Patterson v. Hewitt - 195 U.S. 309 (1904)
U.S. Supreme Court
Patterson v. Hewitt, 195 U.S. 309 (1904)
Patterson v. Hewitt
Argued October 25-26, 1904
Decided November 28, 1904
195 U.S. 309
The owners of a mining claim in New Mexico transferred their interests to one of their number as trustee, who was to retransfer to each one contributing his share of development expenses for a year, a one-eighth interest. Plaintiff, one of the parties, contributed his share and demanded a deed which the trustee refused to give. Plaintiff made no further demand and did not contribute any more to the expenses, but the trustee and some of the other owners continued to develop the claim, and finally succeeded in finding a valuable body of ore. Eight years after the former demand, plaintiff commenced an action in equity to enforce the original trust. There is a statute in New Mexico to the effect that no action for the recovery of lands shall be commenced after a lapse of ten years, etc. Held:
That persons having claims to mining property in the course of development are bound to the utmost diligence in enforcing them, and in such cases the doctrine of laches is relentlessly enforced.
That, while in actions at law, courts are bound by the literalism of statutes, in equity, the question of unreasonable delay within the statutory limitation is still open, and that, even where a statute of limitations exists and has been made applicable in general terms to suits in equity, defendant may avail of the laches of complainant notwithstanding the time fixed by the statute has not expired.
That the refusal by a trustee of a demand to execute a deed in alleged pursuance of a trust agreement is a repudiation of the trust, and opens the door to the defense of laches.
That a delay of eight years during which large sums of money have been spent in developing a mining property is inexcusable laches.
Appellants C. Ewing Patterson, a resident of New Jersey, and Henry J. Patterson, a resident of New Mexico, on April 29,
1903, filed their bill of complaint in the district court for Lincoln County, Territory of New Mexico, against John Y. Hewitt, William Watson, Mathew Hoyle, and Harvey B. Fergusson, residents of New Mexico, and the Old Abe Company, a corporation of the same territory, to enforce a trust which is alleged to have existed between the appellants and the defendant Hewitt, and by virtue of which they sought to recover a one-fourth interest in two mining locations, made in the name of John Y. Hewitt, on the second day of May 1884. The bill prayed for an accounting of proceeds of ores taken from the mines, and a lien on the property, for an injunction, and the appointment of a receiver.
The facts in the case as found by the district court and adopted by the supreme court are substantially as follows:
In 1881, the property in controversy was claimed by the appellants and by Watson, one of the defendants, under locations previously made by them. Between 1881 and 1883, appellants, in conjunction with the defendant Watson, did a large amount of work upon the claims, and were asserting their rights under the mining laws of the United States. During this time, the same ground was also claimed by other parties, among whom was the defendant Hewitt. In August, 1883, a dispute arose in regard to this property between appellants and the defendant Watson, on one side, and the other parties, upon the other side.
The parties interested held a meeting in August or September, 1883, for the purpose of adjusting the differences then existing between them, and to endeavor, if possible, to arrive at an agreement whereby the interests of all would be protected. The two appellants, the defendant Watson and the defendant Hewitt, with several others who were interested, attended this meeting. The result was an agreement between them that all the old locations then existing, whether made by the appellants or any of the defendants, or conflicting claimants, should be from that date abandoned, surrendered, and given up by all of the parties, and that the ground should be
put in possession of Hewitt, as trustee, to hold in his own name for the benefit of all the parties then interested. It was also agreed that Hewitt, as such trustee, should make a deed to such of the said parties holding interests therein as should contribute their part to the work, labor, and expenses necessary to obtain a patent to the land; but there was no agreement as to what should become of the interests of any one who failed to contribute his share of the expenses. It was also agreed that each of the appellants contributing his share of the expenses should receive a one-eighth interest in the location, and that the said Watson and Hewitt should each receive a one-eighth interest, part on account of their services and part on account of their interests in the ground, and that the remaining shares should go to other parties who were interested therein.
In pursuance of this agreement, Hewitt took charge of the property, and together with the defendant Watson and one of the appellants Patterson, superintended and directed the work upon said mine during the year 1883 and part of the year 1884. In order to raise money for the working of the mine, it was agreed that a one-sixth interest should be sold to H.B. Fergusson for $500.
During 1884 and 1885, a sufficient amount of work was done upon the property to obtain a patent, and to discover mineral thereon. The appellants contributed their share of the work, which enabled the trustee to obtain a patent, and so far carried out their part of the agreement as to entitle them to a deed from the trustee for their one-eighth interest each, according to said agreement.
In April, 1885, the appellant Henry J. Patterson, in person and by his agent, demanded a deed from Hewitt, trustee, of the one-eighth interest to which he claimed to be entitled; but the defendant Hewitt at that time refused to make the said deed, and has ever since refused to execute the same, and has disputed his right thereto.
No demand for a deed appears to have been made by C.
Ewing Patterson until just before the commencement of this suit, when it was also refused.
In 1883, the complainant C. Ewing Patterson left New Mexico, and, up to the time of the bringing of this suit, had never returned there. The appellant Henry J. Patterson left in 1885, and from that time until the fall of 1892 was a nonresident of New Mexico.
From 1885 to 1890, the defendants performed a large amount of work and expended a good deal of money on the mine in addition to the annual assessment required by the government of the United States thereon; but neither of the appellants ever contributed or offered to contribute any part of the expenses of said work, or perform any labor.
In November, 1890, the defendants discovered a large body of rich ore in the mine, and since that date have taken out therefrom gold amounting to several hundred thousand dollars. In 1892, a corporation known as the Old Abe Mining Company was organized by the defendants Hewitt, Fergusson, Watson, and others, and the ground in controversy, known as the Old Abe ground, including the interests claimed by the appellants, was turned over to the new corporation by the trustee, Hewitt, and this corporation is now holding title thereto.
The appellant Henry J. Patterson, through his agent, Henry Burgess, had knowledge from April, 1885, that Hewitt had refused to carry out said agreement, and execute the deed to him and his co-complainant, and both of the appellants were again informed after April, 1885, that Hewitt had refused to make the said deeds or to carry out the trust agreement.
Upon this state of facts the district court dismissed the bill upon the ground of laches. The supreme court of the territory affirmed its action, 66 P. 553, and complainants appealed to this Court.