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Gamble v. Silver Peak Mines

December 31, 1912


J. W. Dorsey (R. M. F. Soto, of Counsel), for Petitioners.

Samuel Platt and Geo. A. Bartlett (Rush Taggart and Clarence Blair Mitchell, of Counsel), for Appellants.

By the Court, Norcross, J.:

Upon petition for a rehearing, counsel for respondents raise, for the first time, the question of the jurisdiction of this court to consider and determine the appeal. Want of jurisdiction is urged upon the ground that the judgment entered in the court below was not a final judgment, and therefore an appeal therefrom would not lie.

This court has repeatedly held that questions raised for the first time on petition for rehearing will not be considered. (Kirman v. Johnson, 30 Nev. 154; Brandon v. West, 29 Nev. 135; Powell v. N. C. O. Ry., 28 Nev. 305, 343; Beck v. Thompson, 22 Nev. 419.)

While it is a general rule that a jurisdictional question may be raised at any time, it is also settled in this court that a party may, by his conduct, become estopped to raise such a question. A party in an appellate court who has treated the judgment as final and asked that the same be affirmed or reversed will not be heard afterwards, when the decision has gone against him, to contend that the judgment was not final and the court therefore without jurisdiction to determine the questions presented on the appeal.

In Costello v. Scott, 30 Nev. 88, a case where the finality of the judgment was questioned for the first time on petition for a rehearing, we said: “Even if there was room for argument as to whether the judgment rendered in this cause was a final judgment, appellants, by treating it as such and appealing therefrom, are estopped to deny the finality of the decree”—citing State v. Commissioners, 22 Nev. 78.

In State v. Commissioners, supra, this court said: “Lander County treated it as a final judgment when it appealed from it to this court, and we entertained the

[35 Nev. 319, Page 324]

appeal and decided the case upon its merits. Having treated the entry as a judgment decisive of the merits of the case, and having taken and received the benefit of a remedy which it was otherwise not entitled to, we think that Lander County, and consequently the defendants, as its representatives, should now be estopped to claim that no final judgment has been entered in the action. In Bigelow on Estoppel, p. 601, the author says: ‘It may accordingly be laid down as a broad proposition that one who has taken a particular position in the course of a litigation must, while that position remains unretracted, act consistently with it.' * * * In Clark v. Dunman, 46 Cal. 204, the court said: ‘The only point to be decided under the agreed statement is whether the decree of August 20, 1869, is a final money judgment in the sense of the statute, and therefore bore interest. The plaintiff in this action treated the decree as final when he prosecuted an appeal from it. If it was not final his appeal should have been dismissed on that ground. But we entertained the appeal and decided the cause, and in justice the plaintiff should now be estopped to deny the finality of the decree.'“

In Brandon v. West, supra, we said: “There was no motion made to dismiss the appeal from the judgment because of any alleged defect therein, nor was the sufficiency or regularity of the appeal questioned upon the presentation of the cause. The case was briefed, argued, and presented as though the appeal was entirely regular. Its sufficiency, therefore, cannot now be questioned upon petition for rehearing.”

In Taylor v. Crook, 136 Ala. 354, 34 South. 905, 96 Am. St. Rep. 26, it was held that one who induces the dismissal of an appeal on the ground that the decree is not final cannot afterward claim as against a bill of review that it was final. See, also, Ohio and Mississippi Railroad Co. v. Heaton, 137 Ind. 14, 35 N. E. 687.

In Silver Peak Mines v. District Court, 33 Nev. 120, we said: “By the stipulation in the lower court regarding a bond to be given in compliance with that section,

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petitioners become estopped to deny that the section governed the undertaking to stay execution in the case, or to assert, as they have done, that the other sections controlled the stay bond. This is not the first time that we have had occasion to hold that the parties are estopped to rely in this court upon a position the reverse of that taken by them in the district court.”

