120 P. 771 | Cal. | 1911
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *691
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *692 This is an action by the owner of a mine, against the owners of an adjoining mine, to recover the value of certain ore alleged to have been extracted by the defendants from the mine of the plaintiff.
The plaintiff claims the ownership of a mine known as the Lightner mine. The defendants are the owners of the Utica mine, which adjoins the end line of the Lightner mine, and lies *693 southeasterly of it. The vein is about eighty feet thick and extends from the southeast to the northwest through both claims. The ore was taken by the defendants at the depth of 525 feet below the surface by means of a shaft sunk on the Utica mine. From that shaft two cross-cuts were made to the vein, one at a depth of 425 feet and the other at 525 feet, striking the vein about 288 feet from the division line between the two mines. Drifts were then run along the vein from each of these cross-cuts to the division line. The upper drift is called the "No. 2 level"; the lower drift the "No. 3 level." The No. 3 level was extended some forty-two feet over the line into the Lightner mine, and the No. 2 level some thirteen feet over the line. More than twelve thousand tons of the ore of the Lightner mine were then taken by the defendants and converted to their own use. The object of the action was to recover the value of this ore.
1. The plaintiff did not obtain possession of the Lightner mine nor any right or interest therein until November 21, 1896. The defendants claim that there is no evidence that any of the ore in question was extracted by the defendants after that date, and, hence, that no damage accrued to the plaintiff. This claim is without support. The fact that the body of ore above mentioned was taken at some time by the defendants from the Lightner mine through the drift extending into it from the underground workings of the Utica mine was established beyond all reasonable doubt. V.W. Miller, who was the foreman in charge of the work in the Utica mine from October, 1893, to October 24, 1897, testified that the ore between levels 2 and 3 in the Utica mine was stopped out during that period; that the north wall, next to the Lightner mine, was carried up perpendicular from No. 3 level, and that "the north line of that stope was entirely within the Utica boundary line given to us." He was a witness for the defendant. Other witnesses for the defendant gave similar testimony. It was shown also that the boundary line had been correctly given to them and was marked on the wall of level No. 2. If the jurors believed this testimony, as they had the right to do, they could come to no other conclusion than that the extension of the excavation into the Lightner mine was made after the completion of the stopes described by Miller — that is, after October, 1897. Many other circumstances, which we need not here rehearse, *694 corroborated this conclusion. It is true there was other testimony tending to prove that this ore was taken out as long ago as 1893 or 1894, but it was for the jury to determine the fact from the conflicting evidence, and their decision, in such cases, is conclusive on appeal.
2. It is next contended that the plaintiff had no interest in the Lightner mine sufficient to give it the right to sue for the value of ore extracted therefrom. Prior to November 21, 1896, and on that date Alice L. Eastland was the owner in fee of the mine. On that day a written agreement between her and the plaintiff was executed by them. Thereby she agreed to sell said mine to the plaintiff at the price of one hundred thousand dollars, of which fifty thousand dollars was to be paid by the plaintiff out of half of the gross proceeds of the mine after the year 1897, and the other fifty thousand dollars out of sales of plaintiff's capital stock. It further provided that plaintiff should diligently proceed to sink a shaft thereon to the depth of five hundred feet and erect hoisting works thereat; that it should have the right to take and hold possession of the mining claim and to mine ore therefrom, and that it should work the mine diligently until the price was fully paid. It also stated that a deed of conveyance of the mine from Mrs. Eastland to the Lightner Mining Company was on the same day signed and acknowledged by her and deposited in escrow with a third person, and that the same was to be delivered to the company upon payment of the purchase price. The deed was signed and delivered in escrow, as stated, and the plaintiff immediately took complete possession of the mine under the agreement. It has been in exclusive possession thereof ever since, and has proceeded to develop and work it. The deed was not delivered out of escrow until September 2, 1902, which was after this action was begun. A clause of the agreement provided that if the vendee at any time failed, for three months, to perform any covenant therein, the vendor, after ten days' notice, might cancel the contract and take possession of the mine. No such default occurred.
