218 P. 89 | Nev. | 1923
Lead Opinion
By the Court,
This is an appeal from an order denying a motion for a new trial, and from the judgment rendered in favor
It is alleged in the original complaint, inter alia, that at a given time M. Cohn and J. H. Rae were each the' owners of an undivided one-half interest in the mining ground in question; that for some years they were engaged as copartners in holding, developing, and perfecting the title to said property; that on April 1, 1902, for the purpose of more conveniently handling and operating said property, said Cohn and Rae caused to be organized the Nevada Mining and Exploration Corporation, one of the plaintiff corporations, and caused to be conveyed thereto the mining claims referred to, and that thereafter, and on or about March 16, 1906, said Cohn and Rae caused to be incorporated the Virginia and Tonopah Gold Dredging Company, and caused to be conveyed thereto a portion of the property in question, and that said Cohn and Rae were at all times the owners of all of the stock in said corporations; that thereafter the plaintiff corporations performed assessment work upon and developed said mining claims, and that said Cohn expended and advanced to said plaintiffs large sums of money for the purpose mentioned. It is further alleged that on or about January 29, 1913, the
“ * * * An agreement was entered into between the said plaintiffs and said defendant J. H. Rae to the effect that said deed should be delivered to the said J. H. Rae, and that the said J. H. Rae should form a corporation for the purpose of taking over, operating, and developing said property, the stock in which should be issued to the said J. H. Rae, and that either the said property or the stock in the corporation so to be formed should-be sold, and that, upon the consummation of said sale, the said sum of $40,000 should be paid to the plaintiffs. It was further provided by said agreement that, if the sale was consummated by the sale of the stock in the corporation so to be formed, the said $40,000 should be paid from the proceeds of sale thereof, and, if consummated by the sale of property, the same should be distributed in the form of dividends to said J. H. Rae, and by him paid to said corporations plaintiff; that the agreement to transfer the said property to said J. H. Rae and to the corporation so to be formed was solely for the purpose of conveniently handling and disposing of said property and without any intention of changing the beneficial interests of the said plaintiffs in said property.”
It is further averred that no consideration was paid for said property by Rae; that immediately after the delivery of said deed to Rae, he had the same recorded; that at the time of said transaction plaintiffs had entire
It is further averred that the said Rae did not incorporate nor cause to be incorporated a company for the purpose of taking over, operating and developing the said mining property, but, on the contrary, on or about November 16, 1914, he caused to be incorporated a corporation known as the Rae Consolidated Gold Dredging Company, with which are certain ones going to the refusal of the court to strike certain portions of the complaint.
“Thereafter the said plaintiffs continued to develop said properties and to do the assessment work thereon, and to perfect their title thereto, the said Morris Cohn expending and advancing to said corporations large sums of money for the purpose aforesaid.”
It is clear that this paragraph has no place in the complaint. This is a suit by two corporations, and not one in which Morris Cohn is a party plaintiff. Furthermore, it appears that the advances made by Cohn were made to the plaintiffs in the action, and, if he had any ground of relief on account of the advances, it is clearly against the plaintiffs, and not against the defendants, or any of them. However, pursuant to the paragraph mentioned, evidence was introduced showing-large advances by Cohn. Such testimony, under the terms of the paragraph mentioned and the pleadings
The amended complaint charged that Rae falsely and
We are of the opinion that the court should not have made an order permitting the filing of the amended complaint. Our code of civil procedure is quite liberal as to amendments, but there is nothing therein which justifies an amendment after verdict so as to plead a cause of action diametrically opposed to the theory of the original complaint and that upon which the plaintiff proceeds until after the verdict of the jury is rendered. This court,. in Marshall v. Golden Fleece M. Co., 16 Nev. 156, 180, in passing upon the refusal of the trial court to permit an amendment changing the theory of a party, said:
“We are unable to say, and so was the court below, that defendants expected, or had reason to think, that the affairs of the company, subsequent to the commencement of the action, would be inquired into with the view of arriving at a judicial settlement of the same, or that the case was, in fact, tried upon that theory. The contrary plainly appears. Such being the case, it would 'have been an unwarrantable exercise of power to have permitted the amendment at the time it was asked.”
