Appeal from Sixth Judicial District Court, Humboldt County; Edward A. Ducker, Judge.
Hoyt, Gibbons & French and H. J. Murrish, for Appellants.
L. G. Campbell, R. H. Young, and M. B. Moore, for Respondents.
By the Court, Sanders, J.:
This was an action to quiet title and to remove a cloud from the respondents' title to an undivided one-fourth interest in three contiguous lode mining claims, situate in the Rochester mining district, Humboldt County, Nevada, known as the Weaver group.
The main question to be considered on this appeal is, whether the respondents by their acts and conduct are prevented from asserting their title to the property in controversy as against the appellant company, which claims title to the whole of the property in dispute.
The appellant company, by its answer, set up two equitable defenses, either of which, if sustained, constitutes a complete defense to the action. One was in form an affirmative defense, admitting the execution and delivery to the respondents of a deed purporting to convey to them an undivided one-fourth interest in the Weaver group, but that their said deed was obtained by fraud. The other was in form a separate and distinct defense, in substance and to the effect that the respondents knew at the time their title accrued that their grantor had, prior thereto, executed a deed conveying his entire interest in the premises to the appellant Schick, and with full knowledge of the material facts,
ratified the acts of their grantor by accepting from him one-half of the proceeds of the sale of the property.
Whether, upon the facts proved, a case was made upon which, according to the principles of equity, the respondents are prevented from asserting their legal title against the appellant company, is the real point in controversy. The point is important as between the parties, and still more important because it involves in its wider aspects a question affecting the security of all title to real property and a consideration of the circumstances under which a legal title may be practically subverted and lost, although the true owner has never executed any deed or conveyance of or any writing agreeing to convey his land. Thompson v. Simpson, 128 N. Y. 284, 28 N. E. 627. Such defense to an action of this character rests upon the plain principle of justice of right, and law, that a man cannot accept the benefits and reject the burdens of a transaction, and not upon any of the essential elements of estoppel in pais.
1. Where one has an election either to ratify or disaffirm a conveyance, he can either claim under or against, but he cannot do both. And having adopted one course, he cannot afterwards pursue the other. And it is wholly immaterial, of course, what may be the infirmities of the transaction abstractly considered; if he elects to take under it, he thereby cuts himself off from attacking it. It is good as to him, though it may be bad as to everybody else. Kahn v. Peter, 104 Ala. 531, 16 South. 524.
Upon this principle, the books abound with cases in which those who are entitled to avoid a sale, or to adopt and ratify it, or to claim under or in opposition to a conveyance, by accepting the proceeds of the sale, or the benefits of the conveyance, preclude themselves from avoiding it. Goodman v. Winter, 64 Ala. 434, 38 Am. Rep. 13.
2. The rule is, that where one, without title or authority from the real owner, assumes to sell and convey the land in fee, and the true owner, knowing the facts, consents to and does accept the proceeds of the sale in full
satisfaction of his interest, this ought in equity to operate as a confirmation of the unauthorized sale, and preclude the real owner from asserting his legal title. The sale in the case supposed is treated as his act, or at least it operates in connection with the receipt of the purchase money as an agreement on his part to sell to the purchaser and as a payment by the latter to the true owner of the consideration. Thompson v. Simpson, supra.
The acts relied upon in this case as constituting ratification of the unauthorized acts of respondents' grantor are that the respondents, with full knowledge of all the material facts, accepted from him one-half of the purchase price of the property in controversy. To rebut the presumption and inference deducible from their act, the witness Moore, one of the respondents, testified that their intent and motive for accepting from their grantor a sum equivalent to one-half of the proceeds obtained by him from his unauthorized conveyance of the property was not to ratify or affirm the conveyance, but was demanded as and for an additional compensation for legal services to be performed as attorneys in behalf of their grantor in an action then pending between him and his grantee Schick, involving the former's title to other mining ground, and to support his statement the witness gave in detail an account of the transaction whereby respondents received from their grantor a sum equal to one-half of the proceeds of the sale of the property. From the testimony of this witness, and facts and circumstances connected with it, the trial court found, quoting from its decision, that:
Moore's testimony in this regard is satisfactory, and from it the court concludes that plaintiffs' conduct in reference to the transaction did not amount to a ratification of Olson's acts in accepting $5,000 from Schick for his interest in the Weaver claims, and therefore does not constitute an estoppel.