We see no valid reason why the rule of estoppel to question the finality of the judgment ought not to apply as well to a respondent who has assumed throughout the proceedings that the judgment was final. In this case counsel for respondents, not only did not question the finality of the judgment in brief or oral argument, but prayed for its affirmance. In the lower court they stipulated that the statement on motion for a new trial should be regarded as the statement on appeal from the judgment. They also petitioned for and obtained an order for the issuance of a writ of assistance as a part of the process to carry out the judgment, assuming, as they must have done for such purpose, that the judgment was final. (4 Cyc. 294; 3 Standard Procedure, 140; Stanley v. Sullivan, 71 Wis. 586, 37 N. W. 801, 5 Am. St. Rep. 245.) See “Argument for Respondents,” Silver Peak Mines v. District Court, 33 Nev. 108.

In the briefs filed by counsel for respondents in the prohibition proceedings last above cited, which briefs were referred to and made a part of the briefs filed in this case, it was one of the contentions of counsel for respondents, as a reason why prohibition would not lie against the issuance of the writ of assistance, that the petitioners in that case had the right of appeal from the order granting the writ, under the provisions of Comp. Laws, 3425. Under that section, the order, if appealable, was so because it was “a special order made after the final judgment.” In this court and the court below both parties have contended that the judgment was final, and both parties have sought for and obtained relief upon the theory that the judgment was final, and both courts have assumed its finality.

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It is a primal duty of all courts to keep within their jurisdiction. Whenever a court takes any affirmative action there is an implied adjudication that it has jurisdiction so to act. (11 Cyc. 700; Manier v. Trambo, Fed. Cas. No. 18,309; Cook v. Weigley, 68 N. J. Eq. 480, 59 Atl. 1029.)

Whether the judgment is final or only interlocutory is a question of law. That question having impliedly been determined in favor of its finality, and both parties having proceeded in both courts upon the assumption that it was final, neither party will be heard to raise the question for the first time on petition for rehearing.

Undoubtedly, a court, at any time, even of its own motion, may determine a question of jurisdiction, and there are cases where, notwithstanding that the rule as to waiver would ordinarily apply, the court should not refuse to take notice of a suggestion of want of jurisdiction; for example, a case like that of In re Castle Dome Mining Co., 79 Cal. 246, 21 Pac. 746, where a party interested in maintaining the judgment and who would be injuriously affected by its reversal is not made a party to the appeal by the service of notice of appeal upon him.

A court, however, should not be required, on petition for a rehearing, to go into the consideration of a legal question, which has virtually been adjudicated in accordance with the contentions of all the parties, for the sole purpose of affecting the jurisdiction in the event the direct ruling might be contrary to that implied.

The lower court determined all the issues raised by the pleadings in the case, and the judgment entered was manifestly intended as a final judgment, and it was so treated by all the parties.

In addition to the jurisdictional question, the petition for a rehearing is confined to an argument of the questions fully considered and determined in the opinion heretofore rendered. We entertain no doubt as to the correctness of the conclusion heretofore reached upon the merits of the case.

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Included in the reply to the petition for a rehearing, counsel for appellants have requested this court to modify the order heretofore made by directing the court below to enter a judgment in favor of the defendants dismissing the action with costs. No contention was made, upon the hearing, that such an order should be made by this court. If counsel for appellants were of the opinion that this is such a case as would justify this court in directing a judgment in appellant's favor, they should have presented that question upon the original hearing when opposing counsel would have had full opportunity to be heard in opposition. A question as to the modification of the order heretofore entered, in the respect suggested, will not now be considered. (Brando v. West, 29 Nev. 138.)

The petition for a rehearing is denied and the cause remanded.

Sweeney, C. J.: I concur.

Talbot, J., dissenting from the order denying petition for rehearing, and concurring in the order reversing the judgment:

The opinion of the majority of the court, stating the facts at length, the contentions of the parties, and the history of the case, with a copy of the contract in dispute, will be found in 34 Nev. 351. Since the rendition of the opinion the petition for rehearing and answer thereto have been filed, and the petition has been denied by the two members of this court who concurred in the opinion.

Consideration of the controlling facts is essential to a proper understanding of the case.