While the facts in that case are very dissimilar from those in the instant one, it-clearly appears from the quotation that the court held that the defendant had no reason to anticipate, from the nature of the pleadings, that the case would be tried upon the theory sought to be presented by the amendment, or that it was so tried, but that it clearly appeared that it was not tried upon that theory, and, such being the case, it would “have been an unwarrantable exercise of power” for the court to have allowed the amendment. While the
“Courts should be liberal in allowing amendments, and when the cause of action is improperly set forth in the complaint, or a pleading is defective in any respect, the court may, in its discretion, at any stage of the case before the cause is submitted, authorize such amendments as may be necessary to make the case as intended by the original pleading, but not to insert a new and distinct cause of action or defense. Ford v. Ford, 53 Barb. 525; Davis v. Railroad Co., 110 N. Y. 646; 17 N. E. 733; Baldock v. Atwood, 21 Or. 79, 26 Pac. 1058.”
See, also, Barnes v. Quigley, 59 N. Y. 265; Clark v. St. Louis T. R. Co., 127 Mo. 255, 30 S. W. 121; Anderson v. Groesbeck, 26 Colo. 3, 55 Pac. 1086; 1 Stand. Ency. Proc. 919; 1 Ency. Pl. & Pr. 584-586; Grand Cent. M. Co. v. Mammoth M. Co., 29 Utah, 490, 83 Pac. 648, 685.
While we have deemed it proper to dispose of the foregoing questions, we are clearly of the opinion that there is no competent and relevant evidence in the record to establish fraud upon either of the theories suggested „by the pleadings.
For the reasons given, the judgment and order are reversed, and the trial court is directed to enter judgment in favor of the defendants.
Rehearing
On Petition for Rehearing
By the Court,
Counsel for respondents have filed a 52-page printed petition for a rehearing. In the petition we find this statement:
“In form this is a suit in the name of two corporations, because the j oint adventurers, under the pleadings, evidence, and findings, placed title to the property in the corporations for convenience of management. Rae acquired the property from those corporations, and, it is claimed, by fraud. The corporations, however, consisted only of Rae and Cohn. The fraud iri fact was practiced on Cohn, as he was acting for the corporation.*185 Rae could not act for the corporation because he claims he was buying the property from the corporation. Cohn, therefore, alone represented the corporation. In connection with the claim of fraud the existence of a confidential relation between the parties was highly important. The confidential relation grew out of the partnership of two men in this venture, their equal joint ownership, and their mutual contributions to the venture. The allegation of the previous ownership by Cohn and Rae, the joint handling of the property, and the contributions to it by them or either of them was all proper for the purpose of showing these relations.
“Defendants in their answer denied the interest of Cohn at the time of the transactions complained of, claimed that his interest was entirely different and arose at a much later date, and that the only interest he had was under a contract of 1913, which it was alleged he had not fulfilled.
“In order to prove this ownership and relationship we introduced the letter from the defendant, and, furthermore, the payment of these sums of money, aggregating about $10,000, by Cohn, which was the strongest kind of evidence of such ownership during the entire period. Even if there had been no allegation of the payment, the same evidence would have been material for the purpose of proving the ownership of Cohn and Rae and the relationship of the parties.
“The evidence did not confuse either the court or jury, but it did serve to show that the sworn answer by Rae denying the joint ownership of this property by Cohn and Rae was false. The allegation was not made for the purpose of making any claim against any one for the advances, but for the purpose of showing the relationship of the two real actors in this matter. That this relationship was vital and materially affected both the allegation and proof of fraud is well settled, as we will point out when discussing that subject.”
