Arizona republican., 1897-10-12
THE SEVEN STARS CASE.
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morals is wrong, or which a man CT delicacy would not have taken; but is essentially necessary, in order to set aside the transaction, or to grant relief from what might perhaps be an otherwise harsh and unconscion- able advantage, not only that the par ty should have been mis1ed and ae great advantage should be taken, but there must also be an obligation on the party to disclose that which has been concealed.
 This, I take it, to be the law, and these are the principles which are ap plicable to, the case at bar; and it only remains to apply them to the facts herein and to determine wheth- CT or not there 1s anything, CT, if so, sufficient in the record before this court to justify it in saying that these defendants were in duty and good conscience bound to make known their rights and title to this property which they now claim, or were they such strangers to all the plaintiffs, and at all times, and to all the cir cumstances, conditions and transac- ticns which resulted in the plaintiffs recent unfortunate condition, that they could, regardless of those cir cumstances and conditions, regardless of the sources from which the funds to make these payments were derived: regardless of the representations that Warner and his cohorts did, or might make, in order to induce the contri- buttons of these funds from the vari- ous stockholders, that they are in equity and good conscience, entitled to enforce their rights and claims un- der and by virtue of the terms and conditions of the agreement of May 12th, 1892; regardless of what will. or might be the result to these plain tiffs.
 While in my judgment, there is no single act of these defendants which. perhaps, taken by itself, would have been sufficient to charge them with any such duty as the law requires to disclose the facts concealed, or to en- title plaintiffs to any relief, yet, when we take into consideration all the facts and circumstances surrounding these various transactions as one complete composite whole, believe they do.
 Considering the fact that at the time eNof executing the deed and agree ment of May 12th, 1892, Lawler and Wells had actual knowledge and no- tfce that Warmers intentions were tc incorporate company and, to use the language of one of the defendants themselves, "werk it for all there was in it." the failure to record this agreement so that those, dealing with Cowland and Warner and.their asso- ciates should have constructive, if not actual nctice of its exis+ente, and the rights claimed by defendants there under; the delivery of possession t7 Warner, or his agents, and through him, or them, to the Industrial com pany, and to the Gold company, and the circumstances and conditions un- der which they took and retairai thf open, notorious and exclusive posses sion of the property, working, oper- aHing and dealing with them and hold Ing themselves out to the world ant l to those who dealt with them. tha- | they were the owners of said proD erty; the notice and knowledge whicl they must have had long before an, Of this stock was sold, that Warner whatever his original intentions were did not intend, or was not able to pa, i the purchase price himself but ex
 pected to raise it all or at least tn
 greater part of 1t, by the sale of tn. T stock of<thiS company; their partici
 patton, to some extent at least, in tn
 preparation of this prospectus. an,
 the knowledge which they had, o
 would have had, had they not close.
 their eyes and ears, as to it's con
 tents, these and all of them are ele
 mentS as it seems to me, which go t
 make Nup this complete and composit
 whole.\
 For while I do not give the sam
 weight and effect to this prospectu
 that counsel for plaintiffs do, so ia
 as it charges these defendants, it i one of the elements which go t make up this constructive fraud, an though the testimony is somewhs : conflicting, I think the reasonabl deduction from 1t Is, that Iawler an Wells knew of its preparation an } circulation.
 Furthermore, these various exte1 sions of the time for the paymen' ] under the original agreement, one which, to-wft: the first, was mac | before a share of this stock had bet issued, and which, if it had not bee l made. would have rendered imposs
 ble the unfortunate condition out which this litigation has arisen. B1 by far the most. important consider
 tion and the one which, as it seer
 to me, is controlling in this case, t,
 acceptance and retention by the
 of large sums of money which fro = the very nature of the transact,
 that had gone before, they must ha
 known came through the sale of tt r stock. Add to this their condu
 prior and subsequent to May 12t . 1893, when the extension was mat
 the circumstances under which it W
 made, llaiwler's election as manae
 at his and Wells suggestion, the
 ceipt and retention by them of fiji
 thousand dollars of full paid sto
 Of this corporation, and the rece