Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1885-10-10

cations and. liabilities of this immense intricate
! and hazardous business. Clearly, one could
Wen afford TO get cut of such business with very
lnueh less than the great expectations of profit
Whlch were attended with such untold risks
sueh perilous business, with its glitter and pow
en- may SUIT some persons, and the hope itholds
OUT OF colossal fortunes may tempt Others The
ueiendanis may perhaps delight i'll these ex-
citing though dangerous WAYS ioafir,o tn
borrow somewhat slang expression, upon the
circumstances of the occasion. trusting to the
suDhmlty OF luck" But if one of these hold
a!dFenIureTs were to attempt to sell out and re-
| tire with his millions with such srIerar,fee
against the hazards of the ex2edients by which
hehes accumulated them, he would find his many
nllnons IN expectancy, and not a few of those
apparently IN hand vanishing like the baseless
! iaorle OF aVision The guarantee win be found
t tLe Steatest 1lilculty He could not begin to
touen, on such terms, the market value
Iaklng, therefore, the circumstances of this
catse, ana remembering that the sale was made
as ;a Peflod OF unp9ralleled depression in the
prices prices OF every species OF property, and OF very
great gloom throughout the business world. and
IN the rear almost of eommunistic uprising in
Caluornlai that il was lump settlement made
! with full knowledge of both sides. that the sinh
Ject matter-was of most uncertain value de-
pendlng upon future events of which each party
undertook to judge for himself and particularly
that the defendants assertion after repented
| nhportunltles OF the plaintiff, must decline to
| ma that the consideration was Inadequate
| 1Hc pialnui haq competent and faithful adj
| vlserS. Ihey had examined the conditions for
months. Every avenue OF Information was
| throwh open TO them. They did examine for
| afterwards, when business generally had I'M
proved, that they We're able to make great gains
rom the property, especially when these gains
were III great part the result of further large ex-
| penditures and risks on the part OF defendants
Ny attention has been called to an al eyed
| difference between Section pos Of the Civil
/ Gode, IN regard 10 the conduct OF trustees and
! Section l56S, in regard to frauds In matters of
trust II IS said tha' the slightest misrepresenta-
| ton or adverse pressure is prohibited while In
cases Of fraud il must appear 10 warrant aelief
that ttecoliscfft wUuid NOT nnve Been given hut
Tor the fraud, undue influence etc. But l see
| no difference. True by Section DDS il max be
claimed that The slightest misconduct is forbid
den, but 1t only forbiGs, in terms the trustee to
| gain an advantage by such means. This puts it
/ on the same plane, as no doubt Il was intended
1 10 be, with Section l5tS. The question here
| too, is Did he gain the advantage by the use of
adverse pressure?
WILSON NOT IGNORANT or ANY FACT.
! l may as well say here tlnt do not al IT.
accept the proposition that " iiiissifHas I-fIor-
ant ei any fact or Circumstance from which
| attorneys now seek o. show q fCuciarv reIa-
! ton between Cotton ard his assoeiafes Ua
had been intimate with Il e usunrement of
these railroad enterprises almost frol- their IN
! eeption For years he had been the regular re-
tanned legal adviser Of all the corporations and
| OF me associates IN their management of thenI,
I including the Contract and Finance Company
/ ana the western Developm ent Company. He
! speaks in his testimony OF what he had always
| understood with reference to those companies
! counsel delight 10 compare his intimacy with
! Cotton 10 the friendship between David and
| charge OF new duties in these important affairs
| Wilson was already familiar with their manner
OF DONG business then, and Coitons
I 0tef ego cotton mad right to cOniide all these
matters to Wilson, for Wilson was then the con
tdential adviser with reference to al the bust
] ness, with salary larger even. than Colton's
! lie knew now they transacted their business
and that they were cooperating with each other
| to get control of q system of roads
! have expressed ny belief that he knew of
the agreement under which Cotton was allowed
! to retain his share Of the diyidGud which ne
/ had caused to he improperly made. Indeed,
/ the compromise Itself shows that ali parties
I thoroughly understood thC relation of fhe do
PENDANTS 10 these YaGi0us corporations Ii
! takes for granted the extent OF defendants
/ interest and control. Wilson could hardly have
taken the first step in finding out Colton's inter
csts without discovering the relatiOns
There would have beeu 40 sense even in at
tempting to Obtain q settlement with the iudi-
| Eidual defendants or insisting upon their buy
| ing her out unless he already knew of their
| association and peculiar relations. The whole
proceeding in regard to the negotiation seems
| absurd If Wilson did not know ofcther relations
! between the parties than the ordinary relations
| OF stockholders i'll the same corporations
And then Wilson testies that he cooked IN
the question of the effect the death of n co-ad-
Yenturer would have put upon the right of his
| estate to the fruits of incomplete ventures his
| contribution being largely personal service He
satisfied himself that Colton's rights were not
! lost because he died before the end of the per-
| iod for which they had contracted to cooperate
in these enterprises.
| He speaks of the associates as partners-as
!
