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Lind v. Webber

December 31, 1913

H. B. LIND AND GEORGE L. KAEDING, APPELLANTS, V. W. H. WEBBER, JOHN T. HODSON, JAMES R. DAVIS, AND NEVADA HILLS MINING COMPANY (A CORPORATION), RESPONDENTS.


Appeal from the Seventh Judicial District Court, Esmeralda County; Theron Stevens, Judge.

Bryant & O'Brien and H. B. Lind, for Appellants.

R. G. Withers, for Respondents.

By the Court, Talbot, C. J.:

This case is based on an agreement for locating and acquiring mining claims. In the extended and carefully prepared briefs a number of questions relating to conflicting evidence and interesting propositions of law have been presented, which under our view we need not determine. From the findings of the court, which are as favorable to respondent as the conflicting testimony will warrant, and from the undisputed evidence

[36 Nev. 623, Page 625]

sufficient facts appear to enable us to reach a conclusion as to the ultimate rights of the parties.

At Goldfield, on the 3d day of February, 1906, the plaintiffs and the defendants Webber and Davis entered into an agreement that Webber should make a trip into the Fairview mining district in Churchill County, where a new find of mineral had been reported, for the purpose of examining the district and acquiring by location, option, or otherwise any mining rights which might be deemed of value.Each of the parties was to pay one-quarter of the expense, and Webber was to make no charge for his time or services. This agreement was made on the solicitation of Lind, upon his telling Webber and Davis about information which he had obtained from a friend regarding a rich assay of float from that recently discovered mining district. It is said that Webber also had information or had heard rumors regarding the new discovery.

The plaintiffs caused to be furnished to Webber money, blankets, and other things for the trip. In pursuance of the agreement, Webber left Goldfield on February 4, 1906, and went to the Fairview district. On the same train by which Webber left Goldfield were George Bethune and the defendant Hodson, who were going to the Fairview district under a contract made by them with W. H. Clark and J. A. Kirby. Webber, Hodson, and Bethune went from Hazen to Fairview in the same conveyance, bought their provisions together, stayed over at Sand Springs, where separate locations were made, went into fairview, and remained together throughout the trip.

Shortly after arriving at Fairview, Hudson and Bethune, without stopping to prospect, located on ground which had been pointed out to them as being vacant the Lookout group, consisting of eleven or twelve locations, the Mountain Sheep, and other claims. While they were making these locations, Webber was prospecting in the vicinity, and, after the Silver Butte claim had been located by Hodson and Bethune, Webber discovered on it a small mineralized vein, and, after endeavoring to determine its character and strike, Hodson, at the request

[36 Nev. 623, Page 626]

of Webber, located in the name of Lind four claims known as the Silver Bow group. The other claims were located in the names of Hodson and Bethune. No mineral outcrops were discovered upon the Silver Bow claims or upon the Hodson and Bethune locations, except the vein discovered by Webber on the Silver Butte. Directly after locating these claims, Webber and Hodson left Bethune at Fairview and returned to goldfield together, taking with them samples of rock, and reached there on the 14th day of February, 1906.

Upon his arrival, Webber reported to the plaintiffs, and presented a statement of the expenses of the trip, amounting to $90, one-half of which, less the amount which they had advanced on his departure, was paid by the plaintiffs and a receipt taken. Upon the day of his return to Goldfield, Webber had conferences with Davis, Clark, Kirby, and Hodson, and on the following day, without payment of any consideration, they executed a written agreement that all claims theretofore located in the Fairview mining district by Hodson and Bethune, or that might be thereafter located or acquired in that district, should be owned by these parties jointly, and that Webber and Davis should each have an equal interest therein with Hodson, Kirby, and Clark. On the same day an agreement in writing was executed between those parties and W. B. Rice, which created a new partnership by them, and by which it was agreed that an undivided one-sixth interest in the mining claims located in the names of Hodson and Bethune should be sold to Rice for the sum of $5,000, provided that the interest of Bethune in these claims could be acquired for a sum not to exceed $2,500. If his interest could be so acquired, the remainder of the $5,000 was “to be spent in improvement and perfecting of titles of the properties or for acquiring additional ground or options on additional ground as might be deemed advisable.” Further provision was made in the agreement that Hodson and Webber should act for and represent the interests of the parties to the agreement.