The duty devolves upon us, at the expense of prolixity, to review the evidence upon which this finding is based, and determine if the evidence is such as to prevent the
respondents from asserting in equity their legal title against the appellant company.
One Olson, respondents' grantor, and one Schick, the appellant, were the owners of the Weaver group and other mining ground, situate in the Rochester mining district. Olson, on the 28th day of October, 1912, conveyed to Schick his undivided one-half interest in the Weaver group. The deed was placed in the First National Bank of Lovelock, with instructions to the bank, signed by both parties, to deliver the deed to Schick on the payment by Schick into the bank, to the credit of Olson, the consideration expressed in the deed, to wit, $5,000, according to the payments named in the instruction to the bank. Shortly after this transaction, Olson apparently became dissatisfied with the relationship existing between him and Schick, and on the 10th day of December, 1912, consulted his attorney, the respondent Young, concerning his legal rights in the premises. The witness Moore, upon solicitation of Young, participated in the conference, and as a result the following agreement or memorandum was signed by Olson:
I hereby employ R. H. Young of Lovelock, and Stoddard, Moore, and Woodburn of Reno, Nevada, as my attorneys to represent me and my interests, and to take such action by suit or otherwise to secure for me the interest to which I am entitled in mining ground located in Rochester Canyon or vicinity in Humboldt County, Nevada, by F. M. Schick in our names jointly, or his, F. M. Schick's, or any claim located by him or any other person or persons, and being without funds to pay my said attorneys, I hereby agree to allow them as payment for said services to be rendered, and I do hereby agree with my said attorneys to pay over to them and transfer to them one-half (1/2) of all money or property which now stands in my name and said Schick's name or which they may secure for me from said Schick or any other person or persons or corporation by action, suit or in way of settlement with said Schick or any other person, persons or corporation.
Thereupon the respondents, with the authority and
consent of Olson, and over his signature, gave notice to the bank and to Schick of his rescission and repudiation of the deed of October 28, 1912, and caused to be posted a similar notice upon the ground in controversy, and thereafter notified all parties dealing with Schick for the purchase of the Weaver group of Olson's repudiation of the instrument, and also, on later dates, gave notice to others dealing with Schick of respondent's title to an undivided one-fourth interest in the property. On the 18th day of December, 1912, Olson executed, acknowledged and delivered a deed, at the request and solicitation of the respondent Young, conveying to the respondents an undivided one-fourth interest in the Weaver group, the Rochester group, the Crown Point Extension and the Weaver Extension lode mining claims. This deed was filed for record on the 23d day of December, 1912.
Pursuant to their employment, the respondents, on or about the 23d day of December, 1912, filed suit in the name of Olson v. Schick to establish Olson's undivided one-half interest in and to the Rochesters, the Crown Point Extension, and the Weaver Extension locations, and pursuant to their employment, on the 9th day of January, 1913, filed suit in the name of Olson v. Schick to annul the deed of October 28, 1912, on the ground of fraud and deceit, and also filed contemporaneously therewith notice of lis pendens, and on the 20th day of January, 1913, filed an amended complaint in the cause, all the pleadings being verified by Olson.
Olson, without the knowledge of the respondents, and after he had been advised and instructed not to accept any money from Schick on account of the transaction with him in connection with the Weaver group, had actually on or about the 6th day of January, 1913, and before the filing of the suit to cancel his deed to Schick of the Weaver group, accepted the sum of $1,000 on the purchase price of the property; and, without the ...