entitled to an undivided one-third interest in the land thus acquired; that Nichols should do all the labor of opening and developing the coal necessary for securing title thereto, at his own expense; that plaintiffs were to render all the services necessary in and about the business of procuring title thereto, at their own expense; that each of the parties should pay one-third of the cost of filing on the land and the expense of procuring title in the land office; that the filing should be in the name of Nichols, who should receive and hold the title in trust for the plaintiffs, together with his own interest therein; and that, when the title was thus secured, that he should convey to the plaintiffs the respective interests to which they were entitled, as aforesaid; that, in pursuance of said agreement, the necessary steps were taken and the filing made on the 26th day of August, 1880; that plaintiffs have fully performed all their parts of the agreement and paid their share of the costs and expense of procuring the title to the said land but that defendant Nichols has refused to make the conveyances as agreed; and that afterwards one Jacob Fleischer, one of the defendants, acting for himself and also on behalf of one Loeckheim, having at the time actual notice and full knowledge of all the rights of the plaintiffs in the premises, fraudulently conspired with the said Nichols, and agreed with him that he should convey two-thirds of said land to the said Fleischer and Loeckheim; and that in pursuance of said fraudulent agreement, the said Nichols executed and delivered to said Fleischer a deed conveying to said Loeckheim two-thirds of the said land; and that said Fleischer, as agent for said Loeckheim, and with notice as aforesaid, procured and received said conveyance for the joint interest and benefit of himself and his principal, the said Loeckheim.

Complainants further charge said Nichols with fraudulent intent and bad faith in entering into said agreement with plaintiffs, and in refusing to perform the conditions on his part, and pray that the conveyance aforesaid be decreed null, and said defendants be required to convey to plaintiffs the interest to which they are entitled in the premises, and for full relief, etc.

To this bill of complaint the defendants demurred, on the ground that it does not state facts sufficient to constitute a cause of action; that, first, the verbal contract set out is void under the statute of frauds; and second, because the contract is in violation of the act of congress providing for the entry of coal lands, and the rules and regulations of the commissioner of the general land office, made in pursuance of said act.

The demurrer was sustained, the bill dismissed, and the assignment of error is based upon the sustaining of said demurrer. The questions thus raised are as to the sufficiency of the bill for the relief sought.

That the court erred is, we think, beyond question.

The rule is well settled, that, when land is purchased, for which one party pays the consideration, and another party takes the title, a resulting trust immediately arises in favor of the party paying the consideration, and the other party becomes his trustee; and it is equally well settled, that where the one party pays only a part of the consideration, the party taking the title to the whole land becomes a...