MOORE v. NICKEY et al., 133 F. 289

GILBERT, Circuit Judge, after stating the facts, delivered the opinion of the court. It is assigned as error that the trial court held that by the testimony produced on behalf of the appellant he had not established by clear and satisfactory evidence that the bill of sale of January 7, 1893, by the mutual mistake and inadvertence of the parties, did not correctly express their intention, and that he had not shown that it was the intention of the parties to that instrument to thereby evidence the sale by J. J. Nickey and Joseph C.

Hudnutt to the appellant and Schweitzer of one-third of one-half of 100,000 shares, less 5,000 shares, of the capital stock of the Britannia Mining Company. There are no findings and no opinion in the record, and we have no means of knowing what the court held concerning the effect of that instrument, or upon what grounds the bill was dismissed.

As we read the instrument, we think it is reasonably clear from its terms, and without the aid of extraneous evidence, that, notwithstanding that it purports to sell an undivided one-third of one-half of the Britannia quartz lode mining claim, it was the intention of the parties to transfer, not an interest in the claim, but stock in the mining company, which at that time had an option on the claim, and shortly afterward obtained the title to it. The instrument specifies that the one-third of the one-half interest so transferred is to be “in the capital stock of the company.” What company?

Clearly they meant the company which had taken steps to acquire the claim, and which had issued the capital stock to represent it. If there be any doubt on this point, it is dispelled by the testimony, which shows, and it is not disputed, that the company referred to was the Britannia Mining Company ; that in March, 1892, J. J. Nickey and J. C. Hudnutt had a lease and bond for a deed on that claim, and had made certain payments on the purchase price thereof, and that they had entered into an agreement with certain persons residing at Milwaukee, one of whom was G. R.

Nickey, to form a corporation to be known as the Britannia Mining Company, with a capital stock of 125,000 shares; and that Nickey and Hudnutt were to relinquish to the company their lease and bond for a deed, and that of the said capital stock Nickey and Hudnutt were to receive one-half of 100,000 shares, less 5,000 shares. The records of the Britannia Mining Company show further that at a meeting of its stockholders held on September 30, 1892, a resolution was adopted requiring the president and secretary of the company to issue and deliver to Hudnutt and Nickey each 11,875 shares, and to one Z. T.

Merrill, as trustee, 15,000 shares, upon the release and transfer to the company of the interest of J. J. Nickey and Hudnutt and others of their interest in the Britannia mine. There was proof also that said company never owned any property other than this mining claim. The principal question, however, is whether or not the appellant is barred by his laches from prosecuting the present suit. The bill was filed on January 30, 1902, more than nine years after the date of the instrument upon which the suit is brought.

The appellant seeks to excuse his laches on various grounds, one of which is that the stock was to remain in the names of the vendors until demand. There is nothing in the instrument itself to show that this was the understanding between the parties, nor is there any proof whatever that the sellers of the stock were to occupy the relation of trustees to the purchasers. The testimony contains the admission of the appellant that in the summer or fall of 1893 he made demand on J. J. Nickey for the stock.

Schweitzer, who was a witness for the appellant, testified that the understanding was that the stock was not to be delivered until the corporation obtained title to the mining claim, and that thereafter it was to be delivered upon demand. He testified further that at some time between January and July, 1893, he also made demand for the stock, and that later, in the summer of 1896, after the death of J. J. Nickey, he called upon G. R.

Nickey, as an officer of the company, to transfer the stock in question, and for that purpose addressed a letter to him at his address in Milwaukee, and later in the same summer sent him a second similar communication. The appellant further seeks to excuse his delay by showing that with the decline of the price of silver in 1893, operation of the mining property ceased; that the office of the company was at Milwaukee, while the appellant lived at St.

Paul; that the secretary of the company died, and that in 1896 the bill of sale was temporarily lost, and the possession thereof was not recovered until September, 1900. We are unable to find in any of these circumstances a sufficient excuse for the appellant’s delay. If a temporary loss of the instrument presented an impediment te> the institution of the suit, that excuse ceased to exist on September 20, 1900, when the instrument was again in his possession. It was no excuse that mining operations ceased, or that he deemed the property of insufficient value to justify a resort to litigation.

There is no allegation or proof that any of the defendants deceived him either as to the extent or the cessation of the mining operations, or the value of the mining property. A party guilty of laches cannot screen his claim from the imputation of staleness merely by alleging an imaginary or unsubstantial impediment to the institution of proceedings to enforce the same. In Johnston v. Standard Mining Company, 148 U. S. 360, 13 Sup. Ct. 585, 37 L.

Ed. 480, the court held that the defense of laches was particularly applicable where the thing in dispute is mining property, which is of uncertain character, and liable to suddenly develop a great increase in value. In that case the plaintiff, after a lapse of seven years, brought suit to enforce an agreement for the conveyance of an interest in mining property. The court held that his delay was fatal to his right to the relief sought.

Section 518 of the Code of Civil Procedttre of Montana, in reference to causes of the nature of the case at bar, provides, “An action for relief not hereinbefore provided for must be commenced within five years after the cause of action shall have accrued,” and the Supreme Court of that state has held that this statute applies as well to equitable suits as to actions at law. Mantle v. Speculator Company, 27 Mont. 473, 71 Pac. 665. Said the court in Godden v. Kimmell, 99 U. S. 210, 25 L.

Ed. 431: “Equity courts in eases of concurrent jurisdiction usually consider themselves bound by the statute of limitations which governs courts of law in like cases, and this rather in obedience to the statute of limitations than by analogy.” But where there is no statute of limitations to govern a case, courts of equity often act upon their own inherent doctrine of discouraging, for the peace of society, stale demands by refusing to interfere where there has been gross laches in prosecuting the same. In Norris v. Haggin, 136 U. S. 391, 10 Sup. Ct. 944, 34 L.

Ed. 424, the court applied to the case the statute of limitations of the state of California and said: “It is sufficient to say that, as a court of equity is governed by the analogies of the statute of limitations of a court of law, and as the object of this suit is to do what generally could be done at law, namely, recover possession of real estate, and as the plaintiff is equally guilty of the laches, which a court of equity regards in the same spirit it does the statute of limitations, this unexplained delay after the plaintiff had recovered whatever mental capacity he now has must stand as a sufficient bar to the successful prosecution of this suit.” In Curtner v.

United States, 149 U. S. 676, 13 Sup. Ct. 985, 37 L. Ed. 890, the court, referring to the statute of limitations of the state of California, by which no action could be brought for the recovery of real property or the possession thereof except within five years after the cause of action accrued, held that, whether the statute be applied directly or by analogy, or the rule in equity founded upon lapse of time and staleness of claim, the delay and laches were fatal to the maintenance of the suit. On the ground of laches the bill was, we think, properly dismissed.

In the federal courts it is not necessary, in order to let in the defense that the claim is stale, that a foundation should be laid by any averment in the answer. Sullivan v. Portland, etc., R. R. Co., 94 U. S. 806, 24 L. Ed. 324. .The decree of the Circuit Court will be affirmed.