Lockhart v. Leeds/Opinion of the Court

United States Supreme Court

195 U.S. 427

Lockhart  v.  Leeds

 Argued: October 20, 1904. --- Decided: December 5, 1904

One phase of this controversy has already been before this court in Lockhart v. Johnson, 181 U.S. 516, 46 L. ed. 979, 21 Sup. Ct. Rep. 665, which was an action of ejectment brought by the plaintiff (who is the complainant herein) to recover possession of the mine above mentioned from the defendants herein. It was there held that the plaintiff could not maintain an action, as the facts showed that he had no legal title, and that the remedy he might have, if any, was in equity.

Upon the trial of the ejectment action the plaintiff offered to prove, in substance, the same facts as are set forth in this bill in regard to Pilkey's action under the agreement with plaintiff and Johnson, and the fraudulent conspiracy entered into by the defendants for the purpose of defrauding the plaintiff out of his right to such mine. The evidence was objected to and excluded on the ground that it did not show any legal title in the plaintiff, assuming its truth; that, in the courts of the United States, an action of ejectment was based upon the strict legal title, and if the plaintiff failed to show that it was in him, he must fail in such action. The defendants now contend that, if the plaintiff have any remedy, it is at law; and also that there is no cause of action stated in the bill. At the time of the trial of this suit, the ejectment action had not been decided by this court, the action having been here decided May 13, 1901. It must be regarded as determined by the decision in that case, that the complainant herein has no remedy at law, and, if he has none in this suit, he is without remedy for the gross fraud set out in the bill. All facts well pleaded in the bill are admitted by the demurrer, and the question, therefore, is whether the bill states facts sufficient to entitle him to relief in a court of equity.

The court below has held that the bill does not state with sufficient certainty the time when plaintiff discovered the alleged fraud set forth in the bill, in that it does not appear by any certain averment that the plaintiff did not discover such fraud before the expiration of the ninety days after the discovery of the lode, in which to file a copy of the notice of location in the recorder's office, which, if he had done, he might, by himself filing the copy, have thereby fulfilled all the provisions of the statute relating to the location and recording of the notice of claim. We entirely agree with the court below that the facts constituting the cause of action in equity must be distinctly alleged, so that the defendant may know what he has to meet, and so that he may, if he choose, put them in the issue. The rule must receive a reasonable interpretation, and must be so enforced as to further, and not obstruct, the administration of justice. We think the court below erred in holding that there was no sufficient averment as to the time of the discovery by plaintiff of the alleged fraud set forth in the bill, assuming such averment to have been necessary. He averred that Pilkey, acting under the agreement with plaintiff and Johnson, discovered the mine, and located the same by posting the requisite notice on the ground on the 10th of July, 1893. He also averred that some time about the 1st of October (the exact time, however, he could not state) the defendants entered into the conspiracy and combination referred to. This was but a few days before the expiration of the statutory time in which to file a copy of the notice of claim in the recorder's office of the county. He averred that the conspiracy and combination was secret, and that, while the plaintiff and his copartner Johnson were able and willing to comply with all the laws of the United States and territory, they failed to do so because of the wrongful, fraudulent, and unlawful acts of the defendants thereinafter mentioned. Those acts were a secret effacement of the work done by Pilkey, the taking down of the notice of claim posted on the ground by him, the failure to file a copy thereof, the posting of a claim on the part of the defendants, and the filing of a copy of such notice in the recorder's office on December 13, 1893.

We think the plain import of these averments is that the conspiracy and combination did not become known to the plaintiff until after the expiration of the ninety days from the discovery of the mine, in which to file a copy of the notice posted on the ground, in the recorder's office of the proper county. That is a sufficiently definite averment of time, and it is enough to show that the failure to file a copy of the notice within the necessary time was owing to the action of the defendants.

Under the agreement first mentioned between plaintiff, Johnson, and Pilkey, as copartners, it became the duty of Pilkey, in order to complete the location it was his duty to make, to file a copy of the notice in the recorder's office; and the parties to the agreement had the right to rely upon Pilkey to file the necessary copy for record; and it is plain that the failure to file on the part of the plaintiff was because of his ignorance of such failure on the part of Pilkey, consequent upon Pilkey's fraudulent conspiracy and agreement with the other defendants not to file it. After the discovery of the conspiracy, the plaintiff did procure a copy of the original notice posted by Pilkey on the ground, and filed the same in the office of the recorder on the 9th of December, 1893. Taking these allegations together, we think it hypercritical to hold that the bill does not, with sufficient distinctness, allege the fact that the plaintiff did not discover the fraud until after the expiration of the ninety days mentioned, and hence did not himself file the copy of the notice within that time.

All pleadings must be construed reasonably, and not with such strictness as to refuse to adopt the natural construction of the pleading because a particular fact might have been more distinctly alleged, although its existence is fairly, naturally, and reasonably to be presumed from the averments made in the pleading.

The agreement between the plaintiff, Pilkey, and Johnson shows it to have been the duty of Pilkey to make the necessary filing for record, in order to complete the location of the mine, which he, in the agreement, was to do. The plaintiff had the right to rely upon Pilkey carrying out that agreement, and fulfilling his duty thereunder by making the necessary filing; and plaintiff alleges that he would have done all things made necessary by law had it not been for this fraudulent combination and conspiracy on the part of the defendants. We regard the allegations of the bill as sufficient in these particulars.

