Court Opinion

ID: 6472758
Source: CourtListenerOpinion
Date Created: 2022-06-26 22:32:15.479608+00
Date Added: 2024-06-11T15:53:52.574411
License: Public Domain

BARNES, J.
This is an appeal from the district court of the Second judicial district of Arizona in and for the county of Maricopa. The facts of the case are about these: Philes owned four certain mining claims, and a mill-site near them. He and Thomas H. Blair each owned an undivided one-half of another; and he, Blair, and Polhemus each owned an undivided third of another. These mining claims all lay, in a group adjoining each other, in the Cave Creek mining district aforesaid. Plaintiffs conveyed all their interests in these six mining claims to William W. Hickies, one of the defendants in this action, and Philes also conveyed to him the mill-site; and, to save the expense of several deeds, they all joined in the same deed, conveying all their rights in the property, without specifying their respective interests therein. At the same time, and as a part of the same transaction, all the parties executed another instrument, in which Hickies is styled “party of the first part,” and the plaintiffs “party of the second part,” by which it is agreed that.said mining-property was conveyed by plaintiffs to said Hickies in trust for him to organize a joint-stock company to work, operate, and develop said mines; that said company should be called the “Ithaca Consolidated Gold & Silver Mill and Mining Company,” and, when organized, Hickies would issue and deliver to the plaintiffs, and place to their credit on the stock-books of the company as unassessable stock, an amount of stock not to exceed three-fifths of the capital stock of the company, and that the fulfillment of these promises by Hickies in this *410respect was'the real consideration for which said deeds were made; that 20,000 shares for each mine, or 120,000 in the aggregate, should be set aside -as a working capital to defray expenses, etc., and the stock to which plaintiffs were entitled should not exceed three-fifths of the capital stock which remained after setting aside or deducting this working capital of 120,000 shares. In July, 1881, Hickies organized said company under the laws of California, and, -in.pursuance of the laws of Arizona, filed the articles of incorporation with the recorder of Maricopa county. The capital stock was fixed at $6,000,000, divided into 600,000 shares, of the par value of $10 each. Of this stock, Hickies, at the same time, subscribed for and took in his own name 584,600 shares. Upon the organization of the company, Hickies was elected president thereof, and has held the office ever since, and is now holding it. In September, 1882, Hickies conveyed all this mining property to the said company,—he, at that time, being president of the company; and the company through him, at once took possession of the property, working and improving the same, and is now in the actual possession thereof, claiming as owner under said deeds. Hickies in the mean time has sold some 25,000 shares of stock; the balance is still in his possession. The plaintiffs have received no stock of said company; and, their rights thereto being denied by defendants, in 1886 they brought this action to compel, a specific performance of said agreement, and a ■ complete execution of the trust; and a decree was entered in their favor at the April term of said court, 1887, from which this appeal is now prosecuted.
It is urged that, as these mines were unpatented, the plaintiffs must show that they had complied with the mining laws; that is, that they had made a valid location, and had done the annual work, before they can seek any remedy in this ease to enforce the contract of Hickies. We cannot concur in this proposition. As between the contracting parties, grant- or and grantee, trustee and cestui que trust, and those holding under them, with knowledge of the title of grantor, such title cannot be disputed. Alexander v. Sherman, ante, p. 326, *41116 Pac. 45; Blake v. Thorne, ante, p. 347, 16 Pac. 270. It is urged that the cause is barred by the statute of limitations. It is clear that the contract in evidence made Hickies the trustee of the title to these mines for the purpose of organizing a corporation, and distributing the stock of such company among the owners, after disposing of a part for working capital. This does not mean that Hickies was to keep all the stock of the company until this stock for working capital had been actually sold. It meant that when the company was organized, and this stock was set apart or was devoted to this purpose, then grantors were to be entitled to their stock. The statute of limitations does not begin to run in such a ease. Hickies holds this stock in trust for the plaintiffs. We think the evidence sustains the findings, and see no error in this record. The judgment is affirmed.