Rubie Combination Gold Mining Co. v. Princess Alice Gold Mining Co.

• Decision Date: 02 March 1903
• Citation: 71 P. 1121,31 Colo. 158
• Parties: RUBIE COMBINATION GOLD MIN. CO. v. PRINCESS ALICE GOLD MIN. CO.
• Court: Colorado Supreme Court

71 P. 1121

31 Colo. 158

RUBIE COMBINATION GOLD MIN. CO. v. PRINCESS ALICE GOLD MIN. CO.

Supreme Court of Colorado

March 2, 1903

Appeal from District Court, El Paso County.

Action by the Rubie Combination Gold Mining Company against the Princess Alice Gold Mining Company. From a judgment for defendant, plaintiff appeals. Affirmed.

Ady & Sheafor, for appellant.

T. M S. Rhett, for appellee.

CAMPBELL C.J.

Action to cancel a deed to mining property, to forfeit a lease, and for an accounting. The Ruble Combination Gold Mining Company being the owner of the property, acting through its board of directors, in which such power was vested, gave to James A Twitchell a lease and bond on the Lafayette mining claim situate in the Cripple Creek mining district. The term of the lease was for 15 months. It was in the ordinary form, and provided for the payment of a specified royalty. The bond was conditioned upon payments by the grantee to the grantor of the sum of $20,000 before the end of the lease, such payments to be made at different times and in different amounts, which were specified therein. About four months after they were executed, the lease and bond, with the consent of plaintiff, were transferred and assigned by Twitchell to the Princess Alice Gold Mining Company, which, having succeeded to his rights and assumed his obligations thereunder, at once took possession of and operated the mine under the lease. Before this action was begun, it had paid upon the agreed purchase price the sum of $15,000. In pursuance of the terms of the bond and lease, the plaintiff company, by its board of directors, executed a deed to the mining claim, and placed the same in escrow with the First National Bank of Colorado Springs, to be delivered to the Princess Alice Company, as the assignee of Twitchell, upon compliance by it with the terms agreed upon, which were indorsed on the envelope inclosing the escrow. The first payment of $5,000 upon the bond was made in accordance with the agreement, and, a short time before the second payment of $5,000 became due, upon the initiative of the plaintiff company, through its president, negotiations were set on foot with the defendant company, acting by its authorized agent and manager, which resulted in a modification of the terms of the bond. This new agreement was that, if the defendant at once paid in cash $10,000, plaintiff would accept the same in lieu of the sum of $15,000 which was still due under the terms of the original agreement, but not payable for several months. This proposition was accepted by defendant, the $10,000 were paid, and the bank, under the written instruction of plaintiff's president, delivered to defendant the escrow deed, which was afterwards duly recorded. The plaintiff thereupon brought this action, alleging, among other things, that the defendant had not observed the terms of the lease with respect to the payment of royalty, and that surreptitiously, fraudulently, and against the consent of plaintiff, it obtained possession of the escrow; and in the prayer for relief asked that the $15,000 of the purchase money already paid by the defendant be declared forfeited, that the deed be canceled and held for naught, and that an accounting be had to ascertain the amount of royalty still due. The trial court found the facts in favor of the defendant, and dismissed the action.

Upon the trial, and also here, plaintiff abandoned its claim for a forfeiture of the lease and for an accounting, and its position now is that there should have been a cancellation of the deed, because it was delivered fraudulently and without its consent; or, if this cannot be done in accordance with the principles of equity, that a money judgment be given in its favor for the entire sum of $15,000; or if, in the circumstances of the case, it is inequitable either to cancel the deed or to require defendant to pay the entire sum of $15,000 after it has paid $10,000 of that amount to plaintiff's president, then that plaintiff should have a money judgment for the $5,000 remaining unpaid on the purchase price, together with interest thereon.

1. It is well to bear in mind that this is an action for the cancellation of a deed which was in escrow, and, as alleged was obtained from plaintiff by defendant's fraudulent conduct. That an escrow delivered without authority, or obtained fraudulently, conveys no title, is elementary. Of the entire consideration of $20,000 which the defendant agreed to pay the plaintiff for the property described in the escrow deed, $15,000 were paid by defendant,...