In the spring of 1893 the defendant Gamble went to New York and obtained from John I. Blair an option on all the stock of the Silver Peak Mines, with the privilege of investigating the property, making surveys, prospecting, taking ore from the mines, and working it at the mill; the proceeds to be paid to the Silver Peak Mines

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unless he purchased the property, in which case the same would become a part of the purchase price of $500,000, $200,000 of which was required to be paid on or before the 1st day of November, 1893. Under date of August 5, 1893, he assigned a half interest in this contract to Chadbourne. A short time thereafter Gamble took out experts and had them examine and report upon the mines. In consideration of the receipt of $250 from Chadbourne and J. B. Wright, and transportation, Gamble agreed, on October 30, 1893, to go to New York to try to obtain a bond on the property of the Silver Peak Mines and to transfer to Chadbourne and Wright a one-third interest each in any bond he might acquire.

Under date of November 13, 1893, Gamble obtained from John I. Blair an agreement for an option on the property of the Silver Peak mines. The time for fulfilling certain conditions connected therewith was extended by John I. Blair to February 1, 1894. In January, 1894, C. J. Canda, who represented John I. Blair and the Silver Peak Mines and transacted the business for them and was secretary of the company, had received a letter from Chadbourne stating that they had concluded to send L. J. Hanchett to New York. As a result of the latter's visit to that city and of his negotiations with Canda, John I. Blair by letter dated February 2, 1894, extended the time for the execution of the contract or option until the 1st day of May, 1894. On April 24, J. B. Wright wrote to Canda asking an extension of ninety days from May 1, 1894. On May 4, 1894, Canda wrote to Wright saying that they would give him all reasonable extensions necessary, but objected to recommending Mr. Blair to give as much as ninety days' additional time. In the letter Canda stated that he was informed Mr. Chadbourne was one of Mr. Wright's most influential associates.

On June 4, 1894, Wright wrote to Canda, expressing gratification for the extension by telegram to July 1. On June 19, 1894, Canda wrote to Wright that as the result of a full conference with Hanchett he was sending a proposed contract executed by the Silver Peak Mines, to

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execute both copies if satisfactory, and to send one back to Canda, or both if they did not meet with his approval. Canda also stated in this letter that the contract was slightly changed from the copy which Hanchett had taken with him.

On July 27, 1894, Canda wrote to Wright, enclosing contract as they in New York had modified it, asking Wright to return to Canda the two executed copies of the contract sent to Wright on June 19, and saying that they would defend the title to the mines until Wright was satisfied to pay for them. The contract enclosed with Canda's letter of July 27, 1894, was in the same form as the one given by the Silver Peak Mines in the name of Hanchett, of date September 7, 1894, which is in controversy, excepting that the date for the party of the second part to be put in possession and commence development work was August 1, 1894, in the contract sent to Wright, and October 1, 1894, in the one sent to Hanchett, and the dates allowing election to purchase August 1, 1895, and December 31, 1895, respectively, and the periods for the payment were accordingly.

On July 27, 1894, Canda transmitted a letter of John I. Blair to Wright, agreeing that if he exercised the option Blair would deliver on the completion of the purchase all the shares of the capital stock of the Silver Peak Mines. It will be observed that the time for exercising the option under this letter and under the agreement to Wright, which belonged to him and his associates, had a long time to run after the date of the contract in the name of Hanchett.

The evidence is clear and undisputed that Gamble secured the option originally and conveyed an interest to Chadbourne; that later Gamble, Chadbourne, and Wright had Gamble go to New York to obtain an option an option or extension in which they would each hold a one-third interest; that later Chadbourne and Wright sent Hanchett to New York as their representative to obtain a further extension or option, which was given to May 1. While these fiduciary relations existed with Gamble,

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Chadbourne, and Wright, and within the period of ninety days which Wright had asked of Canda as an extension of their option from that date, Wright, with the assistance of Hanchett, obtained the agreement of July 27 in his own name, but had that agreement returned to Canda, and nearly eleven months before the time for its fulfillment had expired Wright, Hanchett and Canda had another contract, in similar form but with different dates for payment and performance, executed by the Silver Peak Mines in Hanchett's name, under date of September 7, 1894, which is the one in controversy.