It is a well-settled proposition that the proper party plaintiff in an action for trespass to real property is the person in actual possession. No averment of title in plaintiff is necessary. (1 Chitty on Pleadings, 63; Heilbron v. Heinlen,
3. The defendants next claim that the action is barred by the statute of limitations, particularly by section
The plaintiff insists that an exception exists in cases where the trespass is fraudulently concealed by the perpetrator from the knowledge of the owner of the land and that in such cases the period of limitation does not begin to run until the aggrieved party discovers the trespass, or with reasonable diligence might have discovered it. It is also contended that the case, as made by the pleadings and the findings of the jury, does not fall strictly within the class described in subdivision 2 of section
It was the settled rule in actions at law that the plaintiff's mere ignorance of the existence of the injury complained of, or of the facts constituting such injury, or of the identity of the person liable therefor, until the period of limitation had passed, will not prevent the running of the statute. This rule has been followed in this state in several cases in which the point that there was fraud involved in the cause of action itself, or a fraudulent concealment thereof, was not raised or considered. (Gale v. McDaniel,
But in actions at law, where the party liable had fraudulently concealed the injury, or the essential facts thereof, from the party injured, there has been a great diversity of opinion on this question in the courts of this country and of England. The following cases hold that the period of limitation runs from the date of the commission of the injury, or of the acts from which it flows, notwithstanding such fraudulent concealment thereof.(Somerset Co. v. Veghte,
The following declare that such fraudulent concealment delays the running of the statute until the injured party discovers, or with reasonable diligence might have discovered, the facts constituting the injury and cause of action: Porter v. Smith,
The leading cases in favor of the running of the statute in the foregoing list are Troup v. Smith, Somerset Co. v. Veghte, andClarke v. Reeder. The argument is simple and is the same in all of them. It is most forcibly and elaborately stated in Clarke v.Reeder. It is, in brief, that the statute of limitations makes no exception, in actions at law, in regard to fraud or fraudulent concealment, and that the courts are bound by the terms of the statute and cannot add to it, or declare an exception which would nullify it in its application to cases properly embraced in its terms.
The leading cases declaring that a fraudulent concealment stays the operation of the statute are Bailey v. Glover, Sherwood v.Sutton, Lewey v. Frick Co., and Bulli C.M. Co. v. Osborne. InBailey v. Glover, the supreme court of the United States, by Justice Miller, says: "We are of the opinion that the weight of judicial authority, both in this country and in England, is in favor of the application of the rule to suits at law as well as in equity. And we are also of opinion that this is founded in a sound and philosophical view of the principles of the statute of limitations. They were enacted to prevent frauds; to prevent parties from asserting rights after the lapse of time had destroyed or impaired the evidence which would show that such rights never existed, or had been satisfied, transferred, or extinguished, if they ever did exist. To hold that by concealing a fraud, or by committing a fraud in such a manner that it concealed itself until such a time as the party committing the fraud could plead the statute of limitations to protect it, is to make the law which was designed to prevent fraud the means by which it is made successful and secure. And we see no reason why this principle should not be as applicable to suits tried on the common-law side of the court's calendar as to those on the equity side. . . . We hold that when *699 there has been no negligence or laches on the part of the plaintiff in coming to the knowledge of the fraud which is the foundation of the suit, and when the fraud has been concealed, or is of such a character as to conceal itself, the statute does not begin to run until the fraud is discovered by, or becomes known to, the party suing, or those in privity with him."
There is perhaps no better statement of the rule and the reasons for it than the above. The precise question was decided in this state in the early case of Kane v. Cook,
This decision has never been questioned. It was rendered in 1857. Although it has not been cited, it has been followed in principle in subsequent cases. (See Christensen v. Jessen, and other cases hereinafter cited.) The statute then in force contained the provision now found in subdivision 4 of section
The evidence is sufficient to show a fraudulent taking and fraudulent concealment of this character. The mine of the plaintiff adjoined that of the defendants on the end lines. Defendants sunk a shaft in their own mine to a depth of five hundred and thirty feet about two hundred and ninety feet from plaintiff's line and by means of cross-cuts therefrom to the vein and drifts therein beneath the surface to plaintiff's boundaries, they secretly, knowingly, and willfully took from plaintiff's mine ore of the value found by the jury. The plaintiff had no knowledge or means of knowledge of this. The circumstances justified the inference that the defendants concealed it from plaintiff, and prevented it from becoming generally known. The limit of their mine was plainly marked by their own engineer in the first drift which reached plaintiff's bounds, known as No. 2 level. Defendants inadvertently took several hundred tons of ore from plaintiff's mine through this drift, and, upon discovering that fact, explained the matter to plaintiff stating that it was a mistake, and *702 promised to pay its value, which, it seems, they afterwards did. While thus appearing and professing to act in good faith, they proceeded secretly with other workings beyond their line, and below level No. 2, and took the ore in controversy. It was not distinguishable in any way from the ore taken at the same time from their own mine and it was mingled therewith. Although there were many workmen engaged in the mine, the fact of the trespass did not become known to plaintiff, whose men were at work also in its mine adjoining. There is no real dispute about these facts. They bring the case clearly within the rule we have stated and prevent the running of the statute until the trespass was discovered.
