Lockhart v. Leeds

The appellant filed his bill in this suit, in the proper court of New Mexico, for the purpose of obtaining relief against the defendants mentioned therein. The defendants demurred on several grounds, among which was that the complainant's remedy, if any, was at law, and that the bill did not state a case for a court of equity. The demurrer was sustained and the bill dismissed, and the judgment of dismissal was affirmed by the supreme court of New Mexico, and the complainant thereupon appealed to this court. Among other things the bill averred that, about May 7, 1893, the complainant and one Johnson and the defendant Pilkey entered into an agreement in Bernalillo county, New Mexico, by which they were to become partners in the enterprise mentioned in the agreement; and that, for the consideration mentioned therein, Pilkey was to start out to discover, if possible, and to locate for the purpose of operation by the parties, any mining claim of gold, silver, or other metal; and that, in order to enable Pilkey to carry out his portion of the agreement, he was to be furnished certain tools, etc., and some money. If he discovered any such mine, it was his duty to locate the same, and to send in to the other partners specimens of the ore, in order that its value might be determined. Work was to be begun within twenty days after the signing of the agreement. Any fraud by Pilkey was to forfeit his share, which was to be one-third interest in any mine discovered and worked.

The agreement was to continue for a year, and all discoveries and locations of any mines during that time by Pilkey were to be under the agreement mentioned. After the making of this agreement, Pilkey started out to prospect and to discover, if possible, a mining claim of the character mentioned. The parties were aware, at the time of the execution of the agreement, of the existence of the place where Pilkey went for the purpose of prospecting and discovering a mine, and that there possibly might be a valuable claim at that place. Accordingly, Pilkey at once went to the spot, and, on or about the 10th of July, 1893, he discovered the claim at that place, and it turned out to be a valuable mine. He located the mine according to the agreement, and posted the notice thereon provided by the laws of the United States and New Mexico, and proceeded to do work thereon pursuant to the provisions of those laws, but did not do all the work made necessary by them. The bill then alleges that Pilkey commenced to sink a shaft or cut upon the mineral-bearing lode, and did work enough thereon to arrive at mineral-bearing ore in place, within less than ninety days from the time of taking possession of the lode; and it is then averred that the parties were ready, able, and willing in all things to comply with the laws spoken of, 'and would have so done except for the wrongful, fraudulent, and unlawful acts of the defendants hereinafter mentioned.' Some time about the 1st of October, 1893, Pilkey, while so in possession of the lode, wrongfully and fraudulently conspired, combined, and confederated with the defendants to defraud plaintiff; and they agreed that said Pilkey, in violation and fraud of the rights of the plaintiff in and to the mine, should transfer, convey, and deliver possession of the mine to the defendants, or one of them, without the knowledge or consent of plaintiff and the said Johnson. This was done. It was also agreed that they should do all other acts necessary to transfer the right to defendants. Pilkey was to have a certain proportion of interest in the mine, and the defendants, the balance. The defendants also caused and procured the defendant Pilkey to stop work upon the mine, under the agreement already referred to; and it was also agreed that Pilkey should fail and neglect to record, in the proper office, a copy of the location notice posted by him on the ground. The defendants also covered up and concealed the work which had been done on the ground by Pilkey; and they posted another notice thereon, and called the mine the 'Washington' mine, and filed a copy of the same for record, December 13, 1893, without the knowledge or consent of the plaintiff or his copartner, Johnson; and they made the location for the benefit of themselves as locators, under the mining laws of the United States. For the purpose of concealing the interest of Pilkey in such pretended location, it was agreed that each of the four defendants named should be entitled to a fifth interest, and that Pilkey should be entitled to the remaining fifth, which last-named interest should be claimed and held by Walker in trust for Pilkey. Johnson subsequently transferred all his interest, under the agreement of copartnership between plaintiff, Johnson, and Pilkey, to the complainant, who was, at the time of the commencement of the suit, the owner of Johnson's interest under the assignment. The bill further states that, after the removal by the defendants of the original location notice posted by Pilkey, as already stated, the complainant procured a copy thereof, and had the same recorded in the office of the recorder of the county, on December 9, 1893. The complainant averred that, by virtue of the premises, he became and was, at the commencement of the suit, the equitable owner of said mine, and of the gold and silver ores therein contained, so discovered and located by Pilkey under the agreement; and that he was equitably entitled, as against the defendants, to the possession and enjoyment of the same, and to the preferential right to acquire the legal title from the United States; and that the pretended location of the mine under the name of the Washington mine, by and in the names of the defendants named, was wholly inoperative and void; and that Pilkey, by reason of his participation in a fraudulent conspiracy with the defendants, forfeited all right or interest in the said mine pursuant to the agreement made by Pilkey with complainant and Johnson; and complainant averred that he was equitably the owner of and entitled to such interest. He further averred that the defendants refused to permit complainant to enter upon the property or to work the same; and that the defendants claim title to the mining property under and by virtue of their agreement with Pilkey, and their pretended location of the same as the Washington lode. It is further averred that the defendants were engaged in mining, extracting, and converting to their own use, the ores and minerals contained in the mine, and had mined and removed ores and minerals of great value therefrom, and had converted to their own use all such mineral; and that, unless enjoined, they would remove all the ores and minerals, and thereby the entire substance and value of the property would be destroyed, and the complainant would sustain irreparable injury, as the defendants, or some of them, were wholly insolvent. To this bill the defendants demurred, as already stated.

Mr. J. H. McGowan for appellant.

Mr. W. B. Childers for appellees.

Statement by Mr. Justice Peckham:  Mr. Justice Peckham, after making the foregoing statement, delivered the opinion of the court: