Court Opinion

ID: 9529075
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:47:14.477204+00
Date Added: 2024-06-11T13:27:39.016219
License: Public Domain

CROCKETT, Justice
(concurring).
I concur in the opinion of Judge Jones, and as a supplement thereto, set forth a further analysis of the case as it appears to me. The plaintiffs’ claim that the Columbia Iron Mining Company participated in a conspiracy to defraud them in connection with the purchase of their interests in the mining claims stems from the fact that plaintiffs received only $33,333.33 each for their respective one-fourth interests therein, whereas, A. E. Moreton, who had acted as their attorney, and who negotiated the deal for them, received $287,000 for his one-fourth interest in the same claims. The charge made is that as a result of deceiving them and concealing the facts about the true value and purchase price being paid for the claims, plaintiffs were induced to part with their property for much less than it was worth, and less than they would have done had they known the facts.
The depositions of all concerned in the transaction were taken. Upon the basis thereof the corporate defendants made a motion for a summary judgment, which was granted as to them. This intermediate appeal is taken from that ruling. It should be kept in mind that although the principals dispute each other as to essential facts in their depositions, in reviewing the order, the plaintiffs, against whom it was granted, are entitled to have us consider the evidence *308and every inference fairly arising therefrom in the light most favorable to them.1
If Columbia is to be held responsible, it is upon the conduct of its president Walter Mathesius, in collaborating with Arthur E. Moreton. It, therefore, becomes necessary to set forth what the plaintiffs claim as to the latter’s conduct in order to provide a background upon which to analyze the part Mathesius played therein.
It appears that after conversations with Mathesius, Moreton contacted the Hollands at Cedar City with respect to the patenting of the mining claims in question which plaintiffs had previously located with a view to eventually arranging a- sale; that he acted as their attorney in doing so;- that he advanced the necessary costs- involved in the patenting and became a one-fourth owner;- that he acted for his co-owners in negotiating a sale of the claims to Columbia ; that Moreton bore a fiduciary relationship to the Hollands 2' and, therefore, owed them a duty to make a full disclosure of facts;3 that he seems to have followed a carefully studied plan to conceal from the Hollands that he was getting $287,000 for his one-fourth interest, whereas, he was getting for them only $33,333.33 for each of. their one-fourth interests; that meanwhile he warned the Hollands not to talk to anyone else about the matter.
The above facts appear from the Hollands’ testimony and are supported by other circumstances shown: that the letters (later referred to herein) which Mathesius requested and which Moreton presented to the Hollands for them to sign, carefully avoided any recitation of the price per ton or the actual purchase price being realized from the claims; the fact that when Columbia furnished papers handling it as one transaction, Moreton returned them and requested two separate conveyances which would have the effect of concealing from the Hollands the full consideration being paid; the fact that the two separate conveyances were used and the transaction at the closing was so managed that the plaintiffs 'first received their check for $100,000 about which they quite naturally would be somewhat elated and preoccupied while the Moreton phase of the transaction was handled.
Mathesius can be held legally responsible for conspiracy to defraud the plaintiffs *309only if there existed a wrongful scheme to cheat them or deprive them of their property in connection with which he wil-fully did or omitted some act purposed toward the furtherance of such wrongful scheme.4 It is not necessary, however, that it be shown that he or his company profited therefrom.5
The following are the facts and circumstances pointed to as having any bearing upon,, or giving any color to the claim that Mathesius assisted Moreton in deceiving the Hollands:
(1) Mathesius and Moreton belonged to the same club.
(2). They discussed these claims and the possibility of their purchase by Columbia before Moreton had contacted the Hollands or had any interest therein.
(3) Mathesius told Moreton that he might suggest that the claims be patented so they would be in a position to do business.
(4) Pursuant to these conversations, Moreton contacted the Hollands at Cedar City respecting the claims.
(5) Mathesius received a letter from. Rex Holland dated September 14, 1948, advising that he thought Moreton was deceiving them and that the Hollands wanted three-fourths of the proceeds of the sale, which they considered to be their fair share.
(6) After having had prepared the agreement to purchase and the deed made out as one transaction, reciting the full consideration, at Moreton’s request and without advising the Hollands, Mathesius withdrew such documents and had two separate sets of papers made out. which would have had the effect of not revealing to the Hollands. the full consideration paid for the claims.
(7) Mathesius either knew or should have known that Moreton was a fiduciary of the Hollands and as. such had a. duty to fully inform them of the facts concerning the transaction, he was handling for them. This is particularly so because Mathesiüs was conferring with his attorney Mr. Heald right along about the matter; and upon the basis of Rex Holland’s letter’ is charged with knowledge that Hollands.were claiming that Moreton was concealing facts from them.
(8) Mathesius himself stated that upon the basis of his then knowledge and upon advising with his attorney, Mr. Heald, they decided that the Hollands should know the full facts before the deal was closed.
(9) To acc.omplish the above' purpose he requested a letter indicating that the Hollands knew the facts and were satisfied with the transaction, but accepted a letter which did not state the purchase price, nor the price per ton, and which he admits noticing omitted doing so.
*310(10) Mathesius participated in so handling the final transaction that Hollands received their $100,000 check, about which they were elated and preoccupied while Moreton’s phase of the transaction was consummated.
(11) The revenue stamps were affixed to the deeds without being seen by the Hollands.
(12) When Mathesius was interviewed by an attorney, Mr. Spanos, who said he was going to sue Moreton for the Hollands, Mathesius immediately became defensive of Moreton, volunteering the advice that he didn’t think Spanos had a case, as Moreton was not acting as attorney but as co-owner. The latter fact he reiterated in his deposition on two occasions.
(13)"Matttesius"appears to have lacked forthrightness in his testimony. One of the plaintiffs’ attorneys, Mr. Pollack, talked to him by long distance, asking certain questions concerning the transaction. Upon being advised that the conversation was recorded, Mr. Mathesius immediately sent a special delivery letter and a telegram forbidding any use or publication of the conversation. Upon his deposition, although his expressions indicate that he was indignant about the recording of his conversation, and he seemed to recall the facts surrounding it quite vividly, he persisted in answering that he did not recall whether Mr. Pollack had asked him any one of more than a dozen questions, nor the answers he made to them.
(14)Another matter may be given consideration as bearing on the overall picture: the unequal positions of the parties. It appears that the Hollands were poor folk, of little learning and were inexperienced in business. All except Rex were of advanced age. Accordingly, immediate cash was of great importance to them. Those on the other side of the transaction were well educated, experienced and skilled in business, particularly such transactions as this, and with practically limitless resources behind them, all of these facts being known to Mathesius.
Plaintiffs argue that if in viewing the foregoing facts in the light most favorable to them there exists even “a slight doubt” as to whether Mathesius participated in furthering a fraud, the summary judgment must be reversed. This somewhat overstates the case for the plaintiffs. It is true, indeed, that a summary judgment is a drastic remedy which the courts are, and should be reluctant to use.6 Yet it does have a salutary purpose in the administration of justice in not requiring the time, trouble and expense of trial, when the best showing the plaintiff can possibly claim would not entitle him to a judgment.7
*311Viewing the evidence in the light most -favorable to the plaintiff does not mean that the court should pick out all of the aspects thereof favorable to supporting plaintiff’s claim and ignore those that indicate to the contrary. It means that the court surveys the whole picture, takes into consideration facts and inferences therefrom tending to favor the plaintiff’s position, and also considers other facts appearing which must be accepted as a matter of law, and weighs the whole matter against the background of legal precepts "bearing on the problem. If when so viewed, reasonable minds could make findings that would make out a cause of action in accordance with the plaintiff’s claims, summary judgment should not be granted; on the other hand, if it appears to the court that reasonable minds could not make findings which would establish a cause of action for the plaintiff, then the summary judgment is proper.
Directing attention to the various matters enumerated from 1 to 14 above, which are suggested as indicating Mathesius’ complicity in a conspiracy to defraud plaintiffs: it will readily be observed that most of the points listed are obviously reconcilable with right conduct on his part. In the event of .a trial, the burden would be upon the plaintiffs to prevail by a preponderance, or greater weight of the evidence. This cannot be done upon circumstances which are equally reconcilable with right as with wrong conduct.8 I think it true that if some one or more of the facts could reasonably be regarded as definitely linking Mathesius with such a conspiracy, then all of the facts might be considered in analyzing his conduct in connection therewith. It is my purpose to discuss only those matters concerning which it seems to me that there may be some possibility that could reasonably be interpreted as indicating that Mathe-sius wilfully assisted in furthering a conspiracy to deceive and cheat the Hollands.
Point 5 is the first to warrant scrutiny in that regard. It relates to Mathesius’ receipt of Rex Holland’s letter of" September 14 and the fact that he failed to answer it. The first observation to be made is that the inquiry here is not as to morals, ethics, or social amenities, but strictly as to Ma-thesius’ legal duty and whether there was a violation thereof. It may be that it would have been considerate to have- at least answered the letter, but Mathesius was under no legal duty to do so.. Had he elected to make any statement concerning the matter, he would have been obliged to speak the whole truth,9 but in the absence of any fiduciary relationship, he could remain silent.10 A purchaser is under no obligation, to tell his seller . of facts concerning the value of the latter’s property.11 Unless *312one already has some basis for súspicion, there 'does not appear to be anything either unusual or unnatural in the fact that Ma-thesius went immediately to Moreton, with whom he had been dealing, instead of in effect “going around him” and entering into the arrangement requested by Rex Holland to assist the Hollands in their dealings with Moreton.