It may be added that they also make a case coming within subdivision 4 of section
Here the discovery was made but thirteen months before the action was begun, the plaintiff was not put on inquiry, and *703 the trespass could not reasonably have been discovered sooner. Therefore, under the doctrines we have stated, the action is not barred.
The rule of practice stated in Kane v. Cook,
Upon this branch of the case, the question whether the ore was taken by the defendants, themselves, or by their agents without their knowledge or consent, is immaterial, provided it was taken willfully, intentionally, and secretly. The fraud of the agents will be imputed to the principal for the purpose of preventing the running of the statute of limitations whether the principal was aware of it or not. The injustice of allowing such fraud to become successful by reason of lapse of time and concealment, is an injustice to the owner, and it is precisely the same in effect and extent whether the fraud is that of the principal or his agent. The principal, having received the benefit of his agents' fraud, has no equity in his favor.
The defendants contend that the evidence shows that plaintiff was put on inquiry as to the existence of other trespasses than that on level No. 2, which defendants had admitted, and that with reasonable diligence it could have discovered, at least as early as 1897, the trespasses now complained of. But, as we have shown, some of the defendants' own agents in charge of the mine declared that these trespasses had not occurred at that time. After the trespass on level No. 2 was admitted, in 1897, the officers of plaintiff visited defendants' mine and were conducted through it by defendants' superintendent. They saw the admitted trespass and were shown into level No. 3, where the trespasses complained of here were made, but they were not shown or informed of those trespasses, if, indeed, they then existed, and they did not see them. The only information they had after that visit consisted merely of vague rumors. Under the circumstances, we are of opinion that the finding of the jury on this point cannot be disturbed.
4. The next question presented is that of the measure of damages. Twelve thousand tons of ore were taken from plaintiff's mine by the defendants. From this, after milling it at their own expense, defendants obtained gold of the value of fifty-four thousand dollars. The cost of mining and milling *704 it was twenty-seven thousand dollars. The verdict and judgment was for fifty-four thousand. Defendants claim that the cost of mining and milling should have been deducted from the value of the gold obtained.
Plaintiff's counsel concede the rule to be that if the invasion of the mine by defendants was the result of honest mistake and inadvertence, the measure of damages would be the value of the gold less the cost of mining and milling, but they say that if it was intentional and with knowledge of plaintiff's rights, the defendants are chargeable with the value of the gold after reduction, without any deduction for expenses of mining and milling. The authorities sustain the latter proposition. (4 Sutherland on Damages, secs. 1126, 1127, 1128; 2 Sedgwick on Damages, secs. 500 to 504.) The objection of the defendants is that to allow damages in excess of the value of the ore as it lay in the mine is to give plaintiff the benefit of defendants' labor without any equivalent in return, and is, in effect, punitive damages, allowable only where there is oppression, fraud, or malice, and which will not be given against principals for the fraud of their agent, unless such fraud was known to the principals, or was authorized or ratified by them. The authorities last cited assume that such enhanced damages are punitive in character.