The trouble with the foregoing statement is one which inheres in the entire case of the plaintiffs from start to finish. Either Cohn is the real party in interest in this
There are no more learned, sagacious, and skilful members of the bar than counsel for respondents. They are such all-round men from the standpoint of qualifications for the bar that at the conclusion of the oral argument we were not only convinced of the correctness of their contention but of the righteousness of the judgment, and it was only after unusual study of the record and the briefs that we were willing to abandon the conclusion then reached. And here we may say with propriety that, if there be any merit in the matter which we have quoted from the petition, it is hard for us to reconcile it with the action taken at a meeting of the board of trustees of the plaintiff corporations at which this suit was authorized at the expense .of the plaintiff corporations. If Cohn is the real party plaintiff in the action, why did he not bring the suit in his own name and at his own expense rather than at the expense of the plaintiff corporations? Furthermore, how can we reconcile the contention made with the allegation in the complaint, quoted in the former opinion, to the effect that plaintiffs continued to develop the properties and to do assessment work thereon and to perfect their title thereto, and that Cohn advanced to said plaintiffs large sums of money for the purposes mentioned ?
In writing our former opinion we pointed out that Cohn is not a party plaintiff, and that his personal rights were not involved in this litigation, and it was upon that ground that we took the position that the pleadings and evidence affecting him personally were improperly in the case. There is no question but that Rae and Cohn originally owned jointly the bulk of the property in question; that they conveyed their entire interest therein to the plaintiff corporations. Nowhere in the pleadings or in the evidence is there a suggestion that the conveyances by Cohn and Rae to the plaintiff
We will now take up the contention that our conclusions as to the bringing into the case, by the amendment, of a new cause of action or a new theory, were not justified. In this connection it is said in the petition:
“The original complaint, of course, alleged the contract and conveyance, because that is necessary in any action to rescind. It also alleged the representations made as to the purpose of the contract and conveyance; that no consideration was paid for it; that plaintiff believed the representations; that the contract had not been performed; that the advantages were acquired by breach of confidence; that the contract has been abandoned by defendants; that defendant entered into the contract without any intention of performing it; that said plaintiffs, upon learning the facts above set forth on or about the 9th day of May, 1920, proceeded to and did rescind and annul the said contract by reason of the things herein set forth, and notified the defendants of such rescission, and also notified them that the said contract was void and without any consideration, and had long since expired by the abandonment of said contemplated sale and by the nonperformance thereof by the defendants.”
In order that we may test the correctness of this statement, we quote .the written contract as it was executed. • It reads:
“This agreement, made in duplicate and entered into this 11th day of November, 1914, by and between the*188 Nevada Mining and Exploration Company, a corporation under the laws of the State of Nevada, and the Virginia Tonopah Gold Dredging Company, a corporation under the laws of the State of Arizona, both of said corporations acting by and through its respective president and duly authorized officer, Morris Cohn, of the town of Tonopah, county of Nye, State of Nevada, hereinafter known as grantors, and J. H. Rae, of the town of Dayton, county of Lyon, State of Nevada, hereinafter known as grantee, witnesseth:
“Whereas, the grantors are the owners of certain placer mining ground situated in Lyon County, State of Nevada; and
“Whereas, the said grantors heretofore, to wit, on the 29th day of January, 1913, made and executed a good and sufficient deed to said placer mining ground in favor of grantee herein, the said deed to be delivered unto said grantee upon the payment of the sum of forty thousand dollars; and
“Whereas, said sum of forty thousand dollars has not been paid; and
“Whereas, said grantee is desirous of purchasing said placer mining ground and securing the title thereto by •delivery to him of said deed heretofore made and executed in his favor :
“Now, therefore, the said grantors, for and in consideration of one ($1) dollar and other good and valuable consideration, do by these presents sell, assign, transfer, convey and set over unto the said grantee, all right, title and interest of, in and to said placer mining ground as described in deed aforesaid, and as evidence of said transfer do deliver unto the said grantee the deed aforesaid.
“It is covenanted and agreed on the part of said grantee, in consideration of the foregoing premises, as follows, to wit:
“That he will incorporate, or cause to be incorporated, a company 'for the purpose of taking over, operating and developing said placer mining ground.
