Case ID: colo_42/html/0121-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Goddaed", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

[No. 4914.]
    Wolfe et al. v. Childs et al.
    1. Mines and Mining — Vendor and Vendee — Bond to Convey— Assignment.
    A grantee in a bond for a deed becomes, on tbe assignment by him of an interest in tbe bond to a third person, a trustee of sucb interest in favor of tbe third person, and, on tbe conveyance under tbe bond of tbe legal title to him, be bolds tbe same for tbe benefit of sucb third person. — P. 126.
    2. Same — Bona Fide Purchasers — Notice.
    The owner of an undivided fourth interest in a mining claim executed a bond for a deed to a third person, who assigned a half interest in tbe bond. Tbe bond and assignment were recorded and sucb third person obtained a conveyance of tbe legal title. Held, that those who succeeded to tbe third person’s title took tbe same subject to tbe rights of the assignee, and held tbe legal title in trust for him. — P. 127.
    
      3. Mines and Mining — Tenancy in Common — Mutual Rights and Liabilities — Enjoyment and Use of Property.
    One tenant in common of a mining claim, who, without the consent of his co-tenants incurs expenses in prospecting, cannot demand contribution from them; but a tenant operating a mine may, when called on to account for the profits, set off as against a non-operating tenant, the cost of the necessary improvements, on his showing that the improvements were necessary and enhanced the value of the common property. — P. 129.
    4. Mines and Mining — Tenancy in Common — Care of Property— Services of Co-Tenant — Compensation.
    Tenants in common, in the absence of a special agreement or mutual understanding to that effect, are not entitled to compensation from each other for services rendered in the care and management of the common property. — P. 129.
    
      Error to the District Court of Lake County.
    
    
      Eon. Frank W. Owers, Judge.
    
    Action by Minnie B. Childs, administratrix of Charles D. May, deceased, against Augustus B. Sullivan, Maria. L. Bussell, The Julia L. Beal Estate Loan and Investment Co., Aug. Zobel, Eli Larimer, Ole Oleson, Gabriel Lake and Mike Libbi, in which James S. Wolfe and George L. Hodges, Sarah S. Chase, Stephen H. Standart and Alanson C. Bailey intervened. Prom a judgment granting alleged insufficient relief, intervenors bring error.
    
      Reversed and remanded.
    
    Messrs. Hodges, Wilson & Hodges, for plaintiffs in error.
    Mr. John P. Mail, for defendants in error.
    This action was commenced by Minnie B. Childs, administratrix of the estate of Charles D. May, deceased, against the other defendants in error, alleging a tenancy in common in the St. Louis lode mining claim, and that defendants Zobel, Sullivan and other defendants had wrongfully extracted ore therefrom, and prayed for an accounting. Plaintiffs in error intervened, claiming ownership of an undivided one-eighth interest in said claim through conveyance by James M. Patrick, one of the original locators, and the ownership in equity of an undivided one-eighth interest acquired' through an assignment of a one-half interest in a certain bond for a deed executed by Daniel Smullen, another of the original locators, to W. F. Patrick; and alleged that defendant in error Zobel had, through operating and leasing said property, received a large amount of money which he had applied to his own use, and which he refused to account for; prayed for a determination of their interest in the claim, and an accounting for the moneys received.
    In answer to the petition of intervention, the defendants in error admit that intervenors own the one-eighth interest in the property derived from J. M. Patrick, but deny their ownership of the one-eighth interest alleged to have been derived through William F. Patrick from Daniel Smullen. Defendant in error Zobel denies that he has wrongfully worked the property, and avers that he rightfully extracted ores therefrom, and that his expenditures upon the property in so doing exceeded the amount received from ores so extracted, and claims a large balance due him for such expenditures; prays an accounting and judgment against intervenors for their proportionate part of such expenses.
    A referee was appointed to take testimony and report findings of fact and conclusions of law. In lieu of the findings and conclusions of the referee the court made findings of fact and rendered a decree thereon adjudging that intervenors were the owners of an undivided one-eighth interest in the property, instead of an undivided one-fourth interest, as claimed by them. The facts upon which the court based its conclusion that they were not the equitable owners of the one-eighth interest claimed by virtue of the assignment to Chase of the one-half interest in the bond for a deed executed by Daniel Smullen to W. F. Patrick, are set forth by the court in its findings as follows:
    