Point number 6 is the only one made by the plaintiffs which gives me any real concern as to whether it reasonably could be found that Mathesius was wilfully assisting Moreton in deceiving the plaintiffs. After Columbia had prepared the agreement to purchase and deed showing the co-owners as grantors and reciting the full consideration in one transaction, at Moreton’s request, and without advising the Hollands, Mathesius withdrew such documents and had prepared two separate sets of papers. Moreton gave Mathesius the excuse that he did not want to join in warranting title to Hollands’ interest, the very title he had just obtained the patents for. It does seem that this was but a pretext which ties in with Rex Holland’s complaint that Moreton was misrepresenting facts to them and which should have raised Mathesius’ suspicions as to such matter, and may well have done so as indicated by Mathesius’ conduct presently to be discussed.
Arising out of his knowledge of the circumstances mentioned above in connection with points numbered S and 6 Mathe-sius went to Moreton for an explanation. The latter exhibited to him an Option signed by the Hollands that Moreton could purchase their interest in the claims for $100,000, and also an Agreement of Ownership which recited that if the claims were sold or leased on a tonnage basis for $133,-333.33, that each should take one-fourth, and that if a greater amount was realized, then the excess should go to Moreton. Mathesius was not concerned as to the validity of these documents as between the parties, but they provided an informational basis for him to assume that the Hollands were satisfied with $100,000 as their share as was stated in the letters thereafter furnished to him.
In response to Mathesius’ question as to the fairness of the transaction, Moreton stated in substance that in his opinion it was both right and fair, the “right” being based on the documents just mentioned, (Option to purchase and Agreement of Ownership) and the “fair” on the fact that he had kept the Hollands and Murie “in feed” many times over the past 20 years. The record does not disclose that there was any basis in fact for the latter statement. However, there is no indication that Ma-thesius then had any reason to know that it was not true. Nevertheless, after conferring with his attorney, Mr. Heald, it was decided that there should bé a Ml disclosure of all the1 facts to the Hollands before the deal was finally closed. For that purpose Mathesius requested Moreton to get a statement in writing signed by the *313Hollands that all parties to the transaction were completely satisfied, and for the same, purpose, arranged that all interested parties should meet together at the closing of the transaction.
Point 9: The argument is made that Mathesius having decided that there should be a full disclosure of facts to the Hollands, it is incompatible with that purpose that he accepted a letter which did not recite the purchase price, nor the price per ton. From this it is reasoned that the contents of the letter itself are chargeable to Ma-thesius ; that it is artfully drawn, to give the superficial appearance of fully advising the Hollands, but that it in fact carefully avoids reference to these vital matters. Contra to those contentions these thoughts arise: The Hollands, after having expressed apprehension about whether they were getting a fair share of the proceeds in the September 14th letter, signed the letter of October 16, 1948, which More-ton had presented to them, containing the statement as to tonnage “which we understand you estimate at 1.55 million tons,” which “is entirely satisfactory to us,” and further, “needless to say, Mr. Moreton may offer and sell his interest in said claims for whatever price you and he may agree upon, * * * and the entire proceeds will, of course, be his sole property, * * ” Another letter of similar import was signed by them on November 20, 1948.
In this connection it is significant to remember that in Rex Holland’s lettgrof September 14th he had said that Moreton misrepresented the price at 10 cents per ton, whereas, Hollands claimed it should have been 25 cents per ton. Twenty-five cents per ton- was the price actually paid and the only evidence in the record is that this was equal to the highest price Columbia paid for iron ore to anyone in the area. The simplest mathematical, calculation would have shown that 25 cents per ton x 1.55 million tons totals $387,500, which calculation Rex Holland could easily have made, as is apparent from the contents of the September 14th letter itself. These letters were signed without any direct contact from Mathesius or anyone associated with his company, so it cannot be supposed that there was any undue persuasion or deception on his part in procuring them.