! him as saying one partner could not steal from
the other. Contract \ was in his hands and of
| course he knew of the pledge of stock and the
! terms including the right to draw mt a pro-
| portion as payments should be made on the
note Certainly Wilson did know all the facts
which could evidence fiduciary relation be-
| tween the parties.
, There was, however, a Misrepresentation in
regard to the 40S shares of the K. N. C 4 /. Co.'S
stock TO the extent of los shares valued at S16.-
| 500. ana not sure that this matter might not
| be adjusted without interfering with the con-
| tract of compromise.
| This is the only part of the whole transaction.
| apparently, which the parties supposed they
were settling on accurate knowledge.
| THE COMPROMISE NEED NOT BE DISTURBED
| There are, think, some precedents which
would justify the Court III rectifying this mis-
! take without disturbing the compromise in
| either respect but at all events it seems to me
plain that this is not sufficient to Justify a de-
| cree of cancellation of compromise Of these
| large claims. 1t is impossible to find this to
! have been an intentional misstatement In
most respects the legal effect, if it be only an
unwarranted assertion of fact which turns
out not be true, is the same. Still they are not
! in all respects the same.
! An unwarranted assertion, believed to be
! true, though on insufficient grounds, and which
| actually misleads, cannot characterize trans
| action as deliberate fraud. I think the de
| PENDANTS believed themselves masters of the
| situation on other grounds, and for this If not
TOR better reasons, disdained to mislesd, deceive
| or conceal.
The Misrepresentation caused a loss to Mrs.
] %
! such, however, at the time that Wilson con
! Guided that it would do no good if he could sat
! isiactoTily explain away charges OF approprat-
| ing SlSl 600.
In comparison with these figures the sum in
/ volyod in this unwarrante ed assertion is small
! But think, on general principles, in matter
1 OF such magnitude as this, such mistake or
| misrepresentation would not justify setting aside
| the agreement, especially where. as here ey-
! pendltureS have been made 10y the Defendants
| on inc talth OF the agreement which have ma
| teTially enhanced the value OF the property in
| VOWED III this litigation.
| The main fact after all was the unfortunate
| time IN which the compromise was made and
4 the better times " ich came so soon afterwards
Really can find no other discovery which has
been made by the plaintiff since the cOmDru-
| mise, calculated 10 show the uniairpesS of that
! transaction Ii seems hard TO think that they
made or might have made SO much out of it-in
| sOshor- q time-pr1dis which possibly She might
have realized could she nave held on n lew
| months longer. Concerning this however I
! have already said enough.
| The power TO cancel "a contract is most ex-
! traoTdinary power. 10 is one which should be
| exercised with great cauton-uay, l may say,
! with great roluetance-uuless in a clear case A
too Tree use OF this power would render all bust
/ ness uncertain and, it has been said, make the
! length of ChaucelOrs foot the measure OF in
diyidual rights. The greatest liberty OF making
contracts is essential 10 the business interests Of
| the country.
JUDGMENT FOR Defendants.
( In general, parties must look out FOR them
! selves. kach is supposed TO knew " hat is test
| proceeding, en- iIely because one party has
/ judged rightly, or chosen more unfortunately
| than the other. IL is an everyday occurrence
here that people in Slaughtered circumstances
| are compelled at disadvantage. or to foregO
| the profits of enterprises which they have I'M
| dertNken without the means OF completion.
in accordance with the views | have reached
in this case of the relations Of the parties TO each
| other at the time Of the mp2achcd Transaction
| and OF Che law applicable TO that relation, judg-
ment must be rendered for defendants.
Though the plaintiff be cund correct in regard
I to the law Of trusts, judgment on the findings
may probably be entered for her without fur
/ Their LEial in the appellate COurI.
| There are still o great many points IN the case
| on which have not touched. The conclusion
| TO which have come renders it unnecessary to
! inquire whether the parties couid'not be placed
| IN the position they could have occupied had
| the compromise not been made, or whether, for
| other reasons, it would now be inequitablc to
| cancel the compromise agreement. Much that
| has been said, however, has bearing upon that
| question, and | end. rs commenced. by eX-
pressing my satisfaction in the conviction that
| all questions involved both Of law and of fact,
can be fully considered in the Supreme Court.
j. TEMPLE. superior Judge
| Endorsed: Filed October 6. 1885.
j. f. MI GREW, Clerk.
gu