“That upon the perfecting of said incorporated company he will convey to it all right, title and interest in said placer mining ground.
*189 “That thereafter he will devote his time, attention and ability to the successful promotion of said company, and the successful operating and developing of said placer mining ground.
“That in the event he is successful in the promotion of said company and placing said mining ground upon a paying basis, then and in that event, he will pay said grantors from the net proceeds of his individual interest as a stockholder in said company, the sum of forty thousand dollars, the said forty thousand dollars to be the first forty thousand dollars realized from his individual interest as stockholder of said company, whether it be from the sale of his personal stock or from dividends paid on said stock, and said money received from said interest, or by reason thereof, shall be paid immediately to said grantors to apply upon the payment of said forty thousand dollars.
“It is mutually understood and agreed between the parties hereto, and in consideration of the foregoing premises, that it is the intention to create a personal liability upon the grantee herein only in the event of his individual stock interest in the new company producing financial results as above stated, and it is further understood and agreed that, upon the final, full and complete payment of forty thousand dollars, all claims and demands of grantors will have been fully and completely satisfied.
“This agreement is binding upon the heirs, executors, and assigns of all parties hereto.
“In witness whereof, the grantors herein have hereunto set their corporate names and caused their corporate seals to be affixed by their duly authorized officer, and the grantee has set his name hereunto in his individual capacity, the day and year first above written.
“[Seal] Nevada Mining and Exploration Co., “By Morris Cohn, Pres.
“[Seal] Virginia Tonopah Gold Dredging Co., “By Morris .Cohn, Pres.
“J. H. Rae.”
We submit that, from a comparison of the facts as stated in the original opinion, with which no fault is found, and the contract as executed, the plaintiffs did
Now, let us consider the statement of counsel for petitioners that—
“The original complaint, of course alleged the contract and conveyance, because that is necessary in any action to rescind.”
The logic of this statement is sound. The premise is bad because the original complaint did not plead “the contract.” Rejecting the erroneous premise, and accepting the sound logic, what was the situation presented to the trial court? It was this: Evidence had been received, and properly and without objection, to establish the contract pleaded because it supported the allegations of the complaint which pleaded the contract according to its legal effect as interpreted by plaintiffs.
“The contention that Cohn did not testify that the terms of the contract were not explained to him, of that he was misled: A consideration of this suggestion would lead us into a discussion of the merits of the case, which we will make under the next point. Suffice it to say at this point that we do not complain that the contract was not explained to him, but our complaint is that the purpose of the contract and conveyance was falsely represented to him. The complaint is, and the evidence is, that it was explained to him, and its purpose stated, and it is the falsity of that statement that we rely upon. We shall also pbint out that he did in effect testify that he was misled. Nor do we rely on the fact that Cohn did not read the contract. We offered no evidence to that effect. On cross-examination he was asked if he read it, and, as he did not, he so testified. He with equal candor testified that he had read it later. Our contention is that the contract is clearly subject to the construction that it was for the purpose represented, and it is well settled that when a party leads another to believe that an instrument' means a certain thing he cannot claim the contrary.”
“The original complaint charged that the contract was entered into without any intention of performing it. The amended complaint alleged fraud in obtaining it. This was simply a broader allegation of fraud, and there is no inconsistency.”
There can be no doubt about the meaning of this language. The first sentence construes the original complaint as we did in our former opinion, wherein we said :
“There is not a word or a line in the complaint indicating that plaintiffs sought to charge fraud, unless it be that Rae entered into the contract without intention to fulfil it. * * *”
And the second sentence is substantially what we said about the amendment in that opinion. The assertion that the amendment was simply a broader allegation of fraud, and that there is no inconsistency, falls of its own fallacy. We are not only of the opinion that plaintiffs sought to bring into the case an entirely new theory by the amendment, but we are unable to reconcile the statements contained in the petition for a rehearing.