Points 10 and 11 relate to alleged concealment of facts from the Hollands at the meeting when the transaction was closed. It is true that Mathesius seemed to be in general direction of the proceeding, but the conduct of the meeting, even as described by the Hollands, does not indicate any designed concealment by Mathesius. Ignoring the full exposition of facts and opportunity for questions, claimed by the defendants, because this is disputed by the Hollands, it still must be realized that Mathesius had seen the documents: More-ton’s Option to purchase, the Agreement of Ownership,, and the letters, all signed by the Hollands, indicating that the price they wanted for their share of the claims was $100,000;; that they were entirely satisfied *314with it; and that it “is no concern of ours” what Moreton gets for his share. In reference to the affixing of the revenue stamps: it was the grantor’s duty to do so, which was done for them by Moreton. No fault can be found with Mathesius because he failed to do so or to advise the plaintiffs as to the amount thereof, as he had no legal responsibility in that regard.
Speaking generally with respect to the matters just discussed, the claimed deficiency in the letters and the manner in which the meeting was handled, this observation is to be made: under usual circumstances, all Mathesius would have had to do in such a transaction would have been to have Moreton bring deeds duly executed by the Hollands and pay the consideration therefor. Beyond that, Mathesius would not be concerned with the relationship or dealings between the co-owners. It was upon Mathesius’ initiative that the letters were required and that the meeting was set up. His contention that this was done in conformity with his stated purpose that all parties should be fully advised rings true because the acceptance of the conveyance from the Hollands and the payment of their $100,000 check could have been handled in any number of other ways, and would have made a firm and unassailable transaction without any such letters or meeting.
It is undoubtedly now to be regretted that' Mathesius did not insist that the letters be more explicit as to the purchase price and that the meeting was not handled so that it was indisputably clear that the Hollands, knew the full details of what was going on.. Mathesius had not warned them to silence.. He had a right to assume that they were, people of ordinary intelligence, and that they knew the facts which ordinary prudence would reveal to them.12 It is to be-kept in mind that it was Moreton who had', been handling the transaction for them,, not Mathesius. It does not seem improbable that the letters were designed so as not to reveal to the Hollands the full purchase-price, nor that the meeting actually was. handled in such a manner that they did not learn of it. But the letters were admittedly prepared in Moreton’s office and taken by him for the Hollands to sign. The meeting was also held in Moreton’s office. There was no reason why they should be-looking to Mathesius as their adviser and' confidant. They had not been encouraged' to look upon Mathesius as such, and he bore-no fiduciary relationship to them.
The idea of Mathesius’ complicity in a conspiracy to deceive the Hollands is beclouded by the evidence that Moreton .so engineered the transaction as to get an unconscionably large proportion of the total purchase price for his one-fourth interest-in the claims. For obvious and understandable reasons an effort is made to link Ma-thesius, and the companies he represents, to this transaction. Color is given thereto, because Mathesius and Moreton belonged *315to the same club. If one surveys the picture through the eyes of suspicion with a preconceived notion that he connived with Moreton, it is possible to create a fabric of conjecture upon which to believe that Mathesius wilfully assisted Moreton in deceiving the Hollands. But it seems to me that if one is willing to indulge the presumption of right conduct, until some evidence definitely indicating the contrary is shown, which presumption Mathesius is entitled to have indulged in his behalf, his activities are understandable as the business-like carrying on of negotiations for his company for the purchase of the mining claims, for which the fair going price was paid, but except for the precautions he did take to protect his side of the transaction, refraining from going over on the other side to police the transaction by seeing that the sellers were dealing fairly with each other.
It is also to be observed that it seems somewhat anomalous that Mathesius’ acts in the requiring of a statement in writing that the Hollands were satisfied, and the circumstances surrounding the holding of a meeting for their benefit, should be used as a basis for charging him with a conspiracy to defraud because they were not carried out with the thoroughness that hindsight now indicates would have been more efficacious to accomplish his purpose.
Further supporting the action of the trial court is the fact that the Hollands signed these letters for the purpose of having them delivered to Columbia with knowledge that that company was negotiating for the purchase of Moreton’s interest in the claims; and that he was to get at least, as they put it, “a little more” for his share, and that Columbia was to consummate a deal and to act thereupon. In reliance on the statement in the letters that Hollands were entirely satisfied, Columbia paid out the full and fair market price for the total estimated tonnage of ore. This works an es-toppel against the Hollands.13 I agree, as plaintiffs argue, that if it were established that Columbia was a party to a fraud it could not invoke estoppel to assist in perpetrating .it.14 However, it is my opinion that there is no basis in evidence for implicating Columbia in fraud and the estop-pel would apply against the Hollands.
I concur in affirming the judgment.
McDONOUGH, C. J., concurs in the opinion of the court as elucidated by the concurring opinion of CROCKETT, J.