      “4. That on or about.the 5th day of September, A. D. 1879, one Daniel Smullen, being then and there the owner of an undivided one-fourth, interest in and to said lode mining claim, executed and delivered to said W. F. Patrick a certain bond for deed, wherein and whereby the said Daniel Smullen agreed to convey by good and sufficient deed an undivided one-fourth interest in and to the said St. Louis lode mining claim upon condition that the said W. F. Patrick should within one year from the date hereof pay to the said Smullen the sum of $850, which said bond, contained the following provisions, to wit:
    “ A hereby agree that the said W. F. Patrick shall, on the expiration of this bond, have the privilege of renewing it for a further term of one year, or until the title of the claim is settled by law, on payment to me of $100 on or before the 5th day of September, 1880,'’ which bond was duly recorded on the 17th day of September, A. D. 1879.
    “5. That on or about the 23d day of September, A. D. 1879, the said W. F. Patrick, in consideration of $50 paid to him, receipt of which was acknowledged, did assign and set over to one Henry J. Chase, Trustee; a one-half interest in and to said bond, which said assignment was evidenced by an instrument in writing executed on the day last-aforesaid, and duly recorded on the 23rd day of September, A. D. 1879.
    
      “6. The court further finds that on the 23rd day of August, A. D. 1880, the sum of $100 was paid by J. M. Patrick, as agent for W. F. Patrick, to the said Smullen; that said payment is evidenced by a certain receipt in writing given by tbe said Smullen to the said J. M. Patrick on the 23rd day of August, A. D. 1880; that the same was duly recorded on the 7th day of September, A. D. 1880; * * * which said receipt is in words and figures as follows, to wit:
    “ ‘St. Louis, August 23, 1880.
    “ ‘Received of William P. Patrick, by the hands of James M. Patrick, the sum of $100 in full for the sum to be paid by him to entitle him to an extension of one year from September 5th, 1880, of a certain bond executed by me to him for the conveyance of a one-fourth interest in the St. Louis mining claim, situated in Lake county, state of Colorado, and described in said bond. Said bond bears date September 5th, 1879.
    “ ‘Daniel Smullen.’
    v “That there is no evidence concerning any contract made on the date of said payment, or at all, with reference to said payment or the effect thereof.
    “7. The court doth find that on or about the 26th day of November, A. D. 1881, the said Daniel Smullen conveyed to said W. F. Patrick the said undivided one-fourth interest in and to the said St. Louis lode mining claim for a consideration of $850, and that the mining deed evidencing such conveyance was duly recorded on the 1st day of December, A. D. 1881, * # * and there is no evidence of the date when saidconsideration was paid other than the instrument itself.
    “8. That the litigation involving the title to said St. Louis lode mining claim, which had been initiated before the giving of said borid, was not settled until after the 26th day of November, A. D. 1881.
    “9. That said W. F. Patrick retained the legal title to said Smullen interest from the said 26th day of November, A. D. 1881, until, to wit, the 7th day of May, A. D. 1889, upon which date said'W. F. Patrick, for and in consideration of the sum of one dollar, executed his mining deed conveying’ all of said interest to one Charles D. May; that said Charles D. May purchased said interest with actual and constructive notice of the execution of the aforesaid bond, the assignment of a one-half interest to Henry J. Chase, Trustee, the payment of $100 by James M. Patrick for W. F. Patrick on the 23rd day of August, A. D. 1880, and the language of the said receipt; that said May conveyed a one-third of said interest to said August Zobel, which is still retained by him, and one-third of said interest to said A. B. Sullivan, which interest is now vested in said The Julia L. Eeal Estate, Loan & Investment Company, and the interest retained by said May was included in the conveyance from said May to The Julia L. Eeal Estate Loan and Investment Company, hereinafter referred to.”
   Mr. Justice Goddaed

delivered the opinion of the court:

1. We do not think that in this state of facts the conclusion reached by the court as to the ownership, of the one-eighth interest derived by Patrick from Smullen is correct. - By the assignment of the one-half interest in the Smullen bond, Chase became the equitable owner of that interest, and was entitled to receive the legal title thereto in the event that Patrick acquired the legal title to the undivided one-fourth interest from Smullen through and in pursuance of the terms of the bond. In other words, Patrick, by his partial assignment of the bond to Chase, became trustee of the interest so assigned, and upon the conveyance of the legal title to him by Smullen under and by virtue of the bond, be was vested with, and became trustee of, such title for the benefit of Chase to the extent" of the interest acquired by him through such assignment, and continued to hold the legal title in trust until he parted with the same on the 7th of May, A. D. 1889, and, therefore, the defendants in error that succeeded to Patrick’s title with actual and constructive'notice of Chase’s rights, took the same subject to such rights, and held the legal title in trust for him and his associates.