Under the rules laid down in the Civil Code, it must be conceded that the plaintiff can be allowed the benefit of defendants' work in mining and milling the ore, only upon the theory that it is given as a punishment of the defendants. The general rule of damages in tort is declared to be "the amount which will compensate the injured party for all the detriment proximately caused thereby, whether it could have been anticipated or not." (Sec. 3333.) For the wrongful conversion of personal property the damage allowed is its value "at the time of the conversion," with interest, or, if "the action has been prosecuted with reasonable diligence," the highest market value at any time between the conversion and the verdict, without interest, at plaintiff's option. (Sec. 3336.) Treating the case as one for the conversion of chattels, the conversion was complete when the defendants had mined the ore and mingled it with ore from their own mine. Its value at that time would not include the cost of milling. No evidence was given as to the cost of mining alone. The subsequent *705
"highest market value," referred to in the second clause of section 3336, ordinarily means the subsequent value of the thing in the condition it was in at the time of the conversion. It would not include a value added to it by reason of an improved condition given to it by the defendant after conversion. Of course, if the property taken can be identified in its changed condition, the rightful owner may retake it as it is, since the title remains in him, and he may thus in that case obtain the benefit of the improved condition. But in this case identification is impossible. It is not claimed that the unmilled ore was, or would have been, ever of any higher value than it was when it was mined. The giving to the plaintiff of the value added to it by the milling, as damages, is therefore not authorized by section 3336. It can be allowed only as exemplary damages, authorized by section 3294, as a punishment, where the defendants have been guilty of oppression, fraud, or malice. It is the settled law of this state that exemplary damages cannot be given against a principal for the fraud of the agent, unless the principal either had knowledge of the fraud at the time, or authorized it, directly or by implication, or ratified it after it came to his knowledge. In the recent case of Davis v. Hearst,
We do not find in the evidence any substantial proof that the defendants had any knowledge of the trespass complained of, or of its fraudulent character, at the time of its occurrence, or that they either specifically or by general directions or suggestions authorized it. The management and supervision of the defendants' mining operations appear to have been committed to the defendant, C.D. Lane. Defendant Hayward was consulted, but he seldom visited the mine. Lane was in the mine in 1897 after the admitted trespass on level No. 2 occurred, and he immediately noticed it and condemned it. He gave instructions to those in subordinate control that they must mark the boundary in the levels, so that the men would know *706 when they came to it, and that they must take care not to trespass again on the Lightner mine. There is no evidence that either of the defendants were ever informed of the trespass here in issue, until this suit was begun against them. The defendant, Hobart Estate Company, owned a one-third interest in the Utica mine, but it took no part in the management and none of its officers ever visited the mine. Its only participation in the enterprise was the receipt of dividends from the other partners and the payment of expenses when called on to do so.
Plaintiff argues that the defendants ratified the wrongful and fraudulent acts of their agents by the denials thereof in their answer to the complaint, and their failure to investigate the matter or make restitution, after they were informed of the facts by the service upon them of a copy of the complaint. Where a party is sued, he has the legal right to make such defenses as he believes he can establish by proof. It is true, as we have said, that there is sufficient evidence to sustain the verdict of the jury holding that the ore in question was taken after November 21, 1896, when plaintiff first acquired an interest in the Lightner mine. But it must also be admitted that, although sufficient to raise a conflict, this evidence is not particularly strong or convincing, and that the defendants produced ample evidence to show their good faith in denying the trespass in issue and pleading the statute of limitations. The jury gave credit to the opposing testimony as to the date of the taking, but there is nothing in the case that would authorize the conclusion that the defendants alleged these defenses in bad faith, or that the pleading thereof should be taken as evidence of ratification of a fraudulent act which they obviously expected to prove had not been committed against the plaintiff at all. There may be some circumstances that would arouse a suspicion of knowledge on their part prior to the filing of their answer, but there was no substantial proof thereof. The service of the complaint in the former action in 1897 for the admitted trespass cannot serve as such proof, for the plaintiff's case rests entirely upon the theory that the ore in question here was taken subsequent to that date, and after the defendant Lane had given positive instructions to the men at the mine not to trespass again. There is no proof of knowledge, authorization, or ratification.
The result is that the verdict for fifty-four thousand dollars *707 is excessive. It should have been for only twenty-seven thousand dollars, which the jury found to be the value of the ore before mining and milling.