. Morris v. Farnsworth Motel, Utah, 259 P.2d 297, 298; Strauss v. Strauss, 90 Cal.App.2d 757, 203 P.2d 857, 858.

. Whez-e an attorney client l-elationship exists, parties have been held to sustain the relation of trustee and cestui que trust, and their dealings with each other are subject to the same intendments and imputations as obtain between other beneficiaries. 5 Am.Jnr. 286 n. 8, Attorneys at Law sec. 46; 37 C.J.S., Fraud, § 16, p. 247.. See Omega Investment Co. v. Woolley, 72 Utah 474, 271 P. 797, as to where a co-owner acts as agent, see Shaw v. Shaw, 160 Cal. 733, 117 P. 1048.

. See Peterson v. Budge, 35 Utah 596, 102 P. 211, 216; Matter of Danford, 157 Cal. 425, 108 P. 322, 324.

. 15 C.J.&., Conspiracy, §§ 2, 9, pp. 996-1005, passim.

. Anderson v. Thacher, 76 Cal.App.2d 50, 172 P.2d 533, 546.

. Travelers Indemnity v. McIntosh, 112 Cal.App.2d 177, 245 P.2d 1065, 1068.

. Zampos v. U. S. Smelting, Ref. and Mining Co. (Anderson v. U. S. Smelting, Ref. & Mining Co.), 10 Cir., 1953, 206 F.2d 171.

. Alvarado v. Tucker, 2 Utah 2d 16, 268 P.2d 986, 988.

. 23 Am.Jur. 860, 55 Am.Jur. 564.

. Annotation, 56 A.L.R. 429, 432-438.

. Ibid.

. Grenlac Holding Corp. v. Kahn, Sup., 106 N.Y.S. 83.

. 31 C.J.S., Estoppel, § 113, p. 362.

. John Hancock Mut. Life Ins. Co. v. Markowitz, 1944, 62 Cal.App.2d 388, 144 P.2d 899.

. See 6 Moore’s Federal Practice, 2nd Ed.R. 56.02 (10), 56.04 (2), 50.15 (1), (3) and (8) and tlie cases therein discussed and cited.