Again, it is alleged that the bill prays that the location of what is called the Washington lode by the defendants be declared void, and that the plaintiff may have the possession of the claim; while the plaintiff now asks to have the defendants treated as constructive trustees, etc., which is inconsistent, as alleged, with the former prayer for relief. The bill contains a prayer for general relief in addition to the prayer for special relief, and under such prayer this relief may be given. It is objected that, under the prayer for general relief, no relief of that nature can be granted, inasmuch as it is opposed to the special relief asked for by the bill, and also because the general allegations in the bill do not justify such relief. All the facts upon which the plaintiff seeks relief from a court of equity are clearly stated in the bill. The facts constituting the fraud are set forth, and it is alleged that the parties doing the acts mentioned concealed them from the plaintiff for the purpose of defrauding plaintiff out of his interest and ownership in the mine. Having set out all the facts upon which the right to relief is based, the plaintiff asks specially for the possession, and also for the proceeds, of the mine, because, by reason of the facts, the location made by the defendants was a void location. Whether it was a void location or not was matter of law, arising from the facts appearing in the bill. Those facts were not changed in the slightest degree, nor were any inconsistent facts set up thereafter. The plaintiff now, under his prayer for general relief, contends that, although the location of the Washington lode by the defendants may have been so far valid as to create a title in the defendants, yet that, by reason of the fraud already distinctly set forth in the bill, the plaintiff was entitled to avail himself of that title, and to hold them as trustees ex maleficio, for his benefit.

There is nothing in the intricacy of equity pleading that prevents the plaintiff from obtaining the relief under the general prayer, to which he may be entitled upon the facts plainly stated in the bill. There is no reason for denying his right to relief, if the plaintiff is otherwise entitled to it, simply because it is asked under the prayer for general relief, and upon a somewhat different theory from that which is advanced under one of the special prayers. The cases of English v. Foxall, 2 Pet. 595, 7 L. ed. 531; Boone v. Chiles, 10 Pet. 177, 9 L. ed. 388; Hobson v. M'Arthur, 16 Pet. 182, 10 L. ed. 930; Hayward v. Eliot Nat. Bank, 96 U.S. 611, 24 L. ed. 855; Georgia v. Stanton, 6 Wall. 50, 18 L. ed. 721, are not opposed to the views just stated.

We agree that the relief granted under the prayer for general relief must be agreeable to the case made by the bill; and that, in substance, is what is held by the above cases. The case made by the bill consists of the material facts therein stated; and where all the facts are stated, it is no reason for denying relief under a general prayer, because it may differ from the theory of the law upon which the special prayer for relief is based, where both prayers are based upon the same facts, clearly set forth in the bill.

The defendants contend that, if Pilkey, under the fraudulent agreement alleged, and pursuant thereto, surrendered possession to the defendants, the latter became cotenants with the plaintiff, and he could maintain an action at law to recover possession from his cotenants. We have already held that the plaintiff could not, upon the facts, maintain ejectment. When Pilkey surrendered possession to defendants unde this fraudulent agreement, and they entered and posted the notice and filed the copy, they did not enable plaintiff to maintain ejectment against them as upon his ouster of possession by defendants.

Neither plaintiff nor Johnson had ever had anything but a constructive possession through the possession of Pilkey; and when he fraudulently surrendered it to the other defendants, and they entered and completed their location, the plaintiff could not then sustain ejectment, as we have already held. This is not in opposition to the case of Erhardt v. Boaro, 113 U.S. 528, 28 L. ed. 1113, 5 Sup. Ct. Rep. 560. The question whether the relief should be at law or in equity was not there raised. The action was commenced in Colorado, and was in accordance with the usual form in actions for mining claims under the procedure in Colorado, and was brought to recover possession of a mine. There was no discussion as to the forum. The complaint simply followed the usual practice. Here we have already held, in the ejectment suit (181 U.S. 516, 45 L. ed. 979, 21 Sup. Ct. Rep. 665), that the relief is not to be had by ejectment, but must be obtained in equity if at all. Under the circumstances we think it immaterial whether Pilkey surrendered possession before or after the expiration of ninety days from the discovery of the mine, July 10, 1893. All the acts of fraud set up in the bill, committed by the defendants, are, if proved, sufficient to entitle the plaintiff to treat them as trustees ex maleficio, and to recover from them, as such trustees, all the materials taken from the mine. See Saunders v. Mackey, 5 Mont. 523, 6 Pac. 361; Doherty v. Morris, 11 Colo. 12, 16 Pac. 911. Upon the case made by the bill, some of the defendants being insolvent, we think the plaintiff entitled to an injunction restraining the defendants from further mining during the pendency of the suit; an injunction to issue upon such security as may seem appropriate to the court below.

We decide this case solely upon the questions raised by the demurrer.

The judgments of the Supreme Court of New Mexico and of the trial court must be reversed, and the case remanded to the Supreme Court, with directions to remand it to the District Court for the Second Judicial District of the Territory of New Mexico, within and for the county of Bernalillo, with directions to overrule the defendants' demurrer, and with leave to answer upon such terms as may seem proper to that court.

So ordered.

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