This conclusion, of course, is based upon the condition that Patrick acquired the title to the undivided one-fourth interest under and by virtue of the terms of the bond. That he did so acquire it, and that Smullen executed a deed on the 26th of November, 1881, in pursuance of, and to carry out, the obligation of his bond, which he recognized as in force at that time, are manifest from the consideration paid, and all the circumstances attending the transaction.

Assignments of error Nos. 2, 5 and 6 are, therefore, well taken.

2. Zobel, as owner of an undivided interest in the mine, under an agreement with A. B. Sullivan’ and The Julia L. Beal Estate, Loan & Investment Company, but without the consent and after the refusal of intervenors to join with him therein, operated the mine from the 1st of May, 1898, until October 31st, 1902, and leased parts of the property containing ore bodies to certain lessees. As to the character of the work done by him, and the amount expended therefor, and the value of the ore extracted by him, and the amounts received as royalties, the court finds as follows:

“14. That said Zobel, prior to the 1st day of September, A. D.' 1901, did considerable development work upon said property in the way of driving drifts, tunnels and winzes for the purpose of exploiting and developing the same. # * *
“15. That subsequent to the 12th day of April, 1898, the said Zobel had expended upon said property for development work, as aforesaid, the sum of $4,969.50; that part of said expenditure was for necessary work to the actual mining of ore aforesaid ; that part of -said work was non-productive and done on a part of the property remote from where the ore sold was mined, but was legitimate development and prospecting work in a part of said property that has yielded no income; that said Zobel performed personal services, expended labor and time in the course of said work of .a reasonable value of two thousand, one hundred and eighty dollars and ninety cents- ($2,180.90).”

And further finds that Zobel received from the ore extracted by himself and in royalties the sum of $9,953.06, and finds, as a conclusion of law, that he, Zobel, is entitled to retain the proceeds of the ore taken from the mine to- the amount of $4,969.50 expended as aforesaid, and $2,180.90 for his personal services, and that the balance of $2,847.70 only should be credited and paid to the respective interests in the mine, the amount so credited to the intervenors being the sum of $355.97.

The intervenors contend that the conclusion of law announced by the court upon the- facts as found by it is erroneous, for two reasons:

(1) That a portion of the work, as the court expressly finds, for which such expenditure was made, was “non-productive and done on a part of the property remote from where the ore sold was mined”; that it was simply prospecting, that resulted in no improvement of the property or benefit to the intervenors, and was a character of work for which Zobel was entitled to no credit.
(2) That it erroneously allows Zobel compensation for his personal services.

We think it is clear, from the finding of the court below, that a portion of the expenditure for which Zobel was allowed credit was made in doing work for which he was not entitled to contribution from these intervenors. As was said in Stickley v. Mulrooney, 36 Colo. 242, 244:

“It appears to be well settled that one co-owner, without the consent of the other co-owners, cannot demand from the co-owners, who have not joined with him or in some way given their consent to the development or prospecting in mining property, remuneration for expenses incurred in so prospecting or developing the common property.”

While the operating tenant may, in case he is called upon to account for profits, set off as against a non-operating tenant the cost of the necessary improvements, he must show that such improvements were necessary and added to and enhanced the value of the common property. A portion of the expenditure for which credit was allowed Zobel was, we have seen, not of this character. What portion it is impossible to determine from the findings of the court; it appearing therefrom that part of the expenditure was for work which resulted in the development of the ore body which was opened at the time intervenors acquired title, and in extracting such ore, which would be a legitimate off-set, and a part was for prospecting and developing other parts of the mine, for which he was entitled to no contribution from the intervenors.

It is also well settled that tenants in common are not entitled to compensation from each other for services rendered in the care and management of the common property in the absence of a special agreement or mutual understanding to that effect. — 1.7 Am. & Eng. Enc. Law, p. 688, sub-div. 6; Gay et al. v. Berkey, 137 Mich. 658; Dunavant v. Fields, 68 Ark. 534; Sharp v. Zeller, 38 So. 449.

It is manifest, therefore, that the court erred in allowing Zobel the full amount of his expenditures for work and development, and compensation for his personal services. For the foregoing reasons, the judgment is reversed, and the cause remanded. Reversed and remanded.

Chief Justice Steele and Mr. Justice Bailey concur.