5. Some of the instructions given by the court are contrary to the conclusions above stated, and are, as we conceive, erroneous. But in view of the special findings of fact by the jury, we do not think any of them can be considered as affecting the right of the plaintiff to recover the twenty-seven thousand dollars found to be the actual compensatory damages. Instruction 22 was to the effect that the statute of limitations for an underground trespass did not begin to run when the trespass was committed, but from the time of the discovery thereof by the injured party, or from the time when with ordinary diligence he might have discovered it. It omits the elements of secrecy and of fraud in the trespass and fraudulent concealment thereof by the trespasser, and, for that reason, it is erroneous. But the jury, in answer to interrogations, expressly found that the trespass was made by defendants, secretly, knowingly, willfully, and intentionally, and that the defendants, with knowledge thereof, concealed the trespass from the plaintiff. As we have before stated, for the purpose of staying the statute of limitations, the defendants are chargeable with the fraud and fraudulent concealment of their agents, although it may never have been brought to their personal knowledge. The finding of the jury, therefore, establishes, for the purposes of our review of the case, the fact that the trespass was fraudulently made and fraudulently concealed, and, hence, that the statute did not begin to run until the discovery was or should have been made, as stated in the instruction. Under these circumstances, the giving of the instruction was not prejudicial, since the jury have found the additional facts which should have been contained in it to make the instruction correct. This was held in Lowe v. San Franciscoetc. Co.,
One of the instructions objected to was to the effect that if the jury should find that the ore taken by defendants from the Lightner mine was partly extracted before the Lightner Company entered into possession under its purchase and partly afterward, the burden rested upon the defendants to show *708
how much was taken before the entry and how much was taken afterward, and that if defendants failed to do so, then the plaintiff was entitled to recover for the entire amount taken. In view of the facts found this was not error. As we have seen, the plaintiff's ore was taken by the defendants' employees in charge of the mine, secretly and knowingly. It was wrongfully carried to defendants' mill, along with their own ore, and indistinguishably mingled with that ore. The doctrine of confusion of goods applies. "It has long been settled at the common law, that where personal chattels, solid or fluid, are so mingled as to have become undistinguishable by the wrongful act of one owner, he cannot recover for his own proportion, nor for any part of the intermixture, but the entire property rests in him whose right was so invaded." (2 Schouler on Personal Property, sec. 47.) Under some circumstances he can obtain the benefit of that proportion of the mass which was originally his own. But it rests with him to show the proportion which belongs to him. "All the inconveniences of the confusion is thrown on the party who produces it, and generally it is for him to distinguish his own property or lose it." (6 Am. Eng. Ency. of Law, p. 596, citing First N.B. v. Schween,
Instruction 9 was to the effect that "the right of the plaintiff to recover is not at all affected by the fact that the trespass was not willful." This would be technically correct if it meant only that the plaintiff could recover compensatory damages for a trespass not Willfully made. The right to recover exemplary damages would be affected by the fact that the trespass was willful, if by a willful trespass is meant a fraudulent or malicious trespass. But the right to recover compensatory damages is not affected by the fact that the trespass was not *709
willful. (Maye v. Yappen,
The case appears to have been fully and carefully tried and we do not find any error which substantially affects the right of the plaintiff to recover the twenty-seven thousand dollars, found to be the value of the ore taken, as it lay in the ground before it was mined. Substantial justice demands that instead of reversing the cause for a new trial, the plaintiff be at least given an opportunity to accept the part of the damages as to which the verdict is not vitiated by the errors aforesaid.(See Salstrom v. Orleans etc. Co.,
It is therefore ordered that in the event that plaintiff, within thirty days from the date of the filing of this opinion, file with the clerk of this court its written consent to a modification of the judgment by the deduction of twenty-seven thousand dollars therefrom, leaving the same to stand for the remaining twenty-seven thousand dollars and costs of suit, said judgment be modified accordingly, and the order denying a new trial shall be affirmed; such modified judgment to bear interest at the legal rate from the date of the entry of the original judgment of the superior court; but that if such consent is not so filed within said time, the judgment and the order denying a new trial shall be reversed.
Sloss, J., Angellotti, J., Henshaw, J., Melvin, J., and Lorigan, J., concurred.
On January 8, 1912, the supreme court in Bank made the following order in the foregoing appeal:
The plaintiff having consented thereto in open court, it is *710 ordered that the judgment appealed from be modified by the deduction of twenty-seven thousand (27,000) dollars therefrom, leaving the same to stand for the remaining twenty-seven thousand (27,000) dollars, and costs of suit, such modified judgment to bear interest at the legal rate from the date of entry of said judgment, and that the order denying a new trial be affirmed.
Rehearing denied.