Upon the delivery of this contract a direct agreement was executed between Wright and Hanchett, which provided that Wright should have, clear of expense, a twenty per cent interest in the contract in the name of Hanchett. On September 5, 1894, Wright stated in a telegram to Canda: “On account of the pressure of company business caused by the late strike I find I will not be able to personally attend to Silver Peak business and will place it entirely in the hands of Mr. L. J. Hanchett to personally supervise and manage. On that account would like much to have the bond made in his name instead of mine.” On September 8, 1894, Hanchett wrote to Canda: “There are too many people in the bond, on our side, who want to share but who will not put up any money. For that reason Mr. Wright telegraphed you to change the bond to my name, as that will reduce the number interested so that agreements can be reached and work commenced. I am to look after the interests of Mr. Wright and the ones directly interested, that is, ones who have put up the money or have an active part in raising it. All of the above so that you will understand why I am delaying and why I want the bond transferred to me.”

The contract in controversy, dated September 7, 1894, in Hanchett's name, was forwarded with Canda's letter to Wright dated September 19, 1894. On the same day Canda wrote requesting the return of the other agreement, which had been signed by the company, making it

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clear that Wright, notwithstanding he was a party to the venture and a part owner in the option, which had originally been secured by Gamble and later as an extension in the name of Wright for the parties to the venture, was mainly instrumental in securing the new contract in the name of Hanchett, and was assisted in so securing the same by Hanchett, Canda, and the Silver Peak Mines without the consent of Gamble or Chadbourne. These facts, as shown by letters, telegrams, contracts, and depositions, beyond dispute indicate that Wright, Hanchett, Canda, and the Silver Peak Mines, while well knowing that Gamble and Chadbourne had an interest in the option, given for the Silver Peak Mines, surrendered the contract in the name of Wright while they knew it was owned by him in common with Gamble and Chadbourne, and had a new agreement executed in the name of Hanchett for the purpose of depriving Gamble and Chadbourne of their two-third interest in the agreement or option and eliminating them from the venture. This was done with the intention and side agreement on the part of Wright and Hanchett that Wright should have twenty percent clear of expense and Hanchett the remainder of any money which might be made out of the option, and with the willingness of Canda and the Silver Peak Mines to transfer the rights of Gamble and Chadbourne to Wright and Hanchett, at their suggestion, when they had millionaire kindred and associates who, it was hoped, might be induced to pay the Silver Peak Mines a half million for the property.

It is shown not only by the deposition of Gamble that Canda, who acted as agent for the company in all the negotiations, was informed regarding the associated interests of Gamble, Chadbourne, and Wright, but notice of this was also given to Canda. In the letter of December 12, 1894, to Canda, Gamble stated: “Of course, I can hold Mr. Wright and Hanchett by law to give me the interest agreed upon. * * * The entire facts are as follows: Mr. Wright and Chadbourne made an agreement

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with me to carry my one-third interest of the amount we would hold and they were to furnish the money for all expenses. * * * Mr. Wright claimed that Mr. Hanchett had some business of his own in New York and would attend to this for me. I was not to pay any of the expenses under my contract, but for fear something might happen I paid one-third of the expense. When Hanchett returned he claimed an interest in the contract. * * * Then Mr. Wright assigned the contract to Mr. Hanchett. Why I do not know. I then asked Mr. Wright to give me a contract for my one-third and he told me to go to Hanchett.” In January, 1895, Gamble wrote to Canda: “These men were my partners, and I don't see how they can make a contract on the side without telling me and then declare me out. My lawyers say that I can hold Wright and Hanchett to the original agreement, but I don't want a lawsuit if it can be avoided, and this can be avoided by telling them to do as they agreed to do by and with me. If you will do that Mr. Hanchett will lose no time in signing over my interest.”

On November 21, 1895, the Silver Peak Mines extended to August 12, 1896, the option which had been given in the name of Hanchett on September 7, 1894. This extension inured to the benefit of Gamble and Chadbourne because they were part owners in the contract for the reason stated before. Canda, the representative of the Silver Peak Mines, had declined to recognize any further rights in Gamble; and as Gamble could not obtain recognition of his rights in this agreement, which in effect withheld from him any opportunity of going into possession of the mines or purchasing them if he obtained the required money or found parties willing to take them over, he filed his complaint in this action on March 2, 1896, and on March 6, 1896, a lis pendens, asking to be decreed the owner of a one-third interest in the contract, over five months before the termination of the extension obtained by Hanchett.