“ Tt is well settled, by a long- line of decisions of this court, that, when the parties reduce their contract to writing, all oral negotiations and stipulations are merged therein.’ * * * The mere statement of the defendant That she did not know what she was signing, when she signed the bill of sale,’ is no excuse in law. In order to be of any benefit to her, she should have set out in her answer that the paper introduced in evidence was obtained by misrepresentations of its contents, and that the misrepresentations were false. * * * ”
When the matter was formerly before us, we were of the impression that the purpose of filing an amended
In our former opinion we did not discuss the evidence, but stated generally that there was ho evidence to support the judgment. As we pointed out in the opinion, fraud is never presumed, but must be clearly and satisfactorily proven. There is such a paucity of evidence in this case which can be said to raise even a suspicion of fraud that we find it hard to decide just where to enter upon a consideration of it. If we correctly understand upon just what theories the plaintiffs rely to establish fraud, they are: (1) That Rae did not intend to comply with the terms of the contract when it was entered into; and (2) that its execution was procured by fraud.
Considering the latter contention first, it will be remembered that a contract for the sale of the properties involved was entered into in 1913, and that on November 11, 1914, the contract in question, which is set out herein, was executed. Mr. Cohn, after testifying relative to the contract of sale of 1913, was interrogated relative to the preliminaries to the execution of the contract assailed in this suit. Referring to the statements made by Mr. Rae as inducing the contract of November 11, 1914, Mr. Cohn testified:
*195 “Q. And did he tell you what he came for and what proposition he had? A. Yes; the same thing as before; that he had a deal on for that; he didn’t want to miss a deal by sending papers up and down, and I could trust him, and I always did, and he would protect me, and see I got my share, my one-half interest, and to sign some papers. That evening we went to Richards after I closed up. The papers were all ready made out, and laid there, and I signed them, and walked out with him.”
Again he testified:
“Q. Well, how — will you tell me what occurred on that second visit? A. Well, the same story; he had a chance to sell it, and he didn’t want to lose a chance; for me to sign; and I signed. I had such confidence in the man I never asked the second question.
“Q. Do you remember any particular points in the conversation? A. That is all he told me. He came in and told me he had a chance to dispose of the property, and for me to sign up some papers, and he wanted to know, if I remember right, when I can go. I always told him in the evening after I close up.
“Q. Well, where was that paper signed on the second visit? A. I think at Richards’s office again.
“Q. Mr. Rae didn’t have it prepared when he first saw you that day, did he ? A. Sir ?
“Q. Did Mr. Rae have the paper with him when you first saw him that day ? A. Not that I know of.
“Q. He didn’t show you any paper that day, did he? A. I don’t think he did.
“Q. Did he tell you at that time he would go up to the lawyer’s and get the paper drawn ? A. If I recollect right, he said he was getting the papers drawn.
“Q. Well, you went up with him, didn’t you? A. In the evening.
“Q. Yes. This paper which is dated November 11, 1914, you signed that without reading it, didn’t you? A. Yes, sir. Hardly ever read the papers he showed me; always signed what papers he want me to sign, I had such confidence in him.
“Q. You are sure you signed that without reading it, didn’t you? A. Yes.
*196 “Q. Now, Mr. Cohn, on any of these visits, these papers were signed in Mr. Richards’s office, weren’t they? A. I believe so.
“Q. And the lawyer didn’t read them at all? A. No.
“Q. Aloud? A. No.”
The foregoing is substantially his entire testimony as to the fraud which it is contended was practiced in obtaining the contract. All that it amounts to is that a contract was sought by Rae different from the one which was executed. It amounts to nothing more than an attempt to vary the terms of the written agreement. We assumed in our former opinion that was the'theory of plaintiffs, and pointed out that there was no testimony to the effect that the contract was not explained to Cohn before it was executed, and, further, that Cohn had possession of the contract for over six years, and did read it over a few months after it was executed, and was satisfied with it, and did not bring this suit until 1921. The fact that, he was satisfied with its terms for nearly six years is pretty conclusive evidence that during that time he entertained no impression that it was obtained by fraud.
The petition for a rehearing is denied.