[36 Nev. 623, Page 627]

In compliance with the agreement, Rice on that day paid the sum of $5,000 for a one-sixth interest in the mining claims which had been located in the names of Hodson and Bethune, and the money was delivered to Hodson, who was authorized by his associates in the agreement to return to Fairview and acquire the interest of Bethune in the mining claims, which he did for the sum of $1,500.

For the appellants it is said that Bethune's interest was so acquired by concealing from him the formation of the new partnership and the payment of the $5,000 by Rice for a one-sixth interest in the claims, and by stating that the assays from the samples taken were low, and that Clark and Kirby refused to proceed further with the properties which had been located. Webber left Goldfield for Fairview a day or two after Hodson had left, and after the purchase of Bethune's interest they went together from Fallon to Fairview and began the work of perfecting the locations which had been made on their first trip.

The Lookout claims covered a portion of the Boulder and boulder No. 1 claims, prior locations, and on March 14 an option was secured on the Boulder and Boulder No. 1 for $5,000, and final payment was made for them on April 12. A part of the money received from Rice, remaining after the payment of the $1,500 to Bethune for his interest and the payment of certain expenses, was used in the purchase of the Boulders. The defendants and their associates in the agreement last mentioned, under a contract dated April 16, sold to one Sherman and received for a portion of the Lookout group the sum of $50,000; the first payment of $5,000 being made on April 19, seven days after the final payment on the Boulders. The remainder of the $50,000 they divided equally among themselves, Webber, and Davis, each receiving one-sixth. They transferred to the Pyramid Mining Company a portion of the claims, for which they received an divided equally between them 700,000 shares of the capital stock of that company. Another portion of the claims, with

[36 Nev. 623, Page 628]

the interest in the Boulder and Boulder No. 1, which lapped and adjoined, they conveyed to the Nevada Hills Mining Company, and received therefor, and likewise divided, 700,000 shares of its capital stock, and Webber and Davis each received $50,000 in dividends upon their proportion of the stock of that company.

After Rice had paid the $5,000, and after the options had been secured on the Boulders, Davis, on the last of March, 1906, gave a check for $2,000,and Kirby and Clark advanced certain moneys about that time. These advances to the partnership were only temporary, for, as stated, the payment was made by Sherman nineteen days later, and seven days after the money was actually used for the final payment on the Boulders. The plaintiffs were not notified regarding these transactions.

Webber completed the locations of the Silver Bow group after he returned to Fairview, and the cost of the work was paid by plaintiffs and Webber and Davis. Later the Fairview Aztec Mining Company was incorporated to take over the Silver Bow group of claims, and Webber and Davis received their share of the stock of the company.

No demand was made upon plaintiffs for any money, except for their proportion of the expenses incurred by Webber on his first trip to Fairview and on the claims located in the name of Lind, which were conceded to belong to him, Webber, Davis, and Clark, or which they did not pay; nor does it appear that they were informed that any money was needed which they did not advance, or that until a short time before the commencement of this action they were aware that, without making any payment therefor, Webber and Davis had acquired each a one-sixth in the claims located by Hodson and Bethune, or that money or stock acquired through the location of those claims, and moneys, and stock derived from sales and transfers thereof, had been received by Webber and Davis.

Under the conflicting evidence the district court finds against the contentions of the plaintiff that the first

[36 Nev. 623, Page 629]

agreement made by the plaintiffs and Webber and Davis was one creating a general mining partnership, and against the claim of the plaintiffs that there was a secret understanding between Webber and Hodson in advance of their return to Goldfield that Webber should have an interest in the claims located in the names of Hodson and Bethune, and the court found in favor of the contention of the defendants that the original agreement, under which Webber went to Fairview, was terminated upon the payment of the expenses of the trip upon his return to Goldfield.

1. Notwithstanding the findings of the district court, we are of the opinion that under the conceded facts and under equitable principles and the decisions of this court that, regardless of whether the original agreement made by the plaintiffs and Webber and Davis be considered as one constituting a partnership, or only as providing for a joint venture, or in the nature of a grubstake agreement, as held by the court, and regardless of whether there was any fraudulent or secret understanding between Hodson and Webber before they returned to Goldfield, and regardless of whether the agreement of the plaintiffs was terminated upon the payment by them of their portion of the expenses of Webber's trip, the plaintiffs are entitled to have an accounting and to recover from the defendants Webber and Davis one-half of whatever Webber and Davis have acquired from the Fairview mines, stocks, and properties under the transactions mentioned, in which they were interested with Hodson, Rice, Kirby, and Clark. We come to this conclusion because it is apparent that Webber and Davis acquired their interests in the ...


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