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The Silver Peak Mines brought suit against Hanchett in the United States Circuit Court for the Southern District of New York on April 6, 1897, and in the United States Circuit Court in Nevada on April 17, 1897, asking for a finding that the Hanchett contract was terminated, for the payment of royalties, and for damages for improper mining, which actions resulted in judgment being rendered against Hanchett.

John I. Blair brought a suit against the Silver Peak Mines and Hanchett in the federal court of Nevada in July, 1897, to foreclose the mortgage given by the Silver Peak Mines to him in 1879 for $204,000, bearing six per cent interest, obtained judgment, and had the property sold. In 1898, Blair recovered judgment in the United States Circuit Court for the Southern District of New York against the Silver Peak Mines for $68,000 for money which he had advanced to enable it to maintain and develop its properties. He brought suit upon that judgment and obtained judgment in the United States Circuit Court for the District of Nevada, and had the property sold. Gamble, Chadbourne, and Wright were not made parties in any of the suits brought by the Silver Peak Mines or by Blair, and it will be observed that all of these actions were brought after the filing of the complaint and the lis pendens in the present case brought by Gamble.

If notice to a corporation is required to be given to one agent or officer more than another, it would ordinarily be given to the secretary. Canda, as the agent and secretary of the Silver Peak Mines, and as the business representative of John I. Blair, conducted the negotiations and secured the execution of the contracts. Blair, living in New Jersey, at the advanced age of about ninety years, was not to be seen by the parties securing the options, and the negotiations, when conducted personally or by letter, were with Canda in New York. Notice to Canda as the representative of Blair and the company, and as secretary of the company, was notice to Blair and

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to the company; consequently they all had notice that Gamble and Chadbourne and Wright were interested in the option and extensions. Canda, and through him the Silver Peak Mines and John I. Blair, certainly had notice of their own acts and that they had given the original option to Gamble with the understanding that he would induce men of capital to join in the enterprise; that he made trips to the property and at considerable expense had taken experts to examine and report upon it; that he had conveyed interests in the option to Chadbourne and Wright; that Chadbounre and Wright had assisted in securing an extension; that Chadbourne and Wright had sent Hanchett to interview Canda in New York and secure an extension or a new agreement giving an extension or further time, the agreement for which was given in the name of Wright; and that before the contract given to Wright for the benefit of Gamble, Chadbourne, and Wright had expired, Wright, by conspiring with Hanchett and Canda, obtained from the Silver Peak Mines a new option or extension in the name of Hanchett and surrendered the one given to Wright for the benefit of himself, Gamble and Chadbourne.

In addition to knowing all the facts which indicated the ownership of Gamble, Chadbourne, and Wright in the option, notice was given to Canda and the Silver Peak Mines of such ownership, although not necessary. Soon after the contract was executed in the name of Hanchett, and perhaps as soon as Gamble became aware of it, he wrote to Canda asserting his rights, stating that they were trying to deprive him of his interest and control by having the agreement taken without his name, and pleading to be protected. Consequently it appears that before the commencement of this suit by Gamble, and long before the institution of the suit by the Silver Peak Mines against Hanchett, Canda and the Silver Peak Mines were informed regarding the claims of Gamble, and before the contracts in the name of Hanchett were given, and regarding the facts which in law gave Gamble, Chadbourne and Wright an interest in the contracts, including

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the last extension or agreement executed in the name of Hanchett.

The original promotion and expenditures were paid by Gamble, by reason of whose efforts Chadbourne, Wright, and Hanchett became interested. There was no pretense by Gamble that he had the money for developing the mines and building reduction plants or purchasing the property, but he made it plain from the beginning that he was seeking an option for the purpose of inducing men with capital to join him. Blair had long held the stock or mines, which had become hundreds of thousands of dollars in debt, and was anxious to sell or deal with some one who would make disposition of them.

Gamble was good enough to use as a promoter to interest men who might be induced to develop and purchase the property at a big price. It is shown by their respective correspondence that Gamble was given the option with the express understanding between him and Canda and Blair and the Silver Peak Mines that he would try to interest men with means. It was not expected that he would pay his own money for the mines. They were all aware that he was without means to buy the property. Under the well-settled rules of equity and just legal principles, after Chadbourne, Wright, and Hanchett had been induced to join and take an interest with Gamble in the option, Hanchett and Wright and the Silver Peak Mines could not by a surrender of the option without the consent of Gamble and Chadbourne shift it to the name of Hanchett so as to deprive them of their interest or defraud them of their right to share in the venture. Under these circumstances, Gamble ought not to be deprived of his interest because not possessed personally of means to buy the property, nor should any different rule of law be applied against him because he is poor, nor is the long and persistent opposition of his wealthy opponent any good reason for depriving him of his rights. He is as much entitled to comply with the terms of the agreement if he obtains any money required from others as if he

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possessed any amount needed for fulfilling the agreement and taking over the property.

Canda wrote in his letter to Hanchett of September 19, 1894: “I send this to Mr. Wright with a letter to Mr. Wasson, asking him to return to me, before he delivers these to you, the original papers which have been signed by the company, and which he holds. It does not seem right that contracts executed by the company should be in two hands at the same time.” And notwithstanding the contract in the name of Wright had not expired at the time Canda forwarded the one in the name of Hanchett, in the letter of January 8, 1895, Canda wrote to Gamble: “Mr. Wright also permitted his contract to expire, and after some weeks we entered into an agreement with Mr. Hanchett. The contract stands with him.” Mr. Canda, who represented the corporation, and whose knowledge was notice to the Silver Peak Mines, had the Silver Peak Mines give an option to Gamble with the expectation that he would induce men with capital to develop or buy the mines; and after Gamble had induced Chadbourne and Wright to take an interest with him in the option, and after Wright and Chadbourne had authorized Hanchett to try to obtain in New York an extension or further option on the property, one-third of the expense of Hanchett's trip there being paid by Gamble, the Silver Peak Mines, acting through Canda, and while fully cognizant that Gamble had secured the option originally and that Chadbourne had acquired an interest in it, gave to Wright in his name the extension for which Gamble, Chadbourne, and Wright as parties to the venture and Hanchett had been working; and before this contract in Wright's name had expired it was surrendered by him, and at the instigation of Wright and Hanchett a new contract or extension was given by the Silver Peak Mines in the name of Hanchett.

By Wright first taking a contract in his own name while he was a party to the venture with Gamble and Chadbourne, and surrendering that contract and having another one taken in the name of Hanchett, and the side

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agreement made between Wright and his father-in-law Hanchett, providing that Hanchett should hold four-fifths of the agreement for his own use and one-fifth as trustee for Wright, and that Hanchett at his own expense was to perform the acts required of Wright, it is evident that Wright and Hanchett, Canda, and the Silver Peak Mines were quite willing to eliminate Gamble and Chadbourne and their interest from the contract or option to meet the desires of Wright and Hanchett to secure for themselves the money to be made out of the option, without having to give Gamble and Chadbourne their proportions. Such practices should not in a court of equity deprive Gamble or Chadbourne of their rights in the venture. The moral sense of some men is so blunted that they believe they may deprive others of their rights by acquiring a contract, deed, or evidence of title or ownership in a different name, and it is the duty of a court of equity by its decision to correct such erroneous conclusions and give relief against the perpetrators of such fraudulent acts.

Canda and the Silver Peak Mines, in their eagerness to dispose of the property upon which such a large amount had been expended, complied without hesitation with the requests of the men associated with wealthy interests. Gamble having taken the original option, and having induced the men who might obtain the necessary means to join in the venture, had served a purpose, and, being considered no longer necessary to carry out the project, there was an attempt to cast him and Chadbourne aside in order that Wright and Hanchett might secure the benefits to which Gamble and Chadbourne, the pioneers in the project, might be entitled, notwithstanding the agreement of Wright and Chadbourne to carry Gamble's one-third interest and to furnish the money for expenses.

Whether these methods of high finance on the part of business men in New York and California be considered as “without the slightest warrant for a charge of fraud or double-dealing,” and whether Wright and Canda and Hanchett and the Silver Peak Mines believed that by such

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practices they could eliminate Gamble and Chadbourne and any interest which they held or profits to which they might be entitled in the venture, equity and just legal ...

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